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§ 641. Qualifications of trustees. "Trustees may be (1) individuals, who are respectively competent to perform the duties of that office, and reside or have an office in the judicial district

paid in full and a surplus for himself; and he then asked his creditors to vote for such person, to which they agreed; and pending the election a letter was prepared by the bankrupt's attorney, signed and sent out by a large creditor advocating the election of the bankrupt's candidate, who was elected by a large majority in number and in amount of claims; it was held that the election would not be set aside. Re Eastlack, 145 Fed. 68. See Re Ketterer Mfg. Co., 155 Fed. 987. An election will not be set aside because persons, not the bankrupt, canvassed creditors to secure the election of a particular person as trustee. Re Fisher, 193 Fed. 104, where the trustee occupied the same suite of offices as the bankrupt's attorney; Re Margolies, 191 Fed. 369. See Re Kreuger, 196 Fed. 705. But where the canvasser was an endorser upon the bankrupt's notes, which, after payment, he transferred to a stranger without any consideration, the votes thereupon were excluded. Re L. W. Day & Co., C. C. A., 178 Fed. 545. It was similarly held where the canvasser was a large creditor of the trustee, who was charged with having obtained a preference. Re Anson Mercantile Co., 185 Fed. 993. Where the unpreferred creditors had been paid in full, an election of a trustee was not set aside because the bankrupt solicited votes for him. Re Morton, 118 Fed. 908. The fact that the trustee has solicited votes is not a disqualification if this was not done in the

interest, or at the request, of the bankrupt. Re Lloyd, 148 Fed. 92, 17 Am. B. R. 96. It seems that suspicion by the referee that the appointment was procured by improper considerations, is insufficient to justify him in setting aside an election, although it is based upon the frequency with which the candidate has been selected as trustee in bankruptcy matters under the influence of the same attorneys. Re Kreuger, 196 Fed. 705. See Re Margolies, 191 Fed. 369. Where claims offered for proof and allowance at a meeting of creditors were disallowed and the claimants excluded from voting, the court has power, after they have been allowed upon appeal, to set aside the election provided that their votes, if cast, would have changed the result. Re Eagles, 99 Fed. 695.

§ 641. 1A person is ineligible who is otherwise interested so that he might be compelled to assume inconsistent positions, Wilson v. Continental Building & Loan Ass'n, C. C. A., 232 Fed. 824. (A trustee of mortgages belonging to the bankrupt, who had been intimately associated with the latter's business.) But see Re Archbold & Hamilton, 237 Fed. 408. A trustee may be a creditor of the bankrupt's estate. Re Lazoris, 120 Fed. 716. Hostility to the bankrupt is not an objection to the approval of the election if it has not been accompanied by misconduct; Re Lewensohn, 98 Fed. 576; Re Mangan, 133 Fed. 1000. It has been held that the legal adviser of

within which they are appointed,2 or (2) corporations authorized by their charters or by law to act in such capacity and having an office in the judicial district within which they are appointed." 8 An alien, who has an office in the district, is competent to act as trustee.4

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§ 641a. Bankruptcy sales. "Real and personal property shall, when practicable, be sold, subject to the approval of the court; it shall not be sold otherwise than subject to the approval of the court for less than seventy-five per centum of its appraised

a bankrupt, Re Gordon Supply & Mfg. Co., 129 Fed. 622; and his assignee in insolvency; Re Kellar, C. C. A., 192 Fed. 830, where the assignee had an unsettled account and a claim for his services; and the counsel of the latter, Ibid; Re Forestier, 222 Fed. 537; are disqualified from being appointed or elected trustee. It has been said that his former attorney is ordinarily disqualified; Re Gordon Supply & Mfg. Co., 129 Fed. 622; Contra, Re Machin, 128 Fed. 315; Re Cooper, 135 Fed. 196; Re Wink, 206 Fed. 348. A person is not disqualified because he is a creditor of the bankrupt's estate; Re Lazoris, 120 Fed. 716; even, it was held, in a decision of doubtful authority where he had bought his claim after the bankruptcy; Sweetser, 240 Fed. 167; nor because he is attorney for the petitioner; W. A. Liller Bldg. Co. v. Reynolds, C. C. A., 247 Fed. 90; or other creditors; Re Margolies, 191 Fed. 369; Re Archbold & Hamilton, 237 Fed. 408; although, it has been held, when using a proxy, he voted for himself, Ibid; nor because he is a stockholder, Re Merritt, Const. Col., 219 Fed. 555, or officer, Ibid; or director; Re Syracuse Paper & Pulp Co., 164 Fed. 275, where two

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other trustees were appointed, of the bankrupt corporation. A contract is invalid which stipulates that the attorney for one party shall be trustee and the counsel for the other, attorney for the creditors, that the latter party shall be paid by the former the full amount of his claim against the bankrupt provided that the former could buy the assets for less than a specified amount; Holsberry v. Clark, C. C. A., 242 Fed. 831.

