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A parol assignment of choses in action as security by a bankrupt prior to the bankruptcy; may be established by the testimony of the parties alone where such testimony is uncontradicted and credible, the witnesses are not impeached, and there are no circumstances which cast doubt upon their truthfulness; and, in the absence of a State statute to the contrary they will be sustained.20 Where the estate is insufficient to pay in full all claims entitled to a priority, the court may apportion the priorities as equity requires, with regard to the responsibility of the claimants for the depreciation of the estate.21 The lienor may for laches lose his priority.22 The cases where a trustee in bankruptcy may have liens set aside have been previously discussed. 29 8 649a. Reclamations. A stranger to the proceedings claiming a right to property held by a receiver or trustee in bankruptcy may intervene pro interesse suo and reclaim them. A creditor who does not intervene or prove his claim remains a stranger to the proceedings. The right to reclamation may be waived, or lost by laches.

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vent, transferred his property to a corporation which borrowed money and paid judgments, liens upon his property, it was held that the company was not entitled to subrogation, Re Liller, 253 Fed. 845.

20 Union Trust Co. v. Bulkeley, C. C. A., 150 Fed. 510. For parol agreements for subrogation to the lenders of money to discharge encumbrances that have been tained, see Re MacDougall, 175 Fed. 400; Re Lee, C. C. A., 182 Fed. 579. Contra, J. P. Browder & Co. v. Hill, C. C. A., 136 Fed. 821. It has been held that the lender of money to a bankrupt, for the express purpose of paying such claimants, is not entitled to be subrogated to the priority of those who are thus paid. Re General Automobile & Mfg. Co., C. C. A., 133 Fed. 525; J. P. Browder & Co. v. Hill, C. C. A., 136 Fed. 821; Bell v. Arledge, C. C. A., 192 Fed. 837; even when the borrower agrees that he shall have such right of subrogation, J. P. Browder & Co. v. Hill, C. C. A., 136 Fed. 821. But see note 23 infra. It has been held the general rule of Federal jurisprud

that priority in assignments of choses in action is determined by the receipt of notice by the debtor should be followed in bankruptcy although the State law is contrary and the contract between the bankrupt and the first assignee provided

that it should be construed in accordance with the laws of the State, Re Leterman Decher & Co. Inc., C. C. A., 260 Fed. 543; but that the construction by the State Courts of the recording acts as not applicable to the assignment of choses in action is binding on the Federal Courts. Ward v. Agricultural Chemical Co., C. C. A., 232 Fed. 119. For transactions held not to create valid assignments of book accounts and other choses in action, Home Bond Co. McChesney, 239 P. S. 568; Re Handy, 218 Fed. 956; Eastman Kodak Co. v. National Park Bank, 231 Fed. 320; Re Howley DownDraft Furnace Co., 233 Fed. 451; Re Barker Piano Co., C. C. A., 233 Fed. 522; Re Clark Realty Co., C. C. A., 234 Fed. 576; Re Interocean Transp. Co., C. C. A., No. 269, 234 Fed. 863; Re Lutz & Schramm Co., 235 Fed. 970; Wuerpel v. Commercial Germania Trust & Savings Bank, C. C. A., 238 Fed. 269; Wolfe v. Bank of Anderson, C. C. A., 238 Fed. 343; Bonvillain v. American Sugar Refining Co., 250 Fed. 641; Re Phoenix Planing Mill, 250 Fed. 899; John A. Schmitt's Sons v. Shadrach, C. C. A., 251 Fed. 874; Taylor v. Fram, C. C. A., 252 Fed. 465; Montgomery v. City of Phila. delphia, 253 Fed. 473; Re Imperial Textile Co., 255 Fed. 199; modifying s. c. 239 Fed. 775. Re Klapupon its

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holz, 113 Fed. 1002; Re Torchia, 185 Fed. 576. When the debt has been duly proved, delay in claiming a priority will ordinarily be no defense to the application unless other equities have intervened. Re Ashland Steel Co., C. C. A., 168 Fed. 169 (one year); Re Jamison Bros. Co., C. C. A., 227 Fed. 30, (delay of two years in bringing petition to hearing). The filing of a claim and the receipt of dividends full amount

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be treated as a waiver of the creditors security. Re Fisk & Robinson, 185 Fed. 974. Alienor does not waive his lien by surrendering possession to a receiver in bankruptcy, Re Endlar, C. C. A., 192 Fed. 762 (a chattel mortgage); but a lienor cannot object to the payment of a claimant to a prior lien after notice by the trustee without objection by him, Re Torchia, C. C. A., 185 Fed. 576; and creditors may be estopped by laches from objecting to the payment of claims under orders giving them priority, Ibid. See Re McAusland, 235 Fed. 173.

