the District Court for the Southern District of New York held that, under the act of 1867, infants were not the subjects of either involuntary or voluntary bankruptcy in respect to their general contracts, because the terms of the act did not embrace them. (In re Derby, Fed. Cas. 3,815; 8 N. B. R. 106; 6 Ben. 232.)

So under the act of 1898. (In re Duguid, 3 Am. B. R. 794; 100 Fed. 274.)

With reference to contracts for necessities the court in these cases expressly declined to give any opinion. But general contracts of an infant, having no force or validity if disaffirmed by the infant on coming of age, it would be a frivolous act for courts to permit the institution and prosecution of proceedings which might afterwards be practically annulled by such disaffirmance. As to bankruptcy of an infant liable upon contracts for necessities, there is no known adjudication expressly passing upon that particular question. In re Derby and in re Cotton and in Farris v. Richardson (6 Allen, 118), the question was referred to, but not decided. But where the infant is forbidden by statute to disaffirm a contract which has been made by him in a business in which he engages as an adult and the other contracting party had good reason to believe him adult, he may become an involuntary bankrupt for goods sold him on credit under such circumstances. (In re Brice, D. C. Iowa, 2 Am. B. R. 197; 93 Fed. 942, in which cases are cited.) But except under such circumstances it is doubtful if an infant can commit any act of bankruptcy which involves a transfer of property, his transfers being voidable; also doubtful if a general contract creditor of his can prove a debt in bankruptcy. If a transfer is made by an infant which would be an act of bankruptcy if committed by an adult, and the transfer is affirmed upon his attaining his majority, then a liability exists and proceedings in bankruptcy voluntary or involuntary may be instituted. But if the transfer is not affirmed, then it seems that it is no act of bankruptcy and no proceedings can be instituted by or against the person who did it, even after he becomes of age. If proceedings are instituted upon it during the infancy of the alleged bankrupt, no affirmance of the act after coming of age

Insane Persons - Married Women.

Ch. III.

will give the court jurisdiction of the proceeding; but the proceeding must be instituted de novo. (In re Derby, supra; Belton v. Hodges, 2 M. & Scott, 496; Ex p. Watson, 16 Ves. 265; Ex p. Moule, 14 Ves. 603; Ex þ. Barwise, 6 Ves. 601; Rex v. Cole, I Ld. Raymond, 443; Ex p. Barrow, 34 Ves. 554; Ex p. Henderson, 34 Ves. 163; Ex p. Adam, 1 Ves. & B. 494.)

Insane Persons.-A person incapable of managing his own affairs or judicially declared insane cannot commit an act of bankruptcy. (In re Funk, 4 Am. B. R. 96; 101 Fed. 244.) But section 8 provides that the death or insanity of a bankrupt shall not abate the proceedings, and provides for their continuance. And under the law of 1867 it was held that if an act of bankruptcy has been committed by a person while sane, who afterwards becomes insane, he may be adjudged a bankrupt in involuntary proceedings. (In re Pratt, Fed. Cas. 11,371; 6 N. B. R. 276, citing Robson on Bankruptcy, 84; Anon. 13 Ves. 590; Sumner's note to in re Stamp, DeGex, 345; in re Marvin, 1 Dillon, 178; Ex p. Layton, 6 Ves. 440.) In the matter of Pratt, a guardian had been appointed for the insane person. (Compare in re Murphy,

Fed. Cas. 9,946; 10 N. B. R. 48.)

Married Women.-May become bankrupts either in voluntary or involuntary proceedings where the laws of the states of their residence have so far changed the common-law rule as to make them liable upon their contracts or where they trade as femes sole. (Ex p. Mear, 2 Bro. 266; in re Kinkeade, 3 Biss. 405; Fed. Cas. 7,824; 7 N. B. R. 439.) But wherever her coverture would be a good defense to an action upon a debt, such debt cannot be made the basis of a proceeding in bankruptcy (in re Schlichter, 2 N. B. R. 336); and where she is liable only when she expressly charges her own separate estate, or where the indebtedness is incurred in relation to her own separate estate, then it must clearly appear in the petition that such debts were so charged or were for such estate, else the petition will be dismissed. (In re Howland, Fed. Cas. 6,791 ; 2 N. B. R. 357; in re Goodman, 8 N. B. R. 380; Fed. Cas. 5.540; 5 Biss. 401.)

841

Aliens-"Wage Earners "- -"Farmers" - Executors.

Aliens.—Aliens may be adjudged bankrupts, either voluntary or involuntary, whether resident or not in the United States, if they have property therein, and otherwise come within the terms of section 2 (1). In this respect the present act differs from the act of 1867. See section 65d of this act. If the court cannot get jurisdiction of the person of a non-resident alien, it can at least get jurisdiction of the property within its district.

