DIGEST OF CASES IN BANKRUPTCY.

ACCOMMODATION PAPER. See PROMISSORY NOTES.

ACTION.

Where the subject-matter of an action pending at the time of adjudication would not pass to an assignee, the bankrupt has the right to prosecute it. — Towle v. Davenport, 16 N. B. R. (Sup. Ct. N. H.) 478.

See LIEN, 8; PRINCIPAL AND Agent.

ACT OF BANKRUPTCY.

The taking of partnership property to pay a debt not a partnership debt, when the firm is insolvent, though each partner may be liable for it, is an act of bankruptcy. In re Matot, 16 N. B. R. (Dist. Vt.) 485.

See COMPULSORY PROCEEDINGS.

ADJUDICATION.

1. An adjudication will not be set aside upon the ground that the petition was procured by the bankrupts themselves as an involuntary one, to avoid the necessity of procuring the assent of a requisite proportion of the creditors to a discharge on a voluntary petition. There could be no legal fraud in procuring such an adjudication, unless it should be followed by a discharge that could not be had upon voluntary proceedings. — In re Matot, 16 N. B. R. (Dist. Vt.) 485.

2. An adjudication by default in proceedings substantially regular cannot be set aside, except on application of the debtors. — Ibid.

3. When the affairs of a partnership had been settled by composition for the period of five years, the court will not adjudicate the firm bankrupts upon the petition of one member, who alleges that the firm is insolvent by reason of frauds perpetrated by him in effecting such composition. In re Hamlin, 16

N. B. R. (N. D. Ill.) 522.

4. If it appears that the petitioning partner has obtained assignments of a large amount of the claims of the creditors without consideration to his father, to be used in the proceedings, such an act will be a fraud upon the Bankrupt Act. Ibid.

See CORPORATORS; PETITION; RECEIVER, 1.

AMENDMENT. - See INVOLUNTARY PETITION, 3; JURISDICTION, 8.

ARREST.

The adjudication of one as a bankrupt while under arrest upon a civil process, under the State courts, will not entitle him to a release therefrom. Brandon Nat. Bank v. Hatch, 16 N. B. R. (Sup. Ct. N. H.) 468.

ASSETS.

The term "assets," under the bankrupt laws, means all the property of every name and nature chargeable with the debts of the bankrupt which come into the hands of, or under the control of, the assignee, by reason of such property having ever been owned by or in possession of the bankrupt; and the value thereof ought to be considered a sum not less than the sum actually realized out of said property, and received by the assignee for it. In re Taggert, 16 N. B. R. (N. D. N. Y.) 351.

See ASSIGNEE, 4.

ASSIGNEE.

1. Assignees may sue to recover the assets of the bankrupt in the Circuit of or District Court in a district other than that in which the decree in bankruptcy was entered. Dutcher v. Wright, 16 N. B. R. (U. S. Sup. Ct.) 331.

2. A deed of trust, given to secure a debt, contained a clause that, on failure of the trustee named to act, the cestuis que trust might appoint any one else to execute the trust. Held, that the power thus conferred on the cestuis que trust was personal and confidential, and did not pass to their assignees in bankruptcy. Clark v. Wilson, 16 N. B. R. (Sup. Ct. Miss.) 356.

3. A conveyance of real estate, in Indiana, to a husband and wife creates an estate in joint tenancy which cannot be seized and sold upon judicial process by the creditors of either, nor pass to an assignee in bankruptcy. — In re Benson, 16 N. B. R. (Ind. Dist. Ct.) 377.

4. If the effect of a divorce, obtained after an adjudication in bankruptcy, is to destroy the unity of possession, and to turn what was a holding per tout by husband and wife into a tenancy in common, it is simply, by operation of law, the creation of a new interest in the bankrupt, and is to all intents and purposes a new acquisition, which cannot be claimed by the assignee. — Ibid.

5. The assignee takes the property of the bankrupt, as an attaching creditor would take it, subject to all legal claims upon it. — Safford v. Burgess, 16 N. B. R. (Vt. C. Ct.) 402.

6. The assignee in bankruptcy holds the assets as an officer of the court appointing him; and his possession and management cannot be interfered with by the State court. - Southern v. Fisher, 16 N. B. R. (Sup. Ct. S. C.) 414. 7. Although an assignee may prosecute or defend a suit pending at the time of adjudication in the State court, he is not compelled to resort to that court, and abide by its judgment, but may apply directly to the District or Circuit Court, as the character of his case may require. Ibid.