21 Re Grignard Lithographing Co., 158 Fed. 557. Where a creditor claims priority of payment of notes held by him, which are also a lien on other property not in the custody of the court, an order for the payment of his claim may be conditioned upon his transfer of the notes to the proper officer of the court for the benefit of the whole estate. Mansur v. Dupree, C. C.

A., 150 Fed. 329. A petitioner, who united a prayer for the pay. ment of taxes and assessments by a trustee with one for permission to foreclose a mortgage, or, in the alternative, that the trustee sell the property, was allowed to amend his petition by striking out the two latter prayers. Re Wellhouse, 113 Fed. 962.

22 Re Klapholz, 113 Fed. 1002; Re Torchia, 185 Fed. 576.

23 Supra, $ 644. Upon the bankruptcy of a member of a stock exchange or other exchange, the distribution of the proceeds of his membership is made in accordance with the rules of the exchange. In the

of the New York Stock Exchange, they applied, first, to the payment of the member's indebtedness thereto; next, to claims arising against him out of transactions on the floor thereof; third, to loans from members; and, lastly, to his general creditors. Sexton v. Kessler, 225 U. S. 90; Gorman v. Littlefield, 229 U. S. 19; Duel v. Hollins, 241 U. S. 523; Re Gregory, C. C. A., 27 J.R.A. (N.S.) 613, 174 Fed. 629. For liens held by the customers of bankrupt stock brokers against them, see Richardson v. Shaw, 209 U. S. 365; Re Jacob Berry & Co., C. C. A., 174 Fed. 409; Re T. A. McIntyre & Co., C. C. A., 181 Fed. 955; S. C., C. C. A., 181 Fed. •960; Re James Carothers & Co., 182 Fed. 501; s. c., 192 Fed. 691; Re Brown, C. C. A., 175 Fed. 769; s. C., C. C. A., 184 Fed. 454; S. C., 189 Fed. 432; s. C., 189 Fed. 440; s. C., 189 Fed. 442; s. C., C. C. A., 193 Fed. 24; S. C., C. C. A., 193 Fed. 30; Re Jamison Bros. & Co., C. C. A., 209 Fed. 541; Re H. B. Hollins & Co., 212 Fed. 317; Re Leavitt & Grant, C. C. A., 215 Fed. 901; Re Hollins, C. C. A., 219 Fed. 544; Re T. A. McIntyre & Co., C. C. A., 221 Fed. 232; Re H. B. Hollins & Co., 225 Fed. 618; Re J. F. Pierson, Jr. & Co., 225 Fed. 889; Re Van Schaick & Co., C. C. A., 228 Fed. 465; Re Stringer, 230 Fed. 177; Re H. B. Hollins & Co., C. C. A., 232 Fed. 124; Re Pierson, C. C. A., 233 Fed. 519; Re Stringer, 233 Fed. 799; Re Pierson, C. C. A., 238 Fed. 142; Re Wettengel, 238 Fed. 799; Re Gay & Sturgis, 251 Fed. 420; Johnson v. Bixby, C. C. A., 252 Fed. 103; Re J. C. Wilson & Co., 252 Fed. 631.

$ 649a. 1 See supra, $ 258h. In the determination of the title to real estate the law of the situs governs Supra, § 477h. In determining the title to chattels, usually the law of the situs, Boden & Haac et al. v. Lovell, C. C. A., 205 Fed. 234; Re Ricketts, C. C. A., 234 Fed. 785; but sometimes the law of the State where the contract was made and where it was to be performed. Re Liebig, C. C. A., 255 Fed. 458; Re Torchia, C. C. A., 185 Fed. 570. In the subject of reclamations, see Re Howard, 207 Fed. 402; Ro Killian Mfg. Co., 209 Fed. 498; Re Thorson Bros., 209 Fed. 961; Re Watmough,

