A wife's right to dower having been affirmed in a suit against the assignee, the purchaser at the assignee's sale excepted to the confirmation on the ground that it was said at the sale that the property would be conveyed free from all incumbrances. The exception was sustained. In re Angier, 9 Al. Reg. 190; 1 Fed. Cas. 914.

The court refused to set aside a sale by an assignee in bankruptcy on the ground that the purchaser had agreed before the sale to sell the property to another person at a fixed price on credit. Citizens' Bank v. Ober, 1 Woods, 80; 5 Fed. Cas. 733.

The district court in bankruptcy proceedings having ordered the sale of property that was incumbered beyond its value, the circuit court on review set the sale aside, not for want of jurisdiction in the lower court, but as an improper exercise of its discretion. In re Dillard, 2 Hughes, 191; 7 Fed. Cas. 703.

Where an assignee in bankruptcy has made a conveyance without authority, or which was procured by fraud or imposition, the court of bankruptcy will set it aside in the summary proceeding, while the property is still in the hands of the assignee's grantee. In re Mott et al., 17 Fed. Cas. 901.

The bankruptcy court may refuse to confirm a public sale by the assignee on the ground of mere inadequacy of price. It is not necessary that fraud should be shown, or such gross inadequacy as to indicate fraud. In re O'Fallon, 2 Dill. 548; 18 Fed. Cas. 600 (1873).

Under the circumstances of the case, an application to set aside a sale was granted, notwithstanding the claims of the creditors applying for the order were disputed, and had not been proved. In re Troy Woolen Co., 8 Blatchf. 465; 24 Fed. Cas. 273.

A sale was set aside on the application of creditors who offered to bid a larger sum if another sale were ordered. The court held that they would be bound to make good their pledge. Ibid.

The mere fact that goods were sold at much less than their value, the price being from one-half to two-thirds the market value, was held to be insufficient to invalidate the sale as fraudulent under the thirty-fifth section of the Act of 1867. Sedgwick v. Lynch, 5 Ben. 489; 8 N. B. R. 289; 21 Fed. Cas. 981 (1872).

Where the purchaser was innocently misled by the published notice of a sale in bankruptcy, the court in the exercise of its equity jurisdiction set the sale aside. Searcy v. McChord, 1 Fed. Rep. 261.

Under the circumstances of the case the court set aside a private sale of a bankrupt's property made in pursuance of the order of the court, notwithstanding the purchaser had received a deed and conveyed the title to his father. In re Stevenson et al., 6 Fed. Rep. 710.

Held, that a district court, sitting in bankruptcy in the year 1881, had power by summary order to set aside deeds given by an assignee in bankruptcy under the Act of 1841 when the same were irregularly executed and without due authority. In re Hyde, 6 Fed. Rep. 587.

Before the commencement of proceedings in involuntary bankruptcy,

the debtor promised to pay the petitioning creditor in full. It was held that this did not invalidate the sale of the bankrupt's property in pursuance of the proceedings so instituted. Wallace v. Loomis, 97 U. S. 146. Without proof of actual fraud, a private sale by an assignee under an order of the court will be set aside upon a showing that it was worth much more than the price at which it was sold. In re Palmer, 13 Fed. Rep. 870.

The assignees in bankruptcy sold the real estate in a lump when it should have been sold in separate parcels. The sale was set aside after confirmation, but before delivery of the deed. The court held that purchasers in good faith should be liberally indemnified for damages, costs and expenses. In re Lloyd, 11 Fed. Rep. 586.

The court ordered a stock of goods to be appraised and sold by the marshal on the ground that they were liable to depreciation. They were purchased by one of the bankrupts on account of a friend at the exact value placed upon them by the appraisers. The court set the sale aside without proof of the inadequacy of price, or fraud in the transaction. March v. Heaton et al., 1 Low. 278; 16 Fed. Cas. 700.

Miscellaneous.

Until an assignee is appointed and the assignment made, the title to the bankrupt's property remains in the bankrupt. Sedgwick v. Grinnell, 9 Ben. 429; 21 Fed. Cas. 978 (1878).

Where an assignee recovered a fund for the benefit of creditors, it was held that it must be distributed among them generally, and not given to White v. Jones, 6 N. B. R. 175; 29 Fed. Cas. 1020.

one.

A chattel mortgage, valid when the proceedings in bankruptcy were commenced, is not invalidated in the hands of the assignee because it was not renewed as required by the laws of the state. Carlisle v. Davis et al., 9 Ben. 18; 5 Fed. Cas. 75.

