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proof is otherwise upon the creditors to support the allegations of their petition.28

28 Re Rome Planing Mill, 96 Fed. 812 (transfer with intent to prefer); Re Hudson River El. Power Co., 173 Fed. 934 (class subject to bankruptcy); Albers Commission Co. v. Richter, C. C. A., 251 Fed. 869 (admission in writing of inability to pay debts and of willingness to be adjudged a bankrupt). But where the bankrupt alleged that a note held by a petitioner was void because given in consideration of a gambling transaction, the respondent had the burden of proof to show that fact. Hill v. Levy, 98 Fed. 94. And where the act of bankruptcy charged was fraudulent concealment of property; it was held that the burden of proving solvency was upon the bankrupt. Re Burg, 245 Fed. 173. In determining the question of solvency the capital stock of a corporation is not to be treated as a debt. Tepel v. Coleman, 229 Fed. 201; nor is the liability as surety or indorser of the obligation of a solvent principal. Re Bowers, 215 Fed. 617. Property which the alleged bankrupt has concealed cannot be included in his assets when his solvency is determined. Re Burg, 245 Fed. 173. The accounts due the bankrupt cannot be considered as assets, unless they are such as would be available to meet his liabilities within a reasonable time. Ten months was held to be such a reasonable time. Louisiana Nat. Life Assur. Soc. v.

Segen, 196 Fed. 903. Where, although the books showed an excess of assets over liabilities, the president and sole stockholder of the bankrupt testified to errors there

in, which, if corrected, would make them show an excess of liabilities, the adjudication was affirmed. Re Iron Clad Mfg. Co., C. C. A., 197 Fed. 280. Upon writ of error in the same case, the Circuit Court of Appeals considered the schedules filed by the bankrupt after the adjudication. A letter by the respondent stating his inability to pay his debts and calling a, meeting of his creditors for the purpose of compromising his indebtedness is prima facie evidence of his insolvency. Re Lange, 97 Fed. 197. Voluntary bankruptcy creates no presumption of previous insolvency. Re Chappell, 113 Fed. 545. It was held to be no evidence of insolvency that a corporation made an arrangement with the bank to overdraw its account. McDonald v. Clearwater Shortline Ry. Co., 164 Fed. 1007. A judgment against the bankrupt, entered more than four months before the commission of the act of bankruptcy, is admissible upon the proof of insolvency. Re McGowan, 134 Fed. 498, which considers other questions concerning the admissibility of evidence upon this issue. It has been said: that to justify an adjudication, that an alleged bankrupt is a member of a bankrupt firm, it is insufficient to prove that he has held himself out to various creditors as a partner. Re Kaplan, C. C. A., 234 Fed. 866. Where there was no evidence upon the question of solvency it was held that the referee was justified in finding that the alleged bankrupts were not insolvent and need not limit his report to the statement

The trial is conducted like any ordinary trial at common law.29 The unsuccessful party is entitled to a bill of exceptions.30 The review, except where the verdict is merely advisory, must be by writ of error and not by appeal.31 Where there is a right to trial by jury, the verdict cannot be set aside in a case that would not justify a new trial at common law.32 When both a voluntary and an involuntary petition affecting the same alleged bankrupt are filed the adjudication should ordinarily be made in the voluntary one with proper protection of the rights of those who have filed the other.33 Where a petition for involuntary bankruptcy has been previously filed, notice should be given to the former petitioners before an adjudication upon the voluntary petition.34 Notice to creditors of the filing of an involuntary petition is not required.35 Laches may debar them from attacking the adjudication, at least upon grounds that are not jurisdictional.36 An adjudication of bankruptcy does not dissolve a corporation or terminate its existence.37

§ 637a. Setting aside an adjudication in bankruptcy. Where the jurisdiction of the court appears upon the record the validity of the adjudication cannot be collaterally attacked by a bankrupt or by a creditor or by a stranger to the proceeding. The

that there was no evidence, that they were insolvent.

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29 Elliott v. Toeppner, 187 U. S. 327, 47 L. ed. 200, 23 Sup. Ct. 133; Duncan v. Landis, C. C. A., 106 Fed. 839; Bean-Chamberlain v. Standard Spoke & Nipple Co., 131 Fed. 215, 65 C. C. A. 201, 12 Am. B. R. supra, § 473. Where, through oversight, the question of insolvency was not submitted to the jury before their verdict was rendered; it was held that the court had power, before they had been discharged, to require them to find a supplemental verdict on that issue. Bodders Clothing Co. v. Burnham Munger Coat D. G. Co., C. C. A., 228 Fed. 470.

