INSOLVENCY ACT
                  Act of Jun. 4, 1901, P.L. 404, No. 231              Cl. 39
                                  AN ACT

     Relating to insolvency; embracing, among other matters,
        voluntary assignments for the benefit of creditors, and
        adverse proceedings in insolvency by creditors; forbidding,
        also, certain preferences; providing for the distribution of
        the insolvent's estate, and in certain contingencies
        relieving him, and others liable with him, from further
        liability for his or their debts.

        Section 1.  Be it enacted, &c., That if any person, persons,
     firm, limited partnership, joint-stock company or corporation,
     being insolvent or in contemplation of insolvency, with a view
     to give a preference to any creditor or person having a claim
     against, or who is under any liability for, such insolvent,
     shall procure, suffer or permit any judgment to be entered, by
     confession or otherwise, or any execution to be levied, or any
     attachment or sequestration to be made of any part of his, their
     or its real or personal property, or shall make any payment,
     pledge, assignment, transfer, conveyance or encumbrance thereof,
     either absolutely or as collateral security for a debt then
     existing, whether due or not, such judgment, execution,
     attachment, sequestration, payment, pledge, assignment,
     transfer, conveyance, or encumbrance shall inure to the benefit
     of all the creditors of such insolvent, if an assignment for the
     benefit of creditors be made or proceedings in insolvency be
     commenced within four months after such judgment, execution,
     attachment, sequestration, payment, pledge, assignment,
     transfer, conveyance, or encumbrance shall have been entered,
     issued, commenced, made or recorded, and in the case of personal
     property exclusive possession given.
        Section 2.  If any person, persons, firm, limited
     partnership, joint-stock company or corporations, being
     insolvent or in contemplation of insolvency, with a view to give
     a preference to any creditor or person having a claim against,
     or who is under any liability for, such insolvent, shall
     procure, suffer or permit any judgment to be entered, by
     confession or otherwise, or any execution to be levied, or any
     attachment or sequestration to be made of any part of his, their
     or its real or personal property, or shall make any payment,
     pledge, assignment, transfer, conveyance, or encumbrance
     thereof, either absolutely or as collateral security for a debt
     then existing or about to be created, and if the aforesaid be
     known to such creditor, who thereby collusively attempts to
     obtain for himself or others a preference over other creditors,
     such judgment, execution, attachment, sequestration, payment,
     pledge, assignment, transfer, conveyance, or encumbrance shall
     inure to the benefit of all the creditors of such insolvent, if
     an assignment for the benefit of creditors be made or
     proceedings in insolvency be commenced within four months after
     such judgment, execution, attachment, sequestration, payment,
     pledge, assignment, transfer, conveyance, or encumbrance shall
     have been entered, issued, commenced, made or recorded, and in
     the case of personal property exclusive possession given. A
     presumption of such knowledge and intention shall arise, by
     reason of the fact of such insolvency, if the consideration be
     grossly inadequate, or if such judgment, execution, attachment,
     sequestration, payment, pledge, assignment, transfer,
     conveyance, or encumbrance shall not have been entered, issued,
     commenced, made or recorded, and, in the case of personal
     property, exclusive possession be not given at or about the time
     of the creation of the debt, or if the transaction shall have
     not have been made in the usual and ordinary course of the
     business of such insolvent. But nothing herein contained shall
     in any manner affect any judgment, payment, pledge, assignment,
     transfer, conveyance, or encumbrance taken in good faith,
     without such knowledge or intention, when a debt is created or
     about to be created, if entered, made or recorded, and in the
     case of personal property exclusive possession be given at or
     about that time.
        Section 3.  Any person, persons, firm, limited partnership,
     joint-stock company or corporation may make an assignment of
     his, their or its property to one or more disinterested persons,
     as assignees, not exceeding three, for the benefit of his, their
     or its creditors; but, except as herein otherwise provided, all
     preferences or conditions therein contained shall be wholly
     void, and such assignment shall unconditionally inure to the
     benefit of all the creditors accepting a dividend, as in this
     act provided. An assignment of a portion of such property in
     trust, for the benefit of the creditors, or any of them, however
     expressed, shall be deemed an assignment of the whole estate,
     and shall be recorded in the same counties, with the same
     effect, as a general assignment; but a debtor may assign any
     part of his estate to certain creditors, or in trust for them,
     if at the time of so doing he be solvent, or the same be not in
     contravention of the other provisions of this act.
        Section 4.  Any member or members of a partnership, limited
     or otherwise, except the associations created under the act of
     second June, one thousand eight hundred and seventy-four, and
     its supplements, or any one or more joint, or joint and several
     debtors, may make an assignment of the assets in which he or
     they are interested with others, for the benefit of their
     creditors, in the manner and with the effect herein provided;
     but any other person or persons jointly, or jointly and
     severally, interested in such assets, may, within fifteen days
     after notice thereof, upon petition to the court and with notice
     to the assignors, give security to indemnify and save harmless
     the assignors, and to pay all debts, or to obtain the release of
     the assignors therefrom, within such time as the court shall
     designate, not exceeding six months; whereupon the assignees
     shall forthwith transfer to those entering such security all the
     assets passing by the assignment, freed and clear of all claims
     upon the part of the assignors and assignee, but the rights of
     the creditors shall remain as if no assignment had been made.
