1. Payment of wages to employees, though made in the regular course of
business, is an act of bankruptcy if done in contemplation of insolvency; for
although the law prefers an employee to the amount of fifty dollars, this prefer-
ence must be secured by and through the proceedings in bankruptcy, and not
outside of them or independent of and in spite of the act.-In re Kenyon &
Fenton, 238.
2. A person cannot commit an act of bankruptcy while insane; but if when
sane he has committed such an act, he may be made bankrupt upon a petition
in invitum, after he has become insane. Whether he can obtain a discharge,
quære. In re Pratt, 276.
See ASSIGNMENT, 3; JURISDICTION, 2; RENT, 1.
1. Creditors who have received more than the amount stipulated in the compo-
sition deed, without the knowledge of the other creditors, are not thereby barred
from bringing an action against the debtor on their original obligation, when
such action is brought on the ground that the composition deed was fraudu-
lently procured.-Elfett et al. v. Snow et al,. 57.
2. A petition was filed by a creditor to restrain the assignee in bankruptcy
from prosecuting a certain action of law in the supreme court of New York
state, to recover the payment of money made contrary to the provisions of the
thirty-ninth section of the bankrupt act, claiming to recover back the amount
so paid. Held, That said act is the law of the state courts as well as of the
national tribunals; and if by virtue of that act the state court has no jurisdic-
tion in the action brought against the petitioners, it will so decide upon proper
plea, and that no reason appears to compel the assignee to resort to the national
tribunals instead of those of the State.-In re Central Bank, 207.
1. The application of creditors other than the petitioning creditors in a
bankruptcy proceeding for an order annulling the adjudication on the ground
that there was an agreement of compromise preceding the commencement of
bankruptcy proceedings, to which agreement the petitioning creditor was a
party, must be denied.-In re Bush, 179.
2. The proceeding by a petitioning creditor to force his debtor into bank-
ruptcy is a proceeding inter partes like an ordinary action at law or suit in
equity, and until the adjudication is had, they are the only parties. No outside
creditor has a right to resist the adjudication, or to ask that it be annulled.-ld.
3. Where the district judge for the southern district of New York privately
signed the form of an adjudication of bankruptcy, on the first day of March, and
endorsed on the same the words and figures "Filed March 1st, 1871, S. B.,”
and on the second day of March granted a re-argument of the application of the
petitioning creditor in another district for leave to intervene and oppose an
adjudication in this district, and at such re-argument on the third day of March,
a certified copy of an adjudication made in such other district on the second
day of March having been produced and read, the district judge produced the
paper which had been signed by him on the first of March, but which, during
the interval, had been in the sole knowledge and possession of the said judge,
and had neither been entered with the clerk nor promulgated as an adjudication
of the court, Held, That the said paper operated as an adjudication only as
of the time when it was so produced in court, and promulgated, to wit, as of
the third of March, and that the adjudication which was regularly made and
entered in the other district on the second of March, took precedence as the
earlier adjudication.-In re Boston, Hartford and Erie R. R. Co.
See INJUNCTION, 1, 2; LIEN, 3; PURCHASER OF NOTES, SECURED DEBT.
1. When an agent is sent by an insolvent debtor to compromise with credi-
tors, and some of them, through him, return different terms than those sub-
mitted, such agent does not thereby become that of such creditors, but remains
the agent of the debtor, and his knowledges, mistakes and acts are those of his
principal-the insolvent. The same effect would be produced if he were deemed
the common agent of both parties.-Curran et al. v. Munger et al., 33.
AMENDMENT.-See COMMERCIAL PAPER, 3; DISTRICT COURT, 3; SUSPEN-
SION OF PAYMENT.
1. A court should not do indirectly what it has no power to do directly,
therefore, when a petition has been dismissed in the United States circuit court,
the parties considering themselves aggrieved by such decision cannot apply
to the United States district court for a re-hearing of the original decree, that
they may, on an adverse decision being re-entered, again have the right to ap-
peal to the circuit court, as this would be an attempt to extend the time fixed
by the statute within which an appeal can be allowed.—In re Troy Woolen Co.,
2. An assignee obtained an order of the district court, requiring the bank-
rupt and certain other parties to deliver to him property belonging to said bank-
rupt. From this order an appeal was taken to the United States circuit court,
in form and manner prescribed by the eighth section of the bankrupt act. The
assignee moved to dismiss the appeal on the ground that the proceedings in the
district court were summary, and could only be reviewed by summary petition,
and, therefore, not a case for an appeal under the eighth section of the bank-
rupt act. Held, That although the appeal might be irregular, the district court
had jurisdiction, and from the evidence was justified in making the decree ap-
pealed from. Decree affirmed with costs.-damson, Assignee, v. Blake et al.,
401.
1. The term assets in the thirty-third section of the bankrupt act as amended
July fourteenth, eighteen hundred and seventy, is not used to express the net
balance to be distributed among the creditors, but means the entire estate of the
bankrupt, irrespective of the use to which it may be appropriated by the court.
