candidate was conceived and carried out in the bankrupts' place of business, and that the bankrupts themselves had, by preparing the proofs of claims for creditors without expense to them, and by the solicitation of creditors at their place of business to give their proxies to one of the bankrupts' clerks, attempted to direct and control the proceedings looking to the election of a trustee. The referee disapproved this action, and, on petition for review, the court affirmed the order of the referee. This decision was affirmed by the Circuit Court of Appeals. In re McGill (C. C. A., 6th Cir.), 5 Am. B. R. 155, 106 Fed. 57.

Where the person appointed trustee of a bankrupt estate receives his appointment, in part, at least, as a result of the active efforts in the solicitation and voting of claims by a creditor which is his corporate employer and in which ne is a stockholder, and such creditor holds security for a part of its debt and is charged with having received preferences, such person's appointment will be disapproved. Matter of Anson Mercantile Co. (D. C., Tex.), 25 Am. B. R. 429, 185 Fed. 993.

In the case of In re Rekersdres (D. C., N. Y.), 5 Am. B. R. 811, 108 Fed. 206, an attorney representing the bankrupt and her regularly appointed attorney, who also held letters of attorney from three creditors, nominated a certain person for the trusteeship of the bankrupt. Objection being made in behalf of another creditor to the nomination, the referee sustained the objection, because the business association of the proposed trustee with the regularly appointed attorney of the bankrupt raised a presumption that the person nominated for trustee was nominated in fact by the bankrupt or her attorney, and was therefore not a suitable person to act in the interest of creditors. The District Court approved the referee's action.

Bankrupt had an estate of only $3,500, to be divided, after paying expenses among creditors having claims aggregating $9,000, over $7,000 of which claims were said to be owing to near relatives of the bankrupt or members of the family. One of the bankrupt's attorneys presented the claims of and had powers of attorney from about 80 per cent. of these claimants at the first meeting of creditors, thus controlling the appointment of the trustee and he insisted, over the objection of the other creditors, upon the selection of an attorney as trustee, who had an office in the building occupied by the bankrupt's attorneys. It was held that under this general order the appointment of a trustee by the majority of the creditors being subject to the approval or disapproval of the referee, the referee was justified in disapproving, as contrary to public policy, a selection which would allow the bankrupt and his relatives to administer the estate. In re Sitting (D. C., N. Y.), 25 Am. B. R. 682, 182 Fed. 917.

In the case of In re Henschel (Ref., N. Y.), 6 Am. B. R. 25, upon the election of a trustee, it was objected that the attorney by whose vote the trustees were elected held proxies obtained from creditors who were acting in combination with the bankrupt, and that the trustee was in fact the choice of the bankrupt and had announced in advance that if elected he would not prosecute certain actions which some of the creditors thought should be prosecuted. On a trial of the merits of the objection, the attorney refused to answer certain relevant questions, and this fact, together with the fact that a large number of the claims represented by the attorney were proven, and that the letters of attorney to him were executed before adjudication in bankruptcy, led to the disapproval of the election of the trustee.

In the case In re Dayville Woolen Co. (D. C., Conn.), 8 Am. B. R. 85, 114 Fed. 674, the attorney of certain creditors was asked whether any of the claims

intended to be voted by him had been assigned to any person or corporation in the interest of the bankrupt. He refused to answer the question. Notwithstanding this refusal, and the fact that he had acted as counsel for the bankrupt during the proceedings in insolvency, the referee permitted him to vote and approved the election. On these facts the court set aside the order of approval made by the referee.

In the case of In re Blue Ridge Packing Co. (D. C., Pa.), 11 Am. B. R. 36, 125 Fed. 620, there were objections that the trustee elected by the creditors had previously advised the assignment for the benefit of creditors under the State law, which was the act of bankruptcy complained of, he being also the assignee, and that he was intimately associated with the attorney of certain stockholders of the bankrupt corporation who claimed also to be creditors. But the court held that these mere facts did not make the election an improper one, but called only for a close scrutiny of it. In passing on the point, the court said:

"It is to be remembered in all such cases that the choice of a trustee is lodged by the law with the creditora constituting a majority in number and amount, and that their selection is not to be interfered with, unless it clearly imperils the fair and efficient administration of the estate."

In the case of In re Machin v. Brown (D. C., Pa.), 11 Am. B. R. 449, 128 Fed. 316, it was held that votes of creditors for a trustee could not be rejected, on the mere ground that the candidate voted for had formerly been the attorney of the bankrupts.

In the case of In re Gordon Supply & Manufacturing Co. (D. C., Pa.), 12 Am. B. R. 94, 129 Fed. 622, the trustee elected was only a stockholder in the bankrupt corporation, but had been associated closely as attorney and legal adviser with those who had theretofore been in control of the corporation. Inasmuch as their management appeared not only to be the subject of criticism, but might call for action on the part of the trustee to hold them personally responsible, it was held that the election could not be approved.

