ASSIGNMENTS FOR BENEFIT OF CREDITORS.
See "Building and Loan Associations."
Of risk by employé, see "Master and Servant," §§ 2-5.
Effect of proceedings in bankruptcy, see "Bankruptcy," § 5.
Allowance of attorney's fee in award, see "Arbitration and Award," § 1.
Attorneys in fact, see "Principal and Agent."
§ 1. Retainer and authority.
A warrant of attorney is an instrument authorizing an attorney at law
to appear in behalf of its maker, or confess judgment against him.
-Treat v. Tolman, 113 Fed. 892.....
.51 C. C. A. 522
Of attorney, see "Attorney and Client,” § 1.
1. In criminal prosecutions.
The fact that defendant has been tried and convicted three times on
the same indictment for embezzling funds of a national bank is not suf-
ficient ground for denying bail pending a third writ of error.
-McKnight v. United States, 113 Fed. 451...........51 C. C. A. 285
Where one convicted of crime is admitted to bail pending a writ of
error, the bail should be allowed for a time only sufficient to insure the
filing of the transcript in the court of appeals within a reasonable time,
reserving the question of further bail until the lapse of the time thus
fixed.
-McKnight v. United States, 113 Fed. 451................51 C. C. A. 285
Under the act to establish the circuit court of appeals (26 Stat. 829),
section 11, providing that all provisions of law in force regulating appeals
or writs of error, including provisions for bonds or other securities, shall
regulate such proceedings in that court, and rule 38 of such court, the
court has the power, and it is generally its duty, to admit to bail, after
conviction of a crime not capital, pending a writ of error.
-McKnight v. United States, 113 Fed. 451...........51 C. C. A. 285
Under Rev. St. § 1007, providing that a writ of error, when granted
within 60 days after the rendition of the judgment complained of, or
afterwards, with the permission of a judge of the appellate court, shall
operate as a supersedeas, and under rule 38 of the circuit court of ap-
peals (31 C. C. A. cviii., 90 Fed. cviii.) such writ, in the case of a con-
viction of a crime not capital, stays execution, but such stay of pro-
ceedings does not involve the question as to whether, pending the writ
of error, defendant shall be detained or go at large on bail.
-McKnight v. United States, 113 Fed. 451...........51 C. C. A. 285
Where defendant was convicted of embezzling funds of a national
bank, and the trial court refused to admit him to bail pending a writ
of error, in the absence of some great urgency, a further application for
admission to bail should be made to the appellate court.
-McKnight v. United States, 113 Fed. 451.. ........51 C. C. A. 285
§ 1. Constitutional and statutory provisions.
The Georgia insolvency laws (Code Ga. 1895, c. 4, §§ 2716-2722), provid-
ing for the distribution of the assets of insolvents, and authorizing the
chancellor to recommend to the creditors of the defendant that they
release him from further liability, being in effect a state bankruptcy act,
its operation was suspended by the passage of the bankruptcy act of
1898, and proceedings under the former act are void.
-Carling v. Seymour Lumber Co., 113 Fed. 483........51 C. C. A. 1
§ 2. Petition, adjudication, warrant, and custody of property.
For the purposes of bankruptcy jurisdiction under Bankr. Act 1898
a district court is always open, and has no separate terms.
The pro-
ceedings in a pending suit are therefore continuous from the filing of
the petition to the closing of the estate, and at all times open for re-
examination, and upon proper application and showing any order made
during the progress of the case may be set aside, provided rights have
not become vested under it which will be disturbed by its vacation.
-In re Ives, 113 Fed. 911.....
A creditor has no right to oppose an adjudication in bankruptcy ex-
cept such as is expressly given him by the statute, and Bankr. Act 1898
gives him no right to contest an adjudication upon a voluntary petition.
He cannot, therefore, maintain a petition to vacate an adjudication in
such case after it is made.
In re Ives, 113 Fed. 911....
A creditor of a bankrupt firm, even if entitled to maintain a petition
to vacate the adjudication, cannot do so after the lapse of eight months,
during which other rights have intervened, and without showing a good
reason for the delay; and an allegation that the facts stated in the pe
tition have become known to him "only recently" is insufficient.
-In re Ives, 113 Fed. 911......
§ 3. Assignment, administration, and distribution of bankrupt's es-
tate-Appointment, qualification, and tenure of trustee.
Under Bankr. Act 1898, § 56a, requiring matters submitted to the
creditors to be passed on "by a majority vote in number and amount
of claims of all creditors whose claims have been allowed and are
present," claims allowed are not to be counted in choosing a trustee,
where the creditor is not present, and the power of attorney of his
proxy is insufficient.
-In re Henschel, 113 Fed. 443.....
A notary's certificate of acknowledgment to power of attorney to
proxy of bankrupt's creditor is sufficient though having no venue, as it
complies with the form prescribed pursuant to Bankr. Act 1898, § 30,
vesting the supreme court with power to prescribe rules and forms.
-In re Henschel, 113 Fed. 443.
