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.
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 questions 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 proportion 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.........51 C. C. A. 1
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 qualiãed 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 could 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 daniages 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 th 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.
8, and the assignee, in filing his account with the court, as required by section 47, gives the estimated value of each article, as required by general order No. 17 (18 Sup. Ct. vi.), which also authorizes exceptions therefrom to be taken within 20 days, and a creditor files exceptions, and the referee certifies the question of exemptions to the court, such question may be considered without being specially pleaded.
-McGahan v. Anderson, 113 Fed. 115.....
A bankrupt claiming a homestead exemption has the burden of show- ing by clear and conclusive proof that he was solvent, and able to pay all claims against him, when he acquired the homestead.
-McGahan v. Anderson, 113 Fed. 115..
10. Appeal and revision of proceedings.
The motion of a bankrupt to dismiss an appeal from a judgment al- lowing certain exemptions, for want of jurisdiction, may be denied without consideration on the merits, when the bankrupt fails to take a cross appeal.
—McGahan v. Anderson, 113 Fed. 115.....
The decision of a court of bankruptcy on a petition claiming ownership of funds in the hands of a bankrupt's trustee, where the facts are un- disputed, may be reviewed by a petition for revision, under Bankr. Act 1898, § 24b, and not by appeal under that act.
-Hutchinson v. Le Roy, 113 Fed. 202; In re Hutchinson, Id....... 51 C. C. A. 159
An order sustaining a demurrer to a petition filed for the purpose of vacating an adjudication in bankruptcy is not a judgment from which an appeal will lie under the provisions of Bankr. Act 1898, § 25, but is reviewable by petition under section 24b.
-In re Ives, 113 Fed. 911.....
Building or loan associations, see "Building and Loan Associations."
A purchaser of a note for a valuable consideration may enforce its collection, though there was no indorsement or transfer of it. -Lyman v. Warner, 113 Fed. 87.....
Of municipal bonds, see "Municipal Corporations," § 2.
County bonds, see "Counties," § 1.
Injunction bonds, see "Injunction," $4.
In proceedings in admiralty, see "Admiralty," § 1. Municipal bonds, see "Municipal Corporations," § 2. Sureties on bonds, see "Principal and Surety." Town bonds, see "Towns," § 1.
Of contract, see "Contracts," § 3. Of covenant, see "Insurance," § 2. Of warranty, see "Sales," § 3.
On appeal or writ of error, see "Appeal and Error," § 5.
§ 1. Compensation and lien.
A declaration set out a writing by which defendant authorized plaintiff to sell for him certain timber lands and other property for a price stated, such authority to continue for 60 days. It alleged that, by defendant's request, plaintiff prepared a written memorandum more specifically de- scribing the property; that plaintiff procured within the 60 days the making of a written contract between defendant and a third person, which was set out, and by which defendant agreed to convey the prop- erty on terms therein stated, and the other party agreed to have the same examined within 60 days, and to purchase the same if it should appear from said examination that the statements contained in plaintiff's memorandum were substantially correct; that, by reason of the premises, defendant became indebted to plaintiff for his services in the sum of $100,000, for which judgment was prayed. Held, that such declaration must be construed as one to recover commissions as a broker, and was demurrable as failing to state a cause of action, because, under the con- tract pleaded, plaintiff could recover only by proving (1) either that he had made an actual sale of the property, or (2) that within the time lim- ited he had procured a purchaser able and willing to buy it on the terms stated, and that a sale was prevented by some act or default of defendant, neither of which facts was alleged. -Sullivan v. Milliken, 113 Fed. 93...
BUILDING AND LOAN ASSOCIATIONS.
Complainants in their bill alleged that they owned full-paid stock in a building association, which, under the by-laws, they were entitled to withdraw and receive the value thereof; that they had given the pre- scribed notice and demanded such value repeatedly, but, though other stock on which notice was served after theirs had been paid, payment was refused them; that the managers of the association had squandered and mismanaged the funds, and conspired with the directors of a rival company to turn the assets and business over t such company, and, pursuant to such conspiracy, had caused the election of the majority of such directors as directors of the association, and officers thereof; that such new directors and officers were conducting the business for their own personal gain and in the interest of the other company, ignoring the interests of the stockholders; and that the association was wholly insolvent. Complainants prayed an injunction and receiver. Held, that the bill stated facts entitling complainants to equitable relief, and giv ing the court jurisdiction; application by them to the directors or a meeting of the stockholders for redress or leave to institute the suit being unnecessary.
-Universal Savings & Trust Co. v. Stoneburner, 113 Fed. 251....... 51 C. C. A. 208
Where, on the application for receiver and injunction, the allegations of such bill were fully supported by affidavits and exhibits, the court did not improvidently exercise its discretion in awarding such relief.
-Universal Savings & Trust Co. v. Stoneburner, 113 Fed. 251... . . . . 51 C. C. A. 208
A contract of loan made by a building and loan association is not usurious, if valid under the laws of the state where it is made payable, by which, in the absence of a fraudulent intent, it is governed.
—Kirlicks v. Interstate Building & Loan Ass'n, 113 Fed. 290; Thomas v. Same, Id............. .51 C. C. A. 318 Where certificates of paid-up stock issued by a building association gave the holder the right to withdraw and have his stock redeemed subject to the provisions of the by-laws, which required 30 days' notice of intention to withdraw to be given, the status of a holder of such a certificate as a stockholder is not affected by a notice of withdrawal, given less than 30 days before the commencement of proceedings in in- solvency against the association.
-Coltrane v. Blake, 113 Fed. 785....
Holders of full-paid stock issued by a building and loan association as authorized by its by-laws, and which differs from the common or in- stallment stock only in the fact that the holders are paid interest or a fixed dividend at stated periods instead of their proportionate share of the profits of the association, are stockholders, and not creditors, and on the winding up of the corporation in insolvency are entitled to no prefer- ence over other stockholders.
-Coltrane v. Blake, 113 Fed. 785......
A matured notice of withdrawal given by a stockholder of a building association, as permitted by the terms of his contract, does not operate to terminate his membership, and convert him into a creditor entitled to preference of payment over other members in the distribution of the assets of the association in insolvency, contrary to the express provisions of the by-laws.
A shipper is bound by a provision in a bill of lading exempting the carrier from liability for loss of the goods by fire, where he was charge- able with knowledge that the bill contained such clause, and made no objection thereto, and it is not shown that the loss resulted from the carrier's negligence.
-Cau v. Texas & P. Ry. Co., 113 Fed. 91.
Charnock v. Texas & P. Ry. Co., 113 Fed. 92...
2. Carriage of passengers.
.51 C. C. A. 76 .51 C. C. A. 78
Where, in an action for injuries to a passenger on a street car, the issues are whether plaintiff was injured by the careless starting of the car after it had stopped or by her own negligence in attempting to
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