herein provided with the title to all of the property of the bankrupt as of the date of the final decree setting aside the composition or revoking the discharge. (e) The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication. Such property may be recovered or its value collected from whoever may have received it, except a bona fide holder for value." 10

"(a) A person shall be deemed to have given a preference if, being insolvent, he has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class. (7) If a bankrupt shall have given a preference within four months before the filing of a petition, or after the filing of the petition and before the adjudication, and the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from such person."1 "(d) If a debtor shall, directly or indirectly, in contemplation of the filing of a petition by or against him, pay money or transfer property to an attorney and counselor at law, solicitor in equity, or proctor in admiralty for services to be rendered, the transaction shall be re-examined by the court on petition of the trustee or any creditor, and shall only be held valid to the extent of a reasonable amount to be determined by the court, and the ex

10 30 St. at L. 444, 505, 567, § 70. It has been held that the trustee acquires the right of the bankrupt to a license to sell liquors which is transferable with or renewable with the approval of a public officer, In re Becker, 98 Fed. R. 407; In re Brodbine, 93 Fed. R. 643; Fisher v. Cushman (C. C. A.), 103 Fed. R. 860; to a stall in a market, In re Emrich, 101

Fed. R. 231; and to membership in an exchange, Sparhawk v. Yerkes, 142 U. S. 1; In re Ketchum, 1 Fed. R. 840; In re Werder, 15 Fed. R. 789. But not to a patent applied for be fore the adjudication but subsequently issued. In re McDonnell, 101 Fed. R. 239. As to an insurance policy, see In re Steele, 98 Fed. R. 78. 11 30 St. at L. 544, 562, § 60.

cess may be recovered by the trustee for the benefit of the estate." 12

"Whenever it may be deemed for the benefit of the estate of a bankrupt to redeem and discharge any mortgage or other pledge, or deposit or lien, upon any property, real or personal, or to relieve said property from any conditional contract, and to tender performance of the conditions thereof, or to compound and settle any debts or other claims due or belonging to the estate of the bankrupt, the trustee, or the bankrupt, or any creditor who has proved his debt, may file his petition therefor; and thereupon the court shall appoint a suitable time and place for the hearing thereof, notice of which shall be given as the court shall direct, so that all creditors and other persons interested may appear and show cause, if any they have, why an order should not be passed by the court upon the petition authorizing such act on the part of the trustee." 13 "The trustee shall, immediately upon entering upon his duties, prepare a complete inventory of all the property of the bankrupt that comes into his possession. The trustee shall make report to the court, within twenty days after receiving the notice of his appointment, of the articles set off to the bankrupt by him, according to the provisions of the forty-seventh section of the act, with the estimated value of each article, and any creditor may take exceptions to the determination of the trustee within twenty days after the filing of the report. The referee may require the exceptions to be argued before him, and shall certify them to the court for final determination at the request of either party. In case the trustee shall neglect to file any report or statement which it is made his duty to file or make by the act, or by any general order in bankruptcy, within five days after the same shall be due, it shall be the duty of the referee to make an order requiring the trustee to show cause before the judge, at a time specified in the order, why he should not be removed from office. The referee shall cause a copy of the order to be served upon the trustee at least seven days before the time fixed for the hearing, and proof of the service thereof to be delivered to the clerk. All accounts of trustees shall be referred as of course to the referee for audit, unless otherwise specially ordered by the court." 14

12 Ibid.

13 G. O. xxviii.

14 G. O. xvii.

"Courts of bankruptcy shall designate, by order, banking institutions as depositories for the money of bankrupt estates, as convenient as may be to the residences of trustees, and shall require bonds to the United States, subject to their approval, to be given by such banking institutions, and may from time to time as occasion may require, by like order increase the number of depositories or the amount of any bond or change such depositories." 15 "No moneys deposited as required by the act shall be drawn from the depository unless by check or warrant, signed by the clerk of the court, or by a trustee, and countersigned by the judge of the court, or by a referee designated for that purpose, or by the clerk or his assistant under an order made by the judge, stating the date, the sum, and the account for which it is drawn; and an entry of the substance of such check or warrant, with the date thereof, the sum drawn for, and the account for which it is drawn, shall be forthwith made in a book kept for that purpose by the trustee or his clerk; and all checks and drafts shall be entered in the order of time in which they are drawn, and shall be numbered in the case of each estate. A copy of this general order shall be furnished to the depository, and also the name of any referee or clerk authorized to countersign said checks." 16

It has been held that the trustee of a bankrupt corporation may call upon the stockholders to make good the unpaid balance upon their subscriptions; that he may collect such subscriptions by a suit in equity in the District Court of the United States where the bankruptcy proceeding is pending, irrespective of the citizenship of the parties; but that he cannot enforce the statutory liability of the directors to creditors for contracting debts in excess of the lawful amount, or for paying dividends when the corporation was insolvent." Where an asset, such as a leasehold, is subject to burdens, the trustee is not obliged to accept it if it would be unprofitable.18 In such a case it was held that the trustee might remain in possession of the premises a reasonable time in order to ascertain whether

15 30 St. at L. 544, 562, § 61.

