tract express or implied," did not cover the case of a contract implied by law.1 There was a great difference of opinion whether a judgment obtained pending bankruptcy proceedings could be proved under the Act of 1867.2 The Supreme Court finally decided that such a judgment was provable. Clause 5 has adopted this rule, except that the debt is now to be proved and not the judgment. * Besides the debts mentioned in § 63, the act provides for the proof of debts of secured creditors and sureties and of debts arising as a penalty.5 Preferred creditors are not allowed to prove unless they surrender their preferences. k Paragraph b does not enlarge the class of debts which may be proved, but provides, that if any claim coming within the scope of paragraph a is unliquidated, it may be liquidated and proved. The use of the word " claims" shows that it was not intended to include causes of action arising out of tort. The Act of 18677 included" unliquidated damages" in actions. of tort for conversion. The difference in phraseology is significant. 8 If this clause were interpreted in the other way it would include all actions for tort, whether property were involved or not. No bankrupt law has ever done this, and it would be a strange anomaly if Congress should have extended in this direction the scope of the law which is so much more restricted in other respects than former laws. The word "claim" is debt." used in this country as a synonym for " demand" In the numerous instances where it occurs in this act it has the same meaning. 10 The provisions of § 17 also throw light on the meaning of paragraph b. It is there enacted that a discharge shall release a bankrupt from all his provable 5 Act of 1898, § 57 h, i, j. See supra, 6 Ib. § 57 g. 1 Dusenbury v. Speir, 77 N. Y. 144. 2 Supra, § 226. See also the cases $ 520. cited on both sides in the argument of Boynton v. Ball, 121 U. S. 457. Freeman, Judgments, 4th ed. § 245. 3 Boynton v. Ball, 121 U. S. 457. 4 Re Pinkel, 1 N. B. N. 138. 7 § 19, 14 Stats. 525, R. S. § 5067. 8 Supra, § 186. 9 Supra, § 220. "9 19 See § 1 (9) & (11), § 2 (2), § 9, § 25, § 55 b, d, e, § 56, § 57. debts except, among other things, judgments for wilful and malicious injuries to the person or property of another. The inference is plain that Congress did not intend that a cause of action in tort should give rise to a provable debt till it was reduced to judgment. Because otherwise it would have included such causes of action in § 17, as it is incredible that Congress should intend to release the debtor from liability for a tort but not from liability on a judgment for a tort. These considerations show conclusively that Congress did not intend to include torts within the scope of paragraph b. § 527. Act of 1898.-SEC. 64. DEBTS WHICH HAVE PRIORITY.a. The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, State, county, district, or municipality in advance of the payment of dividends to creditors, and upon filing the receipts of the proper public officers for such payment he shall be credited with the amount thereof, and in case any question arises as to the amount or legality of any such tax the same shall be heard and determined by the court. b. The debts to have priority, except as herein provided, and to be paid in full out of bankrupt estates, and the order of payment shall be (1) the actual and necessary cost of preserving the estate subsequent to filing the petition; (2) the filing fees paid by creditors in involuntary cases; (3) the cost of administration, including the fees and mileage payable to witnesses as now or hereafter provided by the laws of the United States, and one reasonable attorney's fee, for the professional services actually rendered, irrespective of the number of attorneys employed, to the petitioning creditors in involuntary cases, to the bankrupt in involuntary cases while performing the duties herein prescribed, and to the bankrupt in voluntary cases, as the court may allow; (4) wages due to workmen, clerks, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant; and (5) debts owing to any person who by the laws of the States or the United States is entitled to priority. c. In the event of the confirmation of a composition being set aside, or a discharge revoked, the property acquired by the bankrupt in addition to his estate at the time the composition was confirmed or the adjudication was made shall be applied to the payment in full of the claims of creditors for property sold to him on credit, in good faith, while such composition or discharge was in force, and the residue, if any, shall be applied to the payment of the debts which were owing at the time of the adjudication. The provisions of paragraphs a and b are somewhat similar to those of § 28 of the former act,' but the order of priority is different. It has been held that taxes on a homestead which is exempted from the operation of the bankrupt act should be paid by the trustee, 2 and also taxes on a bankrupt's property, part of which is exempt.3 The provisions of the former act gave priority to debts due the United States as well as taxes, but the result will be the same because Revised Statutes § 3466 gives such priority independent of the bankrupt law. Debts as well as taxes due a State were also included. There is nothing which would give such a debt priority at present, unless the state law contained a provision to that effect. 