exercising ancillary jurisdiction. Musica v. Prentice (C. C. A. 1914) 211 Fed. 326, affirming decree In re A. Musica & Son (D. C. 1913) 205 Fed. 413. Appeal dismissed Lazarus, Michel & Lazarus v. Prentice (1914) 34 Sup. Ct. 851, 234 U. S. 263, 58 L. Ed. 1305. 38. Attorneys for petitioning and other creditors.-The court of bankruptcy is authorized to allow a reasonable fee to the attorney for the petitioning creditors in a case of involuntary bankruptcy, to be included in the costs of administration and paid out of the estate. Post, $9648, cl. 3. And see In re Harrison Mercantile Co. (D. C. 1899) 95 Fed. 123, 2 Am. Bankr. Rep. 419; In re Silverman (D. C. 1899) 97 Fed. 325, 3 Am. Bankr. Rep. 227; In re New York Mail S. S. Co. (C. C. 1870) 3 N. B. R. 627, Fed. Cas. No. 10.208; In re King (D. C. 1869) Fed. Cas. No. 7,780; In re O'Hara (D. C. 1868) Fed. Cas. No. 10,465; In re Jones (D. C. 1873) 9 N. B. R. 491, Fed. Cas. No. 7,451; Gordon v. Scott (D. C. 1868) 2 N. B. R. 86, Fed. Cas. No. 5,620; Dundore v. Coates (D. C. 1873) 6 N. B. R. 304, Fed. Cas. No. 4,142; In re Mead (D. C. 1871) Fed. Cas. No. 9,364. But such fee is allowable only in case an adjudication of bankruptcy is made upon the petition, for if the debtor successfully resists it there can be no allowance to the creditors. In re Black Diamond Copper Min. Co. (1906) 10 Ariz. 42, 85 Pac. 653. In case of an adjudication, the attorney for the creditors is entitled to this fee as of right, and its allowance or refusal is not a matter within the discretion of the court of bankruptcy. In re Curtis (1900) 100 Fed. 784, 41 C. C. A. 59, 4 Am. Bankr. Rep. 17. But the amount to be allowed is a question for the exercise of a sound judicial discretion, and to be determined upon a consideration of the nature and character of the services rendered, but if the sum allowed is deemed excessive, it will be reduced on appeal or review. In re Curtis (1900) 100 Fed. 784, 41 C. C. A. 59, 4 Am. Bankr. Rep. 17; In re Sanger (D. C. 1871) 5 N. B. R. 54, Fed. Cas. No. 12,318. The fee will be paid out of the general funds of the estate, and lien creditors cannot be required to bear the expense of it or contribute to it. In re Freeman (D. C. 1911) 190 Fed. 48, 27 Am. Bankr. Rep. 16; In re Gillaspie (D. C. 1911) 190 Fed. 88, 27 Am. Bankr. Rep. 59; In re Allert (D. C. 1908) 173 Fed. 691, 23 Am. Bankr. Rep. 101. Petitioning creditors cannot be allowed, out of the estate, sums paid to their attorneys as retainers. In re Comstock (D. C. 1874) 9 N. B. R. 88, Fed. Cas. No. 3,075. Nor fees for services rendered in preserving the special and individual interests of such creditors, but only for such as were for the common benefit of all the credi tors. In re Mead (D. C. 1871) Fed. Cas. No. 9,364. If two separate petitions in involuntary bankruptcy are filed by different sets of creditors, the one fee allowable should go to the attorneys in that petition on which the adjudication is made. In re Southern Steel Co. (D. C. 1909) 169 Fed. 702, 22 Am. Bankr. Rep. 476; Frank v. Dickey (1905) 139 Fed. 744, 71 C. C. A. 562, 15 Am. Bankr. Rep. 155. And if the petitions are consolidated, the fee must be divided between them according to the relative value of the services and the amount of work done by each. In re McCracken & McLeod (D. C. 1904) 129 Fed. 621, 12 Am. Bankr. Rep. 95. No allowance can be made out of the estate to the creditors who presented the petition, for services of an attorney rendered after the appointment of the trustee, as, in examining the bankrupt, sending out notices, attending sales, or the like, for such services are either for the benefit of the trustee or of the creditors individually. In re Silverman (D. C. 1899) 97 Fed. 325, 3 Am. Bankr. Rep. 227; In re Harrison Mercantile Co. (D. C. 1899) 95 Fed. 123, 2 Am. Bankr. Rep. 419; In re Comstock (D. C. 1874) 9 N. B. R. SS, Fed. Cas. No. 3,075. But where the attorney for the petitioning creditors, concurrently with the petition or directly