     In case of such an assignment, the assignee shall forthwith give
     written notice to the other person or persons jointly, or
     jointly and severally, interested in such assets, and shall file
     of record an affidavit thereof, and the fifteen days shall be
     computed from the time of such filing. If the assignment be set
     aside, the costs incurred, including the reasonable expenses and
     the fees of the assignees, shall be paid as the court shall
     direct.
        Section 5.  Any person arrested on civil process may make an
     assignment for the benefit of his creditors in the manner herein
     set forth and may thereupon present his petition to the court
     issuing the same, accompanied by the assignment, inventory,
     schedules, and oath required, or copies thereof, if the process
     was issued by a different court from that which has jurisdiction
     of such assignment, and praying a rule to show cause why he
     should not be discharged from arrest. The court to which the
     petition is presented shall grant the rule, returnable at some
     convenient time, unless the case is one requiring the
     petitioner's imprisonment, shall discharge the petitioner
     pending the hearing of said rule, upon his paying the fees due
     the jailer, if any, and upon his entering such security for his
     appearance, surrender, and compliance with the decrees of the
     court, and his requirement of this act, as the court shall deem
     requisite. Actual notice of the rule shall be given to the
     plaintiff in the process, or his counsel of record, and to all
     creditors whose addresses are known to the petitioner; and
     publication thereof shall be made twice in a weekly newspaper
     published in the county, and twice in a daily newspaper
     published in the county, if there be any, and once in the legal
     periodical, if any, designated by the court, and an affidavit of
     such service and publication shall be filed in the cause at
     least three days before the day fixed for the hearing. Notice to
     creditors non-resident in the county may be made by registered
     letter. Upon the hearing of the rule, which shall be at the bar
     of the court, and at which the petitioner shall answer all
     questions put to him, and shall produce all papers and books
     required of him, if it shall appear to the court that the
     petitioner has duly assigned all his property for the benefit of
     his creditors, that he has not violated any of the provisions of
     this act, and that all the claims against him would be
     discharged by the creditors accepting a dividend, as by this act
     provided, the court shall forthwith discharge him from arrest;
     and he shall not thereafter be liable to arrest in said
     proceedings, or upon any claim existing at that time, unless
     upon petition to said court, and with notice to the insolvent,
     it shall afterwards be made to appear that, under this act, he
     should have been or should be imprisoned. If, however, he shall
     refuse to answer relevant questions, or to produce his books and
     papers, or it shall appear that he has violated any of the
     provisions of this act, or that any of the claims against him
     would not be discharged by the creditors accepting a dividend,
     as by this act provided, he shall be discharged from arrest only
     upon undergoing such imprisonment not exceeding ninety days, as
     the court shall require. If the petitioner fails to give notice
     as required, or to appear, or to surrender himself within forty-
     eight hours, or to comply with the decrees of the court or the
     provisions of this act, his bond shall thereby be forfeited; and
     recovery may be had thereon by the assignee, for the use of all
     the creditors of the insolvent, and he may be rearrested by an
     alias or pluries writ. A surrender, to be valid, must be
     accompanied by a certified copy of the order of the court, or of
     the writ under which the arrest was originally made. The
     assignment, once made, shall proceed in the usual course. The
     benefits of this section shall not extend to any person who has
     been attached for failure to comply with an order or decree
     requiring him to make an assignment, execute a conveyance, or to
     do any other specific act, until he shall, in fact, have done
     so, nor shall it in any manner affect the liability of the
     petitioner to imprisonment for crime.
        (5 amended Jun. 9, 1911, P.L.728, No.301)
        Section 6.  The court of common pleas of any county, in which
     any person may be confined by sentence or order of any court of
     this Commonwealth until he restore any stolen goods or chattels,
     or pay the value thereof; or in which any person may be confined
     for the non-payment of any fine or of the costs of prosecution,
     or upon conviction of fornication and bastardy, and for no other
     cause, shall discharge such person from confinement on his
     making application and conforming to the provisions herein
     directed in the case of insolvents, who have been arrested on
     civil process: Provided, That where such person shall have been
     sentenced to the payment of a fine, or after a conviction of
     fornication and bastardy, he shall not be entitled to make such
     application until after he shall have been in actual confinement
     for a period of not less than three months, except in case of a
     fine not exceeding fifteen dollars, exclusive of costs, in which
     event the actual confinement need not exceed thirty days.
