months' period, does not constitute a voidable preference. Humphrey v. Tatman, 198 U. S. 91, 14 Am. B. R. 74, 25 S. Ct. 567, 49 L. Ed. 956; Thompson v. Fairbanks, 196 U. S. 517, 13 Am. B. R. 437, 25 S. Ct. 306, 49 L. Ed. 578; Rogers v. Page, 15 Am. B. R. 502, 140 F. 596, 72 C. C. A. 164. Here the transfer and pledge were accompanied by an actual and good-faith delivery of the policies to the bank. That being true, the lien thus created was valid under our law (Kentucky Statutes, § 1908; Frankfort Chair Co. v. Buchanan, 21 Ky. Law Rep. 269, 51 S. W. 179), and the validity of the lien was not affected by the fact that the policies were subsequently delivered to Baker for the purpose of collecting the proceeds, or the further fact that the assignment was made without the consent of the insurance companies, who are not complaining. As the payments were made pursuant to a valid lien created more than four months before the petition in bankruptcy was filed, it follows that the alleged preference was not voidable under the Bankruptcy Act (Comp. St. §§ 9585-9656).

There is the further contention that the facts alleged and proved were sufficient to show a voidable preference under section 1910, Kentucky Statutes. It must not be overlooked that the filing of a suit within six months from the time the mortgage or transfer is legally lodged for record, or the delivery of the property or effects transferred, is a condition precedent to relief under that section (section 1911, Kentucky Statutes; Husband v. Linehan, 168 Ky. 304, 181 S. W. 1089, Ann. Cas. 1917D, 954), and as the policies were assigned and delivered on February 23, 1924, and suit was not brought until December 17, 1924, it necessarily results that the action was not brought within the time required by the state law.

As appellant's counsel had had abundant time in which to take proof prior to his illness and that of his family, it would seem that the action of the court in refusing further time because of such illness was proper, but, whether so or not, the refusal was not prejudicial, in view of the fact that suit was not brought in time, either under the Bankruptcy Act or the state law, and no amount of proof could have remedied the situation.

Judgment affirmed.

STATE V. NATIONAL BANK OF CLEBURNE ET AL.*

Texas Commission of Appeals, Section A, December 1, 1926.

Nos. 835, 4540.

WHAT DEBTS AND CLAIMS ARE PROVABLE-DISCHARGE--LIABILITY AS SURETY ON DEPOSITORY BOND IS PROVABLE AND DISCHARGEABLE.

Liabilities of a bankrupt upon a depository bond of a bank and a tax collector's bond are provable debts and therefore dischargeable if they were duly scheduled or the creditor had actual notice

(See Collier, 13th Ed., pp. 609(3), 1399 (2); Am. B. R. Digest, §§ 826, 1.142.)

SAME-DEBTS NOT SCHEDULED-BURDEN ON BANKRUPT TO ESTABLISH NOTICE IF DEBT WAS NOT SCHEDULED.

If a debt is not duly scheduled the burden of proof rests upon the bankrupt to show that the creditor had actual notice or knowledge of the bankruptcy proceedings.

(See Collier, 13th Ed., p. 633(6); Am. B. R. Digest, § 1116.) SAME DUE SCHEDULING OF DEBT IMPARTS NOTICE.

Under section 17a (3) of the Bankruptcy Act, the due scheduling of a debt of itself imparts notice to the creditor of the existence of the proceedings.

(See Collier, 13th Ed., p. 627(1); Am. B. R. Digest, § 1116.) PETITION AND PROCEEDINGS THEREON-SCHEDULES-LIABILITY ON TAX COLLECTOR'S BOND HELD PROPERLY SCHEDULED.

The liability of bankrupt upon a tax collector's bond is properly scheduled by giving name and address of governor of the state to whom the bond was payable by statute, date of execution, amount, and name of collector for whom bond was given.

(See Collier, 13th Ed., p. 362(2); Am. B. R. Digest, § 249.)

Certified questions from Court of Civil Appeals of Second Supreme Judicial District.

Suit by the state against the National Bank of Cleburne and others. From the judgment, plaintiff appealed to the Court of Civil Appeals, which certified questions to Commission of Appeals. Questions answered.

Dan Moody, Atty. Gen., and John W. Goodwin, Asst. Atty. Gen., for the state.

Wm. Odell, and Walker & Baker, for appellees.

7288 S. W. 438.

NICKELS, J.:

The National Bank of Cleburne, Johnson county, Tex., was duly selected" county depository " and qualified as such by execution, etc., of the required bond on April 14, 1921-all in accordance with the terms of chapter 2, title 47, R. S. 1925. The penal sum of the bond is $2,208,956, and it is signed by J. W. Floore, Jr., and others, as sureties. O. O. Chrisman, county judge, is the nominal payee; it was duly approved by the commissioners' court and the comptroller of public accounts, and it is of statutory form.

During the years of 1921 and 1922, A. D. Griffin was the duly elected, qualified, and acting tax collector for the county, and Floore was surety on his bond as such. This bond is in the penal sum of $65,352.47, Pat M. Neff, Governor, is named as payee, and the instrument is of the form required in article 7247, R. S. 1925.

All moneys representing taxes collected by Griffin were deposited by him with the depository bank, as required by said chapter 2, the credits therefor being made in an account styled "A. D. Griffin, tax collector." In this account, moneys derived as state taxes, county taxes, and various district taxes were credited, in bulk, and upon it Griffin checked in making his settlements with the state and county. The bank suspended on October 17, 1921, and its affairs were duly taken over and process of liquidation begun by the comptroller of the currency. On that date credits for "state taxes," aggregating the sum of $9,261.51, were included in the account.