after it, prepared and presented a petition for an injunction restraining a mortgage trustee of the bankrupt from disposing of the property affected pendente lite it was held that he might be allowed a fee for this service. In re Harrison Mercantile Co. (D. C. 1899) 95 Fed. 123, 2 Am. Bankr. Rep. 419. Counsel employed by creditors of a bankrupt to represent them in the bankruptcy proceedings must look to their clients for compensation and not to the estate of the bankrupt or to the court. In re Evans (D. C. 1902) 116 Fed. 909, 8 Am. Bankr. Rep. 730; Mechanics'-American Nat. Bank V. Coleman (C. C. A. 1913) 204 Fed. 24, 29 Am. Bankr. Rep. 396; In re Smith (D. C. 1901) 108 Fed. 39, 5 Am. Bankr. Rep. 559. Especially where professional services are rendered for the benefit of a particular creditor, and not for all the creditors of the estate, or where they are in opposition to the interests of the general creditors, they cannot be compensated out of the estate in bankruptcy. In re Baxter (C. C. 1886) 28 Fed. 452; In re Hope Min. Co. (D. C. 1873) Fed. Cas. No. 6,682. But where the attorney for a particular creditor succeeds in an undertaking which materially benefits the estate as a whole, as, in discovering concealed assets or recovering property fraudulently transferred, he may be allowed a reasonable fee out of the estate, for though he may have acted primarily in the interest of his own client, yet the result inures to the benefit of all. In re Medina Quarry Co. (C. C. A. 1911) 191 Fed. 815, 27 Am. Bankr. Rep. 466; In re E. I. Fidler & Son (D. C. 1909) 172 Fed. 632, 23 Am. Bankr. Rep. 16; In re Medina Quarry Co. (D. C. 1910) 182 Fed. 508, 25 Am. Bankr. Rep. 405; Smith V. Cooper (1903) 120 Fed. 230, 56 C. C. A. 578, 9 Am. Bankr. Rep. 755; In re Evans (D. C. 1902) 117 Fed. 574. There is no authority for allowance in bankruptcy proceedings of compensation from the estate for services of an attorney employed by a secured or nonsecured creditor. Mechanics' American Nat. Bank v. Coleman (C. C. A. 1913) 204 Fed. 24. The right of creditors of a bankrupt to the allowance of attorney's commissions under their contracts considered. In re Hershberger (D. C. 1913) 208 Fed. 94. Where notes of the bankrupt are placed in the hands of an attorney for collection before maturity, but are paid in due course of the bankruptcy proceedings and without suit, the holder is not entitled to an allowance for attorneys' fees thereon. In re Jenkins (D. C. 1912) 192 Fed. 1000, 27 Am. Bankr. Rep. 860. Where proceedings for the recovery of property concealed or fraudulently transferred have been instituted by the trustee, who is represented therein by competent counsel, it is not the privilege of creditors to have their own counsel assist in such proceedings, and if they do, they are not entitled to fees out of the estate. In re Felson (D. C. 1905) 139 Fed. 275, 15 Am. Bankr. Rep. 185. The court will not charge the estate with fees to be allowed to attorneys for creditors, where the services rendered consisted in opposing the allowance of improper or fictitious claims against the estate, or securing their expunction after allowance, or defeating claims to priorities. In re Medina Quarry Co. (C. C. A. 1911) 191 Fed. 815, 27 Am. Bankr. Rep. 466; In re George Watkinson & Co. (D. C. 1904) 130 Fed. 218, 12 Am. Bankr. Rep. 370; In re Harrison Mercantile Co. (D. C. 1899) 95 Fed. 123, 2 Am. Bankr. Rep. 419. But it seems that this may be done in cases where the trustee in bankruptcy has refused to make defense against such claims or to take the proper steps to defeat them. re Roadarmour (1910) 177 Fed. 379, 100 C. C. A. 611, 24 Am. Bankr. Rep. 49; In re Little River Lumber Co. (D. C. 1900) 101 Fed. 558. In Where a creditor claims priority of payment out of the estate of the bankrupt, on the ground of his having a lien on particular property, and is opposed by the trustee and by other creditors, the attorney for such claimant, who successfully prosecutes