        Section 7.  Any creditor of an alleged insolvent may, in the
     court of common pleas of the county where the alleged insolvent
     resides or his principal place of business is situate, by
     petition, under oath, aver that such person, persons, firm,
     limited partnership, joint-stock company or corporation is
     insolvent, has not made an assignment for the benefit of his,
     their or its creditors, is resident or is carrying on business
     in said county, and:--
        (1).  Has called a meeting of his creditors for the purpose
     of compounding with them, or has exhibited a statement showing
     his inability to meet his liabilities, or has otherwise
     acknowledged his insolvency; or,
        (2).  Has absconded or is about to abscond with intent to
     defraud any creditor, or to defeat or delay the remedy of any
     creditor, or to avoid being arrested or served with legal
     process, or conceals himself within or remains out of the
     Commonwealth, with like intent; or,
        (3).  Secretes or is about to secrete any part of his estate
     or effects, with intent to defraud his creditors, or to defeat
     or delay their demands, or any of them; or,
        (4).  Has assigned, removed or disposed of, or is about to
     assign, remove or dispose of, any part of his property, with
     intent to defraud, defeat or delay his creditors, or any of
     them; or,
        (5).  Has been actually imprisoned for more than thirty days,
     in a civil action, or, being arrested therefor, has escaped from
     custody; or,
        (6).  Has refused or neglected to comply with any order,
     judgment or decree for the payment of money, and an execution
     therefor has been returned unsatisfied; or,
        (7).  Has suffered or permitted any attachment or
     sequestration to remain against any of his property, without
     attempting to dissolve, by rule taken for that purpose, or upon
     entering security for a period of thirty days, or having taken a
     rule to dissolve which has been discharged by the court, has not
     entered security within twenty days thereafter; or,
        (8).  Has made any pledge, assignment, transfer, conveyance
     or incumbrance of the whole or a large part of his stock in
     trade or property, without being able to meet his liabilities
     and without the consent of his creditors, either in payment of
     or as security for a debt then existing, or with the intent to
     prefer one creditor to another, or out of his usual course of
     business, or for the benefit of himself or family.
        Whereupon, the court shall grant a rule to show cause why a
     receiver should not be appointed for the estate of such alleged
     insolvent, and all legal proceedings there against, if any,
     vacated and set aside. Notice of said rule shall be given to the
     alleged insolvent and all other persons interested. If the facts
     averred are not denied, under oath, the court shall make such
     order as the facts averred or shown may require. If they are
     denied, testimony shall be taken at the bar of the court or by a
     law judge thereof, and the court shall make such order or decree
     as the facts found will justify, and may enforce the same by
     attachment of the person or sequestration of the property of the
     party in default. Any person, without foundation, maliciously
     invoking the action of the court under this section, shall be
     liable for a sum equal to double the injury actually sustained
     by the alleged insolvent.
        Section 8.  In such proceedings, as soon as the fact of
     insolvency be made to appear, the court shall forthwith appoint
     a disinterested person as receiver, unless the insolvent has
     made an assignment for the benefit of his creditors or has given
     security to pay petitioner's debt. Property of a perishable
     nature or likely to deteriorate in value may be sold by leave of
     the court, the proceeds thereof to be substituted in lieu
     thereof.
        Section 9.  All such assignments shall be acknowledged before
     some person authorized to take the acknowledgment of deeds, and
     shall be forthwith recorded in the office of the recorder of
     deeds, where the debtor shall reside or his principal place of
     business is situate. Within five days thereafter a copy of said
     deed shall be filed by the assignor in the court of common pleas
     of the said county together with: (one), A schedule of all the
     assets of said debtor, whether real or personal, and wheresoever
     situate, whether in possession, reversion, remainder or in
     trust, and whether presently valuable or otherwise, and stating
     what evidences there are or should be thereof, the present value
     as near as may be, and the liens or claims if any there against;
     (two), a list of the creditors, with the amounts of their
     claims, the exact addresses of the creditors, how and where the
     debts arose, what evidences thereof there may be, and what
     security or claims against other persons the creditors may have
     for the payment of the same or any part thereof; (three), a full
     statement of the cause of his insolvency; (four), a list of all
     the judgments confessed, or payments, pledges, assignments,
     transfers, conveyances or encumbrances made by him in payment
     of, or as security for, a pre-existing debt, or for the benefit
     of himself or family, or with intent to prefer one creditor to
     another, or out of the usual and ordinary course of his
     business, within three months prior to his assignment, and the
     consideration therefor. And attached thereto shall be an oath by
     the insolvent in the following form:
        I do swear (or affirm) that all the schedules above set forth
     are in all respects just and true; that I have not at any time,
     or in any manner whatsoever, since my insolvency, disposed of or
     made over any part of my estate for the future benefit of myself
     or my family, or in order to defraud any of my creditors; that I
     have, in no instance, credited or acknowledged a debt for a
     greater sum that I honestly and truly owed; that I have not
     preferred or attempted to prefer one creditor over another since
     my insolvency, except as in said schedule set forth; that I have
     not withheld, concealed, entrusted, or in any way disposed of or
     encumbered, any of my property which should justly be delivered
     over for the benefit of my creditors; that I have not changed,
     altered or falsified any of my books or papers, but have
     delivered the same to my assignees for the purposes of my
     estate; and that if any further assets of my estate come to my
     knowledge I will forthwith disclose or deliver the same to my
     assignee. So help me God (or, and so I do affirm).
        Section 10.  The assignment or a certified copy of the decree
     of the court appointing a receiver shall be recorded in the
     county where the insolvent resides, or his principal place of
     business is situate, and in every county where he owns real
     estate. A failure to record shall not in any manner affect the
     assignment; but if the assignee fails to record it within
     fifteen days after its delivery, his compensation as assignee
     shall shall be reduced by a sum sufficient to pay the costs,
     expenses and counsel fees of any creditor, or creditors, who in
     ignorance thereof bring suit or proceed with one already
     brought, and such sums shall be paid to such creditors. Any
     creditor may compel the production and recording of an
     assignment, by petition to the proper court of common pleas, at
     the expense and cost of the defaulting assignee, including a
     reasonable counsel fee to such creditor's attorney.
