to sell only the right, title, and interest of the bankrupt in the property and to convey by a quitclaim deed, a purchaser who has actual notice of an agreement made by the bankrupt and binding him to pay certain royalties on mining operations conducted on the land to the former owner, the same constituting a covenant running with the land, will take subject to the same and not free from it. Hinchman v. Consolidated Arizona Smelting Co. (D. C. 1912) 198 Fed. 907, 29 Am. Bankr. Rep. 893. But if a previous conveyance, transfer, or assignment of the property in question, made by the bankrupt, is voidable under the bankruptcy law as having been preferential or as made in fraud of creditors, the purchaser of the property at the trustee's sale of it will succeed to the trustee's right to vacate or annul such transfer or assignment, and may maintain an appropriate action to do so. In re Downing (C. C. A. 1912) 201 Fed. 93, 29 Am. Bankr. Rep. 228; Bryan v. Madden (1903) 79 App. Div. 636, 80 N. Y. Supp. 1131; s. c. (1905) 109 App. Div. 876, 96 N. Y. Supp. 465; Dwinel v. Perley (1850) 32 Me. 197; Bartles v. Gibson (C. C. 1883) 17 Fed. 293. But see Annis v. Butterfield (1904) 99 Me. 181, 58 Atl. 898; Belding-Hall Mfg. Co. v. Mercer & Ferdon Lumber Co. (C. C. A. 1909) 175 Fed. 335, 23 Am. Bankr. Rep. 595. Whatever title the purchaser takes, it is understood to be absolute and final, and not provisional or defeasible. The court has no power to deprive him of whatever rights he may acquire by his purchase, and therefore cannot grant leave to a creditor of the estate, or to any one else, to redeem from the sale on reimbursing the purchaser. In re Novak (D. C. 1901) 111 Fed. 978, 7 Am. Bankr. Rep. 267.

The purchaser will be entitled to the rents and profits of real property purchased from the day of the sale, and not merely from the date of its confirmation. Hall v. Scovel (D. C. 1874) 10 N. B. R. 295, Fed. Cas. No. 5,945. A bankrupt corporation was the owner of a valuable lease on the property which it occupied, subject to a mortgage on the fee given by the lessor. The lease contained a provision giving the lessee the right to apply the rent in payment of the taxes on the property and the interest and principal of the mortgage, and so far as the rent had been paid it had been so applied. The trustee sold the leasehold, there being at the time a certain amount of rent due, in part accruing before the bankruptcy and in part from the trustee during his occupancy. Held, that such provision of the lease was for the protection of the bankrupt's leasehold interest, and that the purchaser took such leasehold with respect to the mortgage in the condition it stood at the time of the sale, and could not insist on the application of the unpaid rent on the mortgage as against the

lessor, who had duly proved his claim therefor. In re Ketterer Mfg. Co. (D. C. 1908) 162 Fed. 583, 20 Am. Bankr. Rep. 694. The purchaser cannot claim the bankrupt's right to any portion of the crops growing on the land and stipulated to be paid to him by way of rent. In re Bledsoe (D. C. 1875) 12 N. B. R. 402, Fed. Cas. No. 1,533.