the claim in the court of bankruptcy and secures its allowance, though he cannot of course claim a fee out of the estate, is entitled to a lien for his services on the fund thus secured for his client; and the court of bankruptcy has jurisdiction to determine the right to such lien, fix its amount, and enforce it in the distribution of the property. In re Rude (D. C. 1900) 101 Fed. 805, 4 Am. Bankr. Rep. 319. And see In re Hershberger (D. C. 1913) 208 Fed. 94, 30 Am. Bankr. Rep. 635. § 9587. (Act July 1, 1898, c. 541, § 3, as amended, Act Feb. 5, 1903, c. 487, § 2.) Acts of bankruptcy. Acts of Bankruptcy.-a Acts of bankruptcy by a person shall consist of his having (1) conveyed, transferred, concealed, or re moved, or permitted to be concealed or removed, any part of his property with intent to hinder, delay, or defraud his creditors, or any of them; or (2) transferred, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors; or (3) suffered or permitted, while insolvent, any creditor to obtain a preference through legal proceedings, and not having at least five days before a sale or final disposition of any property affected by such preference vacated or discharged such preference; or (4) made a general assignment for the benefit of his creditors, or, being insolvent, applied for a receiver or trustee for his property or because of insolvency a receiver or trustee has been put in charge of his property under the laws of a State, of a Territory, or of the United States; or (5) admitted in writing his inability to pay his debts and his willingness to be adjudged a bankrupt on that ground. b A petition may be filed against a person who is insolvent and who has committed an act of bankruptcy within four months after the commission of such act. Such time shall not expire until four months after (1) the date of the recording or registering of the transfer or assignment when the act consists in having made a transfer of any of his property with intent to hinder, delay, or defraud. his creditors or for the purpose of giving a preference as hereinbefore provided, or a general assignment for the benefit of his creditors, if by law such recording or registering is required or permitted, or, if it is not, from the date when the beneficiary takes notorious, exclusive, or continuous possession of the property unless the petitioning creditors have received actual notice of such transfer or assign ment. c It shall be a complete defense to any proceedings in bankruptcy instituted under the first subdivision of this section to allege and prove that the party proceeded against was not insolvent as defined in this Act at the time of the filing the petition against him, and if solvency at such date is proved by the alleged bankrupt the proceedings shall be dismissed, and under said subdivision one the burden of proving solvency shall be on the alleged bankrupt. d Whenever a person against whom a petition has been filed as hereinbefore provided under the second and third subdivisions of this section takes issue with and denies the allegation of his insolvency, it shall be his duty to appear in court on the hearing, with his books, papers, and accounts, and submit to an examination, and give testimony as to all matters tending to establish solvency or insolvency, and in case of his failure to so attend and submit to examination the burden of proving his solvency shall rest upon him. e Whenever a petition is filed by any person for the purpose of having another adjudged a bankrupt, and an application is made to take charge of and hold the property of the alleged bankrupt, or any part of the same, prior to the adjudication and pending a hearing on the petition, the petitioner or applicant shall file in the same court a bond with at least two good and sufficient sureties who shall reside within the jurisdiction of said court, to be approved by the court or a judge thereof, in such sum as the court shall direct, conditioned for the payment, in case such petition is dismissed, to the respondent, his or her personal representatives, all costs, expenses, and damages occasioned by such seizure, taking, and detention of the property of the alleged bankrupt. If such petition be dismissed by the court or withdrawn by the petitioner, the respondent or respondents shall be allowed all costs, counsel fees, expenses, and damages occasioned by such seizure, taking, or detention of such property. Counsel fees, costs, expenses, and damages shall be fixed and allowed by the court, and paid by the obligors in such bond. (30 Stat. 546. 