2 Non-residence in the county where the assets are situated is no disqualification; Re Jacobs & Roth, 154 Fed. 988.

830 St. at L. 556, 547, $45. See Re Lewensohn, 98 Fed. 576. It has been held: that the remoteness of his residence from the place where the trust property is to be administered, is no ground for disapproval where he resides or has an office within the district, Re Kruger, 196 Fed. 705; and that he should not be removed because he changes his legal residence to another district, if he retains his office in that where he was appointed, and the change does not interfere with the administration of the estate and the service of notices upon him; Re Seider, 163 Fed. 138.

4 Rc Coe, 154 Fed. 162.

value.1 (c) The title to property of a bankrupt estate which has been sold, as herein provided, shall be conveyed to the purchaser by the trustee."2 "1. All sales shall be by public auction

§ 641a 1 The court may refuse its approval or may set aside a sale because of gross inadequacy, Re Am. Beaver Co., 242 Fed. 599; Jacobsohn v. Larkey, C. C. A., 245 Fed. 538; but this will rarely be done unless the price seems to be unconscionable; Re Shapiro, 154 Fed. 673; Re Kronrot, 183 Fed. 653; Re Burr Mfg. & Supply Co., 217 Fed. 16, supra, § 394d. When the price is less than seventy-five percentum of the appraised value the court may refuse to confirm the sale; Re Beaver Co., 242 Fed. 540. As a condition of such disapproval, security may be required of the objectors to insure a higher bid on the second sale, even when the first sale was for less than seventyfive percentum of the appraised value; Jacobsohn v. Larkey, C. C. A., 245 Fed. 538. For a refusal to confirm a sale when more than three-fourths of the appraised value was bid. See Untereiner v. Camors, C. C. A., 228 Fed. 890. A sale will rarely be disapproved, when a large majority of the creditors wish its confirmation; Re Haywood Wagon Co., C. C. A., 219 Fed. 655. Objections to the sale may be made by other bidders who are not creditors; Jacobsohn V. Larkey, C. C. A., 245 Fed. 538. If the accepted bid equals the appraised value, the sale will ordinarily be confirmed and not set aside for inadequacy of price; Schuler v. Hansinger, C. C. A., 177 Fed. 119. Cf. Re Zehner, 193 Fed, 787. The purchaser at a judicial sale may be required to accept a title good by Fed. Prac. Vol. III-77

adverse possession, although not supported by the records; Marsh v.. Kenyon, 37 App. D. C. 574. The purchaser was not allowed a credit upon his bid for the amount he had paid in endeavoring to obtain possession of property from a person who gave notice at the sale that he would not surrender the same. Re Criblier, 184 Fed. 338. Where after the sale and before its confirmation the property was seriously damaged by a flood, the buyer was not obliged to complete his purchase. In Re Finks, C. C. A., 224 Fed. 92. For a refusal to confirm because of an appreciation in value, see Re Ohio Copper Mining Co., 237 Fed. 490. The purchaser will be relieved because of a material mistake caused by an innocent misrepresentation by the trustee. Re Caponigri, C. C. A., 210 Fed. 897. But see Re Frasin, C. C. A., 201 Fed. 343; Taylor v. Kimmerle, C. C. A., 232 Fed. 134. For a denial of an application to be relieved from a purchase because the only other bidder was "a puffer" employed to run up the bid, see Williams v. Hogue, C. C. A., 219 Fed. 182. A bid may be withdrawn at any time before it is accepted, Re Glas-Shipt Dairy Co., C. C. A., 239 Fed. 122. But see Re Lane Lumber Co., C. C. A., 207 Fed. 762.

230 St. at L. 544, § 70 Subd C. The Act of March 3, 1893 regulating sales of land by courts of the United States does not apply to proceedings in bankruptcy. Robertson v. Howard, 229 U. S. 254,

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unless otherwise ordered by the court. 2. Upon application to

see supra, § 394. The trademarks cannot be sold separately from the other assets. Re Jaysee Corset Co., 201 Fed. 779 (Court, S. D. New York, November 9, 1911.) When the bankrupt's merchandise was sold without the trademark and good will the trustee was restrained from a subsequent sale of the two latter. Ibid. It has been held that the good will cannot be sold without the bankrupt's consent, unless it has been bought by him from another. Re Myers, C. C. A., 208 Fed. 407.