Assignment, and title, rights, and remedies of trustee in gen-
A trustee in bankruptcy, of a bankrupt whose property has been
seized under a mortgage and is in possession of a receiver appointed
in the mortgage foreclosure suit by a state court of competent jurisdic-
tion, is entitled to the possession of the property not covered by the
mortgage, and to the excess of the proceeds of a sale of the mortgaged
property over the mortgage debt and costs of foreclosure.
-Carling v. Seymour Lumber Co., 113 Fed. 483...
A husband and his wife were each adjudged bankrupt, and the same
trustee appointed for both. His life was insured, the policies payable to
her, but provided that, if she should not survive him, payment should
be made to his executors, administrators, and assigns. They claimed the
policies as exempt under Laws Wash. 1895, p. 336, providing that the
proceeds or values of all life insurance shall be exempt from all liabil
ity for any debt, and Bankr. Act, § 6, providing that the act shall not
affect the allowance to bankrupts of the exemptions prescribed by the
state laws. Held, that such section 6 does not control the provisions of
section 70a, that when the bankrupt has an insurance policy which has
a cash surrender value, payable to himself, his estate, or personal rep-
resentatives, the policy shall pass to the trustee as assets, unless the
bankrupt pays such value to the trustee; and, as the wife could not
hold the policies payable to her, nor the husband hold them when pay-
able to his personal representatives in the event of her prior death, the
policies passed to the trustee.
-In re Holden, 113 Fed. 141....
Bankrupt Act, § 70a (30 Stat. c. 541), provides that a trustee in bank-
ruptcy shall be vested with the title of the bankrupt to (subdivision 5)
property which he could by any means have transferred, or which could
have been sold under process against him, provided that where any
bankrupt has any insurance policy which has a "cash surrender value."
payable to himself, he may pay such surrender value to the trustee,
and retain the policy free from creditors. A semi-tontine policy on a
bankrupt's life contracted to pay insured's wife $10,000 on his death,
and, further, that if three annual premiums had been paid, and default
was afterwards made, a proportionate paid-up plicy should be issued
in favor of the wife. The provisions indorsed on the policy, and made
a part thereof, recited that at the end of the tontine period insured
should have certain options, one of which was to receive in cash the
policy's accumulated reserve, and also the surplus apportioned to it.
Held, that though the policy had no "cash surrender value," within the
meaning of the proviso, it had an actual value, which constituted a right
of property in the bankrupt, and which could have been transferred by
him, and therefore passed to the trustee.
-In re Welling, 113 Fed. 189.....
Preferences and transfers by bankrupt, and attachments
and other liens.
A creditor given a mortgage for past indebtedness within four months
of bankruptcy proceedings against the debtor may retain the preference,
though brought into the proceedings in invitum; no claim being made
against the general estate, and the mortgage being executed with no
intent to give a preference and no knowledge of the insolvency.
-McNair v. McIntyre, 113 Fed. 113....
.....51 C. C. A. 89
Validity of mortgage given by partnership is not affected by bank-
ruptcy proceedings within four months thereafter against one of the
partners alone.
-McNair v. McIntyre, 113 Fed. 113....
Under Bankr. Act 1898, § 67d, which provides that "liens given or ac-
cepted in good faith and not in contemplation of, or in fraud upon, this
act, and for a present consideration,
shall not be affected by
this act," the validity of a mortgage given to secure a present loan of
money within four months prior to the borrower's bankruptcy does not
depend upon his solvency at the time, or upon notice of his financial con-
dition by the mortgagee, actual or constructive, but, to invalidate such
a mortgage, it must be shown that the borrower was insolvent; that the
purpose of the loan was to accomplish unlawful preferences, or other-
wise violate the act; and that the lender knew, or was chargeable with
notice of, both of such facts.
-In re Soudan Mfg. Co., 113 Fed. 804; Stites v. Dunnahoo, Id....
51 C. C. A. 476
A mortgage on the plant of a manufacturing corporation to secure a
loan of money made in good faith by the mortgagee, who was wholly
unacquainted with the company, and acted through an agent, upon
representations made by the president of the company and the report
of an agent sent to examine the security, is not rendered void by the
bankruptcy act, where the company was at the time a going concern,
and actively conducting its business, and not known by the lender or his
agent to be insolvent, although it was in fact insolvent and became a
bankrupt within four months, and although the mortgagee knew that
a large part of the money borrowed was to be used in paying outstand-
ing unsecured debts.
-In re Soudan Mfg. Co., 113 Fed. 804; Stites v. Dunnahoo, Id..............
51 C. C. A. 476
Bankr. Act 1898, § 67f, providing that "all levies, judgments, attach-
ments or other liens" obtained through legal proceedings against an in-
solvent within four months prior to the filing of a petition in bank-
ruptcy against him shall be void if he is adjudged bankrupt, does not
invalidate a lien obtained by the levy of an attachment more than four
months prior to the bankruptcy proceedings, though dependent for en-
forcement on a judgment obtained within four months.
