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NATIONAL BANKS. The Bankrupt Act does not apply to national banks, notwithstanding section 37.-Smith et al. v. Manufacturers' National Bank (N. D. Ill.), 9 N. B. R. 122.


NOTICE OF INSOLVENCY. A creditor is chargeable with notice of his debtor's insolvency, if such facts were brought to his attention as would put a reasonably prudent man on his guard; and it is sufficient to charge the creditor thus if he knew that the debtor had not paid his obligations as they became due in the regular course of business, and a preference gained under such circumstances is void. – Buchanan et al., Receiver, &c., of the Cascade Paper Manufacturing Co. of Penn Yan v. Smith, Assignee of said Company (U. S. S. C.), 7 N. B. R. 513.


1. One partner of a firm died, and the property of the firm under the state law was placed in the hands of his administrator by the probate court. Held, that on a petition in bankruptcy against the other partners the bankruptcy court would not take the settlement out of the probate court, and would not entertain the petition. – In re Daggett et al. (E. D. Mo.), 8 N. B. R. 287.

2. Where there are partnership and individual debts, and there are no partnership assets, and no solvent partner, the debts of the firm and of the individual members can be proved, and the estate is to be distributed pari passu among the creditors. (Howe v. Lawrence, 9 Cush. 35+; Somerset Potter Works v. Minot, 10 Cush. 592, disapproved.) – In re Knight (E. D. Wis.), 8 N. B. R. 436.

3. If a person share in the profits of a firm, the fact is primâ facie proof that he is a partner; but that conclusion may be negatived by evidence that he received such share by way of wages or interest on money lent to the firm. - In re Francis & Buchanan (0, D.), 7 N. B. R. 359.

4. A partnership creditor, with a claim on the individual as well as partnership assels of the partners, must, if there are individual creditors, exhaust the partnership assets before resorting to the individual assets. If there are no individual creditors, he may resort to either set of assets. In re Lewis (W. D. Va.), 8 N. B. R. 546.


PAYMENT. A surety conforms to section 19 by giving his note, provided the note is expressly accepted in payment. — In re George B. Morrill (D. Nev.), 8 N. B. R. 117. PAYMENT IN THE COURSE OF BUSINESS. — See FRAUDULENT PREFERENCE, 2.

Personal PROPERTY. – See GROWING Crops.

PETITION IN BANKRUPTCY. 1. A judgment creditor may file a petition in bankruptcy after he has levied on property to satisfy his judgment. The petition, however, operates as a waiver

of further proceedings on the levy, and he must go on in bankruptcy, In re Sheehan (E. D. Mich.), 8 N. B. R. 345.

2. A petition in bankruptcy may be sworn to by the fully authorized agent or attorney of the petitioning creditor, nothing in the act or orders in bankruptoy forbidding it. - In re Raynor (N. D. X. Y.), 7 N. B. R. 527.

PLEA OF BANKRUPTCY. 1. The defence of bankruptcy is purely legal and not equitable, and laches in pleading it is therefore fatal. — Medbury v. Swan (N. Y. C. of A.), 8 N. B. R. 537.

2. A. began a suit, and afterwards filed a voluntary petition in bankruptcy. An arrangement was made and completed, under section 43. Afterwards the defendants in the original suit pleaded plaintiff's bankruptcy. Plea overruled. — Conner v. The Southern Express Co. (S. C. Ga.), 9 N. B. R. 138.

PLEADING. 1. Declaration on contract of sale; plea, discharge in bankruptcy; replication, that the debt was created by the fraud of defendant. Held, that the plaintiff may make such replication notwithstanding the form of action. — Stewart v. Emerson (S. C. N. H.), 8 N. B. R. 462.

2. A paper filed in the words of form 61 raises the general issue, and no rep- . lication is necessary, in spite of In re Sutherland, 1 N. B. R. 140. It also entitles the defendant to a jury trial. In re Hawkeye Smelting Co. (S. C. Utah), 8 N. B. R. 385.

See DiscHaRGE, 5; PRACTICE, 12.

PRACTICE. 1. The district court may, in furtherance of justice, order an examination of the debtor after petition filed and before adjudication. — In re Salkey & Gerson (N. D. III.), 9 N. B. R. 107.

2. The holder of stock hypothecated to secure call-loans applied to the bankrupt court, after the bankruptcy of the pledgor, for leave to sell the stock and retain the amount of the loans, and turn the balance over to the court. Held, that it could be done without leave. — In re Grinnell (S. D. N. Y.), 9 N. B. R. 137.

