custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a creditor holding a lien by legal or equitable proceedings.' Although otherwise explicit, this provision does not designate the time as of which the trustee is to be regarded as having acquired the status indicated, and yet some point of time must be intended. Is it the date of the trustee's appointment, the filing of the petition in bankruptcy, or some time anterior to both? When not otherwise specially provided, the rights, remedies and powers of the trustee are determined with reference to the conditions existing when the petition is filed.. It is then that the bankruptcy proceeding is initiated, that the hands of the bankrupt and of his creditors are stayed and that his estate passes actually or potentially into the control of the bankruptcy court. We have said: "The filing of the petition is an assertion of jurisdiction with a view to the determination of the status of the bankrupt and a settlement and disposition of his estate. The exclusive jurisdiction of the bankruptcy court is so far in rem that the estate is regarded as in custodia legis from the filing of the petition.' Acme Harvester Co. v. Beekman Lumber Co., 222 U. S. 300, 307. And again: 'We think that the purpose of the law was to fix the line of cleavage with reference to the condition of the bankrupt estate as of the time at which the petition was filed and that the property which vests in the trustee at the time of adjudication is that which the bankrupt owned at the time of the filing of the petition.'

"Everett v. Judson, 228 U. S. 474, 479. And see Zavelo v. Reeves, 227 U. S. 625, 631. Had it been intended that the trustee should take the status of a cred

itor holding a lien by legal or equitable process as of a time anterior to the initiation of the bankruptcy proceeding, it seems reasonable to believe that some expression of that intention would have been embodied in Sect. 47-A as amended. As this was not done, we think the better view, and one which accords with other provisions of the act, is that the trustee takes the status of such

a creditor as of the time when the petition in bankruptcy is filed. Here the petition was filed almost two months after the contract was filed for record, and therefore the trustee was not entitled to assail it under the recording law of the State.

"The record shows that between the date of the contract and the time it was filed for record the bankrupts mortgaged the machine to the First National Bank of Horton and that the bank, although apparently asserting some right under the mortgage, was not brought into the present proceeding. In this situation, our decision and that of the Circuit Court of Appeals must be understood to be without prejudice to further proceedings respecting the rights, if any, existing under that mortgage.'

Question 808: If the conditional sale had been recorded before bankruptcy but after a creditor had obtained a judgment, would the title of the conditional seller have been good against the trustee? If the petition had been filed prior to the recording of the conditional sale and there had then been no creditors who had any lien by legal or equitable proceedings, would the trustee's right be superior to that of the conditional vendors?

(Note: Prior to amendment of 1910, the Bankruptcy Act as construed by the judicial decisions gave the trustee no greater rights than the creditors had at the time of the filing of the petition. That is to say, for example, if there was an unrecorded conditional sale made to the bankrupt under which he took possession, and the statute provided that the rights of the seller should be void as against judgment or attaching creditors, the result would be that a general creditor would have no rights superior to the conditional vendor unless he got his judgment or attachment lien prior to the recording of the conditional sale or prior to the taking possession by the vendor for default. Therefore if at the time the petition in bankruptcy was filed. there were no judgment or attachment creditors, the trustee would merely represent them as general creditors and the rights of the conditional vendor would be superior to his notwithstanding such conditional vendor had not recorded the conditional sale, or taken possession, and notwithstanding the conditional sale was unknown to any of the creditors. This was manifestly

unjust and one might almost say, absurd, because the filing of the petition in bankruptcy took away from the creditors, rights that on that same day they might have procured by obtaining judgment or by attaching the property. Under amendment of 1910, the trustee became vested with all the rights, remedies and powers of a creditor holding a lien by legal or equitable proceedings, and which might have been exercised by them had such bankruptcy petition not been filed. This refers, as shown in the Bailey case to the time when the petition is filed. If a record is made or possession taken under any chattel mortgage or conditional sale prior to the filing of the petition, which at that time is good against creditors, then it is also good against the trustee.)