        Section 11.  The assignee or receiver shall, immediately
     after his appointment, take, subscribe to, and file in the
     proper court, an oath or affirmation in the following form:
        I, A. B., do solemnly swear (or affirm) that I am legally
     qualified to act as assignee (or receiver) of the estate of C.
     D., an insolvent; that I am not interested therein or adversely
     thereto; that I will faithfully manage said estate for the
     benefit of the creditors thereof, in the manner provided by law,
     and will fully and accurately account for all the assets. So
     help me God (or, and so I do affirm).
        Section 12.  The assignee or receiver shall, before entering
     on the performance of his duties, give bond, with sufficient
     sureties, to the Commonwealth, for the use and benefit of all
     parties in interest, in at least double the value of the
     insolvent's estate, as known to him, conditioned as follows:
        The condition of this obligation is such that if the above
     bounden A. B., assignee (or receiver) of the estate of C. D., an
     insolvent, has discharged and shall faithfully discharge his
     duty as assignee, shall faithfully account for all moneys or
     assets received or to be received by him, or in which the estate
     of said insolvent is in any manner interested, and has
     faithfully executed and shall faithfully execute the trust
     confided to him, in the manner provided by law, then this
     obligation to be void; otherwise, to be and remain in full force
     and effect.
        If additional assets are discovered after the giving of said
     bond, or the assets realize much more than their estimated
     value, or the court shall be of opinion that any of the bonds
     theretofore given is, for any cause, insufficient, the assignee
     or receiver shall give a new bond or bonds and with like
     conditions. Suits may be brought thereupon, as in the case of
     other official bonds, until the amounts thereof are exhausted;
     but neither said suits, nor the exhaustion of said bonds, shall
     in any way limit the liability of such assignee or receiver.
        Section 13.  The insolvent shall forthwith deliver to the
     assignee or receiver all his assets; including all vouchers,
     notes, bonds, bills, securities or other evidences of debt,
     documents, muniments of title, and writings in any way relating
     to, or having any bearing upon, or connection with, his estate;
     all books of account, patents, copyrights, assignments, leases,
     agreements, and generally, everything which relates to the
     assets, or will assist the assignee or receiver in collecting
     the same, or in ascertaining the true amount due to the
     creditors of the estate. The said insolvent shall, from time to
     time, at the expense of the estate, make and execute such deeds
     and writings, endorse such bills and other negotiable papers,
     draw such checks and orders for money deposited in banks and
     elsewhere, and do all such other lawful acts and things as the
     assignee or receiver may reasonably require, and which may be
     deemed useful for confirming the assignment, or to enable the
     assignee to demand, recover and receive all the estate and
     effects of the insolvent, especially any part thereof which is
     without this Commonwealth. The court may, by rule to show cause,
     followed by attachments for contempt, compel the insolvent to
     comply with its orders in this regard; but his failure or
     refusal so to do, either before or after such order, shall in no
     wise affect or impair the right of the assignee or receiver to
     recover any of the assets by suit, in his own name.
        Section 14.  Immediately after his appointment, the assignee
     shall give written or printed notice to all the creditors known
     to him of the fact of his appointment; notifying them that on a
     given day and hour, not more than twenty days distant, and at a
     given place, particularly designated, a meeting of all the
     creditors will be held, for the purpose of selecting an
     additional assignee or assignees, if they deem the same to be
     necessary. At such meeting a majority in amount of the creditors
     present, in person or by proxy,--partnerships or joint creditors
     however having but one vote each,--may select as many more
     assignees as there were assignees named in the original deed or
     assignment. The assignees originally named shall, by deed duly
     executed, acknowledged and recorded, transfer to those thus
     selected an equal and undivided interest in said estate, and all
     the assignees thus named and selected shall thereafter act as
     joint assignees, with the same effect as if all were originally
     named in the original deed of assignment.
        Section 15.  The receiver within twenty days after his
     appointment, and the assignees within twenty days after the
     meeting of the creditors, shall file a sworn inventory of the
     estate, with its then present value. For the purpose of enabling
     them to do so, or to file any supplementary inventory, they are
     hereby empowered to examine the insolvent, under oath, as to any
     matter appertaining to such assets, and by leave of the court to
     call before them, by subpoena, with or without his books and
     papers, or the books and papers of any firm, limited
     partnership, joint-stock company, or corporation with which he
     is connected; and examine also, under oath, on the same subject,
     any person who they have reason to believe has knowledge of
     other or further assets of the insolvent's estate, or can give
     them information touching the same. No objection to such
     examination shall be made on the ground that a disclosure would
     tend to bring the witness into contempt, or disgrace or convict
     him of crime; but the information thus obtained shall not be
     used against him in any other proceeding. Any witness may
     decline to answer any question, or produce any books and papers,
     which, aside from the foregoing, he would not be required to
     answer or to produce in court upon a trial involving the same
     questions. Every witness, including the insolvent, shall be
     entitled to receive, out of the insolvent's estate, the usual
     witness fee and mileage for his attendance for this purpose.