Hence, where the estate was originally sufficient to pay fifty per cent. of the debts
proved, but a large part has been wasted by litigation, the bankrupt is entitled
to his discharge without the assent of his creditors.-In re Kabley et al., 189.
2. Bankrupts made application for their discharge and took the testimony
of the assignee, who swore that at the time he took possession of the estate it
was worth fourteen thousand dollars, which was more than fifty per cent. of
the debts of said bankrupts, as set forth in their schedule. The evidence further
shows that the assignee offered the real estate at public sale, but was unable
to obtain a bid upon it for the reason that it was heavily encumbered, and
was at that time advertised for sale under a mortgage foreclosure suit. The
assignee collected some twelve thousand two hundred dollars. Unsecured
claims to amount of fourteen thousand dollars have been proved, of which six
thousand five hundred dollars were contracted prior to January first, eighteen
hundred and sixty-nine, and seven thousand five hundred dollars subsequent to
that date. On the part of the bankrupts it was claimed that a discharge should
be granted from all their debts, for the reason that they had shown that at the
time their estate passed into the hands of the assignee it was worth fifty per
cent. of the claims proved. Held, That the word assets must be construed to
mean money received by the assignee, and that bankrupts are only entitled to
receive a discharge from their debts contracted prior to January first, eighteen
hundred and sixty-nine.-In re G. & J. J. Van Riper, 573.
1. In the absence of fraud, the assignee takes only such rights and interests
as the bankrupt himself had or could assert at the time of his bankruptcy, and
consequently they are affected with all the equities which would affect the
bankrupt himself if he were asserting those rights and interests. In re Dow,
10
2. An assignee is an officer of the court and acts subject to its orders.
bankrupt is entitled to a certificate of the assignee giving the names and resi-
dence of the creditors who have proven their claims, as per form, in order to
enable him to move the court for an order to show canse why he should not be
discharged, &c. The register has the power to make such an order and it is
the duty of the assignee to obey it. Motions to compel an assignee to do his
duty are properly made before the register.- In re Blaisdell et al., 78.
3. It is not essential to the title of the assignee that the assignment to him
by the register should be recorded within six months from its date. The title
of the assignee takes effect by relation, from the commencement of the proceed-
ings in bankruptcy, and the recording is not required for the mere purpose of
giving notice to purchasers.-Davis v. Anderson et al., 145.
4. The assignee in bankruptcy can claim only such interest and right in any
property as the bankrupt could have claimed at the filing of the petition by or
against him. Hence, where the bankrupt has made conveyances by which his
books of account pass to an assignee of his own selection, the assignee in bank-
ruptcy cannot claim them until such conveyances are shown to have been
fraudulent and void. To obtain possession of such books an assignee must
proceed by a bill in equity or action at law, in which the validity of said con-
veyances can be tested, and not by simple petition. --Rogers, Assignee, v. Win-
sor, 247.
5. An assignee is not at liberty to charge the assets of the estate in his hands
for professional and clerical services rendered him in the execution of his trust
until the same shall have been first duly allowed by the court.-In re Noyes,
277.
6. Before incurring expenses for professional services and clerk hire, an
assignee must apply to court for proper authority; if, however, he has incurred
and paid such expenses, or demands compensation beyond what he is entitled
to by section twenty-eight of the bankrupt law, he must accompany his final
account with a separate and distinct application for an allowance of the charges,
and submit to such examination and furnish such proofs as may be required
touching the necessity of such disbursements and services.- Id.
7. The assignee has a right to recover from the judgment creditor, (a bank,)
although it has given no receipt to the sheriff, but only a certificate of de-
posit.- Trader's National Bank of Chicago v. Campbell, 313.
8. An assignee has the right to proceed against a creditor in the federal court
for the proceeds of a sale on an execution issued out of a state court, where the
judgment on which it is founded is alleged to be in fraud of the bankrupt act.—
ld.
9. A, who was insolvent at the time, wrote to his brother-in-law, B, at St.
Louis, to come and buy him out. In response to this letter, B came to the
residence of A, and arranged to take the whole of his stock at twenty-five per
cent. below cost. B, leaving the stock in possession of A, during his absence,
went to Chillicothe, Missouri, and offered to sell the whole stock to C, at twenty
per cent. below cost. Thereupon, B and C went together to the residence of
of A; C examined, paid for and shipped the goods away. The a-signee in
bankruptcy sued C for the goods and recovered a verdict, which was set aside
on appeal and the case remanded. On the second trial he obtained a judgment
from which defendant again appealed. This time, however, the judgment
was affirmed. Defendant then appealed to the United States court, on the
ground that the jury were improperly charged. Held, That the charge was per-
fectly proper, as the judge of the court below had distinctly informed the jury
that notice of the fraud or participation in it, on the part of the defendant, was
essential to the recovery on the part of the assignee. Judgment affirmed.—
Babbitt, Assignee, v. Walbrun & Co., 359.
10. Assignees under the state law cannot receive allowance for attorneys
fees, nor compensation for their own services where the debtor has been ad-
judged a bankrupt.-In re Cohn, 379.
11. A petition was filed against an assignee in bankruptcy to have him re
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