creditor within the meaning of the bankruptcy law. In re McIntosh (D. C. 1869) 2 N. B. R. 506, Fed. Cas. No. 8,826. Where a judgment recovered before a justice of the peace is not a lien on land until docketed in the superior court, this step must have been taken before the bankruptcy, or the judgment will not constitute a security within the meaning of the act. In re Wood (D. C. 1899) 95 Fed. 946, 2 Am. Bankr. Rep. 695. And the same is true of a judgment which has been allowed to become dormant, unless the statute of limitations is applicable only in favor of subsequent purchasers and judgment creditors, in which case, not being available in favor of the judgment debtor, it cannot be set up in favor of his trustee in bankruptcy. In re Huddell (C. C. 1891) 47 Fed. 207. It is otherwise if the dormant judgment has been duly revived. Appeal of Bucknor (Pa. 1886) 4 Atl. 738. A judgment creditor does not acquire a lien, such as to make him a secured creditor, by the mere commencement of proceedings supplementary to execution, for, until the appointment of a receiver, his right is not a lien. In re Wheeler (D. C. 1878) 18 N. B. R. 385, Fed. Cas. No. 17,490. A judgment creditor who attacks an alleged fraudulent conveyance, but does not procure a decree setting it aside until after the bankruptcy of the debtor, is not a secured creditor within this section. In re Estes (C. C. 1880) 5 Fed. 60. In 7. Pledgees, assignees, and holders of collateral.-One holding specific personal property in pledge, as a means of enforcing the payment of a debt, is a secured creditor within this section. re Peebles (D. C. 1875) Fed. Cas. No. 10,902. One is also a secured creditor whose claim is secured by the pledge of bonds, stocks, mortgages, or other collateral security. In re McVay (D. C. 1882) 13 Fed. 443; Dayton Nat. Bank v. Merchants' Nat. Bank (1881) 37 Ohio St. 208; Mitchell v. Roberts (C. C. 1883) 17 Fed. 776; Dumont v. Fry (C. C. 1882) 14 Fed. 293. One who holds a policy of insurance on the life of his debtor as collateral security for the debt, is a secured creditor. Burlingham v. Crouse (C. C. A. 1910) 181 Fed. 479, 24 Am. Bankr. Rep. 632; In re Mertens (D. C. 1905) 134 Fed. 101, 14 Am. Bankr. Rep. 226; In re Newland (D. C. 1873) 7 N. B. R. 477, Fed. Cas. No. 10,170; In re Shoenberger (D. C. 1879) Fed. Cas. No. 12,802. An assignment of a lease running to the debtor will constitute the creditor a secured creditor. Fitch v. Richardson (1906) 147 Fed. 197, 77 C. C. A. 423, 16 Am. Bankr. Rep. 835. And so of the transfer of an order drawn on a third person. In re Hines (D. C. 1906) 144 Fed. 543, 16 Am. Bankr. Rep. 495. Or an assignment of money to become due under a contract. In re De Long Furniture Co. (D. C. 1911) 188 Fed. 686, 26 Am. Bankr. Rep. 469. But the holder of a warehouseman's receipt which is attached to a note executed to the warehouseman, as collateral security, is not a secured creditor in the bankruptcy of the warehouseman. State v. Federal Union Surety Co. (1911) 156 Mo. App. 603, 137 S. W. 613. The holder of a protested draft, drawn by a bankrupt bank, is not entitled to preference over other creditors of the bank, in the character of a secured creditor, merely because the drawee, which was another bank, had funds of the drawer in its hands at the time it refused to accept the draft. Bank of Commerce v. Russell (C. C. 1873) Fed. Cas. No. 884. 8. Holders of notes.-A promissory note is not a security for the payment of a debt, within the meaning of this section. United States Trust Co. v. Brady (N. Y. 1855) 20 Barb. 119. An indorsement of the bankrupt's note by a third person does not make the holder a secured creditor, unless the indorser has security on property of the bankrupt. In re Broich (D. C. 1876) Fed. Cas. No. 1,921. A creditor of a bankrupt who holds a note containing a waiver of exemptions is in the position of a secured creditor, the exempt property being in effect a security for his debt. In re Meredith (D. C. 1906) 144 Fed. 230, 16 Am. Bankr. Rep. 331. 9. Effect of additional security or claim against third person.