his discretion, deny a trustee's motion to dismiss his petition for a reconsideration and disallowance.291 g. Review of order. The right of a party aggrieved by such an order to review, and the practice on a review, and the binding effect of the rulings below on questions of fact, are considered elsewhere; likewise, the effect of proving judgments in other courts.203 292 294 h. Costs and expenses.- Costs, while often not allowed on such contests, are discretionary. Where it appears that either the claim or the contest was not in good faith, they will usually be given. The referee is not entitled to extra compensation for hearing and deciding, but he can insist on reimbursement or indemnity for his expenses, as in the employment of a stenographer, and the like.295 i. Recovery of dividends. It is the trustee's duty to recover a dividend that has been paid, if a claim is rejected, or the proportional part, if it is reduced. The statute is silent as to how this should be done. The claimant being a party, it would seem possible to require him to repay as a part of the order rejecting or reducing, and then, at the instance of the trustee, proceed in contempt if the claimant does not obey. In any event, the trustee can proceed by suit in the proper court.296 291. Matter of Brown (D. C., Ky.), 35 Am. B. R. 826, 228 Fed. 533, holding that ordinarily a plaintiff may dismiss his suit, but a trustee petitioner cannot be allowed to speculate upon the chances of obtaining a favorable decision and upon learning that the decision will be unfavorable frustrate the whole purpose of the proceeding by dismissing his petition. 292. See pp. 961-974, ante; also General Order XXVII. 293. Consult section 63, post. 294. Compare In re Little River Lumber Co. (D. C., Ark.), 3 Am. B. R. 682, 101 Fed. 558; Matter of Elk Valley Coal Co. (D. C., Ky.), 31 Am. B. R. 545, 210 Fed. 386; Matter of All Star Feature Corp. (D. C., N. Y.), 37 Am. B. R. 610, 232 Fed. 1004; In re Troy Woolen Co., Fed. Cas. 14,203. 295. General Order X. 296. When creditors may be required to refund dividends. After an adjudication in bankruptcy a judgment was entered against the bankrupt in an action pending in the State court at the time the petition was filed. The bankruptcy court ordered that the judgment creditors perfect an appeal within sixty days, otherwise the court would not delay its action. No appeal having been perfected within sixty days, dividends were paid according to the judgment of the State court; but thereafter an appeal was perfected and the judgment reversed. It was held that the judgment creditor, not having appealed within the time fixed, must refund the dividends received prior to the reversal of his judgment on the ground that having waived the condition as to time reopened and litigation they should abide the final result. Nelson v. Heckscher (C. C. A., 4th Cir.), 33 Am. B. R. 514, 219 Fed. 679. VI. TIME LIMITATION ON ALLOWANCE OF CLAIMS a. Purpose and effect of limitation.-(1) IN GENERAL.- Subsection n provides that claims cannot be proved against the bankrupt estate subsequent to one year after the adjudication.297 But the subsection does not preclude the bankruptcy court from fixing a shorter time within which claims shall be proved. 298 This provision is intended for the benefit of creditors who file their proofs of claim promptly and to give them the benefit of their own diligence. It was also intended to facilitate the administration and settlement of the assets of bankrupts.299 The authorities hold that the language 297. In re Stein (D. C., Ind.), 1 Am. B. R. 662, 94 Fed. 124; Bray v. Cobb (D. C., N. Car.), 3 Am. B. R. 788, 100 Fed. 270; In re Shafer (D. C., N. Car.), 4 Am. B. R. 728, 104 Fed. 982; In re Rhodes (D. C., Pa.), 5 Am. B. R. 197, 105 Fed. 231; In re Leibowitz (D. C., Tex.), 6 Am. B. R. 268, 108 Fed. 617. Note also Hutchinson v. Otis (C. C. A., 1st Cir.), 8 Am. B. R. 382, 115 Fed. 937; In re Moebius (D. C., Pa.), 8 Am. B. R. 590, 116 Fed. 47; In re Hawk (C. C. A., 8th Cir.), 8 Am. B. R. 71, 114 Fed. 916; In re Rosenberg (D. C., Pa.), 16 Am. B. R. 465, 144 Fed. 442; Steinhardt v. Nat. Park Bank, 19 Am. B. R. 72, 120 N. Y. App. Div. 255, 105 N. Y. Supp. 23, revg. 18 Am. B. R. 86; Cartwright v. West (Ala. Sup. Ct.), 26 Am. B. R. 831, 55 So. 917, citing Collier on Bankruptcy (8th ed.), pp. 612, 613. As to expiration of year, see In re Co-operative Knitting Mills (D. C., N. Y.), 30 Am. B. R. 181, 202 Fed. 1016. Effect of subsection.