In the case of In re Cooper (D. C., Pa.), 14 Am. B. R. 320, 135 Fed. 196, it was held that the attorney who had been employed by the bankrupt to file his petition and whose obligation as attorney ceased at that point, and who had received no fee therefor, was not disqualified from voting on claims afterward received from creditors without his own solicitation or the procurement of the bankrupt.

Review by district judge.— An order of a referee approving the creditors' appointment of a trustee is subject to review by the district judge. In re Hanson (D. C., Minn.), 19 Am. B. R. 235, 156 Fed. 717. The proper way to take a review of the proceedings in the election of a trustee is by a petition for review of the order of the referee approving the appointment of the trustee by the creditors. Matter of Arti-Stain Company (D. C., Mass.), 32 Am. B. R. 643, 216 Fed. 942.

Other cases citing this order. In re McGill (C. C. A., 6th Cir.), 5 Am. B. R. 155, 106 Fed. 57; Matter of Cohen (D. C., Mass.), 11 Am. B. R. 439, 442, 131 Fed. 391; In re Kenny & Co. (D. C., Ind.), 14 Am. B. R. 611, 617, 136 Fed. 451; In re Allert (D. C., N. Y.), 23 Am. B. R. 101, 105, 173 Fed. 691; Vulcan Metal Co. v. North Platte Valley Irrigation Co. (C. C. A., 8th Cir.), 33 Am. B. R. 686, 220 Fed. 106; Matter of Holden (D. C., N. Y.), 44 Am. B. R. 161, 258 Fed. 720.

XIV. NO OFFICIAL OR GENERAL TRUSTEE

No official trustee shall be appointed by the court, nor any general trustee act in classes of cases.

[Part of General Order IX, as amended in 1874, without substantial change.]

XV. TRUSTEE NOT APPOINTED IN CERTAIN CASES

If the schedule of a voluntary bankrupt discloses no assets, and if no creditor appears at the first meeting, the court may, by order setting out the facts, direct that no trustee be appointed; but at any time thereafter a trustee may be appointed, if the court shall deem it desirable. If no trustee is appointed as aforesaid, the court may order that no meeting of the creditors other than the rst meeting shall be called.

[This general order is new. Its validity has been doubted. references below.]

See cross

Cross-references: To the law: §§ 2(17), 44, 45, 56. See also §§ 6 and 47-a (11), and read & 2 (11).

To the Supplementary Forms: (Vol. III, post.) No. 170.

After the lapse of one year. The court may appoint a trustee under this order, upon the petition of the assignee of a creditor alleging that the bankrupt died leaving property which he had fraudulently disposed of to defraud creditors. Clark v. Pidcock (C. C. A., 3d Cir.), 12 Am. B. R. 309, 129 Fed. 745.

Exemptions may be set apart by the court where no trustee has been appointed, as provided in this order. Smalley v. Langenous, 196 U. S. 93, 13 Am. B. R. 692, 695.

Other cases citing this order. In re Soper and Slada (Ref., N. Y.), 1 Am. B. R. 193; In re Rung Bros. (Ref., N. Y.), 2 Am. B. R. 620, 622.

XVI. NOTICE TO TRUSTEE OF HIS APPOINTMENT

It shall be the duty of the referee, immediately upon the appointment and approval of the trustee, to notify him in person or by mail of his appointment; and the notice shall require the trustee forthwith to notify the referee of his acceptance or rejection of the trust, and shall contain a statement of the penal sum of the trustee's bond.

[General Order IX, 1867, with some slight additions as to the contents of the notice and with other minor changes.]

Cross-references:

To the law: §§ 44, 50-a-j-k.

To the General Orders: XIII.

To the Official Forms: (Vol. III, post.) Nos. 24, 25, 26.

To the Supplementary Forms: (Vol. III, post.) Nos. 228, 229.

XVII. DUTIES OF TRUSTEE

The trustee shall, immediately upon entering upon his duties, prepare a complete inventory of all the property of the bankrupt that comes into his possession. The trustee shall make report to the court, within twenty days after receiving the notice of his appointment, of the articles set off to the bankrupt by him, according to the provisions of the forty-seventh section of the act, with the estimated value of each article, and any creditor may take exceptions to the determination of the trustee within twenty days after the filing of the report. The referee may require the exceptions to be argued before him, and shall certify them to the court for final determination at the request of either party. In case the trustee shall neglect to file any report or statement which it is made his duty to file or make by the act, or by any general order in bankruptcy, within five days after the same shall be due, it shall be the duty of the referee to make an order requiring the trustee to show cause before the judge, at a time specified in the order, why he should not be removed from office. The referee shall cause a copy of the order to be served upon the trustee at least seven days before the time fixed for the hearing, and proof of the service thereof to be delivered to the clerk. All accounts of trustees shall be referred as of course to the referee for audit, unless otherwise specially ordered by the court.

