CHAPTER 107 THE PETITION AND PROCEEDINGS THEREON § 833. Voluntary petitions. § 834. Involuntary petitions. § 835. The adjudication; first meeting of creditors and election of trustee. § 836. Duties of trustee. § 833. (Bankruptcy, Sec. 43.) Voluntary petitions. (Note: Voluntary petitions in bankruptcy are filed official Form, No. 1, with Schedule A, itemizing the debts, secured and unsecured and Schedule B, itemizing the assets and claiming the exemptions of the bankrupt.) § 834. (Bankruptcy, Sec. 44.) Involuntary petitions. (1) Who May File Petition. Case 798. Bankruptcy Law, Sec. 59b. "Three or more creditors who have provable claims against any person which amount in the aggregate, in excess of the value of securities held by them, if any, to five hundred dollars or over; or if all the creditors of such person are less than twelve in number, then one of such creditors whose claim equals such amount may file a petition to have him adjudged a bankrupt." Question 798: (1) How many creditors must join in the • petition? (2) What must be the aggregate amount of their claims? Case 799. Stevens et al v. Nave-McCord Mercantile Co., 150 Fed. 71 (C. C. A. 8th Cir.) "The debtor, Stevens, was insolvent and had 48 creditors. He conveyed all his property to a trustee for the use of 47 of these creditors with the intent that they should receive therefrom a payment of part of their claims, and that the 48th creditor, his wife, should receive nothing. The 47 creditors and their trustee, with knowledge that this preference was intended, accepted the transfer and received therefrom payments of 50 per cent. of their claims. Within four months after the assignment the 48th creditor filed her petition for an adjudication of Stevens a bankrupt and set forth the foregoing facts. If the 47 creditors who had received the preference ought not to be counted against the petitioner, there was less than 12 other creditors, her petition stated facts sufficient to warrant the adjudication she sought, and, whether Fowler and Deardorff should have been permitted to join her in her petition or not, its dismissal was error. Since a decision of this question in favor of the appellants will dispose of this case and render all other issues immaterial, it will be first considered. "The argument, in support of the contention that creditors who have secured a voidable preference must be counted in computing the number of creditors that must join in the petition, is that such parties have provable claims, and that every one who has a provable claim, and who is not excluded by section 59e (30 Stat. 562, 3 U. S. Comp. St. 1901, p. 3445), is a countable creditor under the bankruptcy law of 1898. It is said that section 59b provides that 'three or more creditors who have provable claims against any person or if all of the creditors of such person are less than twelve in number, then one of such creditors may file a petition to have him adjudged a bankrupt;' that section 1, subd. 9 (30 Stat. 544 (U. S. Comp. St. 1901, p. 3419)), declares that "creditor" shall include any one who owns a demand or claim provable in bankruptcy;' that section 59f authorizes 'creditors other than original petitioners' to 'be heard in opposition to the prayer of the petition;' that section 18b (30 Stat. 551 (U. S. Comp. St. 1901, p. 3429)), allows 'the bankrupt or any creditor' to appear and plead to the petition; that section 57d (30 Stat. 560 (U. S. Comp. St. 1901, p. 3443)), provides that 'claims which have been duly proved shall be allowed unless objection to their allowance shall be made by parties in interest that section 57g provides that 'the claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences;' and that section 59e provides that, 'in computing the number of creditors of a bankrupt for the purpose of determining how many creditors must join in the petition, such creditors as were employed by him at the time of the filing of the petition or are related to him by consanguinity or affinity within the third degree, as determined by the common law, and have not joined in the petition, shall not be counted.' Counsel reason with much force and cogency that these provisions of the bankruptcy law clearly show that a preferred creditor has a claim which may always be proved and filed, and which may thereafter be allowed upon his surrender of his preference, and that the express specification in 59e of the creditors who may not be counted in determining how many creditors must join in the petition excludes preferred creditors who are not thus mentioned from the latter category under the familiar rule, 'Expressio unius est exclusio alterius,' and thus unavoidably includes them in those that must be counted. The argument is very persuasive, but it is met by other considerations which must not be disregarded. A creditor who has a voidable