3. A bankrupt may be examined by the assignee for the purpose of eliciting information on which to base a suit by the assignee against a third party. – In re Dole (S. D. N. Y.), 7 N. B. R. 538.

4. If property is attached on mesne process from a state court within four months before proceedings in bankruptcy, the proper course is for the assignee to apply to the state court and not to the federal court to have the property turned over to him. Johnson v. Bishop (C. C. Iowa), 8 N. B. R. 533.

5. An answer to a creditor's petition need not be in writing or verified, to entitle the defendant to a hearing by the court or to a jury trial. All he need do is to appear and deny the allegations in the petition, though the better method is to put the answer in writing, and conclude with his demand for a jury, or for a hearing by the court. In re Heydette (E. D. Mich.), 8 N. B. R. 332.

6. Jurisdiction to foreclose mortgages on the bankrupt's estate is not one of the summary powers mentioned in section 1. In such a case suit must be brought in order that all parties may be heard, and, if necessary, an appeal may be had

under section 8. The appeal there mentioned refers to the class of 'cases mentioned in section 2, third paragraph. Such appeals are to be made only from final decrees, not from interlocutory decrees. — In re Casey (C. C. Vt.), 8 N. B. R. 71.

7. The application for review mentioned in section 2 applies inter alia to the class of cases named in section 1, where summary proceedings in the district court may be had. The application ought to specify wherein the proceedings in the district court were erroneous, and not merely state that there was error. There is no limitation of time within which such a review may be sought. A notice of appeal is not a proper process for reviewing summary proceedings under · section 2. In re Casey (C. C. Vt.), 8 N. B. R. 71.

8. On the return day of a rule to show cause why a debtor should not be adjudged bankrupt, he filed a general demurrer. This was adjudged frivolous, when he asked leave to file a general denial and to have a jury. Held, that by demurring as he did, he waived his right to ask for a jury and to file a general denial, and that it was discretivnary with the court whether to grant him leave or not. In re A. Benham (U. T.), 8 N. B. R. 94.

9. Where a debtor on a return day of a rule to show cause why he should not be adjudged bankrupt entered an appearance and got a continuance, and on the day to which the matter was continued asked leave to file a general denial and to demand a jury, held, that he had waived his right thereto by failing to get special leave on the return day. The court in its discretion permitted him to file his denial. -- In re Sherry (U. T.), 8 N. B. R. 142.

10. One creditor cannot object to questions put by another creditor to the bankrupt in the examination of the latter. A witness as such will not be allowed counsel. – In re Stuyvesant Bunk (S. D. N. Y.), 7 N. B. R. 445.

11. A judgment allowing homestead, made a few days before bankruptcy proceedings were begun, in a court of a state where appeals were held to suspend the judgment merely, was appealed from. Held, that the bankruptcy court could not interfere; but that the assignee ought to make himself a party, and ascertain his rights in the state suit. — In re Mosely, Wells, & Co. (S. D. Ga.), 8 N. B. R. 208.

12. In a suit brought by the assignee in a state court against a third party to recover property alleged to have been conveyed in fraud of the Bankrupt Act, the defendant's plea of invalidity of the proceedings in bankruptcy is valid. — Stuart v. Aumueller et al. (S. C. Iowa), 8 N. B. R. 541.

13. A court may require that the answer in cases of involuntary bankruptcy be verified as in common-law actions. — In re Findlay (W. D. Wis.), 9 N. B. R. 83.



PRINCIPAL AND AGENT. Unless a contract is made solely on the credit of the agent, resort may be had to the principal to enforce performance thereof. – In re Troy Woollen Co., 8 N. B. R. 412.



PROMISSORY NOTE. The indorser is discharged by an agreement for extension of time between debtor and creditor, unless the latter makes an express stipulation at the time that he does not discharge the indorser; and the burden is upon him to show such stipulation. — In re Granger & Sabin (E. D. Mich.), 8 N. B. R. 30.


PROOF OF CLAIM. 1. Proof of claim of a savings bank was ordered to be expunged, on the ground that the officers of the bank had no authority to discount the notes from which the claim arose, and by statute the bank funds could not be so used. - In re Jaycox & Green (N. D. N. Y.), 7 N. B. R. 578.

