Fed. 825. A receiver may have a summary examination of the bankrupt or any other person concerning the former's acts, conduct or property, U. S. v. Cameron, 231 U. S. 710; Skubinsky v. Bodek (C. C. A. Third Circuit), 172 Fed. 332. Contra, Re Fixen & Co., 96 Fed. 748; U. S. v. Liberman, 176 Fed. 161. Infra, §§ 638a, 638b. It has been said that receivers in bankruptcy, prior to an adjudication, cannot adjust claims nor properly defend suits upon the same, Re Heim Milk Product Co., 183 Fed. 787. The receiver may be authorized to carry on the business of the bankrupt for a limited period, Re Richards, 127 Fed. 772. It has been held that such an order is administrative, and to a large extent discretionary, and should not be collaterally attacked. Re Isaacson, C. C. A., 174 Fed. 406; but, it has been held, that the expense of continuing the business may not be paid out of the fund in preference to a lienor thereupon, Re Bourlier Cornice & Roofing Co., 133 Fed. 958; Re Clark Coal & Coke Co., 173 Fed. 658. For a case where a receiver was charged with part of the loss, see Re Consumers' Coffee Co., 162 Fed. 786; unless the latter consented to the continuance of the business, Re Erie Lumber Co., 150 Fed. 817. It was held that a lienor was not estopped where it had no notice of the order, although its attorney acted for the receiver and trustee in procuring the same, and its officers had knowledge that the business was being continued, but not that it was being continued at a loss. Re Clark Coal & Coke Co., 173 Fed. 658; but, it has been held that a receiver may reject a lease, Plaut v. Gorham Mfg. Co., 174 Fed. 852.

In an action by the clerk of the court upon the bond running to him as payee, for the benefit of an estate in bankruptcy, it is immaterial whether the recovery is for the benefit of a receiver, as alleged in the declaration, or of some other person representing the estate. American Bonding Co. v. Allison, C. C. A., 182 Fed. 810. By permission of the court he may adjust a controversy concerning the title to property claimed to belong to the estate, Ommen v. Talcott, 175 Fed. 261. Where property is wrongfully surrendered by the receiver, the court of bankruptcy has summary jurisdiction to compel the return of them. Whitney v. Wenman, 198 U. S. 539, 49 L. ed. 1157, 25 Sup. Ct. 778; Re Schermerhorn, C. C. A., 145 Fed. 341; Re McMahon, C. C. A., 147 Fed. 684; infra, § 635. A receiver cannot sell property which is not perishable or rapidly depreciating in value, unless he is authorized to conduct the business of the bankrupt, Re Becker, 98 Fed. 407; Re Kelly Dry Goods Co., 102 Fed. 747, 749; Re Desrochers, 183 Fed. 991. The sale of a liquor license has been authorized. Re Becker, 98 Fed. 407. It was held: that the sale of a lease by a receiver without the direction of the court conveyed no title; that the defect could not be cured by a motion to confirm the sale and the equity of the adverse claimants to the property sold. Re Fulton, 153 Fed. 664. A receiver may be ordered to sell perishable assets. General Order XVIII, infra, § 641a. Such an order may be made by the referee upon the certificate by the clerk of the judge's absence or disability, Re Kelly Dry Goods Co., 102 Fed. 747. It was held that an order author

9

izing the receiver of a bankrupt to sell perishable property, consisting of produce in storage, "at public or private sale within his discretion, at current rates without notice,' was broad enough to justify a sale in bulk of all of the property in the hands of a warehouse company after it had been offered in car load lots. Smithson v. Emmerson, C. C. A., 166 Fed. 96. The receiver may be authorized by the court, at least after adjudication, to consent to a sale of the property held by an adverse claimant with a stipulation concerning the ultimate determination of their respective claims to the proceeds of the same, Ommen v. Talcott, 175 Fed. 261. A receiver may be authorized to take possession from the mortgagee of property in the possession of the bankrupt when the petition was filed and to sell this subject to all valid liens, Charak v. Durphee, 252 Fed. 885. See supra § 633, infra, § 641a. The Court of Bankruptcy may, by summary proceedings, compel the completion by the purchaser of a contract of sale, Mason v. Wolkowich, C. C. A., 10 L.R.A. (N.S.) 765, 150 Fed. 699. Under the amendment of 1910, he might apply to the court of another district for ancillary relief, 36 St. at L. 838. See § 612, supra. Before that statute, it was held that a receiver in bankruptcy had no power outside of the jurisdiction which appointed him Re Schron, 97 Fed. 760; Re Benediet, 140 Fed. 55. Whether without an ancillary appointment he can

sue in another district is a doubtful question. It has been held that he cannot do so before adjudication, Re Schrom (E. D. Ia.), 97 Fed. 760; Re Benedict (E. D.) Wisconsin) 140 Fed. 55; Re Dunseath & Son Co., 168 Fed. 973. See Re National Mercantile Agency (E. D. Pa.), 128 Fed. 639; Remington on Bankruptcy, Supp. 1910, § 1708, p. 1055. Contra, Re Dempster, C. C. A., 172 Fed. 353.