30 Duncan v. Landis, C. C. A., 106 Fed. 839.

31 Re Neasmith, C. C. A., 147 Fed. 160.

32 Elliott v. Toeppner, 187 U. S. 327, 23 Sup. Ct. 133, 47 L. ed. 200; supra, § 530.

33 Re New Chattanooga Hardware Co., 190 Fed. 241. See Re Lachenmaier, C. C. A., 203 Fed. 32..

34 Re Dwyer, 112 Fed. 777.
35 Re Billing, 145 Fed. 395.

36 Re Billing, 145 Fed. 395 (two years); Re First Nat. Bank of Belle Fourche, C. C. A., 152 Fed. 64; Re Marion Contract & Construction Co., 166 Fed. 618.

37 Re Russell Wheel & Foundry Co., 222 Fed. 569; Hunter Walton & Co. v. J. G. Sherry Co., C. C. A., 247 Fed. 458.

§ 637a. 1 Re Marion Contract & Construction Co., 166 Fed. 618; Re

bankrupt or a receiver appointed by another court who is in

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possession of the bankrupt's property or a creditor whose claim is provable or a purchaser whose title is affected by the bankruptcy proceedings may move to set aside the adjudication; but a creditor whose claim has been filed or proved cannot.7 A creditor whose claim is not provable has no legal standing to move to vacate the adjudication, but he may appear in the court of original jurisdiction or, if his application is there denied, by petition for revision in the court of review as a amicus curiæ

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Dempster, C. C. A., 172 Fed. 353; Finn v. Carolina Portland Cement Co., C. C. A., 232 Fed. 815; Sabin v. Larkin-Green Logging Co., 218 Fed. 984; Re Gibney Tire & Rubber Co., 241 Fed. 879; Re Greer, 248 Fed. 131. The following are such jurisdictional defects: Where the petition is filed by only two creditors, the law requiring three, Re N. Y. Tunnel Co., C. C. A., 166 Fed. 285; or fails to state that one of the specified acts of bankruptcy was committed, Re D. F. Herlehy Co., 247 Fed. 369; or shows that the alleged bankrupt was a railroad company or other corporation clearly exempted by the statute from bankruptcy proceedings, Re N. Y. Tunnel Co., C. C. A., 166 Fed. 285; but not a corporation whose liability to bankruptcy is doubtful. Ibid. An inadequate averment in the petition as to the act of bankruptcy charged. Larkin-Green Logging Co. v. Sabin, 222 Fed. 814; International Silver Co. v. New York Jewelry Co., C. C. A., 233 Fed. 945; or as to the principal business in which the corporation is engaged, Re Marion Contract and Construction Co., 166 Fed. 618; and may be cured by amendment. Where the bankrupt fails to appear upon the return day the creditors or receivers previously appointed by a State

court may move to vacate the adjudication if made without notice to them and they have a defense thereto. Re Hudson River Electric Co., 167 Fed. 986; Re New England Breeders' Club, C. C. A., 169 Fed. 586. It has been held that where the adjudication is made before the time for the creditors to answer has expired; this is an irregularity which does not make the adjudication subject to collateral attack; Re Sage, 224 Fed. 525.

2 Fairbanks Steam Shovel Co. v. Wills, 240 U. S. 427.

3 Re Columbia Real Estate Co., 101 Fed. 965; Finn v. Carolina Portland Cement Co., 232 Fed. 815.

4 Re Hudson River El. Power Co., 173 Fed. 934; Re San Antonio Land & Irrigation Co., 228 Fed. 984.

5 Altonwood Park Co. v. Gwynne, C. C. A., 160 Fed. 448; Re Antonio Land & Irrigation Co., 228 Fed. 984.

v.