32 Stat. 797.) In this section, as originally enacted, in subdivision a thereof, clause 4 was as follows: "or (4) made a general assignment for the benefit of his creditors;" It was amended by Act Feb. 5, 1903, c. 487, § 2, cited above, by adding to the clause the further provision, beginning with the words "or, being insolvent," etc., to the end of clause 4 as set forth here. 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. A conveyance, etc., by a person adjudged bankrupt, made within four months prior to the filing of the petition, with intent to hinder, delay, or defraud his creditors, is void as against them, by section 67 of this act, post, § 9651. The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, by section 70 of this act, post, § 9654. A preference, as defined by section 60 of this act, post, § 9644, given by a bankrupt within four months before the filing of a petition, or after the filing of the petition and before the adjudication, if the person receiving it, or to be benefited thereby, or his agent acting therein, had reasonable cause to believe that it was intended thereby to give a preference, is voidable by the trustee, by said section of this act. Meaning of "suffer or permit." Entry of judgment on warrant of attorney. 18. Assignment for creditors. I. ACTS OF BANKRUPTCY (A) Acts of bankruptcy in general and by individuals 1. Construction of statute.-The statute must be strictly construed with reference to the commission of an act of bankruptcy. No one can be adjudged bankrupt on the ground of his having committed an act which, though not among those enumerated by the statute, produces equivalent results. The acts of bankruptcy defined and classified by the statute cannot be enlarged by construction so as to include transactions similar or analogous to, but not identical with those specified. In re Empire Metallic Bedstead Co. (C. C. A. 1899) 98 Fed. 981, 3 Am. Bankr. Rep. 575. 2. Nature and effect of an act of bankruptcy.-Ignorance of the law is no defense to a proceeding founded on the commission of an act of bankruptcy, and an adjudication cannot be avoided on the ground that the respondent did not know that there was such a statute in existence as the bankruptcy law. In re Craft (D. C. 1868) 1 N. B. R. 378, Fed. Cas. No. 3,316. Legal liability for the commission of an act of bankruptcy cannot be avoided by the subsequent rescission of the transaction constituting the act of bankruptcy. In re Ryan (D. C. 1873) Fed. Cas. No. 12,183. Where the execution of a general assignment for the benefit of creditors is proved or admitted, an adjudication of bankruptcy will be made, though the respondent denies that he had any actual intention to defeat or delay the operation of the bankruptcy act. In re Smith (D. C. 1869) 3 N. B. R. 377, Fed. Cas. No. 12,974. A payment of money by an insolvent debtor to one creditor in preference to others is none the less an act of bankruptcy on which a petition and adjudication may be based because it was made in good faith, and was a judicious act and necessary to preserve valuable property. In re Merchants' Ins. Co. (D. C. 1871) 6 N. B. R. 43, Fed. Cas. No. 9,441. It is not sufficient ground for dismissing a petition in involuntary bankruptcy, against a debtor who has given a preference, that he only yielded to the pressure or urgent solicitation of the creditor, or to threats