for shares of a particular stock legally subject to the demand of the customer for whom shares of that stock were bought by the bank- rupt, the customer is entitled to the same although the certificates may not be the identical ones purchased for him. (Richardson v. Shaw, 209 U. S. 365.) Ib.
3. Brokers; right of customers to stock certificates; presumption as to identity of certificates.
Where there are in the bankrupt's possession certificates for enough shares of a particular stock to satisfy the legal demand of a cus- tomer for whom shares of that stock were purchased, and no other customer can legally demand any shares of that stock, those certificates will be presumed to be the certificates kept by the bank- rupt in accordance with his duty so to do to satisfy the demand of such customer. Ib.
4. Brokers; duty to customers to replace securities used; effect to deplete estate.
It is the right and duty of the bankrupt, if he uses securities belonging to a customer, to use his own funds to replace such securities with others of the same kind, and in so doing he does not deplete the estate against his other creditors. Ib.
5. Brokers; stock certificates in possession of; presumption as to title. There is no presumption that certificates of stock in the possession of the bankrupt were embezzled or stolen, but there is a presumption that such certificates were bought and paid for out of his own funds to replace those which he had used belonging to a customer. Ib.
6. Exemptions under § 70f of Bankruptcy Act; interest of trustee in. While title to property exempted under § 70f does not vest in the
trustee, it does pass to him as part of the bankrupt's estate for the purposes named elsewhere in the statute, including the duty of segregation, identification and appraisal. Chicago, B. & Q. Ry. Co. v. Hall, 511.
7. Exemptions under § 67f of Bankruptcy Act; waiver of.
Section 67f does not defeat rights in exempt property acquired by con-
tract or waiver of exemption; but where, as in this case, there has been no waiver, no rights can be acquired. Lockwood v. Exchange Bank, 190 U. S. 294, distinguished. Ib.
8. Exempt property; liens on; effect of § 67f of Bankruptcy Act to annul. The decisions of the state and lower Federal courts in regard to annul- VOL. CCXXIX-41
ment of liens on exempt property have been conflicting, and this court now holds that § 67f annuls all such liens obtained within four months of the filing of the petition, both as against the prop- erty which the trustee takes for benefit of creditors and that which may be set aside to the bankrupt as exempt. In re Forbes, 186 Fed. Rep. 76, approved. Ib.
9. Jurisdiction of bankruptcy court over estate situated in States other than that in which court sits; application of act of 1893, relative to sales of real estate.
The bankruptcy court is not confined in the administration of the property of the bankrupt to state or district boundaries; nor is it necessary to institute independent or ancillary proceedings in the different States in which the bankrupt's property is situated, or to conform to the provisions of the act of 1893 prescribing the method of selling real estate under orders and decrees of courts of the United States. Robertson v. Howard, 254.
10. Preferential transfer; what constitutes.
To constitute a preferential transfer within the meaning of the Bank- ruptcy Act of 1898 there must be a parting with the bankrupts' property for the benefit of the creditor and a consequent diminu- tion of the bankrupt's estate. (Newport Bank v. Herkimer Bank, 225 U. S. 178.) Continental Trust Co. v. Chicago Title Co., 435.
11. Preferential transfer; consideration in determining. In determining whether there has been a preferential payment, the nature of the property transferred is not as essential as the facts showing exactly what transpired between the parties. Ib.
12. Preferential transfer; effect of arrangement which does not diminish estate of bankrupt.
The arrangement involved in this action, made between a bank and a grain broker, in regard to transferring certificates of deposit held as collateral for dealings in grain on the Chicago Board of Trade, do not appear to have in any way diminished the estate and held not to have amounted to an illegal preference. Ib.
13. Preferences; status of bank with reference to. Nothing in the Bankruptcy Act deprives a bank with which the insol- vent is doing business of the rights of any other creditor taking money without reasonable cause to believe that a preference will result. Studley v. Boylston National Bank, 523.
14. Preferences; right of bank to set-off deposits against notes.
In this case it having been found that the deposits and payments of notes were not made to enable the bank to secure a preference by the right of set-off, the bank had a right under its agreement to set off the deposits against the notes within four months of the bankruptcy. (New York County Bank v. Massey, 192 U. S. 138.) Ib.