2. A secured creditor ought to prove his debt and set forth the security, and doing so does not prejudice his resort to the security. A sale of the security, however, cannot be made before the appointment of an assignee, as the assignee has a certain right of election as to the disposition of the security:- In re Grinnell & Co. (S. D. N. Y.), 9 N. B. R. 29.

3. Where a clause in a policy of reinsurance, issued by one insurance company to another, read, “ loss, if any, payable at the same time, and pro rata with the insured,held, that the company reinsured was entitled to prove the entire amount of the reinsurance, though it bad itself paid only eighty-five per cent of its own liability. In re Republic Ins. Co. (N. D. III.), 8 N. B. R. 197.

4. A foreign receiver of a corporation may prove a claim against an estate in bankruptcy. In re Republic Ins. Co. (N. D. III.), 8 N. B. R. 197.

5. The claims of the officers of a bankrupt company or corporation ought not to be proved till after the election of assignee. — In re Lake Superior Ship Canal R.R. & Iron Co. (E. D. Mich.), 7 N. B. R. 376.

6. Proofs of claim can be made before a commissioner as well as before a register, provided he is within the judicial district where the proceedings are had, or where the creditor lives. — In re W. B. Merrick (E. D. Mich.), 7 N. B. R. 459.

7. Where a party bad a claim of $25,000 on an unsecured note, and one of $160,000 on notes secured by mortgage, he was not admitted as a creditor, or to vote for assignee on the latter, until the value of the security was duly ascer. tained under section 20. — In re S. Hanna (S. D. N. Y.), 7 N. B. R. 502.

8. If a creditor receive a preference on a claim which cannot be divided, or which is entire, he must surrender all his preference before he can prove any claim. But if he has several disconnected claims, it is competent for him to prove as to those on which he has received no preference, without surrendering his preference; and he may surrender and prove on a part of those for which he has received a preference, without surrendering the balance of his preference. — In re D. G. Holland (E. D. Mich.), 8 N. B. R. 190.

9. Where a debt was void on account of being in violation of the Oregon usury laws, held, that it could not be proved in the district court against the bankrupt's estate. — In re B. Hock (D. O.), 8 N. B. R. 78.

10. A creditor of a bankrupt insurance company failed to file his proof of claim within twelve months, as required by the policy, and did not furnish proof of loss as required therein. Held, that though the company might have waived these formalities, the assignee could not, and the claim was rejected. — In re Fire. men's Ins. Co. (N. D. III.). 8 N. B. R. 12:3.

11. Where A. lent R. money for three years at thirty per cent, and took a mortgage for the principal and twelve per cent interest, and R.'s note for the other eighteen per cent, payable in three years, and at the end of a year R. became bankrupt, A. was allowed to prove his unsecured note less a rebate of interest at thirty per cent, and not at ten per cent, the legal rate, as claimed by A. In re Riggs, Lechtenberg, & Co. (U. T.), 8 N. B. R. 90.

12. A creditor is not barred from proving a claim which he, knowing his debtor to be insolvent, has sued to judgment, execution, and levy, unless he thus acted with a view to obtaining a preference in fraud of other creditors. — Coxe v. Hole (N. D. N. Y.), 8 N. B. R. 562.

13. An indorser of paper of the bankrupts had a mortgage on their property, conditioned for payment of the indorsed paper, and for indemnity of the indorser. The holders of the paper proved their claim as unsecured. When they took the paper they were ignorant of the mortgage. Held, that the entire debt could not be proved as unsecured without a release by the holders of their equity in the mortgage security, such security taken by an indorser or surety being always held to be for the benefit of the creditors, whether he knew of it or not. If at the time of proof of claim the creditors did not know of the security, they may withdraw their proof, and make proof as secured creditors. But if they have taken a dividend on their claim as unsecured, they must be held to abide by their first proof, otherwise other general creditors would be prejudiced. - In re Jaycox & Green (N. D. N. Y.), 8 N. B. R. 241. (See 7 N. B. R. 303.)




REINSURANCE. — See Proof of Claim, 3.


RENEWAL OF NOTE. Where a note given in 1863 was given up, and a new one given each year until 1870, it was held not to be a debt contracted prior to January 1, 1869. In re Schumpert (N. D. Miss.), 8 N. B. R. 415.

Rent. 1. An assignee should pay the rent of premises of which he has taken possession up to the full value of the goods remaining thereon and liable to be taken on distress. — Longstreth v. Pennock et al. (U. S. C. C. Penn.), 7 N. B. R. 449.

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