8. If the general creditors agree, the assignee may pay privileged debts as soon as he receives money enough for that purpose, or may pay a part equally. – In re Sawyer, 16 N. B. R. (Mass. Dist) 460.

9. Where a separate adjudication is made against a bankrupt who is or has been a member of a firm, the separate creditors have a right to vote for the assignee. In re Falkner, 16 N. B. R. (Mass. Dist.) 503.

10. The district judge is bound to see that the rights of the minority are protected, and to refuse confirmation where he has good reason to suspect the assignee has been chosen in the interests of the bankrupt, or that the circumstances are such as to indicate the election to be unfair, or that the assignee

11. An assignee will not be confirmed, where it appears that he was for many years the book-keeper of one of the bankrupts; that bankrupt and his attorney had endeavored to control the meeting; that both voted under powers of attorney for the assignee; that the bankrupt was actively soliciting votes before the meeting, even though the election was almost unanimous. — Ibid. See ACTION; ASSIGNMENT, 1; COMPOSITION, 5; JUDGMENT, 2; MORTGAGEE; PLEADINGS, 4; PRIVILEGED DEBT; TAXES; TRUST.

ASSIGNMENT.

1. Until a general assignment for the benefit of creditors has been set aside, the title to property embraced in it remains in the assignee. It does not vest in the assignee in bankruptcy by the mere force of an adjudication, and his appointment as assignee. — Belden v. Smith, 16 N. B. R. (N. D. N. Y.) 302.

2. A general assignment for the benefit of creditors, without giving priority, is superseded by proceedings in bankruptcy. - Dolson v. Kerr, 16 N. B. R. (Sup. Ct. N. Y.) 405.

3. A general assignment for the benefit of creditors, made in good faith, with no fraudulent intent, and without preferences, is valid. Haas V. O'Brien, 16 N. B. R. (Ct. App. N. Y.) 508.

See ADJUDICATION, 4; COMPOSITION, 5, 6; Judgment, 2.

1. The bankrupt, until the appointment of an assignee, is a trustee of his estate for the benefit of creditors. — In re Battey, 16 N. B. R. (Mass. Dist.) 397.

2. And if he is indorser upon notes maturing before such appointment can be made, he may waive demand and notice. - Ibid.

3. And it would seem that he might, without leave of court, begin any suits that are necessary to save the Statute of Limitations, or are otherwise of immediate urgency, though he cannot, without suit, receive payment. — Ibid.

See ADJUDICATION, 1.

BANKRUPT ACT.

1. The insolvent law of Connecticut is not wholly superseded by the Bankrupt Act of the United States, in respect either to voluntary or involuntary proceedings under it. Geery's Appeal, 43 Conn. 289.

2. Where the two, however, come into practical conflict, the bankruptcy law must prevail. — Ibid.

3. The bankrupt law does not forbid the creditor from taking from a third party a contract, covenant, or security, as an inducement to forbear instituting proceedings against his debtor, for the purpose of having him declared a bankrupt.-Ecker v. Bohn, 16 N. B. R. (Ct. App. Md.) 544.

4. To constitute such forbearance a valid consideration for the contract,

covenant, or security, the creditor must, at the time of receiving it, have a right to proceed in bankruptcy against debtor. — Ibid.

See ASSIGNMENT, 2, 3.

BOND. See JUDGMENT, 1; PLEADINGS, 2.

BURDEN OF PROOF.

Where the name of a person appears on the stock-book of a corporation as a stockholder, the presumption is that he is a stockholder; and, in an action against him to recover an assessment, the burden is upon him to show that he is not a stockholder. - Turnbull v. Payson, 16 N. B. R. (U. S. Sup. Ct.) 440. CLOUD UPON THE TITLE. - - See LIEN, 1.

COMPOSITION.

1. Where a debtor has been legally released under a composition with his creditors, the voluntary payment afterwards by him of additional sums to certain of his creditors will not revive the debt of a creditor who accepted the composition, upon condition that none of the other creditors should receive better terms. In re Sturgis, 16 N. B. R. (N. D. Ill.) 304.