        Section 16.  Upon application of the assignee or receiver,
     the court shall vacate and set aside all attachments,
     executions, sequestrations or other legal proceedings not wholly
     completed, and all money in court or in the hands of the
     sheriff, by virtue thereof, shall be paid to such assignee or
     receiver. The assignee or receiver shall pay, out of so much of
     the insolvent's estate as was attached, sequestered or levied
     upon, or was received from the court or sheriff, the legal cost
     of such vacated proceedings, as a preferred claim if the
     creditor's claim is afterwards allowed in the distribution of
     the insolvent's estate; and the creditor's claim shall also be
     paid thereout, if it shall be decided that, notwithstanding the
     provisions of this act, he was entitled to a preference.
        Section 17.  An assignee or receiver for the benefit of
     creditors shall be under the control of the proper court of
     common pleas; shall be the representative of the creditors of
     the insolvent, and entitled by proper legal steps, in his own
     name as assignee or receiver, to have vacated and set aside for
     the benefit of all the creditors any judgment, execution,
     attachment, sequestration, payment, pledge, assignment,
     transfer, conveyance or encumbrance which heretofore could have
     been avoided by the creditors, or any of them, or by which it is
     attempted to give one creditor preference over another, or
     which, by this act, inures to the benefit of all the creditors
     of such insolvent. He shall be vested with all the property of
     the insolvent, real or personal, which the insolvent could have
     sold, assigned or conveyed, or which might have been taken in
     execution, or otherwise made liable for his debts or
     engagements, or any of them, at law or in equity, including
     patents and copyrights, royalties, debts due to or for the
     insolvent, liens or securities therefor, and rights of action or
     redemption; and, by leave of and subject to the control of the
     court, may carry on any business in which the insolvent may have
     been engaged. Every beneficial power and the interest of any
     person entitled to compel the execution of a trust power, shall
     pass to the assignee or receiver of the person in whom such
     power or interest is vested. He may, by bill of discovery or
     other legal or equitable proceeding, obtain information of, and
     sue for and recover, in his own name as such assignee or
     receiver, any assets which the insolvent might sue for and
     recover, or which any of his creditors might make available in
     payment of their claims; and any recovery had shall inure to the
     benefit of all, in proportion to their respective demands. And
     he shall be liable to suit, in his representative capacity, by
     any person seeking to recover specific property, if such
     property could have been recovered as against the creditors of
     the insolvent levying an execution thereon: Provided,
        I.  That no purchase or assignment of the real or personal
     property of such insolvent, made bona fide and for a valuable
     consideration, before the recording of the assignment or of the
     appointment of a receiver in the county where such purchase or
     assignment is made, by or to any person not having actual notice
     or knowledge of such insolvency, or of the assignment or
     petition, shall be invalidated or impeached thereby, unless
     voidable under the other provisions of this act:
        II.  That if any person indebted to such insolvent, or having
     possession of any of his property, shall bona fide pay the said
     debt or deliver the said property to the said insolvent, without
     having had actual notice or knowledge of such petition or
     assignment, he shall not be liable to pay or deliver the same to
     such assignee or receiver.
        Section 18.  The assignee or receiver within one year after
     his appointment, unless the court upon cause shown shall extend
     the time, shall collect all the moneys due to the insolvent;
     shall sell at public or private sale all the stocks, bonds,
     mortgages, evidences of debt and other like property of the
     insolvent, and shall sell at public sale the real and other
     personal property of the insolvent, unless upon cause shown the
     court shall authorize a private sale. After the expiration of
     that time the court may, upon cause shown, authorize a public or
     private sale of all the assets, of whatever kind or character
     the same may be and wherever situate. All sales shall be for
     cash unless the court shall otherwise authorize. The purchaser
     from the assignee or receiver may maintain any action, regarding
     the property purchased, in his own name, or continue any action
     already brought to his use, with the same rights and to the same
     effect as the assignee or receiver might or could do, but shall
     be liable for all costs accrued and to accrue in case of an
     unsuccessful issue.
        Section 19.  An assignee or receiver may compound or
     compromise any debt or claim due to the insolvent, if done in
     good faith and after proper inquiry; and, upon payment of the
     amount due, may require all mortgages, conditional contracts,
     pledges and liens, of or upon any real or personal property of
     the insolvent, to be satisfied, cancelled or assigned to him, as
     he may deem best, or he may sell the property subject thereto.
     Where any realty is subject to liens or claims which, under
     existing laws would be discharged by a judicial sale, such liens
     and claims shall be unaffected by a private sale of such realty;
     but a public sale may be made thereof, freed and clear of such
     liens or claims, by leave of court, after notice to the
     claimants; and the fund realized shall take the place of the
     liens or claims, and be distributed on the settlement of the
     account of the assignee or receiver, to the parties found
     entitled thereto. Executions issued on such liens or claims may
     be stayed by the court, to enable the property to be sold by the
     assignee or receiver. If a creditor purchases property upon
     which he has a lien or claim, he shall, after payment to the
     assignee or receiver of all the costs and expenses of the sale,
     and the amount of all prior liens or claims discharged by the
     sale, if any, be entitled to receipt to the assignee or receiver
     to the extent of his lien or claim, upon giving security, to be
     approved by the court, conditioned to make good the amount
     receipted for if it shall afterwards be made to appear that, for
     any cause, he should not be allowed such preference.
