authority thereto enabling this committee, counsel for the corporation be and hereby is authorized and directed to cause to be filed on behalf of the corporation a voluntary petition in bankruptcy, and the officers of the corporation be and hereby are authorized and directed to execute such instruments and do such other acts as in the opinion of counsel may be necessary or desirable for such purpose."

The volutary bankruptcy petition, signed in the corporate's name by its president, was filed on November 1, 1923. It is contended that the above set out resolution of the board of directors was not effective to authorize the filing of the bankruptcy petition, because that resolution undertook to delegate to the corporation's executive committee the determination of the action to be taken in behalf of the corporation to protect the interests of all the creditors and other persons interested in its affairs. The resolution adopted by the directors evidenced their determination that action be taken to protect the interests of the corporation's creditors and other persons interested in its affairs, and their consent that such action be taken by filing a voluntary petition in bankruptcy. It seems that, even in the absence of the circumstance mentioned below, it was competent for the directors to authorize the adoption of any one of several designated methods of accomplishing their expressed purpose, and that it was not necessary for them to select the filing of a voluntary petition in bankruptcy as the method to be adopted. Chappell v. United States, 160 U. S. 499, 510, 16 Sup. Ct. 397, 40 L. Ed. 510.

But the resolution of the directors was not the sole source of the power and authority of the executive committee to take the action evidenced by the adoption of its resolution in pursuance of which the bankruptcy proceeding was instituted. As above disclosed, the executive committee, under by-laws adopted in pursuance of power conferred by a provision of the corporation's charter, possessed "all the powers of the board of directors in the management of the business and affairs of the corporation during the intervals between meetings of the board, except the power to fill vacancies in the board and the power to amend the by-laws." By the quoted provision of the corporation's charter its stockholders authorized their agents, the directors, to delegate to the executive committee the authority which was exercised

by the latter's resolution. It follows that the delegation of authority was valid, and the executive committee, in adopting its resolution, represented and bound the corporation and its stockholders as if directly appointed by them. Union Pacific Ry. Co. v. Chicago, etc., Ry. Co., 163 U. S. 564, 597, 16 Sup. Ct. 1173, 41 L. Ed. 265; Kinkead v. Hartley, 161 Iowa, 613, 143 N. W. 591, Ann. Cas. 1915D, notes 1, 11. The board of directors and its authorized substitute, the executive committee, had the power to authorize the filing of the voluntary bankruptcy petition, and exercised that power. In re Jefferson Casket Co. (D. C., N. Y.), 25 Am. B. R. 663, 182 Fed. 689; 1 Collier on Bankruptcy (13th Ed.) 198.

The contention that the bankruptcy proceeding was instituted without being duly authorized was sought to be sustained on the additional ground that under the terms of the resolution of the board of directors the authority it conferred on the executive committee was not exercisable prior to the corporation's default, by failing to pay when due principal and interest, payable November 1, 1923, on the corporation's outstanding bonds. The resolution of the directors contains no provision or condition to that effect. The minutes of their proceedings at the meeting on October 26, including the preamble of the resolution adopted, show that a recognition of the corporation's inability to obtain funds to make the bond payments falling due on November 1, 1923, had effect in influencing the directors to authorize the taking of action to protect the corporation's creditors and others concerned in its affairs. But it is not disclosed that it was contemplated that the taking of such action should be postponed until after the occurrence of the expected default by failing to make payments due on November 1, 1923. Under the resolution of the directors, the filing on or prior to that date of a voluntary bankruptcy petition in behalf of the corporation was authorized, assuming that the validity of the action taken by the executive committee was dependent upon its being in conformity with the resolution of the directors.

We conclude that the action of the court in refusing to vacate the bankruptcy adjudication was not erroneous on any ground urged. So far as the dismissed petitions sought relief.not dependent upon an impeachment of the bankruptcy adjudication,

the petitioners were not prejudiced by the orders which are complained of, as each of those orders was expressly made without prejudice to any rights of the petitioner which were assertable before the referee in bankruptcy or elsewhere.

Each of the petitions to superintend and revise is denied.

AMERICAN TRUST & SAVINGS BANK OF KANKAKEE v. W. M. DURIIAM, TRUSTEE IN BANKRUPTCY OF DAVID I. BAUER.*

U. S. Circuit Court of Appeals, Seventh Circuit, February, 1921.

No. 3260.

FRAUDULENT TRANSFERS-FORM OF TRANSACTIONS-SALES IN BULK-PROPERTY TRANSFERRED IN VIOLATION OF BULK SALES LAW RECOVERABLE BY TRUSTEE. By virture of sections 67e and 70e of the Bankruptcy Act, a trustee in bankruptcy may maintain an action to recover property transferred within four months of bankruptcy in violation of a state Bulk Sales Act. (See Collier, 13th Ed., p. 1775; Am. B. R. Digest, § 570.)

Appeal by defendant from a decree of the District Court of the United States for the Eastern District of Illinois in an action by a trustee in bankruptcy to recover property transferred in violation of the Illinois Bulk Sales Act. Affirmed.

