The provision of paragraph c resembles the law in England relating to an undischarged bankrupt. The property acquired by him after the bankruptcy is liable for his old debts, but if the trustees have allowed him to trade, the new creditors are given the first right against this property. 1

The trustee becomes the owner of all the property which a bankrupt had at the date of the adjudication (§ 70). And the new trustee who is to be chosen after a discharge is revoked (§ 44) will take all the property 2 and distribute it as provided in paragraph c. There is some doubt under the terms of this clause what should be done with property acquired by a bankrupt after adjudication and before the confirmation of a composition. The intention undoubtedly was to have the same rule in the case of compositions as of discharges. The confusion arose perhaps from the fact that under the act of 1874,3 a composition might be offered and confirmed before the adjudication. The rule on this point is different at present. *

There is some doubt under the present act whether the trustee takes the title to the bankrupt's property which he acquires after the date of the adjudication. The doubt arises. from the peculiar wording of the sections relating to the effect of the confirmation of a composition.5 In the present paragraph the adjudication is indicated as the time from which the bankrupt owns the property in case of revocation of a discharge. This circumstance shows that Congress intended the title of the trustee to stop at the adjudication, otherwise the limit would have been set at the time of granting the discharge. The law in this country has always been that the debtor owned the property acquired after his bankruptcy, and if Congress had intended to change the law it would have done so in express terms.7

1 Supra, §§ 345, 350.

2 Act of 1898, § 70 d.

6 Supra, § 366.

7 In Re Smith, 1 N. B. N. 136, Mr.

3 Act of June 22, 1874, c. 390, § 17, Referee Hotchkiss allowed an undis

18 Stats. 182.

4 Supra, § 475.

charged bankrupt to prove a debt in another bankruptcy, on the ground that

5 Act of 1898, § 21 g, § 70 f, and the the property acquired after the adjudipresent paragraph.

cation belonged to him.

§ 528. Act of 1398.SEC. 65. 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. closing the estate. Dividends may be declared oftener and in smaller proportions if the judge shall so order.

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 courts 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.

Under the former act, § 271 provided that dividends should be declared by a meeting of creditors, except that under certain circumstances the assignee should do so. This is now done by the referee.2

The terms of paragraph a are broad enough to cover all secured claims whether they have been allowed as to the unsecured part or not. It was certainly not intended, however, to prevent a creditor receiving a dividend on a part of his debt which was not secured. This is provided for in § 57 h.

By § 58 creditors are entitled to ten days' notice of the "declaration and time of payment of dividends." The same section provides that the referee shall give all notices unless otherwise ordered by the judge. Form 41 provides for the notice of payment of a dividend; it is to be given by the trustee. As the trustee gives the notice of time of payment there is no need of the referee giving notice also. There remains, however, the notice of declaration of the dividend. The dividend is to be declared by the referee without consultation with creditors.3 The notice of declaration, therefore, is a mere form, and no creditor's rights will in any way be affected if this notice be omitted. Such notice would therefore seem unnecessary.

Paragraph b is not very clear. A strict construction of its terms would require the trustee to keep back money enough to pay in full not only the claims having priority but also all claims which "have not been, but probably will be, allowed." In this way a large sum of money might be tied up to await the future action of creditors in proving claims which have been scheduled. The intent of the section, however, seems to be to require the trustee to hold back enough money to pay in full the claims having priority, and on all claims which may be proved and allowed afterwards a dividend equal to that declared on the claims already allowed. Such a construction would be more reasonable. The section is silent on the question how the referee is to tell what claims may in future be allowed. The only way he has to tell is by the help of the schedule, and

it is therefore his duty to reserve enough money to pay a dividend on all scheduled claims before declaring a dividend.

The meeting for the determination of dividends was under the Act of 1867 to be held within three months. The present law requires a very speedy settlement of the estate. The trustee must pay dividends within ten days after they are declared. It will therefore be his duty to pay the dividend very soon after his appointment, which is to take place at the first meeting of creditors, not more than thirty days after the adjudication.3

The rule of clause c was also contained in § 28 of the Act of 1867. It appears from this provision that claims may be proved subsequently to the first meeting, though this is nowhere specifically enacted. Claims cannot be proved more than a year after the adjudication, except in case of infants and insane persons.5 The terms of clause d, if strictly construed, would allow a citizen of the United States who had proved in the foreign bankruptcy to prove in the United States also before foreign creditors, but this was undoubtedly not so intended.

It is the principal reason for a bankrupt law that the debtor's effects may be divided equally among the creditors. Clause e was apparently introduced out of abundant caution, as there would be no doubt that the result would have been the same without it.6

§ 529. Act of 1898.-SEC. 66. 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

1 Act of 1898, § 47 a (9).

2 Ib. § 44.

8 Ib. § 55 a.

4 14 Stats. 530, R. S. 5097.

5 Act of 1898. § 57 n.

6 Supra, § 216.

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.

One chief purpose of the present law is to close up the estate of a bankrupt as speedily as possible, and Congress has framed many of the provisions of the act with this end in view. Thus the petition is returnable within fifteen days,1 and the pleadings must be filed within ten days afterward.2 The adjudication is then to be made as soon as possible. The trustee is appointed at the first meeting held within thirty days of the adjudication. Dividends are declared also within thirty days of the adjudication, and the trustee must pay them within ten days.5 Claims must be proved within a year, and the estate closed as quickly as possible. And by the present section a dividend remaining unclaimed for eighteen months after the final dividend is declared is to be paid over to the other creditors. A discharge must be applied for within a year.8

§ 530. Act of 1898.-SEC. 67. 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.

1 Act of 1898, § 18 a.

2 Ib. § 18 b.

3 Ib. § 18 d.

4 Ib. § 55 a.

5 Ib. § 47 a (9).

8 Ib. § 57 n.

4 Ib. § 47 a (2).

6 Ib. § 14 a.