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§ 6.

§ 7.

§ 8.

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.

...51 C. C. A. 519

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... . . .

.......

.51 C. C. A. 92

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....

..51 C. C. A. 151

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.

.51 C. C. A. 89

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.....

......51 C. C. A. 167

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......

......51 C. C. A. 167

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...

......51 C. C. A. 167

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.....

....51 C. C. A. 167

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.

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..51 C. C. A. 167

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.....

....51 C. C. A. 92

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.....

......51 C. C. A. 92

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.

.51 C. C. A. 92

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.....

.51 C. C. A. 92

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.....

BENEFICIAL ASSOCIATIONS.

..51 C. C. A. 541

Building or loan associations, see "Building and Loan Associations."

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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.....

....51 C. C. A. 73

BONA FIDE PURCHASERS.

Of municipal bonds, see "Municipal Corporations," § 2.

See "Bail."

BONDS.

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.

BREACH.

BRIEFS.

On appeal or writ of error, see "Appeal and Error," § 5.

§ 1. Compensation and lien.

BROKERS.

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.

..51 C. C. A. 79

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....

....51 C. C. A. 457

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......

......51 C. C. A. 457

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.

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1. Carriage of goods.

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

51 C.C.A.-45

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