8 General Order XVIII. No order of the court is required to authorize such sale. Re La France Copper Co., 205 Fed. 207. It is not a sufficient compliance with this order to advertise for bids to be submitted at a creditors' meeting. A special order for this is necessary, Re Nevada-Utah Mines & Smelters Corp., C. C. A., 202 Fed. 126, but see S. C., below. The court may authorize the sale of land or other property of the bankrupt situated in another district. Robertson v. Howard, 229 U. S. 254. A sale by the trustee should ordinarily not be made without notice to the creditors. Re James Carothers & Co., 193 Fed. 687. But such notice is not required in the sale of securities of fluctuating value which have been pledged by the bankrupt. Ibid. When a trustee sends to a newspaper a legal notice for publication the publisher is not in the absence of any special direction entitled to infer that the notice should be published as a display advertisement and charge for such advertising. Re Pierce, But

ler & Pierce Mfg. Co., 231 Fed. 312.

It has been held that the

court may select an auctioneer, whom all trustees must employ, Re Benjamin, C. C. A., 136 Fed. 175, 14 Am. B. R. 481, affirming 13 Am. B. R. 18, but this ruling has been criticised by a high authority, Referee Remington in his treatise on Bankruptcy, § 2037. When the property consists of several parcels, it is the usual practice first to offer them separately for sale and afterwards in mass and to accept the highest bid. Re Haywood Wagon Co., 219 Fed. 655. But this is not indispensable. Jacobsohn v. Larkey, C. C. A., 245 Fed. 538, supra, § 394. An order for a sale subject to the confirmation of the court is not invalid because it does not fix an upset price for the property. Schuler v. Hastings, C. C. A., 177 Fed. 119. An appraiser has no right to buy property of the bankrupt. Re Frazin & Oppenheim, C. C. A., 181 Fed. 307. A sale to a corporation, in which the appraiser and the bankrupt's family have the controlling interest, was set aside. Ibid. In the absence of a charge of collusion by the trustee, it was held: that, after the confirmation, a creditor could not, upon a petition, obtain a summary order setting aside the same for a conspiracy between the purchaser and former employees of the bankrupt, which enabled the purchaser to buy the property for an inadequate consideration; and that the remedy was a plenary suit by the trustee for an accounting. Re Charles Knosher & Co., C. C. A., 197 Fed. 136. A sale was con

the court, and for good cause shown, the trustee may be authorized to sell any specific portion of the bankrupt's estate at private sale; in which case he shall keep an accurate account of each article sold, and the price received therefor, and to whom sold; which account he shall file at once with the referee. 3. Upon petition by a bankrupt, creditor, receiver or trustee, setting forth that a part or the whole of the bankrupt's estate is perishable, the nature and location of such perishable estate, and that there will be loss if the same is not sold immediately, the court, if satisfied of the facts stated and that the sale is required in the interest of the estate, may order the same to be sold, with or without notice to the creditors, and the proceeds to be deposited in court." A Court of Bankruptcy has power, in its discretion, to order a sale of the bankrupt's property free from liens thereon, which may be transferred to the proceeds.

firmed although the property was bought by a reorganization committee, whose purchase was favored by the trustee. Schuler v. Rassinger, C. C. A., 177 Fed. 119. See Re Ohio Copper Mining Co., 237 Fed. 490. For authorities upon Judicial Sales, see §§ 394-394b,

supra.

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4 Re Nevada-Utah Mines Smelters Corporation, C. C. A., 202 Fed. 126; Re Knox Automobile Co., 210 Fed. 569; Re Eden Musee American Co., 230 Fed. 926. The sale of all the bankrupt's property may thus be be authorized; Re Knox Automobile Co., 210 Fed. 569.

5 General Order XVIII. The term, "perishable" is not limited to liability to physical deterioration, but included liability to deteriorate in price and market value. Re Pedlow, C. C. A., 209 Fed. 820.

6 Re Keet, 128 Fed. 651. See also Factors' & Tr. Ins. Co. v. Murphy, 111 U. S. 738, 28 L. ed. 582; Re Worland, 92 Fed. 893; Re Sanborn, 96 Fed. 551; Re Styer, 98

Fed. 290; Re Pittelkow, 92 Fed. 901; Re Mead, 58 Fed. 312; So. L. & Tr. Co. v. Benbow, 96 Fed. 514; Re Whiteside, 230 Fed. 937. It has been held that such a sale in Pennsylvania does not divest the property of the inchoate right of dower held by the bankrupt's wife; Re Chotiner, 216 Fed. 916; Contra Re Codori, 207 Fed. 784; Kelly v. Minor (two cases), C. C. A., in re 252 Fed. 115. Held otherwise in North Carolina, Re Munford, 225 Fed. 108. As an incident to this power the court has the power to determine the amount of the lien claimed and to direct payment thereof out of the funds arising from the same. Re Torchia, 185 Fed. 576; Re Roger Brown & Co., C. C.. A., 196 Fed. 758; Re Progressive Wall Paper Corp., 222 Fed. 87; Re Reading Hat Mfg. Co., 224 Fed. 786; Dunlap v. Baker, C. C. A., 239 Fed. 193; Re North Star Ice & Coal Co., 252 Fed. 301. But see Re Henderson, 206 Fed. 137. For cases as to the determination of

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