pointment under the same court may, by order of the judge, temporarily fill the vacancy.'

SEC. 44. Appointment of Trustees.-a The creditors of a bankrupt estate shall, at their first meeting after the adjudication, or after a vacancy has occurred in the office of trustee, or after an estate has been reopened, or after a composition has been set aside, or a discharge revoked, or if there is a vacancy in the office of trustee,

'The judge may also, at any time, for the convenience of the parties, or for cause transfer a case from one referee to another (226).

2For analogous provisions, see R. S. 85034; Act of 1867, 13; and as to appointment of an assignee to fill vacancy, R. S. 25041; Act of 1867, 18. See also 855 as to meetings of creditors, and 56 as to who may vote thereat.

The appointment of the trustee is subject to approval by the judge, by whom only he can be removed (Rule XIII; 2[17]). If, after a reasonable opportunity, the creditors are unable to agree upon a trustee, or fail to appoint one, the judge or the referee may make the selection (Rule XIII; 2[17]); in re Kuffler [D C.], 97 Fed. Rep. 187; in re Lewensohn [D. C.], 98 Fed Rep. 576; in re Brooke [D. C.], 100 Fed. Rep. 432), though no official or general trustee to act in classes of cases can be appointed (Rule XIV). An attorney at law, retained generally to represent a creditor in bankruptcy proceedings cannot participate in the selection of the trustee at the creditors' meeting without showing an express authorization as an attorney in fact (In re Blankfein et al. [D. C.], 97 Fed. Rep. 191). If there are no assets and no creditor appears at the first meeting, a trustee need not be appointed, though if assets are afterwards discovered, or the court deems it desirable, he may then be appointed (Rule XV; in re Smith [D. C.], 93 Fed. Rep. 791; in re Levy [D. C.], 101 Fed. Rep. 247). When an appointment is made, the person selected must be notified by the referee (Rule XVI), but the better practice is to get his consent before his appointment so that the creditors would not be obliged to again convene in the event of his refusal (In re Lewensohn [D. C.], 98 Fed. Rep. 576). The approval of the judge is a judicial act, and he will not disregard the choice of the creditors unless the person selected by them is incompetent, related to the parties or of an immoral character (In re Barrett, 2 B. R 533; in re Grant, 2 B. R. 106), though if his appointment result from fraud or improper influence, the same will justify the court in disapproving it (In re Haas & Sampson, 8 B. R. 189; in re Bliss, 1 B. R. 78; s. c. 1 Ben. 407). The burden of establishing the improper choice of a trustee is with the one opposing his approval, but if his integrity or competency are reasonably suspected, he may be rejected (In re Clairmont, 1 Lowell, 230; s. c. 1 B. R 276). The trustee of a partnership is to be appointed by the firm creditors, whether there be assets or not, creditors of individuals of the firm having no voice in the selection (85b; in re Phelps, Caldwell & Co., 1 B. R. 525). This is undoubtedly true when the petition asks only for a discharge from firm debts; but when a release from both firm and individual debts is sought, the creditors of the individuals have an unquestionable right to either participate in the choice of the trustee or select one to represent the individual creditors. The latter alternative would give rise to a complication of proceedings, while the former would be in harmony with the principles of equity to which the court of bankruptcy must conform in the absence of express provisions (Rule XXXVII). When three trustees are appointed, the assent of at least two of them is necessary to all official acts (8476).

appoint one trustee or three trustees of such estate. If the creditors do not appoint a trustee or trustees as herein provided the court shall do so.1

SEC. 45. Qualifications of Trustees.-a Trustees may be (1) individuals who are respectively competent to perform the duties of that office, and reside or have an office in the judicial district within which they are appointed, or (2) corporations authorized by their charters or by law to act in such capacity and having an office in the judicial district within which they are appointed.

SEC. 46. Death or Removal of Trustees.*—a The death or removal of a trustee shall not abate any suit or

1A secured creditor is not entitled to vote on the election of trustee unless his claim exceeds the value of or he surrenders his security (In re Eagles et al. [D. C.], 99 Fed. Rep. 695).

For analogous provisions, see R. S. 85035; Act of 1867, 18.

A preferred creditor, or a director of a corporation having a preferred claim should not be chosen, since his interest would be incompatible with his interest as trustee (In re Powell, 2 B. R. 45). An attorney for either a creditor or the bankrupt may be chosen, though if his duties in the two positions become inconsistent, he should either resign or cease to act for such clients (In re Clairmont, 1 Lowell, 230; s. c. I B. R. 276).

