an assignment for the benefit of creditors, constituting the act of bankruptcy complained of, and was himself the assignee, does not disqualify him from acting as trustee,18 although a referee is justified in disapproving the appointment of a person who was an assignee of the bankrupt under a common law assignment and whose account as assignee is unsettled,19 and he is likewise justified in disapproving the appointment of a member of a law firm which acted as counsel for such assignee.20 A stockholder or officer of a corporation is not ipso facto incompetent to act as trustee of the bankrupt corporation,21 and the fact that the proposed trustee is a stockholder in a corporation appearing as a creditor is not a disqualification,22 but a stockholder who had been intimately associated as legal adviser with those formerly in control will be deemed disqualified and his appointment should be set aside.23 A bankrupt who has not been discharged is not a proper person to act as trustee to another bankrupt.24 The former attorney for the bankrupt, whose relations, business and social, remain close, should not be appointed,25 but the attorney for a petitioning creditor is not disqualified.26 Under the former law, that the assignee-elect was the bankrupt's choice warranted a refusal to confirm; so also where the candidate made it a regular business to solicit creditors' votes, 28 or was a near relative, 29 or a bookkeeper of one of the bankrupts,30 or had a direct adverse interest to the creditors, or where the choice was secured by an agreement to pay

31

27

sent a letter to various creditors signed
by him as receiver, asking that they
send their proofs of claims, and con-
taining directions as to the manner and
form of proof, it appearing that the
schedules had been filed and that he
had no better opportunity to obtains
the proofs than any one else.
In re
Crooker Co. (Ref., Mass.), 27 Am. B.
R. 241.

18. In re Blue Ridge Packing Co. (D. C., Pa.), 11 Am. B. R. 36, 125 Fed. 619.

19. In re Clay (C. C. A., 1st Cir.), 27 Am. B. R. 715, 192 Fed. 830.

20. In re Clay (C. C. A., 1st Cir.), 27 Am. B. R. 715, 192 Fed. 830.

21. Matter of Merritt Construction Co. (C. C. A., 2d Cir.), 33 Am. B. R. 616, 219 Fed. 555.

22. In re Lazoris (D. C., Wis.), 10 Am. B. R. 31, 120 Fed. 716.

23. In re Gordon, etc., Co. (D. C., Pa.), 12 Am. B. R. 94, 129 Fed. 622.

24. In re Smith (Ref., N. Y.), 1 Am. B. R. 37.

25. In re Wink (D. C., Md.), 30 Am. B. R. 298, 206 Fed. 348. Compare In re Machin & Brown (D. C., Pa.), 11 Am. B. R. 449, 128 Fed. 315.

26. Liller Bldg. Co. v. Reynolds (C. C. A., 4th Cir.), 40 Am. B. R. 371, 247 Fed. 90.

27. In re Bliss, Fed. Cas. 1,543; In re Wetmore, Fed. Cas. 17,466.

28. In re Doe, Fed. Cas. 3,957; In re Smith, Fed. Cas. 12,971; In re Haas, Fed. Cas. 5,884.

29. In re Bogart, Fed. Cas. 1,600; In re Zinn, Fed. Cas. 18,216.

30. In re Powell, Fed. Cas. 11,354. 31. In re Clairmont, Fed. Cas. 2,781.

certain voting creditors in full. But, it seems, a general creditor was eligible, and that the bankrupt's attorney was not positively disqualified, if he at once severed his relations as such.3 If the trustee is otherwise competent it does not follow that his election should be disapproved by the referee because of his friendliness to the debtor. A determination that the person chosen was disqualified because he had represented creditors, or because he had voted for himself, cannot be upheld.35

SECTION FORTY-SIX

DEATH OR REMOVAL OF TRUSTEES

§ 46. Death or Removal of Trustees.- a The death or removal of a trustee shall not abate any suit or proceeding which he is prosecuting or defending at the time of his death or removal, but the same may be proceeded with or defended by his joint trustee or successor in the same manner as though the same had been commenced or was being defended by such joint trustee alone or by such successor.

Analogous provisions: In U. S.: Act of 1867, §§ 13, 14, 16, 18, R. S., §§ 5036, 5039, 5042, 5048.

In Can.: None.

Cross-references: To the law: Death or insanity of bankrupt not to abate proceedings, § 8.

Jurisdiction of bankruptcy courts as to suits or proceedings, § 23.
One or three trustees to be appointed, § 44.

I. NO ABATEMENT ON DEATH OR REMOVAL OF TRUSTEE This is but a re-enactment of provisions found in the former law.1 Prior to that law, it had been held that such cause of action vested in his personal representatives; also that, if the assignee was defendant, the right of action abated. It was to meet these rulings that the section was inserted in the present law. It applies to all suits or proceedings, and as well if the trustee is a defendant as if a plaintiff. It applies also no matter how the trustee's removal is brought about, though it is a question whether it would if he resigned:* In that case, the court could doubtless order a resigning trustee to continue such a suit. Removals of trustees are discussed elsewhere; likewise the effect of the death of one of three trustees.