- This subdivision, "while providing that no claim shall be proved subsequent to one year after the adjudication, provides by implication and effect that any claim may be proved within one year after the adjudication." (Opinion of referee.) Matter of Bell Piano Co. (D. C., N. Y.), 18 Am. B. R. 183, 155 Fed. 272. Where over two years and six months after the adjudication in bankruptcy of one of several persons who had signed a written agreement to jointly guarantee the payment of notes, claims were filed by the other guarantors for the bankrupt's proportionate liability which had been paid by them, said claims should be dismissed Matter of Edelen (D. C., Ky.), 40 Am. B. R. 834, 248 Fed. 580. "No statutory right to file a proof of claim subsequent to the expiration of a year after adjudication exists." Matter of Ingalls Bros. (C. C. A., 2d Cir.), 13 Am. B. R. 512, 137 Fed. 517. The court has no discretionary power to permit the filing and proof of a claim after the expiration of the statutory period. In re Sanderson (D. C., Vt.), 20 Am. B. R. 396, 160 Fed. 278. An application by creditors who were neither deprived of an opportunity to ascertain the value of the assets and whether or not property had been concealed or otherwise improperly disposed of, nor prevented from filing their claims in time, for leave to file and prove claims, will be denied, where, after the expiration of a year following adjudication, it is discerned that assets scheduled and stated to be of no value are valuable. In re Peck (D. C., N. Y.), 20 Am. B. R. 629, 161 Fed. 762. 298. Matter of Rouden Mfg. Co., Inc. (D. C., N. Y.), 48 Am. B. R. 272, 278 Fed. 663. 299. In re Peck (D. C., N. Y.), 20 Am. B. R. 629, 161 Fed. 762, affd. 21 Am. B. R. 707, 168 Fed. 48. 301 of this subsection is more than a limitation of time; that it is an absolute prohibition,300 but that this prohibition is not binding on the United States. If an appeal is brought from the order of adjudication it has been held that the time begins to run from the date of the dismissal of the appeal,302 or if an order of adjudication is vacated and afterwards reinstated the time should run from the date of reinstatement.303 304 (2) APPLICATION OF LIMITATION.- This subsection has no application to an adverse claim of title to property in the possession of a trustee; such a claim is not a debt of the bankrupt or his estate. Nor does it apply to a controversy arising between an assignee of a proven claim and the assignor.305 It was not intended to apply to a claim arising after the bankruptcy proceedings were instituted, as part of the cost of administration.306 The question is still unsettled as to whether the limitation applies where a composition has been effected.307 The section only applies to claims sought to be asserted 300. Bray v. Cobb (D. C., S. Car.), 3 Am. B. R. 788, 100 Fed. 270; Matter of Bimberg (D. C., N. Y.), 9 Am. B. R. 601, 121 Fed. 942; Matter of Bickmore Shoe Co. (D. C., Ga.), 45 Am. B. R. 24, 263 Fed: 926; In re Shaffer (D. C., N. Car.), 4 Am. B. R. 728, 104 Fed. 982. Extension of time. § 57-n, requiring claims to be proved within one year from adjudication, is prohibitory and leaves the court no discretion to extend the time. Hence, a creditor who has failed to prove a scheduled claim within the period required is not entitled to have his claim allowed against the objection of the bankrupt out of moneys deposited by the bankrupt for the purposes of a composition, although such deposit is sufficient. Matter of Blond (D. C., Mass.), 34 Am. B. R. 193, 188 Fed. 452. 