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About The Nebraskan. (Lincoln, Neb.) 1892-1899 | View Entire Issue (Nov. 21, 1898)
iMlHKMDMr&nl THE NATIONAL BANKRUPTCY LAW Which Passed Congress at Its Last Session and Became Effective August i, and November i, 1898. University Coal Office Gregory sells Coal Best Quality. Best I'rico Phono 343. THOSE WHO MAY BECOHE BANKRUPT? mm JssssafiMa!!iXfTf M GREAT Timnmii t K t The New Act Discussed From Lawyer's Standpoint By W. C, Spraguc, President of the Sprague School of Law. Tim Xutlonal llankiruptey Jaw, Wllloll IMINMttl flic ltwit Congress, wont Into eti'cot t oikv on. I Us pnijje July 1, 181)8; bit. no petition far vol untary iNiukruptvy couM Im flletl un 111 AiiiffUKt. nt following', ami no peti tion for Involuntary 'bankruptcy could le tlll until Noveniibcr Jt; tilmt Is, after Aupu-st. 1st n mam inny voluntarily become n iKtnkrupt, and before November 1st his creditors eunot compel diim to bccome one. The law con'tnine over 10,000 woixls, niul, as Is the en. wltih all laws cov ering so great n .subject, it provis ions nre so many audi so interde pendent thnt 'tlie average eltlzeiv will do wHl 1o let. lawyer real and in terpret it for him; niul even then, tihe chnnces' nre nbout even that lie inny not understand It, for scarcely was the law hrin ted and in the hands of tihe people before lawyers were con tending over it, differing materially regarding it force and effect niul the praotce under it. Indeed, tlhere is every reason to expect that long and bitter controversies in the courts will ensue before tihe practice is MsWled ami the lawyer audi his client) may feel the ground under thcini secure. It is desirable that the classes of persons wiIvcmii the law was intended to benefit should be distinctly pointed out. It has been held 'by some that the law is a creditor's law, intend ed to benefit first, and most of nil, the craUtor class; by others it is assorted to oe a debtors' law and for tlhai great uuiiubor of citizens who, since tihe last bankruptcy act wa annulled, 1S78, have been unfortunate and need the aid of legislation to enable them to shake off tihe load that oppresses them and to start nfrcslh. We" shall, in this article, look upon the law ns intended for 'tihe unfortu nate debtor, and seek to determine whom 'the law looks upon as such ami, therefore, seeks to relieve. The law says (Sec. 5, Chap. Ill): "Any per son, who owes dobts, except a cor poration, may become a voluntary bankrupt." By 'voluntary banlkrupt is mean one who becomes si'ah by virtue of his own conscious act. But, first, what is meant. 'by bankrupt. This term is not synonymous witfh insolvent. An insolvent is one wflio is tumble to pay 'his debts; a bankrupt is one who Qms been declared by a court 'to be unable to pay Ills debts. A iNinkrupt is an insolvent", but an in solvent is not necessarily a bankrupt. Hence, the law means to say that any .person who owes debts (except a corporation.) may apply to a court to have himself adjudged a bankrupt. Corporations are, in tihe eyes of tine law, "persons;" .hence, as Congress wished to take it out of the power of corporations to go into court and ask to be adjudged iNinkrupt and relieved of their dobts, it was necessary to specifically except them. Under some state insolvency laws, which this Na tional Bankruptcy Law has now su perceded', a corporation1 could file a petition in insolvency. Under tihe provisions of the new law certain classes of corporations, as those engaged' principally in manu facturing, tradng, prating-, publish ing, or mercantile pursuits, may, if they owe debts of $1,000 or more, be proceeded1 nganst by creditors in bankruptcy proceedings; but no pri vate corporation of any kind cam go into court and asK to 'be declared1 a 'bankrupt; and this applies to incor porated banks, insurance companies, fraternal societies, etc., as well as limited or other partnership associa tions organized under laws making the capital subscribed alone responsible for the debts of the association. One need not be a citizen of the United States in order to take ad vantage of the law. An' alien wing debts here may file his own1 petition in bankruptcy as soon as he has ac quired the necessary residence in the United States. The better opnion is that ani infant (that is, one under -legal age) cannot be adjudged a 'bankrupt, though a case in the Federal courts under a former law, and reported1 as In re Book, 3 Mcavean, 317, holds to the con trary. A lunatic or insane thjtsoti' cannot be adjudged a bankrupt. As to married women, it may be said that, the court will regaTd the laws of the sttc where the woman has her legal residence. If by the laiw of that state a woman may make va3 id contracts in trade, she ma-" ...e her petition in bankruptcy, otSierwse not- Sec. 5 of Chap. III., provides, "A partnership during the continuation of the partners' business, or nfter its dissohiton and before the final) Bet tlemant 'thereof, may be adjudged1 n bankrupt. ' One or more of the partners may file the petition. After a firm is dissolved, any one of the partner may petition the court to lmvo the firm declared bankrupt so long as nny unfinished business, debts, credits, or assets, remain. If on petition In bankruptcy by one or more partners, one or more of the partners is not adjudged bankrupt, the partnership property will not be administered In bankruptcy, unless by consent of the partner or partners not adjudged bankrupt; in such a case the artner or partners not ad judged iNinkrupt settle the partner ship business as expeditiously as its nature will permit, and account for the interest of the partner or partners adjudged bankrupt. As to the cost of the procedure, I may say that the great expense uu talled by the old laws was what brought about their repeal. Under the new law, fees are moderate. The petitioner must deposit with the clerk the sum of twenty-five, dol lars ($2."), except in the case of n pe tition "of a proposed voluntary bankrupt, which is accompanied' by an affidavit s'tnting- that the petition er is without, and cannot, obtain, the money with which to pay such fees." In such u case no deposit is required. Of the twenty-five dollars ($25.00), ten dollars $(10) is for clerk's fee, ten dollars ($10) for referee's fee, and five dollars ($:) for trustee's fee. The trustee, in addition', receives such commission ns may be allowed by the court, not to exceed three per centum on the first five thousand dollars ($.", 000), to 'be paid as dividends ami com missions, two per centum om the sec ond five thousand dollars ($5,000), and one per centum on the balance. The referee will receive, in addition to the ten dollars ($10) deposited with the clerk, a commission of "one per centum on sums to be paid' as divi dends and commissions, or one-hnlf of one per centum on the amount to be paid to creditors upon1 the confirma tion of a composition." Tims, n a ease where the net assets for distri bution amount to twelve thousand dollars ($12,000), the clerk's fee would be, as in all cases, ten dollars ($10); the referee's, unless an offer of com position was made and) confirmed, one hundred and thirty dollars ($130); the trustee's not to exceed two hundred and' seventy- hvo dollars ($275) a total expense for these, of ficers in such a case of four hundred and fifteen dollars ($415). The petitioner is allowed also one reasonable attorney's fee, to lie paid out of the estate before distribution, to creditors, the amount, to be fixed bv the court. t-S r w -v When You Write To Your Friends who are coming west to visit you, just add a post script like this; "fie sure to take the Burlington Route. It's much the best." You are quite safe in doing this because our ser vice from Chicago, Peoria, St. Louis and Kansas City, in fact all eastern, south eastern and southern cities is just as good as our ser vice to those points. 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