-In re Beaver Coal Co., 113 Fed. 889.....
Administration of estate.
The bankruptcy court giver jurisdiction by Bankr. Act 1898, § 2,
subd. 11, to determine all claims of bankrupts to their exemption, has
exclusive jurisdiction to determine such claims, as any other rule might
create a conflict of jurisdiction, and deprive the bankruptcy court of its
right to determine all questi ns arising under the act.
-McGahan v. Anderson, 113 Fed. 115....
As the trustee takes the policy subject to the duty of continuing it in
force by the payment of premiums until the completion of the tontine
period, and subject to the contingency of the bankrupt's death before
that time, in which event he would fail to realize anything,-the policy
being payable to the bankrupt's wife, either the actual value of the
policy at the adjudication in bankruptcy should be determined, and the
bankrupt permitted to pay to the trustee the propertion coming to him
at the time stated, and to receive a conveyance from the trustee of all
claims thereto, or the trustee should be directed to sell the bankrupt's
interest in the policy at the date of the adjudication in bankruptcy for
the benefit of his creditors.
-In re Welling, 113 Fed. 189..
Actions by or against trustee.
Where a trustee in bankruptcy is entitled to assets of the bankrupt
which are in possession of a receiver appointed by a state court of com-
petent jurisdiction, comity requires, as a general rule, that the trustee
should first make application to the state court instead of the bank-
ruptcy court for an order for the possession of such assets.
-Carling v. Seymour Lumber Co., 113 Fed. 483....
Claims against and distribution of estate.
The proceeds of property of a bankrupt subject to liens should first
be charged with the costs of sale, and the liens be then paid out of the
remainder, according to their priority.
-McNair v. McIntyre, 113 Fed. 113.
Plaintiff sold books to N., and on October 17, 1899. brought replevin
in a state court to recover possession for false representations as to
solvency. Part of the books were in storage, and under the state statute
possession could not be given plaintiff except by consent or order of
court after proof of title. Four days later. N. was adjudged bankrupt,
and the suit restrained by the federal court. His trustees qualified No-
vember 15th, but took no steps to defend until the court, on plaintiff's
petition, in March, 1900, authorized them to do so, and vacated the
restraining order. It being apparent that the cause c.uld not be
reached for trial until autumn, plaintiff offered to refer the cause, or
to sell the books for the benefit of the action, if the trustees would
permit their removal; but both offers were declined. The case came on
for trial February 11, 1901, and plaintiff recovered judgment for pos-
session, with $1,080 damages for detention. and $647 costs. Held error
for the federal court to enjoin the judgment and direct the damages to
be treated as a claim against the bankrupt and prorated with other
.claims, while permitting the costs to be paid in full, the detention not
being the bankrupt's act except for four days, but the act of his trustees,
and plaintiff being, therefore, entitled to payment in full.
-In re Neely, 113 Fed. 210......
The fact that the trustees never had actual possession of the books
was not ground for prorating the damages, it being their action and
that of the federal court which prevented plaintiff from getting pos-
session.
-In re Neely, 113 Fed. 210......
The fact that the books were of considerable value, and the case such
as to justify the trustees in requiring plaintiff to prove title, was not
ground for prorating the damages.
-In re Neely, 113 Fed. 210....
The fact that plaintiff declined to give an additional replevin bond to
the trustees as a condition precedent to putting the books on the market
for the benefit of the action was not ground fr prorating the damages,
the law not requiring any additional bond.
-In re Neely, 113 Fed. 210....
The fact that plaintiff refused to try title before the referee in bank-
ruptcy was n t ground for prorating the damages, there being no reason
why plaintiff should consent to such proceeding.
-In re Neely, 113 Fed. 210.....
§ 9. Rights, remedies, and discharge of bankrupt.
Under Const. S. C., which allows a debtor to hold personal property
exempt from attachment to the amount of $500, but provides that no
property shall be exempt from payment of obligations contracted for the
purchase of such property, a bankrupt is not entitled to such exemption
out of the proceeds of a sale by the trustee in bankruptcy of mer-
chandise which has not been paid for.
-McGahan v. Anderson, 113 Fed. 115............
A bankrupt admitted that he began the erection of a house claimed
as a homestead after July 1st, but did not make a candid disclosure as
to where he received the money for its construction. He admitted that
a portion thereof came from the sale of goods which were not paid for.
The house was built on a lot owned by his wife, which was conveyed
to him so that he could claim a homestead. An involuntary petition in
bankruptcy was filed against him on October 25th, and he was de-
clared a bankrupt within a month thereafter. Held not sufficient to
show that the bankrupt was solvent, and able to pay his creditors, at
the time of the construction of the house, so as to enable him to acquire
it as a homestead with money taken from his business.
-McGahan v. Anderson, 113 Fed. 115.....
..51 C. C. A. 92
Where a bankrupt files a schedule claiming his homestead and per-
sonal property exemptions as authorized by Bankr. Act 1898, § 7, subd.
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