301. In re Stover (D. C., Pa.), 11 Am. B. R. 345, 127 Fed. 394; United States v. Birmingham Trust & Savings Co. (C. C. A., 5th Cir.), 43 Am. B. R. 430, 258 Fed. 562. 302. In re Lee (D. C., Pa.), 22 Am. B. R. 820, 171 Fed. 266. 303. Effect of order dismissing in voluntary petition after adjudication. Where an adjudication was made on January 7, 1919, and the adjudication vacated by an order granted April 3, 1919, which order was vacated on November 29, 1919, and the order of adjudication and the receiver reinstated, it would seem that the year would not expire until a year from November 29, 1919, or in any event that the time from April 3, 1919, to November 29, 1919, should be deducted. Matter of Malkan (D. C., N. Y.), 45 Am. B. R. 86, 265 Fed. 867. 304. Nauman Co. v. Bradshaw (C. C. A., 8th Cir.), 27 Am. B. R. 565, 193 Fed. 350. 305. Matter of Breakwater Co. (D. C., Pa.), 36 Am. B. R. 752, 232 Fed. 375. 306. Matter of Green (D. C., Pa.), 36 Am. B. R. 188, 231 Fed. 253. 307. Applicable to composition proceedings. In re Brown (D. C., Colo.), 10 Am. B. R. 588, 123 Fed. 336; Matter of Bickmore Shoe Co. (D. C., Ga.), 45 Am. B. R. 24, 263 Fed. 926; In re French (D. C., Mass.), 25 Am. B. R. 77, 181 Fed. 583; In re Lane (D. C., Mass.), 11 Am. B. R. 136, 125 Fed. in bankruptcy; it would not prevent the creditor from setting up his claim, which had not been presented within the year, as a defense in an action brought against him by the trustee.308 309 (3) NECESSITY FOR FILING CLAIM.- -The word "proved" must be read to include filing the claim with the referee; consequently no claim can be allowed against the bankrupt estate unless it has not only been verified but also filed with the referee within one year after the date of the adjudication.3 It is not sufficient that a sworn statement of the claim be made within the time limitation, but such sworn statement must be filed or presented in some form in the bankruptcy proceeding to prevent such claim from being barred by the statute.310 Where a claim is duly presented to the trustee within the year, it is a sufficient compliance with the requirement of the statute, although not delivered to the referee until after that time.311 It has 772; In re Blond (D. C., Mass.), 34 Am. B. R. 193, 188 Fed. 452. Not applicable to composition proceedings. In re Fox (Ref., Ohio), 6 Am. B. R. 525; Matter of Atlantic Construction Co. (D. C., N. Y.), 35 Am. B. R. 838, 228 Fed. 571; Matter of Aarons (D. C., N. J.), 40 Am. B. R. 229, 243 Fed. 634; Matter of Englander's Inc. (D. C., Pa.), 45 Am. B. R. 508, 267 Fed. 1012. 308. Norfolk & W. R. Co. v. Graham (C. C. A., 4th Cir.), 16 Am. B. R. 610, 145 Fed. 809. 309. Matter of Pettingill Co. (Ref., Mass.), 14. Am. B. R. 763. See also this section, ante, subtitle Filing proof of claims." 310. In re French (D. C., Mass.), 25 Am. B. R. 77, 181 Fed. 583. 311. Orcutt Co. v. Green, 204 U. S. 96, 17 Am. B. R. 72, revg. 13 Am. B. R. 512 (sub nom. Matter of Ingalls Bros.), see In re Co-operative Knitting Mills (D. C., N. Y.), 30 Am. B. R. 181, 202 Fed. 1016. Presentation of claim to trustee.In the case of Orcutt Co. v. Green, 204 U. S. 96, 17 Am. B. R. 72, 51 L. Ed. 390, 27 Sup. Ct. 195, revg. 13 Am. B. R. 512 (sub nom. Matter of Ingalls Bros.), the court said: "General Order XXI provides that 'proofs of debt received by any trustee shall be delivered to the referee to whom the cause is referred.' There is nothing in that provision inconsistent with or opposed to anything stated in the bankruptcy law upon the subject and we must therefore take the statute and the order and read them together, the order being simply somewhat of an amplification of the law with respect