has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class.

"b If a bankrupt shall have given a preference within four months before the filing of a petition, or after the filing of the petition or before the adjudication, and the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from such person."

They were amended by Act Feb. 5, 1903, c. 487, § 13, cited above, so as to make subdivision a read as set forth here, and subdivision b read as follows: "b If a bankrupt shall have given a preference, and the person receiving it, or to be benefited thereby, or his agent acting therein, shall have had reasonable cause to believe that it was intended thereby to give a preference, it shall be voidable by the trustee, and he may recover the property or its value from such person. And, for the purpose of such recovery, any court of bankruptcy, as hereinbefore defined, and any State court which would have had jurisdiction if bankruptcy had not intervened, shall have concurrent jurisdiction."

Said subdivision b was further amended by Act June 25, 1910, c. 412, § 11, last cited above, to read as set forth here.

Section 19 of said first amendatory Act Feb. 5, 1903, c. 487, 32 Stat. 801, provided that the act should not apply to bankruptcy cases pending when it took effect, but that such cases should be adjudicated and disposed of conformably to the provisions of the original act.

Section 14 of said second amendatory Act June 25, 1910, c. 412, 36 Stat. 842, also provided that the act should not apply to bankruptcy cases pending when it took effect, but that such cases should be adjudicated and disposed of conformably to the provisions of the original act as previously amended.

§ 9645. (Act July 1, 1898, c. 541, § 61.) Depositories for money. Depositories for Money.-a Courts of bankruptcy shall designate, by order, banking institutions as depositories for the money of bankrupt estates, as convenient as may be to the residences of trustees, and shall require bonds to the United States, subject to their approval, to be given by such banking institutions, and may from time to time as occasion may require, by like order increase the number of depositories or the amount of any bond or change such depositories. (30 Stat. 562.)

§ 9646. (Act July 1, 1898, c. 541, § 62.) Expenses of administering

estates.

Expenses of Administering Estates.-a The actual and necessary expenses incurred by officers in the administration of estates shall, except where other provisions are made for their payment, be reported in detail, under oath, and examined and approved or disapproved by the court. If approved, they shall be paid or allowed out of the estates in which they were incurred. (30 Stat. 562.)

§ 9647. (Act July 1, 1898, c. 541, § 63.) Debts which may be proved.

Debts which may be Proved.-a Debts of the bankrupt may be proved and allowed against his estate which are (1) a fixed liability, as evidenced by a judgment or an instrument in writing, absolutely owing at the time of the filing of the petition against him, whether then payable or not, with any interest thereon which would. have been recoverable at that date or with a rebate of interest upon such as were not then payable and did not bear interest; (2) due as costs taxable against an involuntary bankrupt who was at the time of the filing of the petition against him plaintiff in a cause of action which would pass to the trustee and which the trustee declines to prosecute after notice; (3) founded upon a claim for taxable costs incurred in good faith by a creditor before the filing of a petition an action to recover a provable debt; (4) founded upon an open account, or upon a contract express or implied; and (5) founded upon provable debts reduced to judgments after the filing of the petition and before the consideration of the bankrupt's application for a discharge, less costs incurred and interest accrued after the filing of the petition and up to the time of the entry of such judgments.

b Unliquidated claims against the bankrupt may, pursuant to application to the court, be liquidated in such manner as it shall direct, and may thereafter be proved and allowed against the estate. Stat. 562, 563.)

(30

§ 9648. (Act July 1, 1898, c. 541, § 64, as amended, Act Feb. 5, 1903, c. 487, § 14, Act June 15, 1906, c. 3333.) Debts which have priority.