210 Fed. 539; Roth v. Smith, C. C. A., 215 Fed. 82; Re Underwood & Daniel, 215 Fed. 279; Re K. Marks & Co., 218 Fed. 453; Re McGinley, C. C. A., 219 Fed. 159; Re Sycamore Grain & Milling Co., 221 Fed. 468; Re N. Y. Commercial Co., C. C. A., 228 Fed. 120; Schroth v. Monarch Fence Co., C. C. A., 229 Fed. 549, denied; Re Syracuse Gardens Co., 231 Fed. 284; Walter A. Wood Mowing & Reap. ing Mach. Co. v. Croll, C. C. A., 231 Fed. 680; Re Farmers' Dairy Ass'n, 234 Fed. 118; Re CopiagLindenhurst Co., 240 Fed. 431; Re Hunter-Rand Co., 241 Fed. 175, denied; Re Kaplan & Myers, C. C. A., 241 Fed. 459; Re Collins, 242 Fed. 975; Re Resnek, 243 Fed. 417, denied; Re Golub, 245 Fed. 512; Stennick v. Jones, C. C. A., 252 Fed. 345, denied; Re Arkin Dress Co., C. C. A., 253 Fed. 926. As to the delivery essential to complete a sale, see Gage Lumber Co. v. M’Eldowney, C. C. A., 207 Fed. 255; Re Ricketts, C. C. A., 234 Fed. 785; holding the delivery insufficient; Taney Penn National Bank, 232 U. S. 174; Hiller v. Cornille & De Blonde, C. C. A., 228 Fed. 670; holding the delivery sufficient. As to the rescission of a sale for fraud because of a preconceived intent not to pay, see Halsey v. Diamond Distilleries Co., C. C. A., 191 Fed. 498; Re Liebig, C. C. A., 255 Fed. 458. See Re Weil, 111 Fed. 897; Re O'Conner, 114 Fed. 777; Re Patterson & Co., 125 Fed. 562.

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2 Gratiot County State Bank v. Johnson, 249 U. S. 246.

3 See supra, § 185b. The levy of an execution upon property issued under a judgment for the purchase price is a waiver of the right to reclaim the

Re- Fitzhugh Hall Amusement Co., 228 Fed. 169. It has been held: that, where the claimant has elected to waive the tort and prove his claim upon an implied contract and has participated in a creditors' meeting after such proof; he cannot be allowed to withdraw his proof and apply for the return of the goods, Standard Varnish Works v. Haydock, C. C. A., 143 Fed. 318. That the act of a creditor of a bankrupt in petitioning the court of bankruptcy for the appointment of a receiver to take charge of and protect the bankrupt's property, which petition set forth that certain of the property in the bankrupt's possession was owned by the petitioner, and that the bankrupt was also largely indebted to it, did not estop it to assert its ownership of such property; Re Pierce, C. C. A., 157 Fed. 757; Lynch v. Bronson, 160 Fed. 139; but that proof of a claim is not a waiver of a previous action for the recovery of the specific property. Mould v. Importers & Traders' Nat. Bank, 72 App. Div. (N. Y.) 30, 33. Cf. $ 649, supra. That there is no such waiver by petitioning the court of bankruptcy for the appointment of a receiver when the petition sets forth that certain property in the bankrupt's possession was the prop

erty of the petitioner and the bankrupt was also' largely indebted to it, Re Pierce, C. C. A., 157 Fed. 757 ; nor by attending a meeting of creditors to discuss a composition and not asserting the right of reclamation until subsequently, Re Loll, 162 Fed. 79. Cf. § 647, supra. Nor by the description of a claimant as a creditor in a petition for relief to which he would have been entitled as the owner of property obtained from him by the bankrupt through fraud. Re Midland Motor Co., 224 Fed. 368.

4 Re Watmough, 210 Fed. 539. Where a claim for compensation and expenses in taking care of merchandise which had been sold by the trustee, was disallowed, the claimant was permitted upon appeal from the order or disallowance to assert his equitable claim to the proceeds of the sale although a stranger to the proceedings had presented to the trustee a demand for the goods which he had sold to the appellant. Bramble v. Brett, C. C. A., 230 Fed. 385.

It was said that a petition for reclamation was premature when filed before the maturity of a note extending the time of payment. Re Wegman, Paint Co., 221 Fed. 128.

