to convey property to such party. The compromise was afterward set aside. Held, that the time the compromise remained in force should be deducted in determining the period of limitation under section 5057, R. S. Fairbanks v. Bank, 38 Fed. Rep. 630.

The court here decided what constituted sufficient information as to a trust deed and its contents to put the assignee in bankruptcy on inquiry. Greene v. Taylor, 132 U. S. 415.

The limitation in section 2 of the Act of 1867 was held to apply only to property held adversely to a bankrupt or his assignee. Davis v. Anderson et al., 6 N. B. R. 145; 7 Fed. Cas. 103.

The statute of limitations does not begin to run until the fraud is discovered as to an action to recover property concealed by the party, or for redress against a fraud which, by its nature, remains a secret. Fullings v. Fullings, 3 N. J. L. J. 270; 9 Fed. Cas. 991.

An assignee in bankruptcy sought to recover certain property, or the proceeds thereof, from a third person to whom it was alleged they were fraudulently transferred. The latter opposed the proceedings on the ground that the amount claimed by the assignee was larger than he was liable for, and also on account of a claim for services, which was disputed by the assignee. The court decided that he was not a "person claiming an adverse interest touching the property and rights of property of such bankrupt," within the meaning of section 2 of the Act of 1867. In re Krogman, 5 N. B. R. 116; 14 Fed. Cas. 866.

66

A petition to recover certain property and books of account alleged to have been fraudulently transferred was held to be a suit at law or in equity" within the meaning of section 2 of the Act of 1867, fixing a limitation on such suits. In re Krogman, 5 N. B. R. 116; 14 Fed. Cas. 866. Under the Act of 1867 the limitation of the time for the commencement of actions by an assignee in bankruptcy began to run from the time of his appointment. Bank v. Sherman, 101 U. S. 403.

An action for the recovery of insurance money was held to be barred by section 5057, R. S., notwithstanding the bankrupt had omitted to disclose that the policies had been taken out and assigned before bankruptcy to a trustee for his daughters. Avery v. Cleary, 132 U. S. 604; Cleary v. Ellis Foundry Co., id. 612.

Section 8 of the Act of 1841, fixing a two years' limitation for suits by or against an assignee in bankruptcy, was held to apply only to suits growing out of disputes in respect to property rights of the bankrupt which came into the hands of the assignee, and to have no reference to suits growing out of the dealings of the assignee with the property after it came into his hands. In re Conant, 5 Blatchf. 54; 6 Fed. Cas. 257.

[See notes to §§ 2, 47 and 70.1

[For an important opinion, affirming the authority of the district court under the Act of 1898 to grant an injunction against the sale of property under the process of a State court until a petition in bankruptcy can be filed against the debtor, see notes to section 71.]

COMPOSITIONS.

§ 12. Compositions, when Confirmed.- (a.) A bankrupt may offer terms of composition to his creditors after, but not before, he has been examined in open court or at a meeting of his creditors and filed in

court the schedule of his property and lists of his creditors, required to be filed by bankrupts.

(b.) An application for the confirmation of a composition may be filed in the court of bankruptcy after, but not before, it has been accepted in writing by a majority in number of all creditors whose claims have been allowed, which number must represent a majority in amount of such claims, and the consideration to be paid by the bankrupt to his creditors, and the money necessary to pay all debts which have priority and the cost of the proceedings, have been deposited in such place as shall be designated by and subject to the order of the judge.

(c.) A date and place, with reference to the convenience of the parties in interest, shall be fixed for the hearing upon each application for the confirmation of a composition, and such objections as may be made to its confirmation.

(d.) The judge shall confirm a composition if satisfied that (1.) It is for the best interests of the creditors;

(2.) The bankrupt has not been guilty of any of the acts or failed to perform any of the duties which would be a bar to his discharge; and (3.) The offer and its acceptance are in good faith and have not been made or procured except as herein provided, or by any means, promises, or acts herein forbidden.

(e.) Upon the confirmation of a composition, the consideration shall be distributed as the judge shall direct, and the case dismissed. Whenever a composition is not confirmed, the estate shall be administered in bankruptcy as herein provided.

Application.

In the case cited, the circuit and district courts decided that the provision for compositions in the Laws of 1867 is constitutional, and discussed the requirements of the resolution and other proceedings in such cases. In re Reiman et al., 7 Ben. 455; 12 Blatchf. 562; 20 Fed. Cas. 490, 500.