-If a creditor of the bankrupt holds security in the form of an obligation of a third person, but the third person does not hold counter security, the creditor may prove his debt in the bankruptcy without surrendering the security, and may, notwithstanding such proof, proceed to enforce his security against such third person, provided, however, that he does not take, under the bankruptcy and the security, more than the full amount of his debt. In re Babcock (C. C. 1844) Fed. Cas. No. 696; In re Thomas (D. C. 1878) 17 N. B. R. 54, Fed. Cas. No. 13,886; In re Beaver Knitting Mills (1907) 154 Fed. 320, 83 C. C. A. 240, 18 Am. Bankr. Rep. 528; In re Otto F. Lange Co. (D. C. 1909) 170 Fed. 114, 22 Am. Bankr. Rep. 414; In re Kinne (D. C. 1880) 5 Fed. 59; In re Sauthoff (D. C. 1876) 14 N. B. R. 364, Fed. Cas. No. 12,379; In re Myer (1907) 14 N. Mex. 246, 89 Pac. 246. The enforcement of the security in this case does not diminish the estate of the bankrupt to which the general or unsecured creditors must look for satisfaction, and moreover, the court of bankruptcy would have no authority to interfere between the creditor and the third person, the latter being a stranger to the bankruptcy proceedings. In re Thomas (D. C. 1878) Fed. Cas. No. 부 13,886. So, if a judgment is recovered Where the bankrupt was indorser on In re Rep. 135. And where both the maker and indorser of a note are in bankruptcy, the holder may prove the amount of the note as a claim against each, and receive dividends from both estates, up to the full amount of his debt. National Mt. Wollaston Bank v. Porter (1877) 122 Mass. 308. But a creditor holding a note of the bankrupt, and, as collateral security therefor, another note on which the bankrupt is also liable, is not entitled to prove his claim against the estate in bankruptcy for both, but only for the amount of the actual indebtedness to him. First Nat. Bank v. Eason (1906) 149 Fed. 204, 79 C. C. A. 162, 17 Am. Bankr. Rep. 593. Where a mortgage was made by the bankrupt to secure the mortgagee as a surety for him, it was held that the mortgagee was not entitled to be paid personally the amounts of the debts for which he was surety out of the bankrupt's estate, but was entitled to have such debts paid to the creditors out of the proceeds of the mortgaged property, and to be released from his liability as surety. In re Randolph (D. C. 1911) 187 Fed. 186, 26 Am. Bankr. Rep. 623. 10. Voting at creditors' meetings.Where a partnership creditor holds securities on both the property of the partnership and the individual property of one of the partners (the firm and all its members being in bankruptcy together), the value of the security on the individual property of the partner need not be deducted in ascertaining' the voting power of the creditor, but only the value of the security on the firm property. In re Coe, Powers & Co., 1 Nat. Bankr. News, 294. But a mortgage creditor who, after the adjudication, sells the mortgaged premises, and himself becomes the purchaser, cannot vote on the deficiency as an unsecured creditor. In re Hunt (D. C. 1878) 17 N. B. R. 205, Fed. Cas. No. 6,884. § 9641. (Act July 1, 1898, c. 541, § 57, as amended, Act Feb. 5, 1903, c. 487, § 12.) Proof and allowance of claims. Proof and Allowance of Claims.-a Proof of claims shall consist of a statement under oath, in writing, signed by a creditor setting forth the claim, the consideration therefor, and whether any, and, if so what, securities are held therefor, and whether any, and, if so what, payments have been made thereon, and that the sum claimed is justly owing from the bankrupt to the creditor. b Whenever a claim is founded upon an instrument of writing, such instrument, unless lost or destroyed, shall be filed with the proof of claim. If such instrument is lost or destroyed, a statement of such fact and of the circumstances of such loss or destruction shall be filed under oath with the claim. After the claim is allowed or disallowed, such instrument may be withdrawn by permission of the court, upon leaving a copy thereof on file with the claim. c Claims 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 the case has been referred. d Claims which have been duly proved shall be allowed, upon receipt by or upon presentation to the court, unless objection to their allowance shall be made by parties in interest, or their consideration be continued for cause by the court upon its own motion. e Claims of secured creditors and those who have priority may be allowed to enable such creditors to participate in the proceedings at