Where the property sold consists of a going business, the purchaser will take it with the good will, if that was meant to be included in the sale. James Van Dyk Co. v. F. V. Reilly Co. (1911) 73 Misc. Rep. 87, 130 N. Y. Supp. 755. The sale by a corporation's trustee in bankruptcy of the assets and property of its business, without its good will and trade marks, destroys both the good will and trade marks as things of value, and will preclude the trustee from thereafter selling them as property of the bankrupt, and if he attempts to do so, he may be restrained. In re Jaysee Corset Co. (D. C. 1911) 201 Fed. 779, 29 Am. Bankr. Rep. 856. The purchaser of a going business, acquiring also the good will, may continue the business in the name of the former owner, when it was a corporation. S. F. Myers Co. v. Tuttle (C. C. 1911) 188 Fed. 532, 26 Am. Bankr. Rep. 541. Where a business of supplying remedies for the hair and scalp is made valuable by advertising and can be conducted by clerks filling orders by supplying labeled packages of uniform size and shape, it is a business of a commercial and nonprofessional character; and on a sale of the business and good will by a trustee in bankruptcy, an incorporation of a company, using the name of the bankrupt, with the addition of the word "company," to take over the purchase, cannot be enjoined by the bankrupt. Austin v. Yott (1912) 171 Ill. App. 327. The purchas er will at least have the right to advertise himself, by store signs or oth. erwise, as the successor of the bankrupt in the business. Freeman v. Freeman (1903) 86 App. Div. 110, 83 N. Y. Supp. 478. While, upon the sale of the assets of bankrupt corporation, the good will may be assigned to the purchaser, the trustee cannot convey the right to so use the bankrupt's name as to convey to the public an impression that the assignee and the bankrupt are the same person. Hotel Claridge Co. v. George Rector, Inc. (1914) 149 N. Y. S. 748, 164 App. Div. 185.

Taxes due on the property at the time of the sale will be taken into account in fixing the price. But taxes assessed after the sale, though before the payment of the balance of the purchase price and delivery of the deed must be paid by the purchaser, and he cannot claim reimbursement out of the funds of the estate, and this although the sale was made free of liens and incumbrances, since this applies only to such liens as existed at the date of the sale.

In re Crowell (D. C. 1912) 199 Fed. 659, 29 Am. Bankr. Rep. 478. The liability of a purchaser of a bankrupt's real estate for taxes thereon, constituting under the law of the state a lien, depends on the terms of sale. In re Reading Hat Mfg. Co. (D. C. 1915) 224 Fed. 786.

37. Approval or confirmation of sale. -Under the requirement of section 9654, post, any sale for which it is practicable to obtain the approval of the court of bankruptcy must be approved or confirmed, and the sale passes no title until approved or confirmed, either expressly or impliedly. In re Shea (1903) 126 Fed. 153, 61 C. C. A. 219, 11 Am. Bankr. Rep. 207; Everett v. Selden & Wright (1910) 127 La. 573, 53 South. 867. If the matter is drawn in question, a purchaser under a trustee's sale which was not approved by the court has the burden of proving that it was impracticable to make the sale subject to such approval. Davis 7. Ives (1903) 75 Conn. 611, 54 Atl. 922. The authority of the court in this respect may be exercised by the referee. Idem.

Where, after an alleged unauthorized sale of the bankrupt's assets, the trustee applied for an order directing that the proceeds be delivered to him, which was duly entered by the court, this was held to constitute an affirmance of the sale. Mason v. Wolkowich (1906) 150 Fed. 699, 80 C. C. A. 435, 10 L. R. A. (N. S.) 765, 17 Am. Bankr. Rep. 709. But where the trustee makes a sale under order of the court and reports it for confirmation, the general rules governing judicial sales apply, and the validity of the title acquired depends upon the validity of the order of confirmation. J. M. West Lumber Co. v. Lyon (1909) 53 Tex. Civ. App. 648, 116 S. W. 652.

In re

The creditors of the estate are not entitled to notice of an application for the confirmation of a sale. Nevada-Utah Mines & Smelters Corp. (D. C. 1912) 198 Fed. 497, 28 Am. Bankr. Rep. 409.

As to the matters to be considered on such an application, the approval or disapproval of the sale rests very much in the discretion of the court. In re Sanborn (D. C. 1899) 96 Fed. 551, 3 Am. Bankr. Rep. 54. And it may withhold its approval on account of mere inadequacy of price, without more; it is not necessary that there should be fraud shown, or such gross inadequacy of price as to be proof of fraud. In re Groves, 2 Nat. Bankr. News, 30; In re O'Fallon (C. C. 1873) Fed. Cas. No. 10,445. See In re Thompson, 1 Nat. Bankr. News, 355. The court, in deciding whether or not to confirm or approve a sale, where the only question is whether the price offered is the best that could be obtained, should consider what is for the benefit of the creditors

in general, and may properly be influenced by their wishes, if a large majority concur in their views. See In re Peerless Finishing Co. (D. C. 1912) 199 Fed. 350, 28 Am. Bankr. Rep. 429.