to procedure, but nothing which can be construed as beyond the powers granted to the court by virtue of the law itself. The question is not whether any one but the court or referee can pass upon a claim and allow it or disallow it. That must be done by the court or referee, but it is simply whether a delivery of a claim properly proved to the trustee is a sufficient filing. The law provides (subsection c of section 57) that a claim after being proved may, for the purpose of allowance, be filed by the claimants in the court where the proceedings are pending, or before the referee if a cause has been referred; but that does not prohibit their being filed somewhere else prior to their allowance and the order in bankruptcy in substance provides that they may be filed after being proved with the trustee. Such order is equivalent to saying that proofs of debt or claim may be received been held that a presentation of facts before the court establishing the existence of a valid claim against the bankrupt estate is a sufficient compliance with the requirement that a claim must be filed within one year after the adjudication.312 The filing of a clear statement of the claim in writing, duly verified, within the year is sufficient, even though it may be liquidated and allowed after that time.313 (4) EXCEPTIONS TO REQUIREMENTS.-An exception seems to be made in favor of tax claims, which need not even be filed,314 and where the administration was halted by an adjustment out of court, sufficient money being deposited to pay all claimants.315 Other exceptions are made by the language of the subsection, as where the claimant is an infant or insane. by the trustee. When they are so received by him they are in legal effect received by the court, whose official the trustee is. Having been received by the trustee under authority of law, the proofs of debt are thereby sufficiently filed so far as creditors are concerned and it is the duty of the trustee to deliver them to the referee. If a trustee inadvertently neglects to perform that duty it is the neglect of an officer of the court and the creditors are in no way responsible therefore. The presentation and filing having been made within the time provided for and with one of the proper officers, his failure to deliver to the referee cannot be held to be a failure on the part of the creditor to properly file his proofs." In the case of Matter of Kessler (C. C. A., 2d Cir.), 25 Am. B. R. 512, 184 Fed. 51, revg. 23 Am. B. R. 901, 176 Fed. 647, it was held that where a proof of claim against a bankrupt estate has been delivered to its trustee, the claim is sufficiently filed and it is the duty of the trustee to deliver it to the referee. 312. Presentation of facts showing indebtedness. In re Strobel (D. C., N. Y.), 20 Am. B. R. 884, 163 Fed. 787; In re Roeber (C. C. A., 2d Cir.), 11 Am. B. R. 464, 127 Fed. 122, in which case a document inartificially drawn setting forth the amount due and claiming a lien on a certain special fund due the bankrupt was considered a proof of claim; In re Standard Telephone & Electric Co. (D. C., Wis.), 26 Am. B. R. 601, 186 Fed. 586, in which case the claimant was the holder of certain bonds secured by mortgage given by the bankrupt company and covering all its property; the mortgagee filed a petition before the referee setting up a mortgage and praying that it be declared a first lien upon the property of the bankrupt; issue was joined on the petition and at a hearing before the referee the bonds were put in evidence; the referee found that the mortgage was void, but it was held that the facts presented established a bona fide indebtedness and was sufficient as a proof of claim. 313. In re Mertens (C. C. A., 2d Cir.), 16 Am. B. R. 825, 147 Fed. 177. Where a wife succeeds in an action against her husband and his trustee in bankruptcy, commenced within a year after adjudication, her claim is |