        Section 20.  No assignee or receiver shall purchase, directly
     or indirectly, any part of the assets of such insolvent except
     by leave of court, after notice to all the known creditors; nor
     shall he employ any person as manager or attorney who is related
     to the assignor, or has any interest, individually or as
     attorney, for any particular creditor, or in opposition to an
     equal distribution of the whole of the assignor's estate among
     all his creditors.
        Section 21.  The assignee or receiver shall as soon as may be
     after receiving any money belonging to the estate, deposit the
     same in some bank or trust company in good standing, in his name
     as assignee or receiver, and shall, as far as practicable keep
     all the assets of said estate separate and apart from his own,
     or designated by appropriate marks, so that they may be easily
     and clearly distinguished as the property of the insolvent's
     estate.
        Section 22.  The assignees immediately after the meeting of
     the creditors aforesaid, and the receivers immediately after
     their appointment, shall give written or printed notice to all
     the creditors known to them, requiring such creditors, within
     six months from the date of such notice, to make a proof of
     their claims in the manner hereinafter set forth, or be debarred
     from coming in upon the fund. They shall also, at the same time,
     advertise such notice in one weekly newspaper in said county,
     and in a daily newspaper published in the county, if there be
     any, and in such legal periodical, if any, as shall be
     designated by the court, once a week for four successive weeks.
        (22 amended Jun. 9, 1911, P.L.728, No.301)
        Section 23.  No claim against the insolvent's estate shall be
     allowed unless the claimant, or some one for him if he cannot do
     so, shall furnish to the assignee or receiver a statement of his
     claim, together with a copy of any book entries appertaining
     thereto, or any note or other writing evidencing the same,
     verified by an affidavit in the following form:
         I, G. H., do solemnly swear (or affirm) that the above is a
     true statement of my claim against the insolvent estate of E.
     F.; that there are no credits or allowances thereagainst, except
     as therein set forth; that I have not directly or indirectly
     made or entered into any bargain, arrangement or agreement,
     express or implied, to take or receive, directly or indirectly,
     any money, property, or consideration whatever, to or for
     myself, or to or for any other person, firm or corporation
     whatsoever, other than my dividend as a creditor of said estate,
     and that there is no collateral security for said indebtedness,
     or any part thereof, held by me or any one else, other than as
     above set forth. So help me God (or, and so I do affirm).
        If such claim and affidavit be in proper form, and the
     balance claimed agrees with the amount stated by the insolvent,
     or upon consultation between the creditor and the insolvent the
     amount is agreed upon, the claim shall be allowed if presented
     before the filing or audit of the account, unless objected to in
     the manner hereinafter set forth.
        Section 24.  As soon after the expiration of said year as the
     assets shall have been collected, or whensoever thereafter
     required by the court, the assignee or receiver shall file his
     account, and a list of the claims proven before him, in the
     proper court, duly sworn to by him as correct in all
     particulars; and if there are no claims remaining unadjusted, he
     shall give a written or printed notice to the insolvent and all
     the creditors known to him, in the following form:
        You are hereby notified that my account and a list of the
     claims proven before me has been filed in the court of common
     pleas of          county, as of          Term, eighteen hundred
     and         , Number       , and that said account will be
     allowed and distribution of the balance shown thereby will be
     made among the creditors therein named, according to their
     respective claims, on          , the          day of         ,
     eighteen hundred and          , unless objections be filed
     thereto or to any of said claims, before that time.
        Section 25.  The time fixed in said notice shall be between
     three and five weeks distant from the date thereof; and if there
     shall be unrepresented creditors, whose addresses are unknown,
     an advertisement thereof shall be inserted in one newspaper,
     published in the county, and in the legal periodical, if any,
     designated by the court, once a week for three successive weeks,
     prior to the time of meeting. On the date fixed, if no
     objections have been filed, the account shall be confirmed
     absolutely; the assignee or receiver shall prepare a schedule of
     distribution, which shall be approved and filed, and shall
     distribute the assets in his hands in accordance therewith.
        Section 26.  If at the time of filing the account and list of
     proved claims, there are claims which remain unadjusted, or if
     objections be filed, the court shall hear and decide the
     disputed matters, or, in its discretion, may appoint an auditor
     for that purpose. The court or the auditor shall fix a time and
     place for the hearing, of which three weeks' notice shall be
     given by the assignee or receiver to the insolvent and all the
     creditors known to him, in the following form:
        You are hereby notified that the court will (or, I. J. has
     been appointed auditor to) audit, settle and adjust my account
     as assignee (or receiver) of the estate of E. F., an insolvent,
     and make distribution among the creditors of said estate, and
     that a meeting for that purpose will be held at     in the
     of      , on      the    day of     , eighteen hundred and
            , when and where you may be heard if you so desire.
        If there shall have been no advertisement of the filing of
     the account, said notice shall be advertised, also in one
     newspaper published in the county, and in the legal periodical,
     if any, designated by the court, once a week for three
     successive weeks prior to the meeting.
        Section 27.  The hearing before the court or auditor, in case
     of objections filed, shall be confined thereto, unless the
     court, upon cause shown, shall give leave to file other
     objections. If objections be made to any claim duly verified, as
     aforesaid, whether upon objections filed or otherwise, express
     notice and an opportunity to defend the same shall be given to
     such creditor. The costs before the court or auditor shall be
     charged upon the fund or against any party appearing, according
     to equitable principles.