The highest bidder at the trustee's sale, provided he is able and willing to comply with the terms of sale, is entitled to have his bid accepted and reported for confirmation, and to have the sale to him confirmed, if the sale was made on sufficient notice and for a fair price, and there appears to have been a compliance with all necessary and proper requirements for holding the sale, and honesty and fair dealing in the sale itself. In re Williams (C. C. A. 1912) 197 Fed. 1, 28 Am. Bankr. Rep. 258; In re National Mining Exploration Co. (D. C. 1911) 193 Fed. 232, 27 Am. Bankr. Rep. 92; In re Throckmorton (1906) 149 Fed. 145, 79 C. C. A. 15, 17 Am. Bankr. Rep. 856; In re Ewing (C. C. 1883) 16 Fed. 753; In re Kronrot (D. C. 1910) 183 Fed. 653, 25 Am. Bankr. Rep. 738. Trustees in bankruptcy petitioned for and were granted by the referee authority to offer real estate at auction, adjudications to be made at such prices as they might determine, not less than three-fourths of the appraised value. The advertisement of sale referred to the order and stated that the sale was subject to confirmation by the referee, and the auctioneer read the advertisement including such provision before offering the property. A bid of more than three-fourths of the appraised value, but less than the amount which the trustees had told the auctioneer they would accept, was made, and the auctioneer made no adjudication, and refused to accept a deposit, but had the bidder sign an agreement to make such deposit, in order that he might be held if the trustees decided to accept the bid. They, however, declined to do so. Held, that the bidder acquired no legal rights in the bid, as no adjudication was made, and the trustees were vested with ample discretion to reject the bid as a private offer, and hence the referee acted within his authority and discretion in declining to compel a transfer of the property. Untereiner v. Camors (C. C. A. 1916) 228 Fed. 890.

The court may impose equitable terms or conditions upon the purchaser, as, for instance, by requiring him to give security for the payment of future rent on the sale of a leasehold interest. In re Varley & Bauman Clothing Co. (D. C. 1911) 188 Fed. 761, 26 Am. Bankr. Rep. 104.

An order of confirmation has the effect of a judgment and may raise an estoppel against parties whose rights were before the court. Blood v. Munn (1909) 155 Cal. 228, 100 Pac. 694. But it is not a ratification of any act of the trustee done in excess of his authority, where it does not appear that the excess of power exercised

pay a debt to a bank, in an action by its trustee in bankruptcy to recover such amount from the bank as an unlawful preference, evidence by farmers who had sold grain to the company that their checks had not been honored by such bank when presented after the sale is incompetent to show that the payment of the debt was an illegal preference, and does not show that the bank had knowledge of the transactions with the farmers, but such evidence is competent as against payments to the bank after the checks were presented, if such payments were not made in the usual course of business, or were made for the purpose of giving the bank a preference. Chisholm v. First Nat. Bank (1912) 176 Ill. App. 382. Where the validity of a mortgage is in issue, it is proper to show that, on the day following its execution, the mortgagor made a voluntary conveyance to his son of substantially all his property. Supplee v. Hall (1902) 75 Conn, 17, 52 Atl. 407, 96 Am. St. Rep. 188.