Composition proceedings must be had in the district court where the bankruptcy proceedings are pending. In re Wronknow, 15 Blatchf. 38; 18 N. B. R. 81; 30 Fed. Cas. 718.

After the adjudication of a firm, one member may submit a proposition for a composition, notwithstanding the firm had made an assignment for the benefit of creditors under a state law prior to the adjudication. Pool V. McDonald et al., 15 N. B. R. 560; 19 Fed. Cas. 987.

An order refusing a discharge in bankruptcy is not a bar to composition proceedings. In re Joseph, 24 Fed. Rep. 137.

The mere fact that the bankrupts have been refused a discharge in bankruptcy on a specification of objection is not an absolute bar to a composition under the Act of 1867. A discharge releases a bankrupt from his debts whether there are or are not assets for distribution. Under a composition, a sum of money is paid in satisfaction of the debt. In re Odell, 16 N. B. R. 501; 18 Fed. Cas. 575.

A petition for composition should set forth its nature and terms, and the belief of the petitioner that it will be accepted by the required number. So held under the Act of 1867. In re Holmes, 8 Ben. 74; 12 Fed. Cas. 393. A debtor, injured creditors, or the assignee in bankruptcy, can recover money paid to secure signatures to a composition, and it is no defense to such an action that the composition deed was invalid. Bean v. Brookmire, 2 Dill. 108; 2 Fed. Cas. 1132.

United States Act of 1874 and British Act of 1868 concerning compositions compared; extracts quoted in parallel columns. In an elaborate and carefully prepared opinion, Judge Treat discusses the law and procedure in composition, the respective rights of creditors and of the bankrupt, and analogies of the United States statute with the British act. In re Scott, 15 N. B. R. 73; 21 Fed. Cas. 805 (1876).

Hearing.

Where a composition is pending, the bankrupt can be compelled to appear before the register and produce his books for examination on the question whether the composition was for the interest of all concerned. In re Ash, 17 N. B. R. 19; 2 Fed. Cas. 6.

In a proceeding for a composition, the books of the bankrupt must be produced if desired and time given for an examination before the vote is taken. At such meeting the register, or other presiding officer, has power to regulate the proceedings and decide questions subject to review by the court. The examination of the debtor should be conducted like that of a witness in a court, and the proceedings should be recorded. In re Holmes, 8 Ben. 74; 12 Fed. Cas. 393.

Where the object of a meeting of creditors to consider a proposed composition failed by reason of mistakes on the part of attorneys, it was held that the court might order a second meeting. In re McDowell, 6 Biss. 193; 16 Fed. Cas. 69.

It is not competent for a resolution of composition to provide that upon the delivery of the notes agreed to be given to the creditors, all the property in the hands of the assignee shall be delivered to the bankrupt and the assignee discharged. In re Hyman et al., 8 N. B. R. ; 12 Fed. Cas. 1135.

At a meeting of creditors to vote upon a composition, the bankrupt was absent. After a recess, the bankrupt not appearing for examination, a resolution accepting a composition was passed. Creditors who had opposed an adjournment to permit the attendance of the bankrupt, objected to the confirmation on the ground of his absence, and the fact that he had not been examined. The court held that the objections were too late

after the adoption of the resolution. In re Little, 19 N. B. R. 234; 15 Fed. Cas. 600.

At a meeting for final action on a proposed composition, the report of the register will be assumed to be a full and true record of all the proceedings had before him. In re Spencer, 18 N. B. R. 199; 22 Fed. Cas. 914. It was held that a composition by which a previous assignment under a state law was ratified might be varied at a subsequent meeting of creditors by providing for the distribution of the assets in bankruptcy, no creditors being prejudiced thereby. In re Dumahaut et al., 15 Blatchf. 20; 7 Fed. Cas. 1177.

When a bankrupt asks for a meeting of creditors for the purpose of proposing a composition, he will be held primarily liable for the register's costs under the Act of 1867. In re Griffin, 8 Ben. 328; 11 Fed. Cas. 5.

Who May Participate in Proceedings.

In determining whether the required number of creditors had joined in a composition, those who are fully secured need not be taken into account. In re Van Auken et al., 14 N. B. R. 425; 28 Fed. Cas. 946. Attaching creditors have no right to vote in composition proceedings, and are affected by the composition. In re Shields, 4 Dill. 588; 15 N. B. R. 532 (1877); 21 Fed. Cas. 1308.