Debts which have Priority.—a The court shall order the trustee to pay all taxes legally due and owing by the bankrupt to the United States, State, county, district, or municipality in advance of the payment of dividends to creditors, and upon filing the receipts of the proper public officers for such payment he shall be credited with the amount thereof, and in case any question arises as to the amount or legality of any such tax the same shall be heard and determined by the court.

b The debts to have priority, except as herein provided, and to be paid in full out of bankrupt estates, and the order of payment shall be (1) the actual and necessary cost of preserving the estate subsequent to filing the petition; (2) the filing fees paid by creditors in involuntary cases, and, where property of the bankrupt, transferred or

concealed by him either before or after the filing of the petition, shall have been recovered for the benefit of the estate of the bankrupt by the efforts and at the expense of one or more creditors, the reasonable expenses of such recovery; (3) The cost of administration, including the fees and mileage payable to witnesses as now or hereafter provided by the laws of the United States, and one reasonable attorney's fee, for the professional services actually rendered, irrespective of the number of attorneys employed, to the petitioning creditors in involuntary cases, to the bankrupt in involuntary cases while performing the duties herein prescribed, and to the bankrupt in voluntary cases, as the court may allow; (4) wages due to workmen, clerks, traveling or city salesmen, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant; and (5) debts owing to any person who by the laws of the States or the United States is entitled to priority.

c In the event of the confirmation of a composition being set aside, or a discharge revoked, the property acquired by the bankrupt in addition to his estate at the time the composition was confirmed or the adjudication was made shall be applied to the payment in full of the claims of creditors for property sold to him on credit, in good faith, while such composition or discharge was in force, and the residue, if any, shall be applied to the payment of the debts which were owing at the time of the adjudication. (30 Stat. 563. 32 Stat. 800. 34 Stat. 267.)

In this section, as originally enacted, in subdivision b thereof, clause 2 was as follows:

"(2) the filing fees paid by creditors in involuntary cases;"

It was amended by Act Feb. 5, 1903, c. 487, § 14, cited above, by adding to said clause the further provisions beginning with the words "and where property of the bankrupt," etc., to the end of the clause as set forth here.

Section 19 of said amendatory Act Feb. 5, 1903, c. 487, 32 Stat. 801, proIvided that the act should not apply to bankruptcy cases pending when it took effect, but that such cases should be adjudicated and disposed of conformably to the provisions of the original act.

In this section, as originally enacted, also, in said subdivision b thereof, clause 4 was as follows:

"(4) wages due to workmen, clerks, or servants which have been earned within three months before the date of the commencement of proceedings, not to exceed three hundred dollars to each claimant;"

It was amended by Act June 15, 1906, c. 3333, last cited above, by inserting, after the words "wages due to workmen, clerks," the words "traveling or city salesmen," making the clause read as set forth here.

The United States is entitled to priority of payment of all debts due it by an insolvent or bankrupt debtor, by R. S. § 3466, ante, § 6372.

§ 9649. (Act July 1, 1898, c. 541, § 65, as amended, Act Feb. 5, 1903, c. 487, § 15.) Declaration and payment of dividends. Declaration and Payment of Dividends.-a Dividends of an equal per centum shall be declared and paid on all allowed claims, except such as have priority or are secured..

b The first dividend shall be declared within thirty days after the adjudication, if the money of the estate in excess of the amount necessary to pay the debts which have priority and such claims as

have not been, but probably will be, allowed equals five per centum or more of such allowed claims. Dividends subsequent to the first shall be declared upon like terms as the first and as often as the amount shall equal ten per centum or more and upon closing the estate. Dividends may be declared oftener and in smaller proportions if the judge shall so order: Provided, That the first dividend shall not include more than fifty per centum of the money of the estate in excess of the amount necessary to pay the debts which have priority and such claims as probably will be allowed: And provided further, That the final dividend shall not be declared within three months after the first dividend shall be declared.

c The rights of creditors who have received dividends, or in whose favor final dividends have been declared, shall not be affected by the proof and allowance of claims subsequent to the date of such payment or declarations of dividends; but the creditors proving and securing the allowance of such claims shall be paid dividends equal in amount to those already received by the other creditors if the estate equals so much before such other creditors are paid any further dividends.

d Whenever a person shall have been adjudged a bankrupt by a court without the United States and also by a court of bankruptcy, creditors residing within the United States shall first be paid a dividend equal to that received in the court without the United States by other creditors before creditors who have received a dividend in such court shall be paid any amounts.

e A claimant shall not be entitled to collect from a bankrupt estate any greater amount than shall accrue pursuant to the provisions of this Act. (30 Stat. 563. 32 Stat. 800.)