For analogous provisions, see R. S. 85036, 5039, 5042; Act of 1867, 213, 18. See also 44 as to the appointment of trustees and 8476 as to the concurrence required when three have been appointed.

A vacancy in the office of trustee can only occur by death or removal. The court has authority under the express provisions of the statute to remove only for cause upon the complaint of creditors (22 [17]), though in the exercise of its equity jurisdiction, the court may allow the trustee to resign, in which case he should not be allowed his costs of the proceedings, though if he is removed for the benefit of the estate without fault on his part, he should be reimbursed out of the estate for all his costs and expenses incurred (Ex p. Watts, 1 Deac. & Chitt. 22; ex p. James, I Deac. & Chitt. 372). He should have the costs of defense if he successfully resists an attempt to remove him (In re Mallory, 4 B. R. 153; in re Blodget & Sanford, 5 B. R. 472), though if removed for cause, costs may be imposed upon him (In re Morse, 7 B. R. 56), the matter resting largely in discretion (82 [18]). The removal is an exercise of judicial discretion to be exercised only for cause (In re Mallory, 4 B. R. 153), and is not subject to review (In re Adler Bros., 2 Woods, 571. See also in re Perkins, 5 Biss. 254; s. c. 8 B. R. 56), except when there is a clear abuse of discretion (Ex p. Bates, 21 L. J. Bank, 20; 16 Jurist, 459)

The statute provides that the court may remove the trustee "upon complaints of creditors" (2[17]). The language is different from that used in the Act of 1867, which was that the court might "remove an assignee for any cause which, in the judgment of the court, renders such removal necessary or expedient" (Act of 1867, 818). Whether the intention of Congress was to limit the court to remove on the complaint of creditors only must be hereafter determined by the courts. It does not seem, however, that such was the intent, since it would result in depriv

proceeding which he is prosecuting or defending at the time of his death or removal, but the same may be proceeded with or defended by his joint trustee or successor in the same manner as though the same had been commenced or was being defended by such joint trustee alone or by such successor.

SEC. 47. Duties of Trustees.'-a Trustees shall respectively (1) account for and pay over to the estates under their control all interest received by them upon

ing the court to some extent of its jurisdiction in equity. Again, the provision of the present Act differs from that of the Act of 1867, only in enumerating persons on whose complaint the court may act. If such enumeration is to be construed as that of the specific powers of jurisdiction, then the court will have the authority it would have possessed had no enumeration been made (82[17]). This would leave the jurisdiction of the court as to removals the same as it possessed under the act of 1867, in the construction of which it was held that the court might remove a trustee upon the complaint of the bankrupt (In re McGlynn, 2 Low. 127), following the English practice (Ex p. Baker, 2 Mont. D. & D. 60). It will be a ground for removal if the bankrupt improperly attempts to influence the election (Ex p. Shaw, 1 G. & J. 154), if the election is actually fraudulent (Ex p. Morse, II Jur. 482; ex p. Carter, 3 D. & J. 116), or, if because of the improper exclusion of a large number of creditors, the election expresses the wishes of a minority of the creditors (Ex p. Edwards, Buch. 411). There can be little question but that the court has authority to remove the trustee for misconduct or a breach of trust, and certainly so if he fails to exercise reasonable diligence in collecting the assets or disposing of the property (In re Morse, 7 B. R. 56), refuses to furnish information concerning the estate when a reasonable request is made (In re Perkins, 5 Biss. 254; s. c. 8 B. R. 56), holds preferred claims (Ex p. Oakes, 2 Mont. D. & D. 60. See also in re Powell, 2 B. R. 45), if he has occupied a fiduciary position leaving him liable to account to the estate (In re Stuyvesant Bank, 6 B. R. 272; ex p. Lacey, 6 Ves. 625), whenever his interests are in any way adverse to the estate (Ex p. Holland, 2 M. D. & D. 469; in re Powell, 2 B. R. 45; ex p. Startees, 12 Ves. 10), or when, without any fault on the part of the trustee, a disagreement arises between the trustee and creditors, or between the trustees themselves, when such removal promises to inure to the benefit of the estate (In re Mallory, 4 B. R. 153). Under the English practice, it was held that subsequent bankruptcy or insolvency was ground for removal (Ex p. Copeland, 1 Mont. & Ayr, 306; ex p. Bowsar, 1 Mont. D. & D. 194). If the trustee ceases to have either a residence or an office in the district, the court should remove him (Ex p. Gray, 13 Ves. 274). The doctrine of laches applies to causes for removal of trustees, and if complaint is unreasonably delayed, the court is justified in declining to remove (Ex p. Nash, 1 Mont. 50).

