Bankruptcy. Property Passing to Trustee. Liens Which Are Void as to Creditors

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<ul><li><p>Bankruptcy. Property Passing to Trustee. Liens Which Are Void as to CreditorsSource: Harvard Law Review, Vol. 25, No. 1 (Nov., 1911), p. 82Published by: The Harvard Law Review AssociationStable URL: http://www.jstor.org/stable/1325009 .Accessed: 20/05/2014 01:14</p><p>Your use of the JSTOR archive indicates your acceptance of the Terms &amp; Conditions of Use, available at .http://www.jstor.org/page/info/about/policies/terms.jsp</p><p> .JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range ofcontent in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new formsof scholarship. For more information about JSTOR, please contact support@jstor.org.</p><p> .</p><p>The Harvard Law Review Association is collaborating with JSTOR to digitize, preserve and extend access toHarvard Law Review.</p><p>http://www.jstor.org </p><p>This content downloaded from 194.29.185.117 on Tue, 20 May 2014 01:14:03 AMAll use subject to JSTOR Terms and Conditions</p><p>http://www.jstor.org/action/showPublisher?publisherCode=harvardlawhttp://www.jstor.org/stable/1325009?origin=JSTOR-pdfhttp://www.jstor.org/page/info/about/policies/terms.jsphttp://www.jstor.org/page/info/about/policies/terms.jsp</p></li><li><p>HARVARD LAW REVIEW. HARVARD LAW REVIEW. </p><p>two partners executed a general assignment of firm property. In bankruptcy proceedings against the partnership and the individual partners, the partner not assenting to the assignment set up that his individual assets exceeded his individual debts. The property of the firm together with that of both partners was not sufficient to pay the firm debts. Held, that the non-assenting partner may be adjudged a bankrupt. Yungbluth v. Slipper, 185 Fed. 773 (C. C. A., Ninth Circ.). </p><p>This case is opposed to the generally approved rule that partners in a bankrupt firm cannot be adjudicated bankrupts if they have not committed or been participants in committing an act of bankruptcy. See In re Meyer, 98 Fed. 976, 980. This rule is a logical result of the entity theory of partner- ship in bankruptcy. In re Hale, 107 Fed. 432. But the courts fail to apply the entity theory consistently, holding that upon adjudging a firm bankrupt, the court may draw to the administration the individual estates of the partners. Dickas v. Barnes, I40 Fed. 849; Francis v. McNeal, i86 Fed. 481. Although illogical, the principal case accomplishes this result in a practical way and simultaneously provides for the partner's discharge. </p><p>BANKRUPTCY - PROPERTY PASSING TO TRUSTEE- DATE TO WHICH TRUS- TEE'S TITLE RELATES BACK.- A bank, having on deposit moneys belonging to one against whom a petition in bankruptcy had been filed and having no actual notice of the filing, paid out money on checks delivered by the depositor to the payee previous to the filing of the petition. Held, that the bank may not be required, on summary order, to turn over to the trustee in bankruptcy the amount so paid out. Matter of Zotti, 26 Am. B. R. 234 (C. C. A., Second Circ.). See NOTES, p. 79. </p><p>BANKRUPTCY- PROPERTY PASSING TO TRUSTEE-LIENS WHICH ARE VOID AS TO CREDITORS.- A bankrupt gave a chattel mortgage which by the state (Ohio) law was void as to judgment creditors of the mortgagor, though good inter partes. The mortgagee claims his lien on the mortgaged property, now in the trustee's hands. Held, that the trustee takes the property free from the mortgage lien, having the right of a judgment creditor under ? 47 a of the Bankruptcy Act as amended by the Act of June 25, I9I0. In re Hammond, 26 Am. B. Rep. 336 (Dist. Ct. N. D. Ohio). </p><p>This construction of the amendment to ? 47 a does away with the unfortu- nate rule of York Mfg. Co. v. Cassell, 201 U. S. 344. See 24 HARV. L. REV. 620. Cf. In re Franklin Lumber Co., 26 Am. B. R. 37. </p><p>BANKRUPTCY-PROPERTY PASSING TO TRUSTEE- RIGHT OF ACTION FOR. LIBEL. - The plaintiff, in an action for a libel concerning his credit, which caused him pecuniary damage, became bankrupt. Held, that the right of action did not pass to the trustee in bankruptcy. Epstein v. Handverker, 116 Pac. 789 (Okl.). </p><p>For a discussion as to what rights of action in tort should pass to the trustee in bankruptcy, see 24 HARV. L. REV. 396. The principal case seems correct, as the right of action in it arises not from injury to property, but from injury to reputation; and it is only an indirect effect of the tortious act to diminish the bankrupt's estate. </p><p>BILLS AND NOTES - PURCHASERS FOR VALUE WITHOUT NOTICE- RIGHT OF MAKER TO FUNDS OF WRONGDOER HELD BY PLAINTIFF.