Before BAKER, EVANS, and PAGE, Circuit Judges.

Harold F. Lindley, for appellant.

Harry H. Whittemore, for appellee.

PAGE, Circuit Judge:

The District Court, at the suit of appellee, trustee for bankrupt, held that bankrupt's transfer of property to appellant was void under the Illinois Bulk Sales Act.

only question for review.

298 Fed. 304.

That holding presents the

1 So far as material here, the statute is as follows:

"Section 1. That the sale, transfer, or assignment in bulk of the major part or the whole of a stock of merchandise, or merchandise and fixtures or other goods and chattels of vendor's business, otherwise than in the ordinary

Practically all the capital stock of an incorporated mercantile business, that owed $14,000 and carried in its own name $23,000 in insurance, was owned by bankrupt, who, on November 21, 1917, burned the store, and the insurance was never collected. The transfer in question was made on the same day, within four months of bankruptcy, by bankrupt to appellant, of the whole of a secondhand automobile and junk business, the only business then owned by bankrupt, who owed individually over $14,000. Appellant immediately sold the business and applied the proceeds upon bankrupt's debt to it for a larger amount.

No attempt was made to comply with the Bulk Sales Act. The claim that the transfer did not violate the Bulk Sales Act, because it did not include the corporation's insurance, is without merit. There were $14,000 in corporation debts to be paid out of the insurance. Bankrupt could neither claim nor get any part of it until those debts were paid, and then only by way of a dividend upon his stock, theretofore transferred to and then held by appellant as collateral security. Whether appellant knew it or not is immaterial, but bankrupt knew at the time of the transfer that the insurance was absolutely worthless, unless payment could be procured by further fraud on his part.

It is urged that the transfer was mere security, and therefore not obnoxious to the Bulk Sales Act. There is no evidence that the business was taken to be held in pledge and subsequently redeemed; but the evidence is that it was transferred absolutely, and was immediately, without protest, sold and the proceeds applied on a larger debt to appellant. Whether a chattel mortgage, as security for deferred payments, with no right of immediate default or early payment, possession by the terms of the mortgage to remain with mortgagor, would be in violation of the Bulk Sales Act, we are not called upon to decide.

By the transfer to appellant, bankrupt disposed of everything of value that he had, except his homestead, worth, over the incumbrance, less than the exemption. He included the leasehold under which the automobile and junk business was carried course of trade and in the regular and usual prosecution of the vendor's business shall be fraudulent and void as against the creditors of the said vendor. Laws Ill. 1913, p. 258; Cahill's Ill. Stat. 1921, p. 3035; Smith's Ill. Stat. 1921, p. 1752.

on. By no stretch of the imagination can it be said that what he disposed of was not the major part of his business, or that he disposed of it" in the ordinary course of trade and in the regular and usual prosecution of vendor's business." The transfer was clearly obnoxious to the statute, and the property passed to the trustee in bankruptcy, who may maintain this suit. Sections 67e and 70e, Bankruptcy Act (Comp. St. 88 9651, 9654). Sce also, Johnson Co. v. Beloosky, 263 Ill. 363, 105 N. E. 287, Ann. Cas. 1915C, 411; Weskalnies v. Hesterman, 288 Ill. 199, 123 N. E. 314, 4 A. L. R. 128. Decree is affirmed.

IN THE MATTER OF JUDITH GAP COMMERCIAL COMPANY.* BILLINGS CREDIT MEN'S ASSOCIATION V. BOGART.

U. 8. Circuit Court of Appeals, Ninth Circuit, April, 1924.

No. 4115.

(Rev'g 3 Am. B. R. (N. S.) 520.)

TRUSTEE-APPOINTMENT BY CREDITORS-APPROVAL OR DISAPPROVAL-POWER TO DISAPPROVE APPOINTMENT OF TRUSTEE MUST BE EXERCISED BEFORE TRUSTEE QUALIFIES.

The power of a referee or the district judge to approve or disapprove of the appointment of a trustee by the creditors, must be exercised before the trustee qualifies and enters upon the discharge of his duties.

(See Collier, 13th Ed., p. 1021; Am. B. R. Digest, § 316.)

SAME-REMOVAL-TRUSTEE CANNOT BE REMOVED WITHOUT NOTICE AND

HEARING.

A trustee in bankruptcy who has been in full discharge of his duties for more than a year with the consent and acquiescence of the referee and district judge, cannot be removed from office by simply disapproving the original appointment by creditors, without notice or hearing.

(See Collier, 13th Ed., p. 1032; Am. B. R. Digest, § 323.) SAME-REMOVAL-BANKRUPTCY COURT HAS NO INHERENT POWER TO REMOVE

TRUSTEE.

The doctrine of inherent power of a court cannot be applied to the removal of a trustee in bankruptcy, as the mode prescribed by the statute must be followed.

(See Collier, 13th Ed., p. 1032, Am. B. R. Digest, § 323.)

*296 Fed. 89.