9 Re Kanter & Cohen, C. C. A., 121 Fed. 984; Re Spitzer, C. C. A., 130 Fed. 879; Re Spechler Bros., 185 Fed. 311; 25 St. at L., p. 436; supra, § 314, 633.

10 Russell and Birkett, 104 Fed. 248.

11 Re Heim Milk Product Co., 183 Fed. 787, supra, § 633; but, it has been held, that the owner of a chattel mortgage should be allowed the right to foreclose the same, although the property must remain in the possession of the receiver pending the litigation, Re Victor Color & Varnish Co., 175 Fed. 1023. And where a receiver had not been made a party to a suit against the bankrupt for an infringement of a patent, he was not required to furnish an account, which had been decreed prior to his appointment, although it was said that he might be required by subpoena to produce the books before the master, Am. Graphophone Co. v. Leeds & Catlin Co., 174 Fed. 158. Upon the determination of the claim of a stranger to a certificate of stock in the possession of the receiver, the court

ordered the latter to examine the books of the bankrupt and see whether there were any preferred such customer, to whom he was obligated to deliver certificates of the same stock, and that they and no other creditors should be given an opportunity to be heard upon the application, Re R. O. Brown & Co., 171 Fed. 254.

12 Edinburgh Coal Co. v. Humphreys, C. C. A., 134 Fed. 839; Re Erie Lumber Co., 150 Fed. 817, Re Consumers' Albany Brewing Co., 216 Fed. 988. It has been held that such permission should not be granted by a referee, Bray v. Johnson, C. C. A., 166 Fed. 57. The receiver may be authorized to borrow money for the purposes of any business which he has been directed to continue, Re C. M. Burkhalter & Co., 182 Fed. 353. See §§ 307, 309, supra. Where the court has authorized him to borrow a specific sum and he borrows more, it has been said that creditors for the excess are not entitled to any preference and are bound to show that the proceeds of the loan were used for the purposes of the receivership, Re C. M. Burkhalter & Co., 182 Fed. 353. Where a receiver in bankruptcy, in order to prevent the abandonment of work, paid employees of a subcontractor with the bankrupt their wages less the amounts they owed another for supplies, which it was the custom of the sub-contractor to withhold and pay to the supply man; it was held that he did not thereby incur any liability to the latter for the amounts due him. Re Ferguson Contracting Co., C. C. A., 187 Fed. 940.

13 Supra §§ 320-322. In the absence of evidence as to value, it was held that a receiver's account should not be surcharged with the difference between the appraisement of property and the amount for which the same was sold. Re Consumers' Coffee Co., 162 Fed. 786. And that a receiver should not be surcharged with a loss upon a sale, caused by the purchase of claims of the creditors, which prevented them from bidding at the sale. Re Schoenfeld, C. C. A., 183 Fed. 219. The receiver's counsel should only be paid for services rendered for the benefit of the entire estate and not for those rendered in the interest of creditors whom they represented. Re Ketterer Mfg. Co., 156 Fed. 719. Where two petitions in involuntary bankruptcy were successively filed in different districts, a receiver appointed in the former and an adjudication made in the latter, to which the proceedings were transferred because the bankrupt was there domiciled; it was held that the court in the former district had jurisdiction to fix the compensation of the receiver and his counsel, although payment could only be made on order of the court in the latter district, which had custody of the estate. Re Isaacson, C. C. A., 174 Fed. 406. A court of bankruptcy may, of its own motion, direct that the net proceeds of a sale under its decree be paid to a receiver in bankruptcy appointed in the same district, who had not appeared in admiralty, for the satisfaction of his allowance and expenses, and that the libellant should share only in what was left; al

though they who were the sole parties to the proceeding had stipulated that the money be divided between them. Hudson Oil & Supply Co. v. Booraem, 216 U. S. 604, 54 L. ed. 636. An order passing the accounts of receivers, in which they have credited themselves with property surrendered to third persons, who claimed the same, is not an adjudication which will prevent the trustee from recovering the property from such persons. It has been said, that upon the election or appointment of a trustee, the receiver may properly retain a sufficient sum to cover the probable expenses of the receivership, but any surplus should be immediately turned over to the trustee, Matter of College Clothes Shop, 192 Fed. 80. He may be allowed the expense of an appraisal, although the trustee was dissatisfied therewith and ordered another one made. Re Kyte, 158 Fed. 121. Premiums paid by him for fire insurance should be allowed him; but not, it has been held, unpaid premiums upon policies issued to him, since those must be settled by the trustee. Ibid. Ordinarily, when a receivership is dissolved by the reversal of the order of appointment, or by the dismissal of the bankruptcy proceedings, the costs and expenses of the receivership should be charged against the petitioning creditors. Re Ward, 203 Fed. 769; see supra, § 324; Beach v. Macon Grocery Co., C. C. A., 125 Fed. 513; Re Lacov, C. C. A., 142 Fed. 960; Re Desroch