of legal process or arrest and to the fear of disgrace. Clarion Bank v. Jones (1874) 21 Wall. 325, 22 L. Ed. 542; In re Batchelder (D. C. 1869) 3 N. B. R. 150, Fed. Cas. No. 1,098; In re Dibblee (D. C. 1869) 2 N. B. R. 617, Fed. Cas. No. 3,884; Campbell v. Traders' Nat. Bank (D. C. 1871) 3 N. B. R. 498, Fed. Cas. No. 2,370. An act of bankruptcy committed by one of two persons who are jointly and severally liable for a debt, but who are not partners, is no ground for an adjudication of bankruptcy against the other. James v. Atlantic Delaine Co. (C. C. 1875) 11 N. B. R. 390, Fed. Cas. No. 7,179. 3. Insolvency as an element in acts of bankruptcy.-In determining the question of the commission of an act of bankruptcy, where insolvency is a necessary element, that term is to be understood in the sense in which it is defined by the first section of the bankruptcy act, namely, that "a person shall be deemed insolvent, when the aggregate of his property, exclusive of any property which he may have conveyed, transferred, concealed, or removed, or permitted to be concealed or removed, with intent to defraud, hinder, or delay his creditors, shall not, at a fair valuation, be sufficient in amount to pay his debts." Lansing Boiler & Engine Works v. Joseph T. Ryerson & Son (1904) 128 Fed. 701, 63 C. C. A. 253, 11 Am. Bankr. Rep. 558; In re Golden Malt Cream Co. (1908) 164 Fed. 326, 90 C. C. A. 258, 21 Am. Bankr. Rep. 36; Hewitt v. Boston Straw Board Co. (1913) 214 Mass. 260, 101 N. E. 424. In respect to the transfer, concealment, or removal of property with intent to delay or defraud creditors, the test of liability to be adjudicated a bankrupt is insolvency at the time of the filing of the petition. If the debtor was insolvent at the time the fraudulent conveyance or concealment was made, yet regains a condition of solvency before a petition is filed, the petition must be dismissed. Conversely, if he was not insolvent at the time of the fraudulent transfer or concealment, yet becomes insolvent within the next four months, and is insolvent at the time creditors file a petition, he may be adjudged bankrupt. George M. West Co. v. Lea (1899) 174 U. S. 590, 19 Sup. Ct. 836, 43 L. Ed. 1098, 2 Am. Bankr. Rep. 463; Acme Food Co. v. Meier (1907) 153 Fed. 74, 82 C. C. A. 208, 18 Am. Bankr. Rep. 550. A conveyance or transfer of property by a debtor with intent to hinder, delay, or defraud his creditors, or any of them, constitutes an act of bankruptcy, although he may have been solvent at the time. In re Larkin (D. C. 1908) 168 Fed. 100, 21 Am. Bankr. Rep. 711. Where the act of bankruptcy charged is the giving or suffering of a preference, the debtor cannot be adjudged bankrupt if he was solvent at the time the preference was given, though insolvent at the time of the filing of the petition, nor when he is solvent at the date of the petition, though insolvent when the act of bankruptcy was committed. In re Rome Planing Mill Co. (D. C. 1899) 96 Fed. 812, 3 Am. Bankr. Rep. 123; George M. West Co. v. Lea (1899) 174 U. S. 590, 19 Sup. Ct. 836, 43 L. Ed. 1098, 2 Am. Bankr. Rep. 463; In re Dunham (D. C. 1868) 2 N. B. R. 17, Fed. Cas. No. 4,143. But see Acme Food Co. v. Meier (1907) 153 Fed. 74, 82 C. C. A. 208, 18 Am. Bankr. Rep. 550, holding that, if the act of bankruptcy charged is the giving or permitting a preference, insolvency must have existed at the time of the preference, but that solvency or insolvency at the time of the filing of the petition can have only a reflex importance as evidence. Compare Johansen Bros. Shoe Co. v. Alles (C. C. A. 1912) 197 Fed. 274, 116 C. C. A. 636, 28 Am. Bankr. Rep. 299. When the act of bankruptcy charged is the making of a general assignment for the benefit of creditors, it is not necessary to show that the debtor was insolvent either at the date of the assignment or at the time of the filing of the petition. George M. West Co. v. Lea (1899) 174 U. S. 590, 19 Sup. Ct. 836, 43 L. Ed. 1098, 2 Am. Bankr. |