creditors' meetings held prior to the determination of the value of their securities or priorities, but shall be allowed for such sums only as to the courts seem to be owing over and above the value of their securities or priorities. f Objections to claims shall be heard and determined as soon as the convenience of the court and the best interests of the estates and the claimants will permit. g The claims of creditors who have received preferences, voidable under section sixty, subdivision b, or to whom conveyances, transfers, assignments, or incumbrances, void or voidable under section sixty-seven, subdivision e, have been made or given, shall not be allowed unless such creditors shall surrender such preferences, conveyances, transfers, assignments, or incumbrances. h The value of securities held by secured creditors shall be determined by converting the same into money according to the terms of the agreement pursuant to which such securities were delivered to such creditors or by such creditors and the trustee, by agreement, arbitration, compromise, or litigation, as the court may direct, and the amount of such value shall be credited upon such claims, and a dividend shall be paid only on the unpaid balance. i Whenever a creditor, whose claim against a bankrupt estate is secured by the individual undertaking of any person, fails to prove such claim, such person may do so in the creditor's name, and if he discharge such undertaking in whole or in part he shall be subrogated to that extent to the rights of the creditor. j Debts owing to the United States, a State, a county, a district, or a municipality as a penalty or forfeiture shall not be allowed, except for the amount of the pecuniary loss sustained by the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby and such interest as may have accrued thereon according to law. k Claims which have been allowed may be reconsidered for cause and reallowed or rejected in whole or in part, according to the equities of the case, before but not after the estate has been closed. 1 Whenever a claim shall have been reconsidered and rejected, in whole or in part, upon which a dividend has been paid, the trustee may recover from the creditor the amount of the dividend received upon the claim if rejected in whole, or the proportional part thereof if rejected only in part. m The claim of any estate which is being administered in bankruptcy against any like estate may be proved by the trustee and allowed by the court in the same manner and upon like terms as the claims of other creditors. n Claims shall not be proved against a bankrupt estate subsequent to one year after the adjudication; or if they are liquidated by litigation and the final judgment therein is rendered within thirty days before or after the expiration of such time, then within sixty days after the rendition of such judgment: Provided, That the right of infants and insane persons without guardians, without notice of the proceedings, may continue six months longer. (30 Stat. 560. 32 Stat. 799.) In this section, as originally enacted, subdivision g thereof was as follows: "g The claims of creditors who have received preferences shall not be allowed unless such creditors shall surrender their preferences." Said subdivision g was amended by Act Feb. 5, 1903, c. 487, § 12, cited above, to read 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. Notes of Decisions Claims liquidated by litigation. Allowance of proof after expira tion of year. Proof after declaration dend. of divi 8. Persons authorized to prove. 9. Proof by agent or attorney. 10. Proof by assignee of claim. 11. Proof by secured creditors. Waiver of security and proof of ments. 20. Acknowledgment of deposition. 21. Receiving and filing proofs. 22. Allowance of proved claims. Allowance as adjudication. 24. Postponement of proofs. 25. Objections to claims. Manner and form of objections. Grounds of objection. Contest and determination. Burden of proof and evidence. 30. Amendment of proofs. After expiration of year. By secured creditors. 32. 33. Withdrawal of proofs. 34. Re-examination of claims and expung 35. 36. 37. ing. Parties who may apply. Grounds for expunging claim. 38. Review of referee's proceedings by judge. 1. Necessity of proof of claims.