6 Abbott Wauchula Mfg. & Timber Co., C. C. A., 240 Fed. 938.

7 Re Mason, 99 Fed. 256; Re N. Y. Tunnel Co., C. C. A., 166 Fed. 284; Re Worsham, C. C. A., 142 Fed. 121.

8 Re Columbia Real Estate Co., 101 Fed. 965; Re N. Y. Tunnel Co., C. C. A., 166 Fed. 284.

9 See Re Columbia Real Estate Co., 101 Fed. 965.

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and point out a defect in the jurisdiction appearing on the face of the record which will then be considered.10 Stockholders cannot move to set aside an adjudication in bankruptcy of their corporation unless they show such a case as would authorize them to intervene and set up a defense in a suit against it.11 ́ A motion to set aside the adjudication may be denied for laches.12 It has been said, that a creditor cannot complain of an adjudication of voluntary bankruptcy of a corporation upon the ground that the petition was filed without authority; 13 but stockholders were allowed to intervene and set aside the adjudication because the object of the proceedings was to avoid the effect of a judgment obtained by them against the corporation and directors for the appointment of a receiver of the former's property and for an accounting by the latter. 14 A creditor cannot attack a voluntary adjudication because of the solvency of the bankrupt,15 nor an involuntary adjudication, made upon the ground that the bankrupt has admitted in writing inability to pay debts and willingness to be adjudged a bankrupt, because the written admission was not made at the time the petition was filed when it was contained in an answer by the bankrupt.1 A creditor may set aside the adjudication when it was made before his time. to answer had expired,17 but a purchaser of the bankrupt's

10 Re N. Y. Tunnel Co., C. C. A., 166 Fed. 284.

11 Re Eureka Anthracite Coal Co., 197 Fed. 216. An application by stockholders to set aside an adjudication of voluntary bankruptcy upon the ground that the proceedings were fraudulently instituted by the directors to avoid liability in a stockholders' suit was denied. Re United Grocery Co., 239 Fed. 1016.

12 Re Marion Contract & Construction Co., 166 Fed. 618 (3 months); Re Mitchell & Co., 211 Fed. 778; Re Greer, 248 Fed. 131. A delay of six weeks after notice of an adjudication made more than four months before the application was held not to be laches. Altonwood Park Co. v. Gwynne, C. C. A., 160

16

Fed. 448. See Finn v. Carolina Portland Cement Co., C. C. A., 232 Fed. 815 (a delay of twenty-nine days when no subsequent proceedings had been taken). Supra, § 630.

13 Re Gaunacevi Tunnel Co., C. C. A., 201 Fed. 316.

14 Zeitinger v. Hargadine-M 'Kittrick Dry Goods Co., C. C. A., 244 Fed. 719, reversing 239 Fed. 155. Contra, Re United Grocery Co., 239 Fed. 1016. See Re S. & S. Mfg. & Sales Co., 246 Fed. 1005.

15 Re Southern Arizona Smelting Co., C. C. A., 231 Fed. 87.

16 Re Veler, C. C. A., 249 Fed. 633.

17 Re Gibney Tire & Rubber Co., 241 Fed. 879.

property at a sale under execution cannot where the bankrupt has consented to the involuntary adjudication and there are no other equities.18

A motion upon notice for the vacation of the adjudication upon a voluntary or involuntary petition is the proper procedure to raise the propriety of the adjudication.19 Where the allegations in the petition are disputed, the issue cannot be considered upon a motion to open the adjudication, but leave must be obtained to permit that defense to be made.20 Where the trustee and the bankrupt had answered a petition to set aside an adjudication, the court struck out objections by a creditor thereto.21 The motion papers should show that the moving party, if not the bankrupt or a creditor,22 is aggrieved by the adjudication.23 At the hearing upon a petition by the purchaser, the records in the bankruptcy proceeding which show a confession by the bankrupt of insolvency and of the act of bankruptcy are admissible.24 In a proper case, the court when denying a motion to set aside the order of adjudication may amend this so as to preserve the rights of the objectors.25 An order, that if the bankrupt shall within five days appear and plead to the petition, the order of adjudication shall be set aside, otherwise that his motion will be denied and the other stand as entered, is not final nor appealable.26 No subsequent order is required to give effect to the adjudication in case of failure by him to appear.27

18 Abbott v. Wauchula Mfg. & Timber Co., C. C. A., 240 Fed. 938.

19 Re Nash, 249 Fed. 375; Re San Antonio Land & Irrigation Co. Ltd., 228 Fed. 984.

20 Re Order of Sparta, 238 Fed. 437.

21 Abbott v. Manchester Mfg. & Timber Co., C. C. A., 240 Fed. 938. 22 Where the adjudication was prematurely entered, the creditor need not upon his application show facts which constitute a sufficient answer to the petition of involuntary bankruptcy. Re Gibney Tire & Rubber Co., 241 Fed. 879.

23 Abbott v. Manchester Mfg. & Timber Co., C. C. A., 240 Fed. 938. As to the effect of a previous decision that the petitioner should not be compelled to submit to an examination, see ibid.

24 Ibid.

25 International Silver Co. v. N. Y. Jewelry Co., C. C. A., 233 Fed. 945.

26 Re Sutter Hotel Co., C. C. A., 241 Fed. 367.

27 Ibid.

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