1 14 Stats. 530. R. S. § 5101. 4 Act of 1867, § 28, 14 Stats. 530, R. S. § 5101. 5 Lewis v. U. S., 92 U. S. 618. Supra, §§ 228 et seq. The terms of clause 1, paragraph b, would undoubtedly include the expenses of a receiver appointed to preserve the estate under the authority of § 2 (3). In a contested case the petitioning creditor may recover his costs if the debtor is adjudged a bankrupt.1 This does not include counsel fees.2 Costs are to be paid out of the estate and would undoubtedly be given priority together with the filing fee under clause 2. Clause 3 will cover the expenses of officers in administering the estate, such as the publication of notices, the taking of testimony, travelling expenses and the fees of marshals in serving warrants. There is no express provision for the allowance of an attorney's fee to the trustee, but a reasonable fee should be allowed for services necessary in the administration of the estate. Such was the rule under the Act of 1867.5 The expenses of a trustee in administering the estate may be allowed under § 62, since a trustee is an officer. Under this section, and by virtue of Rule XXXV. 3, the trustee should be allowed counsel fees.7 It has been held that where the trustee is a lawyer, he may receive compensation for his own. services as counsel.8 The bankrupt is allowed services of counsel in performing the duties imposed on him by the act, and a reasonable attorney's fee will be paid. In voluntary cases fees will be allowed for an attorney's services which have been of benefit to the estate. 10 Clause 4 differs in terms from the last law, which gave priority to the extent of fifty dollars for work done six months before the publication of notice of proceedings in bankruptcy. Operatives, clerks or house-servants were entitled to this priority, but the terms of the present law would include the same persons. Workmen will have priority up to three hun 1 Rule XXXIV. 2 Re Ghiglione, 93 Fed. Rep. 186. 3 Act of 1898, § 62. 4 See Rules X., XXVI. 5 See ante, $ 510. See also Cadwell's Assignment, 89 Iowa, 533. 6 Act of 1898, § 1 (18). 7.See ante, § 511. 8 Re Mitchell, 1 N. B. N. 264. 9 Re Michel, 1 N. B. N. 265. 10 Re Beck, 92 Fed. Rep. 889. 11 Act of 1867, § 28, 14 Stats. 530, R. S. § 5101. dred dollars only, though under the law of the state they have priority to a greater amount, and clause 5 provides for a recognition of these state laws. Under this clause workmen, clerks or servants will have priority only for wages earned for three months before the proceedings, but where a firm stopped business in August, 1898, and a petition against it could not be filed till November 1, 1898, it was held that the workmen were entitled to priority for the three months preceding the stoppage of business. 2 The claim of a person who manufactures cheese under a contract with the bankrupt is not entitled to priority under this clause, though the person performs manual labor himself. 3 In this case he made the cheese in his own dairy and employed his servants to help him. He was in the position of an independent manufacturer and did not occupy the relation of a workman, clerk or servant. But the fact that the work is not done in the shop of the employer is of no consequence. Thus a person who made shoes at his own home out of leather furnished by the employer was held to be an "operative," entitled to priority under an insolvent law of Massachusetts.* The courts have always construed similar provisions of bankrupt laws in a liberal manner. Thus a person hired to examine the books of a bankrupt was held to be entitled to priority as a " clerk." 5 And under a statute giving precedence to claims of clerks and servants, it was held that the mate of a vessel was a servant of the owner, and a travelling man was a clerk or servant of the person by whom he was employed." The editor and members of the staff of a newspaper are clerks or servants of the owner of the paper. 8 6 Under the Act of 1867 persons having priority under a state law were not given priority in bankruptcy.9 Clause 5 has changed the old law in this respect. 1 Re Rouse, 91 Fed. Rep. 96, 1 N. B. N. 75. 2 Re Rouse, 91 Fed. Rep. 514. 3 Re Rose, 1 N. B. N. 212. Thayer v. Mann, 2 Cush. 371. 5 Ex parte Rockett, 2 Lowell, 522, Fed. Cas. No. 11,977. 6 Ex parte Homborg, 2 M. D. & De G. 642. 7 Ex parte Neal, Mont. & McA. 194. 8 Ex parte Jennings, 7 L. T. N. 8. 601; Ex parte Chipchase, 11 W. R. 11. 9 Re Stuyvesant Bank, 9 N. B. R. 318, Fed. Cas. No. 13,584, 10 N. B. R. 399, Fed. Cas. No. 13,583. |