In this section, as originally enacted, subdivision b thereof did not contain the two provisos annexed to the subdivision as set forth here. Said provisos, beginning with the words "Provided, That the first dividend," etc., to the end of the subdivision as set forth here, were added by amendment by Act Feb. 5, 1903, c. 487, § 15, cited above.

Section 19 of said amendatory Act Feb. 5, 1903, c. 487, 32 Stat. 801, provided that the act should not apply to bankruptcy cases pending when it took effect, but that such cases should be adjudicated and disposed of conformably to the provisions of the original act.

§ 9650. (Act July 1, 1898, c. 541, § 66.) Unclaimed dividends. Unclaimed Dividends.-a Dividends which remain unclaimed for six months after the final dividend has been declared shall be paid by the trustee into court.

b Dividends remaining unclaimed for one year shall, under the direction of the court, be distributed to the creditors whose claims have been allowed but not paid in full, and after such claims have been paid in full the balance shall be paid to the bankrupt: Provided, That in case unclaimed dividends belong to minors such minors may have one year after arriving at majority to claim such dividends. (30 Stat. 564.)

§ 9651. (Act July 1, 1898, c. 541, § 67, as amended, Act Feb. 5, 1903, c. 487, § 16, and Act June 25, 1910, c. 412, § 12.) Liens. Liens.-a Claims which for want of record or for other reasons

would not have been valid liens as against the claims of the creditors of the bankrupt shall not be liens against his estate.

b Whenever a creditor is prevented from enforcing his rights as against a lien created, or attempted to be created, by his debtor, who afterwards becomes a bankrupt, the trustee of the estate of such bankrupt shall be subrogated to and may enforce such rights of such creditor for the benefit of the estate.

c A lien created by or obtained in or pursuant to any suit or proceeding at law or in equity, including an attachment upon mesne process or a judgment by confession, which was begun against a person within four months before the filing of a petition in bankruptcy by or against such person shall be dissolved by the adjudication of such person to be a bankrupt if (1) it appears that said lien was obtained and permitted while the defendant was insolvent and that its existence and enforcement will work a preference, or (2) the party or parties to be benefited thereby had reasonable cause to believe the defendant was insolvent and in contemplation of bankruptcy, or (3) that such lien was sought and permitted in fraud of the provisions of this Act; or if the dissolution of such lien would militate against the best interests of the estate of such person the same shall not be dissolved, but the trustee of the estate of such person, for the benefit of the estate, shall be subrogated to the rights of the holder of such lien and empowered to perfect and enforce the same in his name as trustee with like force and effect as such holder might have done had not bankruptcy proceedings intervened.

d Liens given or accepted in good faith and not in contemplation of or in fraud upon this Act, and for a present consideration, which have been recorded according to law, if record thereof was necessary in order to impart notice, shall, to the extent of such present consideration only, not be affected by this Act.

e That all conveyances, transfers, assignments, or incumbrances of his property or any part thereof, made or given by a person adjudged a bankrupt under the provisions of this Act subsequent to the passage of this Act and within four months prior to the filing of the petition, with the intent and purpose on his part to hinder, delay, or defraud his creditors, or any of them, shall be null and void as against the creditors of such debtor, except as to purchasers in good faith and for a present fair consideration; and all property of the debtor conveyed, transferred, assigned, or encumbered as aforesaid shall, if he be adjudged a bankrupt, and the same is not exempt from execution and liability for debts by the law of his domicile, be and remain a part of the assets and estate of the bankrupt and shall pass to his said trustee, whose duty it shall be to recover and reclaim the same by legal proceedings or otherwise for the benefit of the creditors. And all conveyances, transfers, or incumbrances of his property made by a debtor at any time within four months prior to the filing of the petition against him, and while insolvent, which are held null and void as against the creditors of such debtor by the laws of the State, Territory, or District in which such property is situate, shall be deemed null and void under this Act against the creditors of such debtor