-In general, a creditor is not compelled to present his claim, and his failure to do so may merely deprive him of the right to share in the distribution and bar any further relief against the bankrupt. In re Kligerman (D. C. 1915) 219 Fed. 758. Where property of a bankrupt, on which is a mortgage given by him, is sold in the bankruptcy proceedings free of the incumbrance, the mortgagee, who intervenes merely to subject the proceeds to part payment of his debt, is not bound to prove his claim. In re Goldsmith (D. C. 1902) 118 Fed. 763, 9 Am. Bankr. Rep. 419. And a creditor may procure an order for the examination of the bankrupt, without first proving his claim, when he desires by this means to ascertain whether it will be worth while to prove his claim. In re Jehu (D. C. 1899) 94 Fed. 638, 2 Am. Bankr. Rep. 498; In re Walker (D. C. 1899) 96 Fed. 550, 3 Am. Bankr. Rep. 35. But if he wishes to partici pate in the distribution of the bankrupt's estate, through and by means of the bankruptcy proceedings, it is necessary for him to establish his status and the validity and amount of his claim by proving it as the law directs. In re Dunn Hardware & Furniture Co. (D. C. 1904) 132 Fed. 719, 13 Am. Bankr. Rep. 147. Where all things necessary to bring a proposed composition before the court for confirmation have been done, the court cannot as a matter of law refuse confirmation on the objection of creditors whose claims, though mentioned in the schedules, have not been proved or allowed. In re French (D. C. 1909) 181 Fed. 583. Since taxes assessed against the property of a bankrupt during the administration of his estate are matters of public record, they need not be proved as a claim against the bankrupt's estate in order to be allowed. In re Prince & Walter (D. C. 1904) 131 Fed. 546, 12 Am. Bankr. Rep. 675. Where a city has a lien for municipal taxes only on the property assessed, it has no right to share in the general assets of a delinquent taxpayer who is a bankrupt, and need not prove its claim in order to preserve its lien. In re Harvey (D. C. 1903) 122 Fed. 745, 10 Am. Bankr. Rep. 567. The United States is not bound to prove a debt or claim in bankruptcy, as a condition to the priority of payment accorded to it by the statute. In re Stoever (D. C. 1904) 127 Fed. 394; U. S. v. Lewis (C. C. 1875) Fed. Cas. No. 15,595; In re Bousfield & Poole Mfg. Co. (D. C. 1878) Fed. Cas. No. 1,704. A landlord, having a lien or charge for the rent due him on the property of his tenant at the time of the latter's bankruptcy, but the amount of which has not been adjudicated, must, in order to preserve his priority, establish his claim by proof, the same as other creditors. In re Hayward (D. C. 1904) 130 Fed. 720, 12 Am. Bankr. Rep. 264. The lien of a judgment is not lost by failure to prove the claim in bankruptcy. Cottrell v. Pierson (C. C. 1881) 12 Fed. 805. But the judgment creditor cannot share in the distribution of the estate without proving his claim. In re Rosenberg (D. C. 1906) 144 Fed. 442, 16 Am. Bankr. Rep. 465. Where the defendant in a judgment is adjudicated a bankrupt, and the plaintiff with knowledge of the bankruptcy proceedings fails to schedule his judgment in such proceedings, he cannot thereafter set off his judgment against a judgment of the bankrupt recovered against him prior to the bankruptcy proceedings. Shoemaker v. Hurwitz (1914) 56 Pa. Super. Ct. 632. The finding, in a decree of adjudication in involuntary bankruptcy, that the petitioning creditor has a valid and provable claim to a certain amount, is not conclusive upon the trustee and creditors, so as to dispense with proof of the debt of that creditor, or to preclude questioning his right to participate in the distribution of the estate. In re Harper (D. C. 1910) 175 Fed. 412, 23 Am. Bankr. Rep. 918; In re Cleveland Ins. Co. (C. C. 1884) 22 Fed. 200. And a voluntary litigation against the trustee of a claim against the estate, resulting in a judgment against the trustee, does not create a preferred debt which can be enforced directly against the estate, but its only effect is to liquidate the claim, and the judgment must be proved. In re Havens (D. C. 1910) 182 Fed. 367, 25 Am. Bankr. Rep. 116. The statement of a debt in the schedule of the bankrupt is not a proof of it; it may be stated in fraud and may not exist, or the bankrupt may have made payments upon it or