2. The compromise provisions of bankruptcy design that every creditor shall receive the same proportion of his debt; that the secured creditor is a creditor for that purpose, for all that is not satisfied by his security. Whenever this fact is ascertained, even after the compromise, that remainder constitutes a debt against the bankrupt, of which he shall pay the same proportion to that creditor that he has paid to the unsecured creditor. - Paret v. Ticknor, 16 N. B. R. (E. D. Mo.) 315.

3. Where, in a composition proceeding, a creditor has notice of the proceedings, and that by the statement of the debtor he is a creditor fully secured, is present at the meeting, and makes no objection thereto, he is not bound thereby, nor is his debt discharged; but he is entitled to the percentage agreed upon in the proceedings, upon the deficit unpaid by sale of the security, whenever that is ascertained. — Ibid.

4. Upon application to set aside a composition proceeding, notice should be given to all the creditors as well as the debtor. In re Bradt, 16 N. B. R. (Dist. Mass.) 320.

5. Where composition proceedings are set aside after being partly carried out, and an assignee appointed, the assignment to the assignee should be made without prejudice to lawful acts done or titles acquired under and by virtue of the resolution for composition theretofore recorded. — Ibid.

6. And creditors who have taken the composition have no right to vote for an assignee. Ibid.

7. The mere fact that the bankrupts have been refused a discharge in bankruptcy, for cause set forth in § 5110, is not an absolute bar to a composition. - In re Odell, 16 N. B. R. (S. D. N. Y.) 501.

8. Where a discharge had been opposed and a composition offered, the court ordered, as a condition of and before the confirmation, that the bankrupt should pay the creditor's expenses and disbursements other than counsel fees, in opposing the discharge. — Ibid.

9. If money be tendered according to the terms of a composition, that is

equivalent to payment; but the court has no power to commit the creditor for contempt, unless he will physically take the offered money. In re Hinsdale,

16 N. B. R. (S. D. N. Y.) 550.

10. A general provision in a resolution of composition, that a payment of so much money, at such time or times, and to be evidenced by such and such promissory notes, shall be accepted by the creditors in satisfaction of their debts, is not an executing provision in respect to the creditors, which the court is bound to enforce. — Ibid.

11. The bankruptcy court has a right to protect a debtor, and to enjoin creditors from harassing him while the composition proceeding is going on. - Ibid.

12. Such proceeding is pending till the time for making the last payment expires. — Ibid.

See ADJUDICATION, 3; INJUNCTION; JURISDICTION; PROMISSORY NOTES; SET-OFF, 2; STATUTE OF LIMITATIONS.

COMPULSORY PROCEEDINGS.

Compulsory proceedings may be resorted to by creditors under the State law, where the debtor declines to go into voluntary bankruptcy, and there has been no act of bankruptcy of which the creditors can avail themselves, and where the proceedings do not deprive the debtor of his opportunity to obtain a discharge under the Bankrupt Act. - Geery's Appeal, 43 Conn. 289.

COMPUTATION. - See PREFERENCE, 3.

By the statute of Illinois, an insurance company was authorized to increase its capital stock. Papers were filed under the law for that purpose; examined by the Attorney-General, and certified to be in due form; and stock was issued to the defendant, who acted in the organization and management of the company, and as an officer. Held, in an action by the assignee to recover the balance due upon his subscription, that the defendant could not set up the irregularity of the organization of the company. - Chubb v. Upton, 16 N. B. R. (U. S. Sup. Ct.) 537.

See BURDEN OF PROOF; CORPORATORS; INVOLUNTARY PETITION.

CORPORATORS.

Within the meaning of § 122, ch. 6, tit. 61, Rev. Stats. of U. S., policyholders in a life insurance company, who are entitled to vote for a trustee of such company, and share in its profits, are corporators, and entitled to be heard before an adjudication in bankruptcy against the company can be obtained. In re Atlantic Mut. Life Ins. Co., 16 N. B. R. (N. D. N. Y.) 541.

COSTS.

Upon a petition to set aside an adjudication, costs may be taxable in the discretion of the court, but not as of right. In re Matot, 16 N. B. R. (Dist. Vt.) 485.

DEBT.

A judgment recovered by a father for damages for seduction of his daughter, there being no promise of marriage, nor any arts or devices resorted to to