ers, 183 Fed. 991. Contra, Re De Lancey Stables Co., 170 Fed. 860; Re Wentworth Lunch Co., 189 Fed. 831; Re Independent Machine & Tool Corporation, C. C. A., 25 Fed. 484. See Re Ward, 203 Fed. 769; § § 659, 664, infra. It has been held that where the receiver was not connected with the application for his appointment his fees may be paid in the first instance, out of the fund, with a reservation of the right subsequently to charge the same against the petitioners. Re T. E. Hill Co., C. C. A., 159 Fed. 73; Re Wentworth Lunch Co., C. C. A., 191 Fed. 821, and payment of the same may be enforced by contempt proceedings, Re Lacov, C. C. A., 142 Fed. 960. Criticized in Remington on Bankruptcy, § 398. But an adjudication in voluntary proceedings does not avoid the appointment of a receiver upon a prior involuntary application, and all rights under such prior proceedings, including the liability for costs and expenses, may be fully protected by an order of the court, Re New Chattanooga Hardware Co., 190 Fed. 241. It has been held: that exceptions to a receiver's account should be verified; but that such an omission may be cured by amendment. Re Ketterer Mfg. Co., 156 Fed. 719.

14 Infra, § 664.

§ 635. 1 Re Briskman, 132 Fed. 201. See Whitney v. Wenman, 198 U. S. 539, 49 L. ed. 1157, 25 Sup. Ct. 778.

2 Mueller v. Nugent, 184 U. S. 1, 46 L. ed. 405, 22 Sup. Ct. 269; Re

D. Levy & Co., C. C. A., 142 Fed. 442; Re Friedman, 153 Fed. 939. 3 Mound Mines Co. v. Hawthorne, C. C. A., 173 Fed. 882; Rathman v. Booth, C. C. A., 183 Fed. 913; Re Denson, 195 Fed. 854; Re Weedman Stave Co., C. C. A., 199 Fed. 948. See § 608, supra.

4 Murphy v. John Hofman Co., 211 U. S. 562, 53 L. ed. 327; where the fact that it was claimed that the receiver, after his appointment, had accepted possession as bailee of another claimant to the property, was held not to oust the Federal court of jurisdiction; Re Briskman, 132 Fed. 201; Re Alton Mfg. Co., 158 Fed. 367; where chattels were replevied between the appointment and qualification of the receiver, Re Walsh Bros., 159 Fed. 560, where a sheriff holding property under an attachment, who had been requested by the referee to hold the property for him until a trustee could be appointed, the attachment having been dissolved by the adjudication, was held to be a custodian of the court, so that a seizure from him was an interference with the court's custody of the property. But see Re、 Mid-Valley Coal Co., 251 Fed. 815. It has been held that the court had no power upon a summary application to compel a depositary, which has passed into the hands of a State officer for liquidation, to pay deposits made by receivers and trustees in bankruptcy. Re Bologh, 185 Fed. 825.

5 Whitney v. Wenman, 198 U. S. 539, 49 L. ed. 1157, 25 Sup. Ct. 778;

6

Re Schermerhorn, C. C. A., 145 Fed. 341; Re McMahon, C. C. A., 147 Fed. 684.

6 Re Purvine, C. C. A., 96 Fed. 192; Re Smith, 100 Fed. 795; Re Alexander, 193 Fed. 749; Re Lipman, 201 Fed. 169; Cohen v. Nixon & Wright, 236 Fed. 407; Gibbons v. Goldsmith, C. C. A., 222 Fed. 826 (community property); Lawhead v. Monroe, C. C. A., 252 Fed. 758. A claim of a set off against a bank deposit made by the bankrupt after the filing of the petition will not prevent the court from entertaining summary proceedings for payment of the money to the trustee. Reed v. Barnett Nat. Bank of Jacksonville, C. C. A., 250 Fed. 983.

7 Re Cole, C. C. A., 144 Fed. 392, 16 Am. B. R. 302; Orinoco Iron Co. v. Metzel, C. C. A., 230 Fed. 40; Re Gottlieb, 245 Fed. 139. The bankrupt may be ordered to execute such assignments, Re Loveland, C. C. A., 200 Fed. 136, or applications to a stock exchange, Re Granite City Bank, C. C. A., 137 Fed. 818, 14 Ani. B. R. 407; O'Dell v. Boyden, C. C. A., 150 Fed. 751, 17 Am. B. R. 751; Re Wiesel, 173 Fed. 718; or other papers or licenses as are necessary to confer the title to his property. Neither a bankrupt, nor any other party, can be ordered to deliver the manual possession of property which is not in his physical control. Re Nisenson, 182 Fed. 912; Re Denson, 195 Fed. 854; Re Loveland, C. C. A., 200 Fed. 136.

8 Re Purvine, C. C. A., 96 Fed.