15. Sales of real estate; application of act of 1893.
General Order XVIII in Bankruptcy does not contemplate that the act of 1893 be followed in sales of real estate. Robertson v. Howard, 254.
16. Sales of real estate; irregularities cured by confirmation. After sale of real estate by the trustee and confirmation by the referee, lack of appraisal and error of description in published notice are mere irregularities cured by the order of confirmation and validated under § 70b of the Bankruptcy Act, and the conveyance cannot be attacked collaterally. Ib.
17. Set-offs under § 68a of Bankruptcy Act. Section 68a of the Bankruptcy Act did not create the right of set-off but recognized its existence and provided a method for its enforce- ment even after bankruptcy. Studley v. Boylston National Bank, 523.
18. Set-off; right of, under Bankruptcy Act; relation of act to banking. The right of set-off is recognized by the Bankruptcy Act and it cannot
be taken away by construction because of possibility of its abuse; nor will the act be so construed by denying such right as to make banks hesitate to carry on business and thus produce evils of serious consequence. Ib.
19. Set-offs; purpose of § 68a of Bankruptcy Act to prevent.
The purpose of § 68a of the Bankruptcy Act is to prevent debtors of the bankrupt from acquiring claims against him for use by way of set-off and reduction of their indebtedness by way of set-off; but the transaction in this case does not come under § 68a. Western Tie & Timber Co. v. Brown, 196 U. S. 502, distinguished. Con- tinental Trust Co. v. Chicago Title Co., 435.
20. Trustee's title; estate vested in; right of administration.
The effect of adjudication in bankruptcy is to transfer title of all of the property of the bankrupt wheresoever situated and vest the
same in the trustee, who has the right to administer the same under the authority of the court. Robertson v. Howard, 254. See CONSTITUTIONAL Law, 17, 18.
1. Collections; when collecting and crediting check equivalent to payment in usual course.
When a bank has performed the dual function of collecting and credit- ing a check the transaction is closed; and, in the absence of fraud or mutual mistake, the transaction is equivalent to payment in usual course as though presented to another bank and paid over the counter. (National Bank v. Burkhardt, 100 U. S. 686.) Amer- ican National Bank v. Miller, 517.
2. Notice to officer; imputation to bank. While knowledge of an officer of a bank of a fact which it is his duty to declare, and not his interest to conceal, is to be treated as that of the bank; where it is his interest to conceal such knowledge the law does not, by a fiction, charge the bank with such knowl- edge. Ib.
3. Notice; knowledge of officer; presumptions as to disclosure to bank. There is a presumption that an officer of a bank will disclose his knowl-
edge of matters which affect the bank and which it is not to his personal interest to conceal; and there is also presumption that he will not disclose those matters of which he has knowledge and which it is his interest to conceal, including his own bankruptcy and indebtedness to other banks. Ib.
4. Notice; imputation to bank of knowledge of officer. A bank, on which the president of another bank just before his own bankruptcy drew a check in favor of the latter, cannot, after hav- ing paid the check by crediting it to the payee bank, cancel the credit and retain the money on the ground that the payee bank is to be imputed with constructive knowledge of its president's bank- ruptcy. Ib.
See BANKRUPTCY, 13, 14, 18;
ESCROW, 2, 3, 4;
ESTOPPEL.
BILLS AND NOTES.
See BANKS AND BANKING, 1.
Claflin v. Claflin, 149 Massachusetts, 19, approved in Shelton v. King,
In re Forbes, 186 Fed. Rep. 76, approved in Chicago, B. & Q. Ry. Co.
Russell v. American Bell Tel. Co., 180 Massachusetts, 467, approved in National Safe Deposit Co. v. Hibbs, 391.
Boom Co. v. Patterson, 98 U. S. 403, distinguished in McGovern v. New York, 363.
Brown v. Elliott, 225 U. S. 392, distinguished in Nash v. United States,
Cashman v. Amador Canal Co., 118 U. S. 58, distinguished in Wheeler v. Denver, 342.
Henry v. Dick Co., 224 U. S. 1, distinguished in Bauer v. O'Donnell, 1.
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