have counterclaims against it. The debt must be proved by the oath of the creditor as the law directs. In re Davis (D. C. 1874) 2 N. B. R. 391, Fed. Cas. No. 3,618. A creditor who proves his debt in bankruptcy must do so absolutely and according to the directions of the statute and the rules of the court, and will not be allowed to interpose any protest, qualification, or reservation. Dutton v. Freeman (C. C. 1842) Fed. Cas. No. 4,210. The ordinary proceedings upon the proof and allowance of the demands presented by creditors are part of the entire proceeding in bankruptcy, and are not to be regarded as so many separate suits at law or in equity. Wiswall v. Campbell (1876) 93 U. S. 347, 23 L. Ed. 923. 2. Effect of proof.-A creditor who proves his claim against the bankrupt's estate and participates in the subsequent proceedings cannot afterwards deny the court's jurisdiction to make the adjudication of bankruptcy. Sabin v. Larkin-Green Logging Co. (D. C. 1914) 218 Fed. 984. If the creditor is a nonresident, his proving his claim amounts to an acceptance of the jurisdiction of the court over him, and his obedience to its orders in the bankruptcy proceeding may be enforced by the power of striking out his claim. In re Kyler (D. C. 1868) Fed. Cas. No. 7,956. If an alien creditor voluntarily appears and proves his claim and receives a dividend thereon, he waives his exterritorial immunity from the operation of the bankruptcy law, which otherwise would have saved his claim from the effect of the bankrupt's discharge. Clay v. Smith (1830) 3 Pet. 411, 7 L. Ed. 723. Proof of claim establishes the status of the claimant as a creditor of the bankrupt, connects him with the proceedings, and gives him the right to participate therein to the fullest extent allowed to creditors. In re Smith (D. C. 1868) Fed. Cas. No. 12,971; In re Baldwin (D. C. 1872) Fed. Cas. No. 795. He may join in a call for a meeting of creditors. In re Back Bay Automobile Co. (D. C. 1907) 158 Fed. 679, 19 Am. Bankr. Rep. 835. He may file charges against the trustee and ask for his removal. In re Roanoke Furnace Co. (D. C. 1907) 152 Fed. 846, 18 Am. Bankr. Rep. 661. The proof establishes the validity and provable character of the claim and its amount, and, unless an appeal or proceeding for re-examination is successfully prosecuted, these matters are res judicata in the subsequent proceedings in bankruptcy or in the creditor's subsequent action. Swofford Bros. Dry Goods Co. v. Owen (1913) 37 Okl. 616, 133 Pac. 193; In re Merrick (D. C. 1873) 7 N. B. R. 459, Fed. Cas. No. 9,463. 3. Rights of action.-Proof of claim by a creditor is not a waiver of his right of action on it in another court, unless his suit is stayed or enjoined by the court of bankruptcy. In re Buchan's Soap Corp. (D. C. 1909) 169 Fed. 1017, 22 Am. Bankr. Rep. 382; Ringenoldus v. Abresch (1903) 119 Wis. 410, 96 N. W. 817. See In re E. B. Havens & Co. (D. C. 1911) 186 Fed. 583; Graves v. Neosho Falls Bank (1913) 89 Kan. 179, 131 Pac. 146. Filing a claim in bankruptcy against an agent, without knowledge of an undisclosed principal, does not preclude an action against the latter. Sweeney v. Douglas Copper Co. (1912) 149 App. Div. 568, 134 N. Y. Supp. 247. Proof of his claim does not preclude the creditor from proceeding independently against any other person who may be separately liable on the same demand, such as a surety. U. S. v. Schofield Co. (C. C. 1910) 182 Fed. 240. Or another partner in the same firm who is not in bankruptcy. Robinson v. First Nat. Bank (1904) 98 Tex. 184, 82 S. W. 505. And it does not waive his right to assert and enforce a lien on particular property. Coles County v. Haynes & Lyons (1907) 134 Ill. App. 320; Sessler v. Paducah Distilleries Co. (C. C. A. 1909) 168 Fed. 44, 21 Am. Bankr. Rep. 723. But see Brown v. City Nat. Bank (1911) 72 Misc. Rep. 201, 131 N. Y. Supp. 92. Or to claim securities held as collateral. Thomas v. Taggart (1908) 209 U. S. 385, 28 Sup. Ct. 519, 52 L. Ed. 845. Or to pursue an independent remedy given by the state law, such as the arrest of the debtor in case of a debt fraudulently contracted. In re Lewensohn (1900) 104 Fed. 1006, 44 C. C. A. 309. If the creditor holds a note containing a waiver of exemptions, his proving the note as an unsecured debt in the bankruptcy proceedings will not debar |