well settled that the pendency of an involuntary petition before adjudication will not prevent an insolvent debtor from making a voluntary petition.21 The debtor has the right to avail himself of the benefits of the bankruptcy law on his own application, and this right cannot be forfeited or rendered ineffectual merely because the creditors' petition is first filed and pending undetermined when the debtor files his petition.22 A voluntary proceeding takes precedence over an involuntary proceeding, unless the latter is first heard or has gone to an adjudication.23 Where both proceedings are instituted in the same court, the duty arises of choosing as to which proceeding is for the best interests of creditors.24 The tendency of the discussions is to adjudicate on the voluntary petition, and, by subsequent steps, protect the rights of the petitioning creditors.25 If voluntary proceedings are entertained subsequent to the filing of an involuntary petition, notice should be given to the petitioning creditors.20 But where a question is raised as to the residence or principal place of business of the bankrupt, it has been held that the court in a district in which such residence or place of business is located may

Davidson, 3 N. B. R. 418, Fed. Cas. 3,599.

21. Matter of Velez (D. C., Porto Rico), 39 Am. B. R. 307, 9 P. R. Fed. 404; In re Waxelbaum (D. C., N. Y.), 3 Am. B. R. 392, 98 Fed. 589; In re Dwyer (D. C., N. Dak.), 7 Am. B. R. R. 532, 112 Fed. 777; In re Stegar (D. C., Ala.), 7 Am. B. R. 665, 113 Fed. 978; Matter of Carpenter (Ref., N. Y.), 25 Am. B. R. 161, citing Collier on Bankruptcy (8th ed.), p. 629; In re New Chattanooga Hardware Co. (D. C., Tenn.), 27 Am. B. R. 77, 190 Fed. 241; Matter of Pennington & Co. (D. C., Ky.), 35 Am. B. R. 832, 228 Fed. 388, citing text. In re Lachenmaier (C. C. A., 7th Cir.), 29 Am. B. R. 325, 203 Fed. 32.

Intent to effect composition.- It is no objection to an adjudication in voluntary bankruptcy proceedings, upon a petition filed by a debtor subsequent to the filing of involuntary petitions, that the debtor intended to take advantage of section 12-d (1) of the Bankruptcy Act and effect a compo

sition with its creditors. In re New Chattanooga Hardware Co. (D. C., Tenn.), 27 Am. B. R. 77, 190 Fed. 241.

22. Matter of Carpenter (Ref., N. Y.), 25 Am. B. R. 161; In re Stegar (D. C., Ala.), 7 Am. B. R. 665, 113 Fed. 978.

23. Matter of Pennington & Co. (D. C., Ky.), 35 Am. B. R. 832, 228 Fed. 388.

24. International Silver Co. v. New York Jewelry Co. (C. C. A., 6th Cir.), 37 Am. B. R. 91, 233 Fed. 945. See also Matter of Bloomberg (D. C., Mass.), 42 Am. B. R. 115, 253 Fed. 94. 25. Matter of Pennington & Co. (D. C., Ky.), 35 Am. B. R. 832, 228 Fed. 388.

26. In re Dwyer (D. C., N. Dak.), 7 Am. B. R. 532, 112 Fed. 777; Matter of Continental Coal Corp. (C. C. A., 6th Cir.), 38 Am. B. R. 168, 238 Fed. 113; International Silver Co. v. New York Jewelry Co. (C. C. A., 6th Cir.), 37 Am. B. R. 91, 233 Fed. 945. Contra, In re Stegar (D. C., Ala.), 7 Am. B. R. 665, 113 Fed. 978.

retain and exercise exclusive jurisdiction notwithstanding the subsequent filing of a voluntary petition in another district."

d. Form of petition and practice.- Section 18 relates to pleadings in voluntary bankruptcies. It has seemed more appropriate to consider under that section the form and sufficiency of a voluntary petition. The petition must be accompanied by a schedule of liabilities and assets. This is considered under § 7, and it is not necessary to discuss it further in this connection. Subsection c of this section (§ 59) requires petitions to be filed in duplicate, and this applies to voluntary, as well as to involuntary petitions.

