to exemptions is to be determined as of the date of the adjudication. Illustrative cases under the former law, which may be of some value are cited in the note below.8

§ 4. Nature of trustee's title in general.-Stated broadly, the rule is that the trustee takes all the property of the bankrupt, whether in possession or in action, at the time the petition was filed, subject to the rule that he is vested by operation of law with the title as of the date of the adjudication. 10 But he acquires title only to that which the bankrupt had at the time the petition was filed. Property not then owned but acquired before the adjudication,11 and property acquired after it and before the discharge, 12 does not vest in the trustee, but becomes the bankrupt's, clear of all the claims of creditors, save those after the commencement of the proceeding or those who, for statutory reasons, are not

petition, is properly paid to his trustee; Matter of Hooks Smelting Co., 15 Am. B. R. 83, 138 Fed. 954, the trustee is entitled to the combination of a safe belonging to the bankrupt t the time of filing the petition.

7. Matter of Fletcher, 16 Am. B. R. 491.

8. Chapman v. Brewer, 114 U. S. 158; Connor v. Long, 104 U. S. 228; Howard v. Compton, Fed. Cas. No. 6,758; Babbett v. Burgess, Fed. Cas. No. 693; Miller v. O'Brien, Fed. Cas. No. 9,586; In re Lake, Fed. Cas. No. 7,992; Stevens v. Bank, 101 Mass. 109.

9. In re Great Western Mfg. Co. (C. C. A.), 18 Am. B. R. 259, 152 Fed. 123; In re Pease, 4 Am. B. R. 578; In re Burka, 5 Am. B. R. 12. See also Matter of Sherman Mfg. Co., 15 Am. B. R. 740; McFarland Carriage Co. v. Solanas, 6 Am. B. R. 221, 108 Fed. 532; In re Meyer, 5 Am. B. R. 593, 106 Fed. 828.

10. In re Fulton, 18 Am. B. R. 591,

153 Fed. 664; In re Youngstrom (C. C. A.), 18 Am. B. R. 572, 153 Fed. 98; Hiscock v. Varick Bank, 206 U. S. 28, 51 Fed. 945, a pledgee's power of sale may be exercised after filing of the petition and before adjudication.

Wages earned after adjudication do not pass to trustee. In re Karns, 16 Am. B. R. 841, 148 Fed 143. See also In re Home Discount Co., 17 Am. B. R. 168, 147 Fed. 538.

11. In re Harris, 2 Am. B. R. 359; Sibley v. Mason (Mass.), 81 N. E. 87. Where testator died in the morning of the day on which a legatee filed a petition and was adjudicated a bankrupt, the legacy vests in his trustee, In re McKenna, 15 Am. B. R. 4, 137 Fed. 611; otherwise, where legacy takes effect after adjudication. In re Woods, 13 Am. B. R. 240, 133 Fed. 82.

12. In re Stoner, 5 Am. B. R. 402, 105 Fed. 752; In re Rennie, 2 Am. B. R. 182.

affected by the discharge.13 After the adjudication and before the appointment of a trustee or receiver, the bankrupt still retains title to his property so that he may maintain an action on a chose in action, and in such a case, a recovery being awarded against the defendant, the latter may protect himself against liability to another suit by the trustee by application to the bankruptcy court.14 It is well settled that the trustee takes not as an innocent purchaser, but as the debtor had it at the time of the petition subject to all valid claims, liens, and equities.15 In all cases unaffected by fraud, and wherein no attachments or executions have been levied upon the bankrupt's property, the trustee is vested, by operation of law,16 with the same but no higher or better title than the bankrupt had.1 A trustee in bankruptcy takes title to the bankrupt property subject to all the equities imposed upon it which are not invalid as to creditors. 18 The trustee takes subject to the rights

13. In re West, 11 Am. B. R. 782, encumbrance of the property which is 128 Fed. 205. void as against the trustee by some positive provision of the act.

14. Rand v. Iowa Cent. R. Co., 186 N. Y. 58, 16 Am. B. R. 692, 78 N. E. 574.

15. Chattanooga Nat. Bank V. Rome Iron Co., 4 Am. B. R. 441, 102 Fed. 755. The valid liens referred to are those valid as to creditors, In re Cramond, 17 Am. B. R. 22; Receivers, etc., v. Staake, 13 Am. B. R. 281, aff'd 202 U. S. 141, 15 Am. B. R. 639. Compare In re Standard Laundry Co., 7 Am. B. R. 254, 112 Fed. 126; Crosby v. Miller, 16 Am. B. R. 805; In re Kolin, 13 Am. B. R. 531, 134 Fed. 557; In re Plattsville F. & M. Co., 17 Am. B. R. 291; Thompson v. Fairbanks, 13 Am. B. R. 437, 445, 196 U. S. 516, the trustee takes the property of the bankrupt, in cases unaffected by fraud, in the same plight and condition that the bankrupt himself held it, and subject to all the equities impressed upon it in the hands of the bankrupt, except in cases where there has been a conveyance or

16. In involuntary proceedings the passage of title from the bankrupt to the trustee is by operation of law and is neither a voluntary assignment nor a transfer under execution or other legal process. Held not to work forfeiture of a lease. Gazlay v. Williams (C. C. A.), 17 Am. B. R. 249, 147 Fed. 678.

17. In re Great Western Mfg. Co. (C. C. A.), 18 Am. B. R. 259, 152 Fed. 123; In re Newton & Co. (C. C. A.), 18 Am. B. R. 567, 153 Fed. 841; Atchison, etc., R. Co. v. Hurley (C. C. A.), 18 Am. B. R. 396, 153 Fed. 503; In re Franklin, 18 Am. B. R. 218, 151 Fed. 642; In re Blake (C. C. A.), 17 Am. B. R. 668, 150 Fed. 279; Doucette v. Baldwin (Mass.), 80 N. E. 444.

