a

Baumhauer v. Austin, C. C. A., 186 Fed. 260, although he is a near relation of the bankrupt, Ibid. It has been held that the trustee has the burden of proof to establish a set-off. Re Harper, 175 Fed. 412. But see Re Graves, 182 Fed. 443. Where a petition to expunge claim is filed, a reply to the same is required or the claim will be expunged. Re Goble Boat Co., 190 Fed. 92. The failure of the bankrupt to deny an allegation in the petition that the petitioner is a creditor, does not relieve the latter from the necessity of proving his claim. Re Harper, 175 Fed. 412. For a case where a claim was disallowed because the evidence in its support was improbable, see Re Baumhauer, 179 Fed. 966. Upon the hearing of a claim, the claimant may be required to produce papers relevant to the same which are in his possession, and he may be punished for contempt if he disobeys an order to that effect. Baumhauer v. Austin, C. C. A., 186 Fed. 260. For a case where a claim, not mentioned in the bankrupt's schedules and supported only by the claimant's affidavit, was disallowed for insufficient proof, see Re Shaw, 112 Fed. 847.

Mortgages

which are void may be put in evidence as admissions of antecedent debts therein described. Re New Brunswick Carpet Co., 4 Fed. 514. But see Wilson v. Pennsylvania Tr. Co., C. C. A., 114 Fed. 742; Orr v. Park, C. C. A., 183 Fed. 683. The

evidence in support of a claim must be consistent with the claimant's allegations therein, Re Lansaw, 118 Fed. 365.

10Secured Creditor' shall include a creditor who has security for his debt upon the property of the bankrupt of a nature to be assignable under this act, or who owns such a debt for which some indorser, surety, or other persons secondarily liable for the bankrupt has such security upon the bankrupt's assets; 30 St. at L. 544546, § 2, subd. 23; Re Thompson, 208 Fed. 207; Re Shatz, 251 Fed. 351. Where the property held as security does not belong to the bankrupt, no deduction for the value thereof should be made from the claim. Re Noyes Bros., C. C. A., 127 Fed. 286; Re Mertens, C. C. A., 142 Fed. 445, affirmed Hiscock v. Varick Bank, 206 U. S. 28, 51 L. ed. 945; Re J. G. Reichard & Bros., 230 Fed. 525; New York Commercial Co., C. C. A., 233 Fed. 906. Where the liability of the bankrupt is an indorser, a creditor is not obliged to credit the proceeds of collateral securities, given by the maker of the obligation, before being allowed to participate in the distribution of the indorser's estate. Gorman v. Wright, C. C. A., 136 Fed. 164, reversing Re Matthews, 132 Fed. 274. Securities held on exempt property of the bankrupt must be deducted. Re Little, 110 Fed. 621; Fenley v. Poor, C. C. A., 121 Fed. 739; Re Lantzenheimer,

124 Fed. 716; Re Meredith, 144 Fed. 230. But see Re Bailey, 176 Fed. 990. The secret renewal of a lease, given the creditor as security, is considered to be a continuance of the security. Fitch v. Richardson, C. C. A., 147 Fed. 197; Re Sig. H. Rosenblatt & Co., C. C. A., 193 Fed. 638. When the security is surrendered, the claim may be allowed without deduction, Re Eagles & Crisp, 33 Fed. 695; Re Hurlbutt, Hatch & Co., C. C. A., 143 Fed. 958, 16 Am. B. R. 198. An adjudication that a security is void is equalivent to a voluntary surrender by the creditor. Re Pollmann, 156 Fed. 221; Re Otto F. Lange Co., 170 Fed. 114; Re Elletson Co., 193 Fed. 84. The filing of a claim and the receipt of dividends upon its full amount is a waiver of the creditor's security, Re Fisk & Robinson, 185 Fed. 974. Cf. Re Abell, C. C. A., 198 Fed. 484. So it has been held is proof of the claim without mention of the security, Re Burr Mfg. & Supply Co., 47 Fed. 16; Morrison v. Rieman, C. C. A., 249 Fed. 97. But see Re Zitron, 203 Fed. 79. The creditor may however, be allowed to amend so as to claim his security, Britton v. Thomas, C. C. A., 238 Fed. 123. The settlement of a claim by the transfer to the creditor of the legal

title to the security, Re M. I. Hibbler Mach. Supply Co., 192 Fed. 741 (a release after the bankruptcy proceedings had been begun), or otherwise, Re Norris, 190 Fed. 101. prevents the creditor from proving the debt. A secured creditor need not file a proof of claim although when the trustee has interfered with his security he may petition the court for relief, Re Goldsmith, 118 Fed. 763; Hartman v. Swiger, 215 Fed. 986; Courtney v. Fidelity Tr. Co., 219 Fed. 571; Butterfield v. Woodman, C. C. A., 223 Fed. 956; Re North Star Ice & Coal Co., 252 Fed. 301. A secured creditor who files a proof of claim without alleging any insufficiency in his security or instituting proceedings to have the value thereof determined is not entitled to have his claim allowed in any amount so that he may participate in creditors' meetings, Re North Star Ice & Coal Co., 252 Fed. 301.