66

"Wage Earners "-" Farmers," etc.-The term wage earner is defined in section I (27) as meaning "an individual who works for wages, salary or hire at a rate of compensation not exceeding one thousand five hundred dollars per year" who with "farmers" and "tillers of the soil" may not be forced into bankruptcy. But the fact that one changes his occupation to one of the exempted class within four months after an act of bankruptcy will not save him. (In re Luckhardt, 4 Am. B. R. 307; 101 Fed. 807.) In the phrase used in section 4b, providing that persons engaged "chiefly in farming or the tillage of the soil" may not be adjudicated involuntary bankrupts, the words "tillage of the soil" do not limit the remainder of the phrase nor prevent the person who is engaged in raising live stock from coming within the exemption. (In re Thomson, 4 Am. B. R. 340; 102 Fed. 287.)

The defense to proceedings to involuntary bankruptcy that the person sought to be declared a bankrupt is within these exceptions is not simply personal to the bankrupt-it goes to the jurisdiction of the court, and may be raised by any creditor. The fact that the bankrupt does not appear does not change the proceedings from an involuntary to a voluntary proceeding so as to affect interests in property attached before proceedings in bankruptcy are commenced. (In re Taylor, 4 Am. B. R. 515; 102 Fed. 728; C. C. A. 7th Circ.)

Executors.-An executor who as such has carried on business and incurred debts pursuant to the will of his testator may in England be adjudged a bankrupt, or may voluntarily petition. (Ex p. Garland, 10 Ves. 110; Ex p. Richardson, Madd. 138.)

Corporations.

[Ch. III. But in America the bankruptcy law does not extend to executors and trustees, and persons acting in a fiduciary capacity, and although such persons are authorized by a will or otherwise to carry on a business as a part of the administration of an estate, they are not liable to be adjudged bankrupt as such. (Graves v. Winter, 7 Pac. L. R. 165; s. c. 9 N. B. R. 357.)

Corporations. Under the bankruptcy law of 1867, any business, moneyed, or commercial corporation might become bankrupt voluntarily as well as involuntarily. Under the present act it cannot become a voluntary bankrupt, and in order that a corporation may be involuntarily adjudged bankrupt it is necessary that it be actually and principally engaged in one of the lines of business mentioned in the section. The fact that by its charter it may engage in that business, is not sufficient. (In re N. Y. & Westchester Water Co. 3 Am. B. R. 509; 98 Fed. 711.)

The corporation itself may be adjudged bankrupt, but not its directors and stockholders, even though by statute they are jointly and severally liable for its debts. (James v. Atlantic Delaine Co. Fed. Cas. 7,179; 11 N. B. R. 390.) Notwithstanding its dissolution in an action in a state court, if there are undistributed assets or unpaid debts, a corporation may be put into bankruptcy. Like a partnership, a corporation, even after dissolution, exists for the purpose of paying debts and distributing the surplus among the persons entitled thereto. (In re Merchants' Ins. Co. 3 Biss. 162; Fed. Cas. 9,441; 6 N. B. R. 43; in re Independent Ins. Co. 6 N. B. R. 169; Fed. Cas. 7,018; s. c. 6 N. B. R. 260; Fed. Cas. 7,017; in re Washington Ins. Co. 2 Ben. 292; s. c. 2 N. B. R. 648.)

In a recent case in the Circuit Court of Appeals for the 1st Circuit (In re Marshall Paper Co. also reported as Marshall Paper Co. v. Train, 4 Am. B. R. 468; 102 Fed. 872), it is held that the discharge of a corporation does not prevent creditors from taking judgment in a State court against the corporation in such limited form as may enable them to reap the benefit of the stockholders' or directors' liability. The rendering of such judg

ment depends upon the authority of the State court under the local law and there is nothing in the Bankruptcy Act to prevent it. The judgment will not be against the person or property of the bankrupt and has no other effect than to enable the plaintiff to charge the directors in accordance with the State statute. See for further discussion, subject of "Discharge," post.

Manufacturing Corporations.—The meaning of the word “manufacturing" has been considerably discussed, particularly in connection with the internal revenue laws that formerly existed and also in connection with the corporation tax laws of the various States. Presumably the use of the word in this statute is the popular use, that is to say, manufacturing is to make by hand or machinery. (Carlan v. Western Assur. Co. of Toronto, 57 Md. 526; Lawrence v. Allen, 7 How. U. S. 794.)

The Century Dictionary, page 3,620, is authority for saying that "manufacture" means "The operation of making goods or wares of any kind; the production of articles for use from raw or prepared materials, by giving to these materials new forms, qualities, properties or combinations, whether by hand labor or by machinery used more especially of production in a large way by machinery or by many hands working co-operatively."

The N. Y. Court of Appeals, quoting Webster, defines manufacture to be " anything made from raw materials by hand, by machinery or by art, as cloths, iron utensils, shoes, machinery, saddlery, etc. The process of manufacture is supposed to produce some new article by the application of skill and labor to the raw materials." (People ex rel. U. P. P. Co. v. Roberts, 145 N. Y. 377.)

As a general rule a natural product, substance or element rendered more suitable for use by an artificial process or mere manipulation is not a manufactured article. Thus hay pressed in bales ready for market is not a manufactured article. (Frazee v. Moffit, 22 Blatch. 267.) The mining of coal is not a manufacture although it is a preparation of a natural substance for use. (Byers v. Franklin Coal Co. 106 Mass. 131.) It has been held