        Section 28.  All claims shall be made as of the date of the
     distribution of the fund, interest being allowed or discount
     being made to that time. A creditor having a claim for which the
     insolvent is primarily liable, and others secondarily, may prove
     for his whole claim; but, if the insolvent is only secondarily
     liable, the value of the liability of the primary debtor shall
     be adjusted between the creditor and the assignee; or, if the
     valuation cannot be agreed on, the same shall be submitted to
     the appropriate tribunal, and a dividend shall only be awarded
     to the creditor on the difference between such value, so
     determined, and the amount of his claim. In like manner, any
     collateral security held by any creditor for his debt shall be
     valued by said tribunal, and if the security be retained by the
     creditor his dividend shall be on the difference between his
     claim and the value of his security, so ascertained: Provided,
     That the creditor shall have the right to surrender his
     security, and take a dividend on his whole debt. If such
     creditor refuses to have his security valued or surrender the
     same, he shall be excluded from participation in the fund.
        Section 29.  Any creditor who shall, upon such distribution,
     present a claim, whether in judgment or otherwise, which shall
     be so largely in excess of that which is actually due as to be
     fraudulent and collusive, or shall assist others in so doing; or
     shall collude with the insolvent to hinder, delay or defraud his
     creditors, or any of them; or shall have received a preference
     from the insolvent, in violation of the provisions of this act,
     and shall not voluntarily surrender the same to the assignee or
     receiver, shall be postponed to all other creditors on the
     distribution of the insolvent's estate.
        Section 30.  At the time of receiving his dividend in case of
     a voluntary assignment, each creditor shall sign triplicate
     releases in the following form:
        The undersigned creditors of E. F., an insolvent, for and in
     consideration of the sums of money set opposite our respective
     names, and received by us from A. B., assignee of the estate of
     E. F., as insolvent, do hereby release the said E. F. from any
     and every debt, demand and liability which we had or may have
     had against him, at the date of his assignment, on the      day
     of       , Anno Domini eighteen hundred and      , whether due
     or not; and hereby agree that no suit, action or execution shall
     be maintained for or by reason of such debt, demand, or
     liability, reserving, however, to ourselves the right to avoid
     this release, upon showing any of the matters or things which,
     under the insolvent laws, shall entitle us to retain our
     respective claims against said insolvent, notwithstanding our
     participation in the settlement of his estate.
        Witness our hands, the dates set opposite our respective
     names. One of said releases shall be filed in court, one shall
     be retained by the assignee, and one shall be delivered to the
     insolvent.
        Section 31.  An insolvent shall be entitled to the same
     exemption out of the assigned estate as he would be, had an
     execution been issued against him. Any lien or claim for wages,
     for rent, of mechanics or material men, or otherwise, which by
     virtue of any act of Assembly would be preferred in case of an
     execution, shall retain its preference in case of an assignment,
     and to the same extent. Rent accruing after the date of the
     assignment, and wages necessarily incurred in service rendered
     to or for the assignee or receiver, shall be paid as part of the
     expenses appertaining to the assignment. Except as herein
     otherwise provided, all and every interest, claim, and estate in
     the property shall be discharged or divested by an assignee's or
     receiver's sale, if it would have been discharged or divested by
     a sale under an execution at the time of the assignment, and not
     otherwise.
        (31 amended Jun. 19, 1911, P.L.1069, No.817)
        Section 32.  Any person who shall discover to the assignee or
     receiver any secreted property, real or personal, in the
     possession or control of a third party, and in which the
     insolvent estate has an interest, shall receive out of the
     proceeds thereof, for so doing, an amount, to be fixed by the
     court or auditor, at least equal to the commission of the
     assignee or receiver in regard thereto.
        Section 33.  Nothing in this act shall be taken or understood
     as discharging an insolvent from liability to such of his
     creditors as do not choose to exhibit their claims, or who,
     before the schedule of distribution is made or filed, withdraw
     their claims; but, with respect to creditors who exhibit their
     claims before a voluntary assignee, or an auditor appointed in
     such case, and do not withdraw them as aforesaid, they shall be
     wholly debarred from maintaining afterwards, by suit, action,
     execution or otherwise, any claim existing at the time of the
     assignment, whether due or not, unless he shall aver and prove:
        (1).  That said action is founded on the actual force, fraud,
     malice, or deceit of the insolvent; or,
        (2).  That said action is founded on the embezzlement or
     malfeasance of the insolvent; or, for libel, slander, malicious
     prosecution, conspiracy, seduction or criminal conversation; or,
        (3).  That such action is founded on the purchase by the
     insolvent of real or personal property, on credit and without
     security therefor, when he had reasonable cause to believe that
     he would not be able to pay therefor; or,
        (4).  That such insolvent has willfully sworn falsely in any
     material fact appertaining to the settlement of his estate, or
     has failed and refused to make all necessary conveyances to
     enable the assignee to speedily and effectively settle the same;
     or,
        (5).  That such insolvent fraudulently secreted, altered,
     injured, defaced or destroyed any part of his estate; or any
     books, documents, muniments of title, or writings appertaining
     thereto, or permitted the same to be done; or has secreted,
     conveyed or incumbered any part of his property, for the benefit
     of himself or family; or has collected and retained any of the
     assets of the assigned estate; or, in contemplation of
     insolvency, has failed to keep the books of account and papers
     usually kept by him in his business; or,
        (6).  That such insolvent has made any promise of future
     advantage to any creditor, or has knowingly permitted others to
     do so, to induce any creditor to participate in the settlement
     of the assigned estate, and has failed to disclose the same to
     the complaining creditor; or,
        (7).  That such insolvent, while knowingly insolvent or in
     contemplation of insolvency, has in any manner preferred or
     attempted to prefer one creditor to another, or permitted such
     preference to be obtained by judgment, execution, attachment,
     sequestration, or otherwise; or,
        (8).  That such insolvent has knowingly permitted a false or
     exaggerated claim to be made against said estate; or,
        (9).  That such insolvent has absented himself or concealed
     his property, to avoid an execution; or,
        (10).  That the insolvency arose from losses by gambling, or
     in the purchase of lottery tickets; or,
        (11).  That such insolvent has previously been an insolvent,
     and obtained a release of his debts under the provisions of the
     insolvent laws.