11 It seems that this clause applies only to a creditor who has received a voidable preference and not to one who has a valid security, Re Keystone Press, 203 Fed. 710. On a petition of a trustee in bankruptcy to expunge the claim of a creditor on the ground that it had received a preference, the burden is. on the trustee to prove that the

preferential payment was made after the creditor received informa

tion of the insolvency of the bankrupt. Re Frazin, C. C. A., 201 Fed. 86. See Re Greenberger, 203 Fed. 583; First. Nat. Bank V. Harper, C. C. A., 254 Fed. 641; Re Keller, 252 Fed. 942. A creditor who has returned a preference can prove his claim notwithstanding his satisfaction of a judgment against the bankrupt at the time when he received the preference and the expiration of the time allowed by the State law of the vacation of such satisfaction. Hutchinson V. Otis, 190 U. S. 552, 47 L. ed. 1179. The holder of an invalid mortgage can prove the claim for the debt thereby secured, if otherwise good. Post v. Berry, C. C. A., 175 Fed. 564. See Re Elletson Co., 193 Fed. 84. Payment of a judgment for the return of a preference is equivalent to a surrender thereof. Re Louis J. Bergdoll Motor Co., 230 Fed. 248; State Bank v. Ingham, C. C. A., 237 Fed. 76. It has been said that a creditor, who holds a preference that is voidable, may file formal written proof, although it cannot be allowed until the preference is surrendered, Stevens v. Nave-McCord Mercantile Co., C. C. A., 150 Fed. 71. Where a creditor holds several claims, some of which are preferred, and some not, he cannot prove any of them unless his preference is surrendered, Dunn v. Gans, C. C. A., 129 Fed. 750; Re Mayo Contracting Co., 157 Fed. 469. But, it has been held that, in the case of a bankrupt partnership, where he holds securities, which are the individual property of a partner, he may apply these upon

his claim against the latter's individual estate and prove against the partnership estate his entire claim against the firm, Re Mertens, C. C. A., 144 Fed. 818. An unlawful preference cannot be set off against a claim, but must be surrendered before the claim is proved; even if it relates to an independent transaction; Re Chaplin 115 Fed. 162. But see Re WrightDana Hardware Co., C. C. A., 212 Fed. 397. The fact that a lien is obtained in a foreign country does not prevent its being a preference, which must be surrendered before the creditor's claim is proved. It has been held that a sale of goods, to be paid for in ten days, cannot be treated as a cash transaction, so as to prevent a payment within the period from being treated as a preference. Re John Morrow & Co., 134 Fed. 686. A payment is no less a preference because some other creditors have obtained larger proportional payments upon their claims during the same period. Re Mayo Contracting Co., 157 Fed. 469. Amounts paid on a debt of the bankrupt by a surety are not deducted from the creditor's claim; but, if the dividend exceeds the balance due him, the creditor holds the excess in trust for the surety. Swarts v. Fourth Nat. Bank, C. C. A., 117 Fed. 1. See Re Noyes Bros., C. C. A., 127 Fed. 286. A surety, who has paid the bankrupt's debt, stands in the shoes of the creditor and cannot prove the claim without surrendering all preference that the creditor has received thereupon, Livingstone V. Heinman, C. C. A., 120 Fed. 786.

15 By General Order XXI. “6. When the trustee or any creditor shall desire the re-examination of any claim filed against the bankrupt's estate, he may apply by petition to the referee to whom the case is referred for an order for such re-examination, and thereupon the referee shall make an order fixing a time for hearing the petition, of which due notice shall be given by mail address to the creditor. At the time appointed the referee shall take the examination of the creditor, and of any witnesses that may be called by either party, and if it shall appear from such examination that the claim ought to be expunged or diminished, the referee may order accordingly." The petition may ask for a re-examination of claims presented by different persons, Re Caledonia Coal Co., 254 Fed. 742, 745. Copies of the petition need not be sent to the claimants, provided that they are duly notified that the application has been made. Ibid. The referee may upon his Own motion reconsider his action in allowing a claim, provided that he gives due notice to the parties in interest, Cary v. International Agr. Corp., 243 Fed. 475. The claim may be allowed in whole or in part, and, in the latter case, without any requirement of an amendment or new verification thereof, Re Goldstein, 199 Fed. 665. The trustee is not bound to move for a reconsideration of a claim that has been filed until after a direct or indirect order has been made for an allowance of the same. Re Two Rivers Woodenware Co., C. C. A., 199 Fed. 877. For a case where an adjustment of the con

troversy was held not to deprive the trustee of the right to resist claims filed against the estate, see Ibid.

The rules of the District Courts sometimes limit the time for the presentation of an application for the re-examination of a claim. When there is no such rule in force the application will rarely, if ever, be denied for laches, provided that it was made before the estate has been closed. Re Globe Laundry, 198 Fed. 365; Re Caledonia Coal Co., 254 Fed. 742; Re Star Spring Bed Co., C. C. A., 265 Fed. 133. For a case where stockholders were held to be estopped by laches see Re Pittsburg Lead & Zinc Co., Consolidated, 198 Fed. 316. A delay of several months when the trustee was ignorant of the ground of the objection was held not to estop him although meanwhile the statute of limitation had run against security surrend ered by the claimant; Re Star Spring Bed Co., 257 Fed. 176. But see Re Octave Mining Co., 212 Fed. 457. It was held that there was no authority for the referee upon such an application to allow the claim on condition of a payment by the claimant to the trustee; Re United Grocery Co., 253 Fed. 267; contra Re W. A. Paterson & Co., C. C. A., 186 Fed. 64, 34 L.R.A. (N.S.) 31. Upon the re-examination of a claim that has been allowed, the burden of proof is upon the objector, Re Felter, 7 Fed. 904; Re Howard, 100 Fed, 630. Cf. Re Ankeny, 100 Fed. 614; Re Pittsburg Lead & Zine Co., Consolidated, 198 Fed. 316. Upon a petition to re-examine a claim, the objectors should have an opportunity to ex