III. WHO MAY FILE INVOLUNTARY PETITIONS28

a. In general.— Subsection b definitely declares as to what creditors,29 under certain restrictions as to number and amount,— may file a petition against a person alleged to be bankrupt. The words of the subsection state one of the jurisdictional allegations of all involuntary petitions.30 Other essential allegations are referred to elsewhere. This section is confined to creditors and contains the only provision of the act that expressly defines who may file a petition in proceedings to have a debtor adjudged an involuntary bankrupt.32 A bankruptcy petition cannot be filed other than by the debtor, save by (1) a creditor or creditors, (2) having provable claims, 33 (3) aggregating in excess of securities, $500, (4) if but one creditor petitions, he must aver that the alleged bankrupt has less than twelve creditors in all; otherwise, three creditors must join in the petition. If there are a sufficient number of petitioning creditors

27. Roszell Bros. v. Continental Coal Corp. (D. C., Ky.), 38 Am. B. R. 31, 235 Fed. 343; Matter of Continental Coal Corp. (C. C. A., 6th Cir.), 38 Am. B. R. 168, 238 Fed. 113.

28. See also Am. B. R. Dig., §§ 200210.

In England, see Williams on Bankruptcy (12th ed.), p. 40.

29. As to who are creditors, see discussion under section 1, ante.

30. Unless this requirement is observed jurisdiction is not conferred upon the court. In re Gillette (D. C., N. Y.), 5 Am. B. R. 119, 125, 104 Fed. 769; In re Rogers Milling Co. (D. C., Ark.), 4 Am. B. R. 540, 102 Fed. 687. Although it may be that such a defect

is waivable since it pertains merely to want of jurisdiction of the person or thing. In re Mason (D. C., N. Car.), 3 Am. B. R. 599, 99 Fed. 256.

31. See under sections 2, 3, 4, 5 and 18 of this work.

32. In re J. M. Ceballos & Co. (D. C., N. J.), 20 Am. B. R. 459, 161 Fed. 445, 451.

33. See post, this section, subtitle "Creditors who have provable claims. 34. In re Corwin Mfg. Co. (D. C., Mass.), 26 Am. B. R. 269, 185 Fed. 976; In re Brown (D. C., Mo.), 7 Am. B. R. 102, 111 Fed. 979, holding that, where the petition in an involuntary proceeding avers that the creditors of the alleged bankrupt are less than

holding a sufficient amount of provable claims, bankruptcy administration may be had, although a large majority of the creditors are favorable to a general assignment for creditors.35 The holders of composition notes given by a debtor, which were assumed by a corporation organized to take over the debtor's business are creditors entitled to file a petition against the corporation.36 The fact that a creditor has an action pending against the bankrupt is not a bar to filing an involuntary petition.37

38

b. Creditors who were not such at time of commission of act of bankruptcy. There are a number of the earlier cases holding that a creditor who was not such at the time of the commission of an alleged act of bankruptcy cannot petition his debtor into bankruptcy, on the theory that creditors cannot complain of an act of bankruptcy, consising of a transfer or preference by the debtor prior to the time they became creditors, unless, such transfer or preference was made with the direct purpose of defeating their claim.39 This doctrine has been disapproved, on the ground that the statute does not specifically declare that petitioning creditors must have been such at the time of the commission of the act of bankruptcy, and it would appear that the weight of authority now favors the proposition that creditors having provable claims at the time of filing the petition may join therein.40

twelve, and his answer alleges that his creditors are more than twelve, and gives a list of thirteen creditors with their addresses and the amounts owing to them, and the proof shows that one of the creditors has assigned his claim and joined in the petition, and that another alleged creditor claims that he is not a creditor at all, there are still twelve creditors, including the petitioning creditor, and the petition must be dismisssed.

35. In re Perry & Whitney Co. (D. C., Mass.), 22 Am. B. R. 772, 172 Fed. 745.

36. Matter of Fleig Mercantile Co. (C. C. A., 7th Cir.), 38 Am. B. R. 113, 237 Fed. 178.

37. Matter of Automatic Typewriter & Service Co. (C. C. A., 2d Cir.), 46 Am. B. R. 377, 271 Fed. 1.

38. In re Callison (D. C., Fla.), 12 Am. B. R. 344, 130 Fed. 987; affd.

sub nom. Brake v. Callison (C. C. A., 5th Cir.), 11 Am. B. R. 797, 129 Fed. 201; In re Stone (D. C., Pa.), 30 Am. B. R. 392, 206 Fed. 356; In re Brinckmann (D. C., Ind.), 4 Am. B. R. 551, 103 Fed. 65; Beers v. Hanlin (D. C., Or.), 3 Am. B. R. 745, 99 Fed. 695; In re Muller, Fed. Cas. 9,912; In re Burke, Fed. Cas. 2,156. See also Am. B. R. Dig. § 205.