Where defendant permitted a bankrupt's goods to be sold under execution for an amount less than defendant's claim, evidence of what the goods brought at the sale was admissible in a suit by the debtor's trustee in bankruptcy to recover the preference thereby obtained by defendant as bearing on the question whether defendant knew the debtor was insolvent at the time of the attachment. Patterson v. Baker Grocery Co. (Or. 1914) 144 P. 673. The burden is on the trustee to establish the fact that the intention of the debtor in the transaction was to give a preference. Debus v. Yates (D. C. 1910) 193 Fed. 427, 30 Am. Bankr. Rep. 823; Stevens v. Oscar Holway Co. (D. C. 1907) 156 Fed. 90, 19 Am. Bankr. Rep. 399; Whitwell v. Wright (1910) 136 App. Div. 246, 120 N. Y. Supp. 1065; Jackman v. Eau Claire Nat. Bank (1905) 125 Wis. 465, 104 N. W. 98, 115 Am. St. Rep. 955. Such intention may be proved by circumstantial evidence, all the circumstances which go to to show the intent being considered. Little v. Alexander (1874) 21 Wall. 500, 22 L. Ed. 625; Atherton v. Emerson (1908) 199 Mass. 199, 85 N. E. 530; Wills v. Venus Silk Glove Mfg. Co. (1915) 156 N. Y. Supp. 115. The declarations of the bankrupt at and prior to the time of the transaction in question may also be shown. Nudd v. Barrows (1875) 91 U. S. 426, 23 L. Ed. 286. Failure of the defendant to produce the testimony of the bankrupt or of the creditor alleged to have been preferred, is strongly corroborative of such evidence in the case as tends to show an intent to prefer. Darling v. Townsend (D. C. 1880) 5 Fed. 176. But the testimony of the parties to an alleged preferential transfer is entitled to little weight as against proof of the transaction itself. Oxford Iron Co. v. Slafter (C. C. 1876) Fed. Cas. No. 10,637.

If the natural and inevitable result of the payment or transfer is to give a preference, the intention of the debtor in that behalf need not be proved but will be conclusively presumed. First Nat. Bank v. Jones (1874) 21 Wall. 325, 22 L. Ed. 542; Kimmerle v. Farr (C. C. A. 1911) 189 Fed. 295, 26 Am. Bankr. Rep. 818; Brewster v. Goff Lumber Co. (D. C. 1908) 164 Fed. 124, 21 Am. Bankr. Rep. 106; In re McLam (D. C. 1899) 97 Fed. 922, 3 Am. Bankr. Rep. 245; Galveston Dry Goods Co. v. Frenkel (Tex. Civ. App. 1907) 103 S. W. 224; Blyth & Fargo Co. v. Kastor (1908) 17 Wyo. 180, 97 Pac. 921; Ecker v. McAllister (1876) 45 Md. 290; Lazarus v. Eagen (D. C. 1912) 206 Fed. 518; Utah Ass'n of Credit Men v. Boyle Furniture Co. (Utah, 1913) 136 Pac. 572.

The trustee must also assume the burden of proving that the person receiving the alleged preference or to be benefited by it, or his agent acting for him in the transaction had "reasonable cause to believe that the enforcement of the judgment or transfer would effect a preference;" this is absolutely essential and there can be no recovery without it. Barbour v. Priest (1880) 103 U. S. 293, 26 L. Ed. 478; Kaufman v. Tredway (1904) 195 U. S. 271, 25 Sup. Ct. 33, 49 L. Ed. 190, 12 Am. Bankr. Rep. 682; Ogden v. Reddish (D. C. 1912) 200 Fed. 977, 29 Am. Bankr. Rep. 531; Tilt v. Citizens' Trust Co. (D. C. 1911) 191 Fed. 441, 27 Am. Bankr. Rep. 320; Alexander v. Redmond (1910) 180 Fed. 92, 103 C. C. A. 446, 24 Am. Bankr. Rep. 620; In re Houghton Web Co. (D. C. 1910) 185 Fed. 213, 26 Am. Bankr. Rep. 202; Reber v. Louis Shulman & Bro. (D. C. 1910) 179 Fed. 574, 24 Am. Bankr. Rep. 782; Sparks v. Marsh (D. C. 1910) 177 Fed. 739, 24 Am. Bankr. Rep. 280; McElvain v. Hardesty (1909) 169 Fed. 31, 94 C. C. A. 399, 22 Am. Bankr. Rep. 320; Getts v. Janesville Wholesale Grocery Co. (D. C. 1908) 163 Fed. 417, 21 Am. Bankr. Rep. 5; Calhoun County Bank v. Cain (1907) 152 Fed. 983, 82 C. C. A. 114, 18 Am. Bankr. Rep. 509; Parker v. Black (1907) 151 Fed. 18, 80 C. C. A. 484, 18 Am. Bankr. Rep. 15; Harder v. Clark (1910) 66 Misc. Rep. 584, 123 N. Y. Supp. 1102; Matthews v. Joannes Bros. Co. (1909) 156 Mich. 663, 121 N. W. 272; Couturie v. Crespie (Tex. Civ. App. 1911) 134 S. W. 257; Whitwell v. Wright (1909) 115 N. Y. Supp. 48; Atherton v. Emerson (1908) 199 Mass. 199, 85 N. E. 530; Lynch v. Bronson (1908) 80 Conn. 566, 69 Atl. 538; Andrews v. Kellogg (1907) 41 Colo. 35, 92 Pac. 222; Arkansas Nat. Bank v. Sparks (1907) 83 Ark. 324, 103 S. W. 626; Walker v. Tenison Bros. Saddlery Co. (Tex. Civ. App. 1906) 94 S. W. 166; Blyth & Fargo Co. v. Kastor (1908) 17 Wyo. 180, 97 Pac. 921; Alter v. Clark (D. C. 1911) 193 Fed. 153; Galbraith v. Whitaker (1912)