Had there been creditors having a lien by legal or equitable proceedings (i. e. by judgment, attachment or otherwise), and such liens had accrued prior to the filing of the conditional sale, then by the state law as to conditional sales, the creditors would have had the superior advantage and the trustee would have had the same advantage. So if the petition had been filed prior to the recording of the conditional sale the trustee would not take subject to the interest of the conditional vendors, even though no creditor had any such lien (being all general creditors) for the trustee is given the status of a creditor having a lien by legal or equitable proceedings.

If any creditors secured judgments within four months prior to the filing of the petition, their liens would be dissolved so far as they thereby could secure any advantage over other creditors, but the fact that there were such judgment creditors would give the trustee the character of a judgment creditor even if the conditional sale was recorded before bankruptcy for the lien of the judgment though dissolved by the bankruptcy proceedings would be preserved for the benefit of the estate.)

§ 839. (Bankruptcy, Sec. 49.) As to nature of
property.

Case 809. Bankruptcy Act, Sec. 70.

"The trustee of the estate of a bankrupt upon his appointment and qualification, and his successor or successors, if he shall have one or more, upon his or their appointment or qualification shall in turn be vested with operation of law with the title of the bankrupt, as of

the date he was adjudged a bankrupt, except in so far as it is to property which is exempt, to all

"(1) Documents relating to his property;

"(2) Interests in patents, patent rights, copyrights and trademarks;

"(3) Powers which might have been exercised for his own benefit, but not those which he might have exercised for some other person;

"(4) Property transferred by him in fraud of his creditors;

"(5) Property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him;

"Provided, That when any bankrupt shall have any insurance policy which has a cash surrender value payable to himself, his estate, or personal representatives, he may, within thirty days after the cash surrender value has been ascertained and stated to the trustee by the company issuing the same, pay or secure to the trustee the sum ascertained and stated, and continue to hold, own, and carry such policy free from the claims of the creditors participating in the distribution of his estate under the bankruptcy proceedings, otherwise the policy shall pass to the trustee as assets; and

"(6) Rights of action arising upon contracts or from the unlawful taking or detention of, or injury to, his property.

"b. All real and personal property belonging to bankrupt estates shall be appraised by three disinterested appraisers; they shall be appointed by, and report to, the court. Real and personal property shall, when practicable, be sold subject to the approval of the court; it shall not be sold otherwise than subject to the approval of the court for less than seventy-five per centum of its appraised value.

c. The title to property of a bankrupt estate which has been sold, as herein provided, shall be conveyed to the purchaser by the trustee.

d. Whenever a composition shall be set aside, or discharge revoked, the trustee shall, upon his appointment and qualification, be vested as herein provided with the title to all of the property of the bankrupt as of the date of the final decree setting aside the composition or revoking the discharge.

e. The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication. Such property may be recovered or its value collected from whoever may have received it, except a bona fide holder for value. For the purpose of such recovery any court of bankruptcy as hereinbefore defined, and any State court which would have had jurisdiction if bankruptcy had not intervened, shall have concurrent jurisdiction.

f. Upon the confirmation of a composition offered by a bankrupt, the title to his property shall thereupon revest in him.

§ 840. (Bankruptcy, Sec. 50.) Personal privileges.

(Note: Privileges or rights purely personal, that the bankrupt himself could not have transferred or which could not be reached under legal process, as for instance a personal license, do not pass to the trustee; but if of transferable value, even though there might be objections successfully urged to its transfer by others, as for instance by members of a stock exchange to the transfer of a membership it passes to the trustee, although his realization of value thereby might be defeated.)

§ 841. (Bankruptcy, Sec. 51.) Interests in patents, patent right, copyrights and trademarks.

(Note: Specifically given by Sec. 70 of the law quoted above in § 839.)

§ 842. (Bankruptcy, Sec. 52.) Insurance policies. (Note: See Sec. 70, quoted above in § 839.)