39. Brake v. Callison (C. C. A., 5th Cir.), 11 Am. B. R. 797, 129 Fed. 201. Text quoted in In re Stone (D. C., Pa.), 30 Am. B. R. 392, 206 Fed. 356.

40. Matter of Hanyan (D. C., N. Y.), 24 Am. B. R. 72, 180 Fed. 498; In re Perry & Whitney Co. (D. C., Mass.), 22 Am. B. R. 772, 172 Fed. 745, affd. 23 Am. B. R. 695, 175 Fed. 52; Emerine v. Tarault (C. C. A., 6th Cir.), 34 Am. B. R. 55, 219 Fed. 68; Matter of Kehoe (C. C. A., 2d Cir.), 36 Am. B. R. 891; In re Perry &

c. Creditors who have provable claims.—(1) IN GENERAL.- -It is absolutely necessary that each creditor joining in an involuntary petition should be the owner of a demand or claim provable against the bankrupt within the provisions of the act." The existence of three provable claims held by three petitioners, respectively, of the alleged bankrupt, is necessary to the validity of an involuntary petition in bankruptcy, and where there are twelve or more creditors, if challenged by pleading, plenary proof thereof is jurisdictional and indispensable to the maintenance of the petition.12 Whether the petitioning creditor's debt is provable or not is the important test in determining whether his petition will be entertained. The meaning of "provable debts" 43 is discussed in detail under § 63. There are numerous cases under the present law where a creditor's petition has been attacked on this ground; these will be considered here. The provability of the debt should be established by at least prima facie evidence, although it is not essential that formal proof be presented.** A wife may institute proceedings against her husband where she may become his creditor, and, if also a creditor a partner may petition against his partnership, but not as a mere partner. It is clear too, that the creditors of a partnership may file against an individual partner.18 Depositors in an insolvent bank may join in a petition against a stockholder of the bank, where a State statute. makes the stockholder personally liable for deposits. A tax collector cannot file a petition without alleging that the taxes are a prova

Whitney (C. C. A., 1st Cir.), 23 Am.
B. R. 695, 175 Fed. 52; Matter of Van
Horn (C. C. A., 3d Cir.), 41 Am. B. R.
12; 246 Fed. 822; Matter of Page
Motor Car Co. (D. C., Mass.), 41 Am.
B. R. 546, 251 Fed. 318.

41. Matter of Howell (C. C. A., 2d Cir.), 32 Am. B. R. 572, 215 Fed. 1; Hansen v. Uniform Seamless Wire Co. (C. C. A., 1st Cir.), 39 Am. B. R. 627, 243 Fed. 177.

42. Cutler v. Nu-Gold Ring Co. (C. C. A., 8th Cir.), 45 Am. B. R. 505, 264 Fed. 836.

43. Provable and allowable claims distinguished. The distinction between "proved" and "allowed" is always made apparent throughout the bankruptcy act, and the term "provable claims in section 59-d, is not to be given the same meaning as allow

49

47

able claims. Matter of Hornstein (D. C., N. Y.), 10 Am. B. R. 308, 122 Fed. 266.

44. In re McNally Co. (Ref., N. Y.), 29 Am. B. R. 772.

45. In re Novak (D. C., Iowa), 4 Am. B. R. 311, 101 Fed. 800.

47. See In re Schenkin & Coney (Ref., N. Y.), 7 Am. B. R. 162, affd. on this point, 113 Fed. 421.

48. In re Mercur (D. C., Pa.), 2 Am. B. R. 626, 95 Fed. 634. See also Matter of Eclipse Poultry Co. (C. C. A., 3d Cir.), 42 Am. B. R. 49, 250 Fed. 96.

49. In re Walker (C. C. A., 9th Cir.), 21 Am. B. R. 132, 164 Fed. 680. Such a liability is contractual. In re Brown (C. C. A., 9th Cir.), 21 Am. B. R. 123, 164 Fed. 673.

ble claim under the State law.50 It has been held that a creditor, having an unliquidated debt, may file a petition, provided the debt is provable,51 but that an unliquidated claim based upon a tort not connected with a contract is not provable and therefore will not sustain a petition.52 Whether a surety on a debt not due may file a petition is a question.53 That an indorser can is not doubted, hist claim being provable, so also, if the surety has, on default of his principal, assumed the latter's obligation;55 and so can the holder