N. C. 379, 42 S. E. 823. The deed should be acknowledged before a competent officer. Harris v. Pratt (1887) 37 Kan. 316, 15 Pac. 216. It should contain a sufficient description of the property to identify it with reasonable certainty. James v. Koy (Tex. Civ. App. 1900) 59 S. W. 295. It should run to the purchaser at the sale, unless he directs it to be made out in the name of some other person. Wilson v. Winslow (1887) 145 Mass. 339, 14 N. E. 103. A state court has no jurisdiction to enjoin the execution of a deed to the purchaser, on a bill filed by one claiming to be jointly interested with him in the purchase of the property. Henderson v. Henrie (1907) 61 W. Va. 183, 56 S. E. 369, 11 Ann. Cas. 741.

In the absence of specific covenants of title, they are not to be read into a trustee's deed by implication. Clark

v. Post (1889) 113 N. Y. 17, 20 N. E. 573.

A bankrupt in possession of realty at the time of its sale by his trustee, who thereafter agrees with the purchaser to vacate on a certain day, holds as a tenant under the purchaser, and a petition will not lie by the trustee in bankruptcy for delivery of possession. In re Hale (D. C. 1879) 19 N. B. R. 330, Fed. Cas. No. 5,912.

In case of the sale of personal property, the duty of the trustee is to deliver it to the purchaser. But authority as trustee ceases when he has sold the property, and his subsequent failure to make delivery is a personal, and not an official, breach of duty. Sheldon v. Rounds (1879) 40 Mich. 425. On his refusal to deliver, the purchaser may maintain trover against him in a state court, to which action, however, an order of the court of bankruptcy setting aside the sale would be a complete defense. Ives v. Tregent (1874) 29 Mich. 390.

In the case of intangible property or choses in action, delivery to the purchaser will include whatever is necessary to make his title clear and his ownership effective, as, for instance, a written assignment of a mortgage which was the subject of the sale. In re Franklin Sav. Fund Soc. (D. C. 1874) Fed. Cas. No. 5,059. But on the sale of a negotiable note by a trustee in bankruptcy, after its indorsement by the payee, or where it was payable to bearer, it is not necessary in order to pass title that the trustee should indorse the note, mere delivery being sufficient. Wade v. Elliott (1912) 11 Ga. App. 646. 75 S. E. 989; Arnold v. Leonard (1849) 12 Smedes & M. (Miss.) 258. An assignment by a trustee in bankruptcy in pursuance of an order of sale of the bankrupt's bills receivable includes a debt due to the bankrupt for goods sold, although the debt, without the knowledge of the trustee or the purchaser, had been pre

viously reduced to judgment. Rogers v. Abbot (1910) 206 Mass. 270, 92 N. E. 472, 138 Am. St. Rep. 394.