'For analogous provisions as to the first subdivision of this section, see R. S. 5062B; as to the third, R. S. 85059; as to the eighth, R S. 5096, Act of 1867, 228; as to the eleventh, Rule XIX of orders in bankruptcy under the Act of 1867. See also 11 as to suits by and against the bankrupt and notes thereto.

property of such estates; (2) collect' and reduce to

"The title to all the bankrupt's property vests in the trustee upon his appointment and qualification (870), and it becomes his duty to take such steps as may be necessary to reduce the same to his possession. The term 'property" has a broader significance as here used than that generally accorded it. It includes not only the tangible assets, but inchoate rights of every nature, as well as rights of action which pass to him as the representative of the creditors. (See 70 and notes) The trustee may with the approval of the court, when he cannot collect the assets on demand, submit to arbitration (26) or compromise (827). When neither of these methods will enable him to adjust differences, he may bring suit in his own name to possess himself of the property (Dambmann v. White, 12 B. R. 438; s. c. 48 Cal. 439; Morse v. Grittman, 10 B. R. 132; Wheelock v. Lee, 64 N. Y. 242; Hastings v. Fowler, 2 Ind. 216; Wheelock v. Hastings, 45 Mass. 504). A receiver who is appointed pending the appointment of a trustee must collect the assets the same as the trustee and may resort to the same legal remedies for that purpose (In re Fixen & Co. [D. C.], 96 Fed. Rep. 748) It is not proper for the trustee to sue unless the property he seeks to recover would constitute assets of the estate (Dutcher v. Bank, 12 Blatch. 435; s. c. II B. R. 457. See also Sawyer v. Hoag, 9 B. R. 145; s. c. 17 Wall, 610; s. c. 3 Bliss. 293), and should not sue unless he has on hand money to meet the expenses to be incurred (Reade v. Waterhouse, 10 B. R. 277; s. c. 12 Abb. Pr. [N. S.]. 255; s. c. 52 N. Y. 587). Aside from instituting original suits, the trustee may prosecute or defend pending actions (811), sue out writs of error to review judgments against the bankrupt rendered prior to adjudication (Jenkins v. Bank, 97 Ill. 568), and take such summary proceedings in the court of bankruptcy as may be proper (See 22, 23 and notes). When he has once gained possession of property, the court of bankruptcy, on petition of the trustee, will enjoin one claiming to own it from asserting his claim in a State court (Keegan v. King [D. C.], 96 Fed. Rep. 758), as it will also do to prevent an officer of a State court from selling property in his possession under a decree obtained by fraud (Southern Loan & Trust Co. v. Benbow [D. C.], 96 Fed. Rep. 514). No pending suit should be continued by the trustee if it is not worth the expenses of the litigation (Mutual Bed. Fund v. Boussieux, 4 Hughes, 387; Trader's Bank v. Campbell, 14 Wall. 87).

As to the assets of partnership property when an individual of a firm becomes a bankrupt, the firm as such not becoming so, the trustee becomes a tenant in common with the bankrupt's partners, but is entitled only to the bankrupt's share after the solvent partners have settled up the partnership and satisfied such liens as they may have against the bankrupt's share (Story of Partnership, 8375; in re Shepard, 3 B. R. 172; s. c. 3 Ben. 347; Amsinck v. Bean, 22 Wall. 395; s. c. 11 B. R. 495; s. c. 10 Blatch. 361; s. c. 8 B. R. 228; Forsaith v. Merritt, 3 B. R. 48; s. c. Lowell, 336; Murray v. Murray, 3 Johns. Ch. 60; Ayr v. Brastow, 5 Law. Rep. 498; Talcott v. Dudley, 5 Ill. 427). In settling the estate, if it becomes necessary to bring suit, the solvent partners should make the trustee a party (Thompson v. Frere,, 10 East, 418; Burt v. Moued, 3 Tyr. 569; Cannon v. Wellford, 22 Gratt. 195; Coe v. Whitbeck, 11 P. 42; Halsey v. Norton, 45 Mass. 703; Peel v. Ringgold, 6 Ark. 546). Should the solvent partner neglect to promptly and faithfully settle up the firm business, the court of bankruptcy, in the exercise of its equity jurisdiction, will aid the trustee (McLean v. Ihrnsen, 1 West. L. J. 189; Parker v Muggridge, 2 Story, 334; Ayr v. Brastow, 5 Law Rep. 498). The trustee is justified in putting partially manufactured property in a saleable condition, though if the expense of so doing is large, he should first obtain an order for that purpose (Foster v. Ames, 2 B. R. 455; s. c. I Lowell, 313). When it is clear that property which comes into the hands of the trustee did not belong to the bankrupt, he should surrender it to the lawful owner (In re Noakes, 1 B. R. 592).