The Amendatory Bankrupt Act of 1874 contemplated that secured creditors should not vote at a composition. A creditor who had attached, therefore, could not vote until he should release the attachment. In re Scott, 15 N. B. R. 73; 21 Fed. Cas. 805 (1876).

In composition proceedings, where there are joint and separate debts, the creditors may direct a general composition if there is no objection, but if any creditor objects there must be a vote by the separate classes of creditors. In re Spades et al., 6 Biss. 448; 22 Fed. Cas. 848.

Creditors who have proved their debts under a void voluntary assignment may nevertheless vote upon a resolution for a composition in bankruptcy proceedings. In re Troth, 1 Fed. Rep. 405.

Objections to the vote of a creditor upon a proposed composition on the ground that his claim is fictitious cannot be made for the first time on the motion for confirmation. They should be made before the vote is taken, or if the facts are discovered afterward, then as soon as possible. In re Block et al., 18 N. B. R. 328; 3 Fed. Cas. 715.

At a meeting of creditors of a firm to act on a proposed compromise, Individual creditors have no right to vote. In re South Boston Iron Co., 4 Cliff. 343; 22 Fed. Cas. 812.

A creditor who considers himself secured, though he is not, is not entitled to consideration in determining whether the required number have assented to the composition. In re Snelling, 19 N. B. R. 120; 22 Fed. Cas. 719.

The word "creditors" in the provisions of the Act of 1867, relating to compositions, was held to mean all persons having debts provable in bankruptcy. Ex parte Trafton, 2 Low. 505; 24 Fed. Cas. 122.

Workmen having privileged debts were held entitled to vote for a composition only on the excess of their debts over $50, made privileged by law. In re O'Neil, 14 N. B. R. 210; 18 Fed. Cas. 715 (1876).

Where a creditor had appeared at a meeting to consider an offer of composition, and subsequently withdrawn, it was held that he could be counted as voting against the composition. In re Richmond et al., 18 N. B. R. 362; 20 Fed. Cas. 736.

Creditors of a bankrupt gave a power of attorney to sign a composition with directions that it was not to be accepted if made for less then 20 per cent., one-half payable in six months and one-half in twelve months from February 16th. The attorney signed a composition for 20 per cent. payable in six and twelve months, from March 16th.

The difference in time was held to be fatal to the proceedings. In re Alexander, 9 Ben. 99; 1 Fed. Cas. 347.

Creditors who have not proved their debts, but were allowed to intervene in the proceedings prior to adjudication, cannot take part in subsequent proceedings for a composition. In re Bryce et al., 19 N. B. R. 287; 4 Fed. Cas. 520

The question being whether one-half of the creditors had assented to a composition, damages for a tort not assessed were excluded. In re Bailey et al., 2 Woods, 222; 2 Fed. Cas. 362.

A creditor can vote on claims which he bought up for the express purpose of opposing the composition. Ex parte Jewett, 2 Low. 393; 13 Fed. Cas. 580.

Only creditors who have proved their claims are qualified to take part in a meeting to receive a proposed composition. Oral or written testimony may be received at such a meeting when it is pertinent to the question whether the composition is for the best interest of creditors. In re Keller et al., 18 N. B. R. 331; 14 Fed. Cas. 233.

Held, under the Act of 1867, that only creditors who had proved their debts could vote upon accepting a proposition to have a composition. In re Matthers, 17 N. B. R. 225; 16 Fed. Cas. 1093.

Objections to Confirmation.

The court will interfere with a proposed composition on the application of a single creditor who charges fraud or deceit, to examine the charges. In re Keiler, 18 N. B. R. 36; 14 Fed. Cas. 216.

The fact that the debtor retains possession of his assets is no ground for refusing to confirm a composition which was made before adjudication. In re Van Auken et al., 14 N. B. R. 425; 28 Fed. Cas. 946.

The necessary number of creditors having signed, and it appearing that the interests of all creditors would be promoted by the terms of a composition, it must be confirmed, notwithstanding the bankruptcy was brought about fraudulently and collusively. In re Allen, 17 N. B. R. 157; 1 Fed. Cas. 439.

After the refusal of a discharge, a majority of the creditors voted to accept a composition for one-half of 1 per cent. On the objection