40. Application of proceeds.-Out of the proceeds of a trustee's sale in bankruptcy are to be paid first the costs and expenses of the sale. In re Utt (1901) 105 Fed. 754, 45 C. C. A. 32, 5 Am. Bankr. Rep. 383; Arnold v. Greene Gold-Silver Co. (1910) 68 Misc. Rep. 449, 125 N. Y. Supp. 29; In re Johnston (D. C. 1878) Fed. Cas. No. 7,424; In re Whitehead (D. C. 1869) 2 N. B. R. 599, Fed. Cas. No. 17,562. On sale of incumbered real property constituting all of a bankrupt's estate, where both the trustee and the lienors had made untenable claims and were more or less in the wrong, held, that there would be allowed out of the proceeds the necessary expenses of various sales but not the expenses of administration in the bankruptcy court. In re Howard (D. C. 1913) 207 Fed. 402.

Proper expenses incurred in caring for the property or putting it in condition to be sold, including payments for insurance, are to be paid out of the proceeds of sale next after the costs of the sale. In re Prince & Walter (D. C. 1904) 131 Fed. 546, 12 Am. Bankr. Rep. 675. Also the value of improvements put upon the property by a purchaser at a former sale which was set aside. In re William F. Fisher & Co. (D. C. 1906) 148 Fed. 907, 17 Am. Bankr. Rep. 404.

Where the property is incumbered by a valid mortgage or other lien, it is wrong practice to charge the mortgagee with a proportionate part of the costs and expenses of the sale, but these should first be paid out of the proceeds. and then the mortgage creditor should be paid in full if the fund is sufficient for that purpose. In re Sanderlin (D. C. 1901) 109 Fed. 857, 6 Am. Bankr. Rep. 384; McNair v. McIntyre (1902) 113 Fed. 113, 51 C. C. A. 89, 7 Am. Bankr. Rep. 638. But see In re Howard (D. C. 1913) 207 Fed. 402. Only those fees, charges, and expenses necessary for the preservation of the property and the foreclosure of the lien may be charged against the fund realized from the sale without the consent of a lienholder of a bankrupt's property subject to the lien, made free from liens. In re New York & Philadelphia Package Co. (D. C. 1915) 225 Fed. 219. The bankruptcy court cannot sell mortgaged premises free of the lien and use the proceeds in paying the expenses of administering the estate but may ascertain the amount actually due and make proper allowances for the necessary expenses of so doing. In re Howard (D. C. 1913) 207 Fed. 402. Chattel mortgagee petitioning for proceeds of sale by trustee in bankruptcy held liable for expense of sale, including rent

from the enforcement of the security obtained by him is a question of fact, and ordinarily he has the right to have the jury pass upon and decide it. Coleman v. Decatur Egg Case Co. (1911) 186 Fed. 136, 108 C. C. A. 248, 26 Am. Bankr. Rep. 248; Wetstein v. Franciscus (1904) 133 Fed. 900, 67 C. C. A. 62, 13 Am. Bankr. Rep. 326; Ridge Ave. Bank v. Studheim (1906) 145 Fed. 798, 76 C. C. A. 362, 16 Am. Bankr. Rep. 863; Andrews v. Kellogg (1907) 41 Colo. 35, 92 Pac. 222; Brown v. Pelonsky (1912) 210 Mass. 502, 96 N. E. 1102; Hastings v. Fithian (1905) 71 N. J. Law, 311, 60 Atl. 350; Marden v. Sugden (1902) 71 N. H. 274, 52 Atl. 74; Jackman v. Eau Claire Nat. Bank (1905) 125 Wis. 465, 104 N. W. 98, 115 Am. St. Rep. 955; Upson v. Mt. Morris Bank (1905) 103 App. Div. 367, 92 N. Y. Supp. 1101; Hackney v. Raymond Bros. Clarke Co. (1903) 68 Neb. 624, 94 N. W. 822, 99 N. W. 675; Landis v. McDonald (1901) 88 Mo. App. 335; Harmon v. Walker (1902) 131 Mich. 540, 91 N. W. 1025; Deland v. Miller & Chaney Bank (1903) 119 Iowa, 368, 93 N. W. 304. But where the undisputed facts unmistakably show the existence of such reasonable cause of belief, it is not error to direct a verdict. Shale v. Farmers' Bank of Morrill (1910) 82 Kan. 649, 109 Pac. 408; Christopherson v. Oleson (1905) 19 S. D. 176, 102 N. W. 685. Where the only thing that would prevent a trustee in bankruptcy from recovering property sold under a mortgage foreclosure as a preference was the fact that he had taken possession under arrangement of the parties, a verdict for defendant was improperly directed where a portion of such property was not turned over to him. Clifford v. Dalton-Ingersoll Mfg. Co. (1913) 101 N. E. 373, 214 Mass. 302. Where there is no evidence in the case from which the jury could draw the conclusion that the creditor had reasonable cause to believe a preference was intended, binding instructions in favor of the defendant are proper. Keith v. Gettysburg Nat. Bank (1903) 23 Pa. Super. Ct. 14.