money' the property of the estates for which they are trustees, under the direction of the court, and close up the estate as expeditiously as is compatible with the best interests of the parties in interest; (3) deposit all money received by

1In reducing the property to money, the trustee may sell subject to the approval of the court for such sum as he may be offered, and he may sell without the approval of the court when he realizes not less than seventy-five per cent. of its appraised value (8706). The section here referred to is the only provision in the present Act prescribing the method of disposing of the real and personal property belonging to the estate, though the manner is indicated in Rule XVIII. See also 57h which provides for fixing the value of securities held by secured creditors. As to the manner of selling under the former Act, see R. S. 15062, 5062A, 5062B, 5063, 5064 and 5065. The trustee can sell the property wherever it is situated (Oakey v. Corry, 10 La. Ann. 502), but he can convey no title unless he follows the statute of bankruptcy in making the sale (Joy v Berdell, 25 Ill. 537; Wisner v. Brown, 50 Mich. 553; Gray v. Heslep, 33 Mo. 238). As has been before stated, the character of the property which vests in the trustee is two fold, the title which the bankrupt had in the property and the rights of action which the creditors had. If the sale is of "all the trustee's right, title and interest in and to the property," the vendee will acquire all the rights of action which the trustee could have exercised, and may institute proceedings to set aside a prior conveyance for fraud (Williams v. Vermeule, 4 Sandf. Ch. 388), though he could not so act if he had acquired by the sale only such right, title and interest as the bankrupt had (Baker v. Vining, 30 Me. 121. See also Glenny v. Langdon, 98 U. S. 20). If there are no fraudulent conveyances or voidable preferences, then there are no rights in the creditors, and the sale will be of such rights as the bankrupt possessed, the purchaser taking the property subject to all existing liens and equities (In re Stuyvesant Bank, 10 B. R. 399; s. c. 12 Blatch. 179; in re Wynne, 4 B. R. 23; Strong v. Clawson, 10 Ill. 346). Dower rights are not divested by a trustee's sale, the court having no jurisdiction thereover (In re Angier, B. R. 619; s. c. 10 A. L. Reg. 190; in re Hester, 5 B. R. 285; Porter v. Lazear, 109 U. S. 84; in re Kelso,, 102 Pa. St. 7; ex p. Bell, 1 Glyn & J. 232; in re Smith, 5 Ves. 189; Speake v Kinard, 4 Rich. [N. S.], 54. See also 88 as to dower). The trustee, by order of the court, can sell encumbered property free from liens (In re Nat. Iron Co., 8 B. R. 422; in re Pittlekow [D. C.], IN. B. News, 234; s. c. 92 Fed. Rep. 901). The term "court" here used includes the referee (81[7]), and he, too, has authority to order a sale so made (In re Sanborn [D. C.], 96 Fed. Rep. 551). The lien on the property so sold is not vitiated, but it attaches to the proceeds of the sale and should be so ordered by the court (Southern Loan & Trust Co. v. Benbow [D. C.], 96 Fed. Rep. 514). The order authorizing such a sale must be founded on a petition which sets forth all the facts, showing such sale to be for the best interests of all parties (In re Schneff, 2 Ben. 72! s. c. 1 B. R. 190; Sutherland v. L. S. C. Co., 9 B. Ř. 298). The order should not be made if lienors will be injuriously affected (Foster v. Ames, 2 B. R. 455; s. c. I Lowell, 313). They should be given notice of the application to have the property sold free from encumbrances, otherwise their liens will be unaffected and the purchaser will take subject to them (Ray v. Norseworthy, 23 Wall. 128; s. c. 12 B. R. 145; Factors' Ins. Co. v. Murphy, 111 U. S. 738). The court will be justified in disapproving a sale and ordering a new one if it believes, whatever the showing, that a substantially larger price can be obtained (In re O'Fallon, 2 Dill. 548), or if it has been conducted to the prejudice of creditors (In re Troy Woolen Co., 4 B. R. 629; s. c. 8 Blatch. 465). Under the present Act, the only person restricted in purchasing from the trustee is the referee before whom the estate is pending (829 [2]). Aside from the statute, the trustee cannot legally bid or purchase,