preference may make and file his formal proof of claim without surrendering his preference, and in that sense his claim is provable. In other words, it is susceptible of a formal statement in writing under oath which may be filed in court, under sections 57a and 57c. But the claimant may not secure an allowance of his claim, he may not vote upon it at a meeting of creditors, he may not obtain any advantage by means of it in the bankruptcy proceedings, until he first surrenders his preference. Sections 57g, 56a (30 Stat. 560 (U. S. Comp. St. 1901, pp. 3442, 3443)); Keppel v. Tiffin Savings Bank, 197 U. S. 357, 361, 367, 25 Sup. Ct. 443, 49 L. Ed. 790. Cardinal rules for the construction of a statute are that the intention of the legislative body which enacted it should be ascertained and given effect, if possible, regardless of technical rules of construction and the dry words of the enactment; that that intention must be deduced not from a part but from the entire law; that the object which the enacting body sought to attain and the evil which it was endeavoring to remedy may always be considered for the purpose of ascertaining its intention; that the statute must be given a rational, sensible construction; and that, if this be consonant with its terms, it must have an interpretation which will advance the remedy and repress the wrong. U. S. v. Ninety-Nine Diamonds (C. C. A. 8th Cir.), 139 Fed. 961, 965, 72 C. C. A. 9, 2 L. R. A. (N. S.) 185. "The discharge of the bankrupt from his debts and the equal distribution of his unexempt property among his creditors of the same class were the chief objects which Congress sought to attain by the enactment of this statute. The preference of one or more creditors over others of the same class was one of the principal evils at which the statute was leveled. Witness the prohibition of the allowance of the claim of a preferred creditor and of his participation in the meetings of creditors until he surrenders his preference and the right granted to the trustee to recover from him the property he has obtained thereby or its value. Sections 56a, 57g, 60a, 60b (30 Stat. 560, 562 (U. S. Comp. St. 1901, pp. 3442, 3443, 3445)); Pirie v. Chicago Title & Trust Co., 182 U. S. 438, 449, 21 Sup. Ct. 906, 45 L. Ed. 1171; Kippel v. Tiffin Savings Bank, 197 U. S. 356, 361, 25 Sup. Ct. 443, 49 L. Ed. 790. The bankruptcy law contains no express provision that a creditor who holds a voidable preference may so use his claim as to obtain any advantage from it before he surrenders his preference. Should a provision be ingrafted upon this statute by construction by means of which he may avail himself of the act itself to defeat one of its main purposes, a construction by means of which he may use the statute to retain a preference which it was one of the chief objects of the act to avoid? For, if this statute be interpreted to mean that a debtor may confer voidable preferences upon all his creditors but two, and may thereby enable them to hold their preferences and be counted against an adjudication, the evil which Congress sought to remove is promoted, and the remedy it provided is impaired. Such an interpretation does not accord with the spirit of the law. It would not be a reasonable, sensible construction of it, and it seems to be contrary to the intention evidenced by the body of the statute. The most persuasive argument against this conclusion is that creditors holding voidable preferences are not mentioned in section 59e in the list of those who may not be counted, and the rule that the specification of some is the exclusion of others. But, after a thoughtful consideration of this and the other contentions of counsel, the evil of preferences which the bankrupt law was enacted to remove, the remedy of an equal distribution. of the property of the bankrupt which it was passed to provide, the prohibition of the use of their claims by preferred creditors until they surrender them which the act contains, the general scope of the law and all its provisions read and considered together, and the duty to give to it a rational and sensible interpretation, have forced our minds to the conclusion that it was the intention of Congress that creditors who hold voidable preference should not be counted either for or against the petition for an adjudication in bankruptcy until they surrender their preferences. This intention, thus deduced, must therefore prevail over the technical rules of construction which counsel for the appellees invoke. The result is: A creditor who holds a voidable preference has a provable claim in the sense that he may make and file the formal proof thereof specified by the bankruptcy law; but he may not procure an allowance of his claim, he may not vote at a creditors' meeting, and he may not obtain any advantage from his claim in the |