It is competent for an assignee in bankruptcy, as representative of the creditor, to sue where the bankrupt himself could not, to set aside any transaction which, under the general law, is partly or wholly void as against creditors. Mitchell v. McKibbin, 29 Leg. Int. 412; 17 Fed. Cas. 506.

A judgment against a debtor whereby a creditor is given an unlawful preference is not valid in bankruptcy, but only voidable. Sale under execution on such judgment, therefore, vests a valid title to the property sold in a bona fide purchaser for value without notice. Zahn v. Fry, 9 N. B. R. 546; 30 Fed. Cas. 904 (1874).

The bankrupt had made an assignment which was void under section 35 of the Act of 1867. The attorney for the bankrupt was also attorney for the assignee and for one of the creditors, and made payments to them out of the proceeds of the assigned property. The assignee, the creditor, and the attorney were ordered to account for such property to the assignee in bankruptcy. In re Meyer, 2 N. B. R. 422; 17 Fed. Cas. 244.

In this case the supreme court sustained an assignment by one partner of the property of the firm, in the name of the firm. Harrison v. Sterry, 5 Cranch, 289.

The provision in the Act of 1841 concerning transactions in good faith, entered into more than two months prior to the commencement of proceedings in bankruptcy, was held to protect only the party dealing with the bankrupt, and not the bankrupt himself. Gassett et al. v. Morse et al., 21 Vt. 627; 10 Fed. Cas. 79 (1843).

An assignee cannot be bound by a decree in proceedings to which he was not a party. Atkinson v. Farmers' Bank, Crabbe, 529; 2 Fed. Cas. 100 (1844).

In the case of a voluntary bankrupt, his rights to the disposition of his property cease with the filing of his petition. In the case of an involuntary bankrupt, they cease with the adjudication. In re Dillard, 2 Hughes, 191; 7 Fed. Cas. 703.

A mortgagee of property belonging to the estate of a bankrupt, if he fails to intercept the rent before the foreclosure, cannot have the rent applied upon his claim specifically on finding the property insufficient to discharge his indebtedness. As a general rule, where the assignee in bankruptcy receives the rent of mortgaged property, it must be distributed among the general creditors. Foster v. Rhodes, 10 N. B. R. 523; 9 Fed. Cas. 572. Payments made in bad faith to a debtor after a petition in bankruptcy has been filed are void; and the court (Judges Dillon and Treat) citing Mays v. National Bank (64 Pa. St. 74) left the question open whether all payments made under such circumstances are to be held void if the debtor is subsequently declared bankrupt. Babbitt v. Burgess, 2 Dill. 169; 2 Fed. Cas. 280.

The laws of North Carolina require that a deed should be proved before a clerk of the superior court before it can be recorded. It was held that this would not authorize the clerk to refuse to record a deed of assignment executed under the bankrupt law upon a certificate of the clerk of the United States district court. In re Neale, 3 N. B. R. 177; 17 Fed. Cas. 1264.

The bankrupt was a retail grocer and continued to sell goods after filing his voluntary petition. The court characterized his conduct as "utterly unlawful." In re Pryor, 4 Biss. 262; 20 Fed. Cas. 28.

A third person who brings a suit on notes belonging to the bankrupt is to be treated as a trustee of the bankrupt as to the proceeds. In re Perley, 4 N. Y. Leg. Obs. 254; 19 Fed. Cas. 255.

The bankrupts gave a mortgage to secure a party who had become bound with them to pay certain debts. The court of bankruptcy decided that this mortgage inured to the benefit of the creditors to whom the mortgagee was bound, and that it could enforce the trust so created; and the mortgagee having assigned the mortgage to a party with notice of the facts, it was further held that the latter took the property subject to such trust. In re Pierce et al., 2 Low. 343; 19 Fed. Cas. 629. A suit in equity is not the proper proceeding by which an assignee

should seek to obtain possession of property belonging to the bankrupt. The proper remedy is by replevin. In re Oregon Iron Works, 4 Saw. 169; 18 Fed. Cas. 791.

A member of a firm purchased clothing for his private use, and paid for the same out of the firm property, without the knowledge of his copartners. Held, that the assignee in bankruptcy could recover the property turned over, and that a bill in equity was the proper proceeding as questions of fraud, trust and partnership were involved. Rash et al., 5 N. B. R. 399; 23 Fed. Cas. 789.

Taylor v.