18. In re Chantler Cloak & Suit Co., 18 Am. B. R. 498, 151 Fed. 952. Property held by bankrupt as bailee does not pass to the trustee. In re

of the pledgor property held by the bankrupt as pledgee. 19 On a bankrupt's adjudication the debtor's entire non-exempt estate is in legal contemplation brought into custodia legis and appropriated to the payment of his debts as effectually as if taken in execution or attachment, subject to the qualification, except as otherwise provided, that the property is appropriated in the same condition and subject to the same equities as when in the possession of the bankrupt.20 Under certain circumstances, however, the trustee is a representative of the creditors, rather than the bankrupt, in relation to the property of the estate, and he may exercise rights and enforce a title that the bankrupt himself could neither enforce nor exercise.21 Money paid to the bankrupt before adjudication under a mistake of fact is impressed with a constructive trust, which follows it into the hands of the trustee.22 Other cases under the present law, in which the general rule above stated has been applied, are cited in the note below.23 Documents relating to the bankrupt's property include deeds, contracts, securities, bills receivable, notes, bank books, bills of exchange, account books, and all papers and books relating to the bankrupt's business.24 Patents,

Smith & Nixon Piano Co. (C. C. A.), 17 Am. B. R. 636, 149 Fed. 111.

19. In re Bolling, 17 Am. B. R. 399, 147 Fed. 786. In the absence of evidence as to the creditors represented by the trustee, he took subject to agreement between the bankrupt and one who sold him goods that an absolute sale should be deemed a shipment or consignment. Buckwalter Stove Co. v. Stratton, 118 App. Div. (N. Y.) 915, 103 N. Y. Supp. 118. 20. In re Youngstrom (C. C. A.),

18 Am. B. R. 572, 153 Fed. 98.

21. In re Shaw, 17 Am. B. R. 196, 146 Fed. 273, the estoppel of a bankrupt to deny the validity of a lien on his property does not affect his trustee, where such lien was voidable by his creditors; Hosmer v. Tiffany, 17 Am. B. R. 318, 115 App. Div. (N. Y.)

303, 100 N. Y. Supp. 797, in an action by the trustee to set aside a transfer by the bankrupt to his wife in contemplation of their marriage, the trustee is entitled to prove that the "wife" had a husband living, and was incapable of entering into the marriage contract, thereby showing that there was no consideration for the transfer.

22. Matter of Berry & Co., 16 Am. B. R. 564, 146 Fed. 623.

23. Spencer v. Duplan Co., 7 Am. B. R. 563, 112 Fed. 638; Morton v. Lumber Co., 5 Am. B. R. 850; In re Goldman, 4 Am. B. R. 100, 102 Fed. 122; Marden v. Phillips, 4 Am. B. R. 56.

24. In re Hess, 14 Am. B. R. 539, 136 Fed. 988.

copyrights, and trade-marks vest in the trustee, irrespective of the statute.25 But where, though application has been made, the letters patent have not yet been granted, the trustee takes no interest.26 Subdivision 3 is expressive of a general rule of law. A power which is beneficial to a bankrupt donee vests in his trustee; not so a power in trust.27 The plain purpose of the Bankruptcy Act is that the title and right to all things which do not fall within the vesting words of section seventy shall remain in the bankrupt. The studied enumeration of the particular rights and things which the bankrupt is required to surrender takes all other rights and things, not named, without the definition thus fixed, of the property" which the statute intends to take from the bankrupt or to pass to his creditors.28

§ 5. Property transferred in fraud of creditors.-All the property of a bankrupt debtor transferred by him in fraud of his creditors passes to his trustee in bankruptcy. The Bankruptcy Law, section 70a (4), provides that the trustee of the estate of a bankrupt, upon his appointment and qualification, and his successor or successors if he shall have one or more, upon his or their appointment and qualification, shall in turn be vested by operation of law with the title of the bankrupt, as of the date he was adjudged a bankrupt, except in so far as it is to property which is exempt.29 This is the converse of the doctrine that trustees take title subject to equities; they also take title to all property which at any time has been fraudulently conveyed by the bankrupt,30 and in which, therefore, the creditors have

25. An assignee of a copyright vests title in the assignee, which passes to his trustee in bankruptcy. In re Hawley-Dreser Co., 13 Am. B. R. 94, 132 Fed. 1002. Compare In re McBride, 12 Am. B. R. 81, 132 Fed. 285.

26. In re McDonnell, 4 Am. B. R. 230; In re Dann, 12 Am. B. R. 27, 129 Fed. 495.

27. Compare Property which might

have been transferred or levied upon, sec. 7, infra.

28. In re Home Discount Co., 17 Am. B. R. 168, 147 Fed. 538.

29. Bankr. Act, 1898, sec. 70a (4). See In re Tollett, 5 Am. B. R. 305, 105 Fed. 425; Marden v. Phillips, 4 Am. B. R. 566, 103 Fed. 196; In re Brown, 1 Am. B. R. 107, 91 Fed. 358.

30. In re Yukon Woolen Co., 2 Am. B. R. 805, 96 Fed. 326; In re McNa

equities. The trustee is vested not only with the title of the property, but also with the creditors' rights of action with respect to property of the bankrupt fraudulently transferred or incumbered by him, and he may assail in their behalf all of such transfers and incumbrances to the same extent as though the debtor had not been declared a bankrupt.31 The fraudulent transfers here specified are not only those made within the four months period prior to the filing of the petition but those made at any other time. The title vests regardless of the time of the fraudulent transfer.32 Where after the filing of an involuntary