so presented. The security afforded by a trust deed in the nature of a mortgage is not at all impaired by a failure to present the trust deed, and the trustee is not required to waive recourse against other property of the estate as a prerequisite to its enforcement against the trust property although the secured demand has not been allowed.s

32. What Interest Recoverable

Recoverable on Secured

Claim When Estate Insolvent.

Whenever the estate of a decedent is insolvent, the maximum rate of interest payable after the first publication of notice to creditors on any claim which is paid in due course of administration, whether secured by encumbrance or not, is seven per cent per annum simple interest; but if

8 Waiver not Required in Case of Deed of Trust."As the deed. . . . requires no judicial foreclosure, and the trusts and powers therein declared are in full force, it follows that sections 1493 and 1502 of the Code of Civil Procedure, prescribing the time within which claims must be presented against the estate of a deceased person, and section 1500 of the same code, allowing an action for foreclosure of a mortgage, without presentation of such claim, only when all recourse against any other property of the estate is expressly waived in the complaint,' have no application to the case before us, and the right of the defendant to execute the powers conferred by the deed, and apply the proceeds arising therefrom to the payment of the debts and charges named in the deed, is not dependent upon a compliance with these sections': More v. Calkins, 95 Cal. 435, 438, 439, 29 Am. St. Rep. 128, 30 Pac. 583.

the secured demand is enforced by a foreclosure of the security, the encumbrancer may, until the encumbrance is merged in the foreclosure judgment, recover interest at the conventional rate provided for by the parties, so far as the proceeds of the encumbered property are sufficient to pay the same, although exceeding the rate of interest above limited."

9 Interest Recoverable When Estate Insolvent. Code of Civil Procedure, section 1494, last sentence: "If the estate be insolvent, no greater rate of interest shall be allowed upon any claim after the first publication of notice to creditors than is allowed on judgments obtained in the superior court."'

Civil Code, section 1920: "Interest is payable on judgments recovered in the courts of this state, at the rate of seven per cent per annum, and no greater rate, but such interest must not be compounded in any manner or form,"

The claim' referred to in this section [1494] is that which, by the preceding section, must be presented to the administrator or executor for allowance, or be forever barred,' and which, when 'allowed' and filed in the court, is under section 1497, 'ranked among the acknowledged debts of the estate, to be paid in due course of administration.' The rule therein limiting the rate of interest is a direction to the administrator or executor in determining the amount to be 'allowed' by him upon the claim when the estate is insolvent, and which is to be paid out of the general assets of the estate, but has no application to the action of a eourt in a suit for the foreclosure of a mortgage.' ?? For an action for the foreclosure of the mortgage is an independent proceeding. Thus, this provision is inapplicable, and the mortgagee can recover the interest provided for in the mortgage, although the estate was insolvent and the rate of interest contracted fór

exceeded that allowed on judgments: Visalia Sav. Bank v. Curtis, 135 Cal. 350, 352, 353, 67 Pac. 329.

Historical.-Probate Act, sec. 131, in part, provided: "In case the estate is insolvent, no claim contracted after the passage of this act shall bear greater interest than ten per cent per annum from and after the time of issuing letters." Under this provision it was held that where the holder of a claim sounding in contract and secured by mortgage presents his claim against the estate of the deceased obligor, and the same is allowed and paid in the due course of administration, the estate being insolvent, the elaim does not bear more than ten per cent interest: Ellis v. Polhemus, 27 Cal. 349.

CHAPTER 2.

BANKRUPTCY.

ARTICLE 1.

RELATIONSHIP OF FEDERAL AND STATE LEGISLATION TO EACH OTHER.

33. Congress may enact uniform bankrupt laws. 34. Scope of federal bankrupt laws.

35. Scope of state insolvent laws.

36. Effect of enactment and repeal of federal laws on state laws.

37. Bankrupt and insolvent defined.

38. Persons embraced within operation of federal bankrupt law.

39.

Persons embraced within operation of state insolvent law.

33. Congress may Enact Uniform Bankrupt Laws.

The Congress of the United States has power to enact uniform laws on the subject of bankruptcies throughout the United States.1

34. Scope of Federal Bankrupt Laws.

In the exercise of its power to enact uniform2

1 Const. U. S., art. 1, sec. 8, subd. 4.

2 Law Must be Uniform.-"The laws passed on the subject must, however, be uniform throughout

bankrupt laws Congress may, in its legislative discretion, determine the persons to be embraced within the operation of such laws and the effect of bankruptcy upon personal relations and property rights throughout the United States, including the right to impair the obligation of existing contracts.5

the United States, but that uniformity is geographical and not personal': Hanover Nat. Bank v. Moyses, 186 U. S. 181, 187, 22 Sup. Ct. Rep. 857, 46 Law ed. 1113. 3 Persons to be Embraced.-"The conclusion that an act of Congress establishing a uniform system of. bankruptcy throughout the United States is constitutional, although providing that others than traders may be adjudged bankrupts, and that this may be done on voluntary petitions, is really not open to discussion': Hanover Nat. Bank v. Moyses, 186 U. S. 181, 187, 22 Sup. Ct. Rep. 857, 46 Law ed. 1113.

66

4 The provision in the bankruptcy act allowing the bankrupt the exemptions which he is allowed under the particular law of his state does not render the act unconstitutional. The system is, in the constitutional sense, uniform throughout the United States, when the trustee takes in each state whatever would have been available to the creditors if the bankrupt law had not been passed. The general operation of the law is uniform, although it may result, in certain particulars, differently in different states': Hanover Nat. Bank v. Moyses, 186 U. S. 181, 190, 22 Sup. Ct. Rep. 857, 46 Law ed. 1113.

5 Bankrupt Act may Impair Obligation of Contracts. The subject of 'bankruptcies' includes the power to discharge the debtor from his contracts and liabilities, as well as to distribute his property. The grant to Congress involves the power to impair the obligation of contracts, and this the states were forbidden to do': Hanover Nat. Bank v. Moyses, 186 U. S. 181, 188, 22 Sup. Ct. Rep. 857, 46 Law ed. 1113. Liens-5