16 G. O. xxix. It was held under the act of 1867 that a depositary is not obliged to keep a separate account for each bankrupt estate. State Bank v. Dodge, 124 U. S. 333.

17 In re Crystal Spr. B. Co., 96 Fed. R. 945.

18 In re Chambers, C. & Co., 98 Fed. R. 865.

it was expedient to assume the lease; that one month was not unreasonable; and that in such a case, where that time was required for the proper packing and safe removal of the bankrupt's property thereupon, the lease was not assumed and the estate was liable only for a reasonable sum for the use and occupation of the premises.'

20

19

Under the Act of 1867, the assignee was required within six months to "cause the assignment to him to be recorded in every registry of deeds or other office within the United States where a conveyance of any land owned by the bankrupt ought by law be recorded." " There is no such provision in the Act of 1878; and it has not yet been decided whether a buyer of real estate has constructive notice of an adjudication in bankruptcy and the election of a trustee of his vendor in another district.

§ 485. Proof and allowance of claims.-"(a) Proof of claims shall consist of a statement under oath, in writing, signed by a creditor setting forth the claim, the consideration therefor, and whether any, and, if so what, securities are held therefor, and whether any, and, if so what, payments have been made thereon, and that the sum claimed is justly owing from the bankrupt to the creditor. (b) Whenever a claim is founded upon an instrument of writing, such instrument, unless lost or destroyed, shall be filed with the proof of claim. If such instrument is lost or destroyed, a statement of such fact and of the circumstances of such loss or destruction shall be filed under oath with the claim. After the claim is allowed or disallowed, such instrument may be withdrawn by permission of the court, upon leaving a copy thereof on file with the claim. (c) Claims after being proved may, for the purpose of allowance, be filed by the claimants in the court where the proceedings are pending, or before the referee if the case has been referred. (d) Claims which have been duly proved shall be allowed, upon receipt by or upon presentation to the court,

19 Ibid. Cf. In re Grimes, 96 Fed. R. 829; Bray v. Cobb, 100 Fed. R. 270; In re Secor, 18 Fed. R. 319; supra, 251. For a case under the act of 1867 where it was held that the assignee had abandoned the right to a patent, see Sessions v. Romadka, 145

U. S. 29. For a similar case as to a right to a seat in a stock exchange, see Sparhawk v. Yerkes, 142 U. S. 1. But see Dushane v. Beall, 161 U. S. 513.

2014; Taylor v. Irwin, 20 Fed. R.

615.

unless objection to their allowance shall be made by parties in interest, or their consideration be continued for cause by the court upon its own motion. (e) Claims of secured creditors and those who have priority may be allowed to enable such creditors to participate in the proceedings at creditors' meetings held prior to the determination of the value of their securities or priorities, but shall be allowed for such sums only as to the courts seem to be owing over and above the value of their securities or priorities. (f) Objections to claims shall be heard and determined as soon as the convenience of the court and the best interest of the estates and the claimants will permit. (g) The claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences. (h) The value of securities held by secured creditors shall be determined by converting the same into money, according to the terms of the agreement pursuant to which such securities were delivered to such creditors or by such creditors and the trustee, by agreement, arbitration, compromise, or litigation, as the court may direct, and the amount of such value shall be credited upon such claims, and a dividend shall be paid only on the unpaid balance. (2) Whenever a creditor, whose claim against a bankrupt estate is secured by the individual undertaking of any person, fails to prove such claim, such person may do so in the creditor's name, and if he discharge such undertaking in whole or in part he shall be subrogated to that extent to the rights of the creditor. (j) Debts owing to the United States, a State, a county, a district, or a municipality as a penalty or forfeiture shall not be allowed, except for the amount of the pecuniary loss sustained by the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby and such interest as may have accrued thereon according to law. (k) Claims which have been al lowed may be reconsidered for cause and re-allowed or rejected in whole or in part, according to the equities of the case, before but not after the estate has been closed. (1) Whenever a claim shall have been reconsidered and rejected, in whole or in part, upon which a dividend has been paid, the trustee may recover from the creditor the amount of the dividend received upon the claim if rejected in whole, or the proportional part