- The plaintiff, a holder in due course of a check wrongfully indorsed to him, had, at the time of bringing suit against the maker of the check, funds of the wrongdoer in its hands. Held, that the defendant cannot avail itself of these funds as a set-off. Amalgamated Sugar Co. v. United States National Bank of Portland, I87 Fed. 746 (C. C. A., Ninth Circ.). </p><p>For a discussion of the principles involved, see 24 HARv. L. REV. 665. </p><p>two partners executed a general assignment of firm property. In bankruptcy proceedings against the partnership and the individual partners, the partner not assenting to the assignment set up that his individual assets exceeded his individual debts. The property of the firm together with that of both partners was not sufficient to pay the firm debts. Held, that the non-assenting partner may be adjudged a bankrupt. Yungbluth v. Slipper, 185 Fed. 773 (C. C. A., Ninth Circ.). </p><p>This case is opposed to the generally approved rule that partners in a bankrupt firm cannot be adjudicated bankrupts if they have not committed or been participants in committing an act of bankruptcy. See In re Meyer, 98 Fed. 976, 980. This rule is a logical result of the entity theory of partner- ship in bankruptcy. In re Hale, 107 Fed. 432. But the courts fail to apply the entity theory consistently, holding that upon adjudging a firm bankrupt, the court may draw to the administration the individual estates of the partners. Dickas v. Barnes, I40 Fed. 849; Francis v. McNeal, i86 Fed. 481. Although illogical, the principal case accomplishes this result in a practical way and simultaneously provides for the partner's discharge. </p><p>BANKRUPTCY - PROPERTY PASSING TO TRUSTEE- DATE TO WHICH TRUS- TEE'S TITLE RELATES BACK.- A bank, having on deposit moneys belonging to one against whom a petition in bankruptcy had been filed and having no actual notice of the filing, paid out money on checks delivered by the depositor to the payee previous to the filing of the petition. Held, that the bank may not be required, on summary order, to turn over to the trustee in bankruptcy the amount so paid out. Matter of Zotti, 26 Am. B. R. 234 (C. C. A., Second Circ.). See NOTES, p. 79. </p><p>BANKRUPTCY- PROPERTY PASSING TO TRUSTEE-LIENS WHICH ARE VOID AS TO CREDITORS.- A bankrupt gave a chattel mortgage which by the state (Ohio) law was void as to judgment creditors of the mortgagor, though good inter partes. The mortgagee claims his lien on the mortgaged property, now in the trustee's hands. Held, that the trustee takes the property free from the mortgage lien, having the right of a judgment creditor under ? 47 a of the Bankruptcy Act as amended by the Act of June 25, I9I0. In re Hammond, 26 Am. B. Rep. 336 (Dist. Ct. N. D. Ohio). </p><p>This construction of the amendment to ? 47 a does away with the unfortu- nate rule of York Mfg. Co. v. Cassell, 201 U. S. 344. See 24 HARV. L. REV. 620. Cf. In re Franklin Lumber Co., 26 Am. B. R. 37. </p><p>BANKRUPTCY-PROPERTY PASSING TO TRUSTEE- RIGHT OF ACTION FOR. LIBEL. - The plaintiff, in an action for a libel concerning his credit, which caused him pecuniary damage, became bankrupt. Held, that the right of action did not pass to the trustee in bankruptcy. Epstein v. Handverker, 116 Pac. 789 (Okl.). </p><p>For a discussion as to what rights of action in tort should pass to the trustee in bankruptcy, see 24 HARV. L. REV. 396. The principal case seems correct, as the right of action in it arises not from injury to property, but from injury to reputation; and it is only an indirect effect of the tortious act to diminish the bankrupt's estate. </p><p>BILLS AND NOTES - PURCHASERS FOR VALUE WITHOUT NOTICE- RIGHT OF MAKER TO FUNDS OF WRONGDOER HELD BY PLAINTIFF.