The assignee asked for a summary order upon the bankrupt to deliver to him a policy of life insurance on the endowment plan. It was shown that a short time before the commencement of proceedings the bankrupt had assigned the policy to his son, a minor. It was held that it could only be recovered by an action at law or suit in equity, to which the son must be made a party defendant. In re Stevens, 23 Fed. Cas. 1. After a petition in bankruptcy was filed, but before adjudication, a suit is brought in a state court to foreclose a mortgage. Before an assignee is appointed, the mortgage is foreclosed and the property sold. Afterward the assignee files a bill to redeem the property. Held, that the right to redeem was cut off by the foreclosure. Sedgwick v. Grinnell, 9 Ben. 429; 21 Fed. Cas. 978 (1878).

A holder of stock in a corporation is liable to creditors for the amount remaining unpaid, notwithstanding he was assured by the officers of the company when he bought the shares that they were full-paid. Myers v. Seeley et al., 10 N. B. R. 411; 17 Fed. Cas. 1118.

The bankrupt fled from the jurisdiction taking with him a certificate of stock in a corporation. His assignee demanded the issuance of a new certificate, and tendered indemnity. The corporation refused. Held, that the right of the assignee to a transfer and new certificate could be enforced by a bill in equity against the corporation. Wilson v. Atlantic & St. L. R. Co., 2 Fed. Rep. 459.

A register has the right to assign and convey the estate, real and personal, of the bankrupt notwithstanding that the title to the property is in dispute, if there be no one before the register opposing the execution of said assignment. In re Wylie, 2 N. B. R. 137; 30 Fed. Cas. 731 (1868). Where the purchaser of a patent commences an action for an alleged infringement, the defendant cannot set up the right of an assignee in bankruptcy to the patent in defense to such action. Sessions v. Romada, 145 U. S. 29.

In a case where the assignee in bankruptcy had proceeded by a bill in equity against the bankrupt and another person, alleging that the bankrupt had sold his property and invested the proceeds in a business carried on in the name of the other defendant, the plaintiff having failed to prove the latter allegation, the court held that the bill must be dismissed without prejudice to an action at law against the bankrupt. Cramer v. Cohns, 119 U. S. 355.

An assignee in bankruptcy may recover possession of land withheld by

the bankrupt by a summary petition, and the children and wife of his bankrupt having a reversion are not necessary parties. In re McKenna, 9 Fed. Rep. 27.

The presumption that the sale by a retail merchant of his whole stock is fraudulent cannot be overcome by evidence that the vendee did not know of the insolvency of the vendor, and that he paid the full value of the property. It is, however, sufficient for the vendee to show that he sought information as to the pecuniary condition of the vendor; also that the vendor intended to use the purchase price in the payment of his debts. Norton v. Billings et al., 4 Fed. Rep. 623.

The bankrupt had made a contract to buy a certain number of logs at a fixed price, and advanced $1,000 on the contract. Later, he became embarrassed, and was unable to pay the balance of the purchase price when the logs were tendered. Soon after he was adjudged a bankrupt, and the assignee brought suit against the party to whom the advance had been made to recover it. It was held that he could not recover, as the contract had been terminated solely by the default of the bankrupt. Kane v. Jenkinson, 10 N. B. R. 316; 14 N. B. R. 121.

[See notes to §§ 47, 60 and 67.]

THE TIME WHEN THIS ACT SHALL GO INTO EFFECT.

§ 71. (a.) This Act shall go into full force and effect upon its passage: Provided, however, That no petition for voluntary bankruptcy shall be filed within one month of the passage thereof, and no petition for involuntary bankruptcy shall be filed within four months of the passage thereof.

(b.) Proceedings commenced under State insolvency laws before the passage of this Act shall not be affected by it.

Referring to the Act of 1841, the court held that the date of its passage meant the date of its approval. In re Tebbetts, 5 Law Rep. 259; 23 Fed. Cas. 826 (1842).

Bankruptcy Act and Insolvency Laws of States.

State and national bankrupt laws discussed in Adams v. Story, 1 Fed. Cas. 141.

The authority of congress to pass uniform laws on the subject of bankruptcy does not prevent the states from legislating on that subject if the power is not exercised by congress, or if the state law did not conflict with laws that congress might pass. Ogden v. Saunders, 12 Wheat. 213; Boyle v. Zachary, 6 Pet. 348; Sturges v. Crowninshield, 4 Wheat. 122.

The passage of a Bankrupt Act by congress suspended the operation of the insolvent laws of states so far as they covered the same subjectmatter. In re Reynolds, 9 N. B. R. 50; 20 Fed. Cas. 612.