For rulings that goods were held by the bankrupt on consignment for sale and not part of his assets, see Berry Bros. v. Snowdon, C. C. A., 209 Fed. 324; Re Wright-Dana Hardware Co., C. C. A., 211 Fed. 908; Re Caldwell Machinery Co., · 215 Fed. 428; Thomas V. FieldBrundage Co., C. C. A., 215 Fed. 891; Re Handy, 218 Fed. 956; General Electric Co. v. Brower, C. C. A., 221 Fed. 597; Ellet-Kendall Shoe Co. v. Martin, C. C. A., 222 Fed. 851; Re Reeves, 22 Fed. 74; Re National Home & Hotel Supply Co., 226 Fed. 840; Hauck v. Frey, 228 Fed. 779; Re Bondurant Hardware Co., 231 Fed. 247; Re Thomas, 231 Fed. 513; McElwain-Barton Shoe Co. v. Bassett, C. C. A. 231 Fed. 889; McKey v. Clark, C. C. A., 233 Fed. 928; Re Kruse, 234 Fed. 470; Smith Wallace Shoe Co. v. Ternes, C. C. A., 235 Fed. 282; Brandsford v. Regal Shoe Co., C. C. A., 237 Fed. 67; Re Wright & Barron Drug Co., 237 Fed. 411. For rulings that goods were part of the bankrupt's assets and not held on consignment, see: Re Balkind & Joseph, C. C. A., 215 Fed. 697; Re Cozatsky, 216 Fed. 920; Flanders Motor Co. v. Reed, C. C. A., 220 Fed. 642; Re Nicol, 221 Fed. 82; Re M. L. B. Sturkey Co., 224 Fed. 251; Louisville Woolen Mills V. Johnson, C. C. A., 228 Fed. 606; Re Graboyes, 233 Fed. 133; Miller Rubber Co. v. Citizens' Trust & Savings Bank, C. C. A., 233 Fed. 488; L. E. Waterman Co. v. Kline, C. C. A., 234 Fed. 891; Taylor v. Fram, 243 Fed. 733. For conditional sales where the vendors' titles have been sustained, see Hewit v. Berlin Machine Works, 194 U. S. 296, 24 Sup. Ct. 690; York Manufacturing Co. v. Cassell, 201 U. S. 344, 50 L. ed. 782, Ohio; Holt v. Henley, Trustee, 232 U. S. 637, Va.; Bailey v. Baker Ice Machine Co., 239 U. S. 268, Kansas; Re Butterwick, 131 Fed. 371, Pa.;

$ 650. Exemptions of bankrupt property. “This act shall not affect the allowance to bankrupts of the exemptions which

Re Great Western Mfg. Co., C. C. A., 152 Fed. 123, Neb.; see Bryant v. Swofford Bros., 214 U. S. 279, 53 L. ed. 997, Ark.; Re Franklin Lumber Co., 147 Fed. 852, N. J.; Mishawaka Woolen Mfg. Co. v. Smith, 158 Fed. 885, Wisc.; Re Hager, 166 Fed. 972, Ia.; Crucible Steel Co. of America v. Holt, C. C. A., 174 Fed. 127, Ky.; York Mfg. Co. v. Brewster, C. C. A., 174 Fed. 566, Texas; John Deere Plow Co. v. Anderson, C. C. A., 174 Fed. 815, Ga.; Re Miller Pure Rye Distilling Co., 176 Fed. 606, Pa.; Nauman Co. v. Brawshaw, C. C. A., 193 Fed. 350, Ia.; Re J. S. Appel Suit & Cloak Co., 198 Fed. 322, Colo.; Southern Hardware & Supply Co. v. Clark, C. C. A., 201 Fed. 1, Fla.; Burnes v. Epstein, 201 Fed. 393, Conn.; Re Farmers' CoOperative Co. of Barlow, N. D.. 202 Fed. 1005, N. D.; Hart v. Emmerson-Brantingham Co., 203 Fed. 60, Mo.; Re Anson Mercantile Co., 203 Fed. 871, Texas; Re Superior Drop Forge & Mfg. Co., 208 Fed. 813, Ohio; Baker Ice Mach. Co. v. Bailey, C. C. A., 209 Fed. 603, Kan.; Re Lane Lumber Co., 210 Fed. 82, Idaho; Re Rector's, C. C. A., 220 Fed. 645, N. Y.; Potter Mfg. Co. v. Arthur, C. C. A., 220 Fed. 843, Ohio; Re Weg.

iano Co., 221 Fed. 128, N. Y.; Re Brown Wagon Co., 221 Fed. 266, Ga.; Re Cooper's Estate, 226 Fed. 317, Iowa; Re Fitzhugh Hall Amusement Co., C. C. A., 230 Fed. 811, N. Y.; Re Stoughton Wagon Co., C. C. A., 231 Fed. 676, Mich.; Re I. S. Remson Mfg. Co., C. C. A., 232 Fcd. 594, N. Y.; Re Farmers'

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