October 18, 1921, Floore was duly adjudged bankrupt in the District Court of the United States for the Northern District of Texas, and on October 14, 1922, he duly received discharge therein.

July 5, 1923, the state of Texas brought suit in the District Court of Johnson county against the principal and sureties on the depository bond and therein sought recovery for the $9,261.51 mentioned. Floore set up his discharge in bankruptcy as a release of liability on the bond. The manner, in which the issue was raised, is thus stated in the certificate:

"The appellee alleged in his first amended original answer that he was duly adjudged bankrupt Oct. 18, 1921, and was duly discharged Oct.

*

14, 1922; that all the deposits in the account involved were made prior to Oct. 17, 1921; that the bond sued on was properly scheduled as a liability in the bankruptcy proceedings; that the case was still pending in the bankruptey court; and that no distribution of the estate had been made among the creditors; and further alleged that the appellant had notice of the bankruptcy proceedings prior to the discharge through the following persons; The tax collector of Johnson county; Hon. Pat. M. Neff, Governor; Johnson County, and 0. 0. Chrisman, the county judge; J. R. Keith, county attorney of Johnson county; Mr. Cliff Stone, Judge Tom L. Beauchamp, and Wallace Hawkins, assistants to the Attorney General. The appellant, in its supplemental petition, denied the allegations in the appellee's amended answer."

The evidence shows that Johnson county, through its county judge and commissioners, and Keith, Stone, Beauchamp, and Griffin had knowledge of the bankruptcy proceedings long before the discharge; but as to whether or not the Attorney General, Hon. W. A. Keeling, and the Governor, Hon. Pat M. Neff, had such actual knowledge the record is silent, except for Floore's allegation and the state's general denial. It appears that the bond sued on was thus scheduled by Floore in the bankruptcy proceeding:

"Schedule A. (5) Section 4. Accommodation Paper: Name of creditorJohnson county, Cleburne, Tex. The National Bank of Cleburne, Tex., was appointed official depository of Johnson county, Tex., in April, 1921, and executed a depository bond for $2,000,000, signed by J. W. Floore, Jr., J. T. Falkenbury, G. C. Smith, J. R. Nail, J. D. Goldsmith, J. T. Jordan, J. G. Beasley, J. C. Blakeney, S. B. Norwood, all of Cleburne, Tex., as sureties. No collateral.''

The other bond (i.e., the tax collector's bond) was thus scheduled:

: Governor of the

"Schedule A. (5) Accommodation Paper. Section state of Texas, Hon. Pat M. Neff, Austin, Tex. November 25, 1920, J. W. Floore, Jr., executed, as surety, the bond of A. D. Griffin, tax collector of Johnson county, for $65,352.47, and payable to the Governor of the state of Texas."

The defense was sustained by the District Court, and the case, upon the state's appeal, is now pending in the Court of Civil Appeals, Second District.

That court has certified the following questions:

"(1) Was the schedule of the bond in the bankruptcy proceedings sufficient to discharge the claim sued on?

"(3) Are the facts found by this court sufficient in law to show notice to the governor of the bankruptcy proceedings?''

In a prima facie sense, the discharge in bankruptcy so operated as to release Floore from all provable debts existing prior to the adjudication. Kreitlein v. Ferger, 238 U. S. 27, 34 Am. B. R. 862, 35 S. Ct. 685, 59 L. Ed. 1184. Floore's obligation upon the depository bond, as well as upon the tax collector's bond, was a provable debt. 1 Collier on Bankruptcy (13th Ed.), p. 609. That apparent result was absolute in its nature unless (a) the debt was not duly scheduled or, (b) the creditor did not have notice or actual knowledge of the bankruptcy proceedings if the debt was not duly scheduled. Section 17a (3) of the Bankruptcy Act (U. S. Comp. St. § 9601). The latter contingency amounts to an "exception to the exception," so that the bankrupt has the burden of showing notice or actual knowledge, in the absence of due scheduling. Hill v. Smith, 260 U. S. 592, 43 S. Ct. 219, 67 L. Ed. 419.

We merely assume the debt, in so far as it is evidenced by the depository bond, was not duly scheduled, although we are inclined to the opposed view, for we believe the state had notice.

Bankruptcy proceedings have an in rem nature. Hanover National Bank v. Moyses, 186 U. S. 181, 192, 8 Am. B. R. 1, 22 S. Ct. 857, 46 L. Ed. 1113. Filing of the petition gives jurisdiction. 2 Collier on Bankruptcy (13th Ed.), p. 1193. Because of the in rem characteristic, regularity of the petition and schedules makes further notice to the creditor, whose claim may be discharged, nonessential to due process. Hanover National Bank v. Moyses, supra. The fact of a due scheduling of a debt, of itself, imparts to the creditor notice of the existence of the proceedings. Collier, Ibid. Such is the necessary import of section 17a(3), for, according to its terms, notice or actual knowledge must be otherwise shown only when the debt has not been duly scheduled. If a debt has been duly scheduled, it would require perversion of the statute's language to say that the creditor must have further notice in order to be constructively apprised of the proceedings.

The state's funds which were in the bank at suspension were referred to twice in the schedules. Once, in respect to Floore's suretyship for the depository, and, once, in respect to his surety43-N. S. VOL. IX.