- The plaintiff, a holder in due course of a check wrongfully indorsed to him, had, at the time of bringing suit against the maker of the check, funds of the wrongdoer in its hands. Held, that the defendant cannot avail itself of these funds as a set-off. Amalgamated Sugar Co. v. United States National Bank of Portland, I87 Fed. 746 (C. C. A., Ninth Circ.). </p><p>For a discussion of the principles involved, see 24 HARv. L. REV. 665. </p><p>82 82 </p><p>This content downloaded from 194.29.185.117 on Tue, 20 May 2014 01:14:03 AMAll use subject to JSTOR Terms and Conditions</p><p>http://www.jstor.org/page/info/about/policies/terms.jsp</p><p>Article Contentsp. 82</p><p>Issue Table of ContentsHarvard Law Review, Vol. 25, No. 1 (Nov., 1911), pp. i-xxviii+1-102Volume Information [pp. i - xx]Front Matter [pp. xxi - xxviii]Powers in Trust and Gifts Implied in Default of Appointment [pp. 1 - 30]The Standard Oil and Tobacco Cases [pp. 31 - 58]Price Restriction on the Re-Sale of Chattels [pp. 59 - 69]NotesThe Law School [pp. 70 - 71]The Board of Student Advisers [p. 71]The Standard Oil and Tobacco Cases and Prior Decisions of the Supreme Court under the Sherman Act [pp. 71 - 73]Attachment of Stock Certificates [pp. 74 - 75]Justifiable Reliance on Seller as Basis for Implied Warranty of Quality [pp. 75 - 76]Nature of Right of Landowner in Underlying Oil and Gas [pp. 76 - 77]Nature of Quasi-Contractual Relief Applied to Voluntary Payments [pp. 77 - 79]The Date to Which the Title of the Trustee in Bankruptcy Relates Back [pp. 79 - 80]</p><p>Recent CasesAdmiralty. Practice. Appearance of Owner after Libel in Rem; Judgment in Personam [p. 81]Bankruptcy. Discharge. Effect on Surety on Attachment Bond [p. 81]Bankruptcy. Partnership and Individual Claims and Assets. Effect of Act of Bankruptcy on Non-Assenting Partner [pp. 81 - 82]Bankruptcy. Property Passing to Trustee. Liens Which Are Void as to Creditors [p. 82]Charities and Trusts for Charitable Uses. What Constitute Charities. Hospital for Employees Maintained by Railroad [p. 83]Chattel Mortgages. Recording and Registry. Removal to Another State [pp. 83 - 84]Constitutional Law. Due Process of Law. Compelling Railroad to Pay for Side Tracks [p. 84]Constitutional Law. Due Process of Law. Workmen's Compensation Acts [p. 84]Constitutional Law. Vested Rights. Statute Making One-Tenth of Income of Spendthrift Trust Liable to Execution [p. 85]Corporations. Directors. Eligibility of Dummy Director [pp. 85 - 86]Corporations. Stockholders: Powers of Majority. Employment of Attorneys to Defend Suit Brought by Minority to Restrain Ultra Vires Action [p. 86]Corporations. Stockholders: Rights Incident to Membership. Suit in Behalf of Corporation by One Acquiring Stock after Wrong [pp. 86 - 87]Damages. Measure of Damages. Effect of Resale in Cases of Delayed Delivery [p. 87]Death by Wrongful Act. Statutory Liability. Penal Statutes [pp. 87 - 88]Deceit. General Requisites and Defenses. Whether One Represents That His Acts Are Legal [p. 88]Eminent Domain. Compensation. Date as of Which Damages Are Assessed [p. 88]Evidence. Character. Proof of Reputation of Disorderly Houses [p. 89]Evidence. Res Gestae. Train-Dispatcher's Sheet [pp. 89 - 90]Interstate Commerce. Control by States. Prohibition of Exportation of Natural Gas [p. 90]Landlord and Tenant. Repair of Premises. Tort Liability of Landlord [pp. 90 - 91]Mechanics' Liens. Priority over Mortgage for Future Advances [pp. 91 - 92]Mechanics' Liens. What Constitutes Materials Furnished [p. 92]Municipal Corporations. Liability for Torts. Failure to Enforce Ordinances Relating to Use of Streets [p. 92]New Trial. Grounds for Granting New Trial. Prejudicial Conduct by Trial Judge [pp. 92 - 93]Railroads. Liability to Trespassers. Who Are Trespassers [p. 93]Rescission. Rescission for Fraud or Mistake. Misrepresentation as to Foreign Law of Incorporation [p. 94]Restraint of Trade. Sherman Anti-Trust Law. Form of Combination [p. 94]Restrictions and Restrictive Agreements as to Use of Property. Extinguishment of Restriction by Surrender to Party without Notice [pp. 94 - 95]Taxation. General Limitations on the Taxing Power. Constitutionality of Sale of Tax Liens [p. 95]Taxation. Property Subject to Taxation. Taxation of Foreign Corporations Engaged in Interstate Commerce [pp. 95 - 96]Torts. Interference with Business or Occupation. Liability for Constraining Plaintiff by Threat of Wrong to Break a Contract [p. 96]Witnesses. Privilege against Self-Incrimination. Privilege of Corporate Officer Ordered to Produce Incriminating Books [pp. 96 - 97]</p><p>Book Reviewsuntitled [pp. 97 - 99]untitled [pp. 99 - 100]untitled [pp. 101 - 102]</p></li></ul>