1. Act of 1867, § 16, R. S., § 5048. 2. Richards v. Maryland Ins. Co., 8 Cranch, 84.

3. Hall v. Cushing, 8 Mass. 521. 4. Hall v. Burr (Fla. Sup. Ct.), 28 Am. B. R. 837, 64 Fla. 83, 59 So. 787, holding that where a sole trustee of a bankrupt estate institutes a suit to recover property of the estate, and resigns

during the pendency thereof, such suit does not abate on his resignation, but may be proceeded with by his successors when appointed just as though the same had been instituted originally by such successors.

5. See under § 44 of this work. See also Am. B. R. Dig., § 323.

6. Id.; also Bankr. Act, § 47-b.

SECTION FORTY-SEVEN

DUTIES OF TRUSTEES

§ 47. Duties of Trustees.- a Trustees shall respectively (1) account for and pay over to the estates under their control all interest received by them upon property of such estates; (2) collect and reduce to money the property of the estates for which they are trustees, under the direction of the court, and close up the estate as expeditiously as is compatible with the best interests of the parties in interest; and such trustees, as to all property in the custody or coming into the 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 thereon; and also, as to all property not in the custody of the bankruptcy court, shall be deemed vested with all the rights, remedies, and powers of a judgment creditor holding an execution duly returned unsatisfied;* (3) deposit all money received by them in one of the designated depositories; (4) disburse money only by check or draft on the depositories in which it has been deposited; (5) furnish such information concerning the estates of which they are trustees and their administration as may be requested by parties in interest; (6) keep regular accounts showing all amounts received and from what sources and all amounts expended and on what accounts; (7) lay before the final meeting of the creditors detailed statements of the administration of the estates; (8) make final reports and file final accounts with the courts fifteen days before the days fixed for the final meetings of the creditors; (9) pay dividends. within ten days after they are declared by the referees; (10) report to courts, in writing, the condition of the estates and the amounts of money on hand, and such other details as may be required by the courts, within the first month after their appointment and every two months thereafter, unless otherwise ordered by the courts; and (11) set apart the bankrupt's

* Amendments of 1910 in italics.

[1039]

exemptions and report the items and estimated value thereof to the court as soon as practicable after their appointment. b Whenever three trustees have been appointed for an estate, the concurrence of at least two of them shall be necessary to the validity of their every act concerning the administration of the estate.

c The trustee shall, within thirty days after the adjudication, file a certified copy of the decree of adjudication in the office where conveyances of real estate are recorded in every county where the bankrupt owns real estate not exempt from execution, and pay the fee for such filing, and he shall receive a compensation of fifty cents for each copy so filed, which, together with the filing fee, shall be paid out of the estate of the bankrupt as a part of the costs and disbursements of the proceedings.*

Analogous provisions:

In U. S.: As to deposits of money, Act of 1867, § 17, R. S., § 5059; Act of 1841, § 9; Act of 1800, § 54; As to accounting for interest, R. S., § 5062B; As to submission of accounts, Act of 1867, § 28, R. S., § 5062B; As to setting apart exemptions, Act of 1867, General Order XIX; Also, generally, to many sections, prescribing other duties. In Eng. Generally to different sections prescribing duties.

In Can.: Act of 1919, §§ 17, 18, 19, 20, 21, 22, 23, 24, 26.

Cross-references: To the law: Trustee includes all the trustees of an estate,

§ 1 (26).

Jurisdiction of court of bankruptcy as to collection of estate, § 2 (7).

Estates to be closed on approval of final accounts and discharge of trustees, § 2 (8).

Allowance of exemptions to trustee, § 6.

Suits by and against trustee; intervention by trustee, § 11-b, c, d.

Certified copy of approval of bond of trustee, evidence of vesting title in him, § 21-e.

Suits by trustee; controversies between trustees and adverse claimants, § 23-a, b.

Arbitration of controversies by trustees, § 26.

Compromise of controversy arising in administration of estate, § 27.

Punishment of trustee for misapplication of property of estate, § 29-a.
Employment of stenographer on application of trustee, § 38 (5).

Dividends sheets delivered to trustee by referee, § 39-a (1).

One or three trustees to be appointed, § 44.

Accounts and papers of trustees open to inspection, § 49.
Bonds of trustees, amount to be fixed, § 50.

Proof of claim by trustee against another estate, § 57-m.
Preferential transfer may be recovered by trustee, § 60-b.

Amendatory act of 1903 added subsection c.