        But the benefits of this section shall not apply in favor of
     any insolvent who was forced into the hands of a receiver by the
     action of his creditors.
        Section 34.  In cases where the insolvent is primarily liable
     for a claim proved against his estate, a discharge of that
     liability, by the creditor accepting a dividend under this act,
     shall not operate to release or discharge any person secondarily
     liable for the same debt, contract, engagement or other
     liability, if the participating creditor shall have given such
     third party written notice and an opportunity to purchase the
     claim and subrogate himself to the rights of such creditor; but,
     in that event, such secondary liability shall remain, in like
     manner as if such discharge had not taken place; but, if the
     creditor does not give such notice, the discharge of the
     insolvent from primary liability shall also operate to discharge
     from liability the party secondarily liable.
        Section 35.  Whenever a majority in number and value of the
     creditors of an insolvent, who has made a voluntary assignment
     for the benefit of his creditors, shall consent in writing
     thereto, it shall be lawful for the court, upon application of
     such debtor, and notice thereof given to all undischarged
     creditors, in the manner hereinbefore provided for giving notice
     of the meeting of creditors, to make an order that the estate
     and effects which such insolvent may afterwards acquire shall be
     exempted, for the term of seven years thereafter, from
     execution, for any debt contracted or cause of action existing
     previously to such assignment; and if, after such order and
     consent, any execution shall be issued for such debt or cause of
     action, it shall be the duty of any judge of the court from
     which such execution issued to set aside the same, with costs.
        Section 36.  If any such insolvent or his legal
     representative shall satisfy the undisputed claims of his
     creditors, and shall give security, to be approved by the court,
     to pay those which are disputed, the court shall order his
     estate and effects, not sold, to be restored to him or his legal
     representatives; and he shall, by virtue of such order, be
     seized and possessed thereof as of his former estate and title
     thereto; and if, upon the final settlement of accounts by the
     assignee or receiver, there shall be a surplus, after payment of
     all the claims presented and allowed, the same shall be paid to
     such insolvent or his legal representatives.
        Section 37.  Any creditor may, by petition, move the court to
     discharge any assignee or receiver for dereliction of duty,
     incompetency or other reason affecting the estate; or the
     assignee or receiver may voluntarily petition for his own
     discharge; and if the court shall be of the opinion that the
     interests of the estate will be conserved by the appointment of
     some other person in his place or stead, it shall grant the
     prayer of such petition, and appoint a new assignee or receiver,
     with like powers and duties as the one removed, upon entering
     security as in the case of the original assignee; but such
     removal shall be without prejudice to all claims upon said
     assignee or receiver and their securities, growing out of their
     performance or nonperformance of duty. The assignee or receiver
     thus removed shall remain under control of the court, for the
     purpose of compelling him to make all necessary transfers of the
     assets of the insolvent estate to his successor or any others
     interested therein, or to give needed information and assistance
     in the settlement of the estate. If the assignee removed be the
     one selected by the creditors, the new appointee shall be
     selected in like manner.
        Section 38.  Any creditor may, in case of a vacancy in the
     office of assignee or receiver, petition the court for the
     appointment of a new assignee, whenever he may have reason to
     believe that there are assets of the assigned estate that have
     not yet been collected, or that any duties appertaining to the
     office remain unperformed; and such appointment shall be made by
     the court with the same effect as in a case of the original
     appointment.
        (39 repealed Jun. 3, 1971, P.L.118, No.6)
        Section 40.  If any insolvent shall be convicted of perjury,
     in respect to any oath or affirmation taken by virtue of this
     act, he shall be liable to arrest and committal on mesne
     process, and to be charged in execution, in the same manner as
     if he had not before been arrested or taken in execution, or as
     if he had not made application for the benefit of the insolvent
     laws; and, moreover, such person shall never afterwards be
     entitled to his discharge as an insolvent debtor by virtue of
     this act.
        Section 41.  A person shall be deemed insolvent, within the
     provisions of this act, whenever the aggregate of his property,
     exclusive of any property which he may have conveyed,
     transferred, concealed or removed, or permitted to be concealed
     or removed, with intent to defraud, hinder or delay his
     creditors, shall not at a fair valuation be sufficient in amount
     to pay his debts.