[General Order XIX, 1867, with several slight changes.]

Cross-references: To the law: Duty of trustees, in general, §§ 47, 49; As to filing bonds, § 50; As to exemptions, §§ 6, 7 (8), 47-a (11), as perhaps limited by § 2 (11); As to appraisals and sales, § 70-b.

To the General Orders: XXIII, XXI(6), XXV, XXVIII, XXIX, XXXIII, XXXV.

To the Official Forms: (Vol. III, post.) Nos. 40, 41, 47, 48, 49, 50, 51, and generally to the forms for sales, Nos. 42 to 46, inclusive.

To the Supplementary Forms: (Vol. III, post.) Nos. 170, 171, 231, 232 on exemptions, and Nos. 194, 198, 199, 230, 255 as to reports and distribution; also generally.

Meaning of order.- Remington, referee, In re Ellis (Ref., Ohio), 10 Am. B. R. 754, 756, distinguishing In re White (D. C., Vt.), 4 Am. B. R. 613, 103 Fed. 774, says: "What the supreme court's General Order really means is, as it seems to me, simply this: the trustee must, within twenty days after his appointment, set apart the exemptions claimed by the bankrupt, provided and so far as they are correct; the bankrupt may except as of course to his determination; and the creditors shall not be bound in this particular by their trustee's acts, although they usually are bound by their trustee's acts, but may themselves also take exceptions. Were it not for the rule creditors would perhaps have no right to object at all, except for fraud or collusion; but, that they did have the right, would have an indefinite time within which

to except to the trustee's report, and thus tie up the question of exception indefinitely. By this rule the trustee is free from all exceptions on the part of any fault-finding creditors after twenty days. Of course there is no need of any such limitation in regard to the bankrupt's filing exceptions, for he is right on the spot when the exemptions are thus set off and will act without delay anyway if he wants to get more; and his delay, for that matter, would tie up nobody. . . Simply because the supreme court's General Order says that creditors have twenty days' time within which they may file exceptions, does not mean that only creditors may file exceptions, but means simply what it says, namely that when creditors wish to file exceptions to the trustee's report they must file them within twenty days."

Exemptions; setting apart. It is provided by this order that the trustees shall set apart the exemptions and make report of his action, and that thereafter the creditors will file exceptions, if they wish, to such report. In re Allen & Co. (D. C., Va.), 13 Am. B. R. 518, 521, 134 Fed. 620. The language of this order "and Form 47, as to the trustee's report of exempted property, indicates quite clearly that, without reference to any prior allowance of exemption by State officials, it is the duty of the trustee to set apart the bankrupt's exemption." In re Camp (D. C., Ga.), 1 Am. B. R. 165, 91 Fed. 745. See also In re Rung Bros. (Ref., N. Y.), 2 Am. B. R. 620.

The trustee is to set apart bankrupt's exemptions and report the items and estimated value thereof, to the court as soon as practicable after his appointment. Sec. 47-a, cl. 11. And General Order XVII requires such report to be made within twenty days after receiving the notice of his appointment. In re Wishnefsky (D. C., N. J.), 24 Am. B. R. 798, 181 Fed. 896.

It is the duty of the trustee under this order within twenty days after his appointment to set off to the bankrupt the property selected or such part of it as in his judgment the bankrupt is entitled to, and file an itemized report thereof with the referee. For the purpose of determining the correct amount of such exemptions and setting them apart the trustee is entitled to the possession of the property although he does not take title thereto. Matter of McClintock (Ref., Ohio), 13 Am. B. R. 606.

In order that the trustee may be able to report the article set off to the bankrupt by him, the bankrupt must comply with § 7, clause 8, of the bank. ruptcy act, requiring him to file a claim for his exemption within ten days. In re Wunder (D. C., Pa.), 13 Am. B. R. 701, 133 Fed. 821.

The duties of a trustee to set apart the bankrupt's exemptions and report the items and value thereof to the court may not be neglected, or their discharge postponed, until an issue of fraud in regard to the disposition of property is tried. Matter of Harrell (D. C., N. Car.), 34 Am. B. R. 809, 222 Fed. 160.

Selection of exemptions by bankrupt's assignee.- Section 2(11) of the bankruptcy act which authorizes courts of bankruptcy to "determine all claims of bankrupts to their exemptions" and this general order, which requires a trustee to report to the court "the articles set off to the bankrupt by him," cannot be construed as denying the power of the court to recognize the right of a party other than the bankrupt, hold under a valid and effective assignment, conferring in express terms authority to make the selection in the name of the assignor. In re Hastings (C. C. A., 6th Cir.), 24 Am. B. R. 360, 181 Fed. 33. Valuation of property. This order requires that each article shall have an estimated value placed upon it, and thus requires a specification of items and