The instructions on matters of law, such as the meaning of "insolvency," the nature of a voidable preference, what constitutes reasonable cause to believe a preference was intended, and the like, must be framed with careful regard to the language of the statute and its accepted interpretation. Lynch v. Bronson (1908) 80 Conn. 566, 69 Atl. 538; Galveston Dry Goods Co. v. Frenkel (Tex. Civ. App. 1907) 103 S. W. 224; Johnston v. George D. Witt Shoe Co. (1905) 103 Va. 611, 50 S. E. 153; Wilkinson V. Anderson-Taylor Co. (1904) 28 Utah, 346, 79 Pac. 46; Forbes v. Howe (1869) 102 Mass. 427, 3 Am. Rep. 475; Blyth & Fargo Co. v. Kastor (1908) 17 Wyo. 180, 97 Pac. 921. But

a charge in regard to the defendant's having "ground to believe" a preference was intended, instead of "cause to believe," in the language of the statute, is not objectionable. Edwards v. Carondelet Milling Co. (1904) 108 Mo. App. 275, 83 S. W. 764. And where the trustee's suit proceeds purely on the ground of the defendant's having received an unlawful preference, a request to charge on the elements of a fraudulent conveyance is properly refused. Johnston v. George D. Witt Shoe Co. (1905) 103 Va. 611, 50 S. E. 153. Where an assignment by a bankrupt was attacked as a preference and not on the ground of actual fraud, a finding that it was not given in good faith would not be regarded as an affirmative finding of fraud. Telford v. Henrickson (1913) 139 N. W. 941, 120 Minn. 427. In an action against the creditor of a bankrupt person to recover preferential payments an instruction on the "net result rule," which omits the elements of open account, knowledge of insolvency and payments in the regular course of business, held properly refused. Chisholm v. First Nat. Bank of Le Roy (1915) 109 N. E. 657, 269 Ill. 110, reversing judgment (1914) 190 Ill. App. 354.

45. Measure of damages or recovery. Where a transfer by a bankrupt is found to be a voidable preference, the trustee is entitled to recover the value of the property for administration in accordance with the provisions of the bankruptcy law, though some of the bankrupt's debts were contracted subsequent to the transfer. Covington v. Brigman (D. C. 1914) 210 Fed. 499.

If an unlawful preference consisted in a payment of money, the trustee, prevailing in a suit to annul it, is entitled to a judgment for an equal amount. Jones v. Kinney (D. C. 1871) Fed. Cas. No. 7,473. If it consisted of a transfer of personal property, he is entitled to a return of the specific property if it still remains in the creditor's hands. Cookingham v. Morgan (C. C. 1870) Fed. Cas. No. 3,183; Claridge v. Kulmer (C. C. 1880) 1 Fed. 399. But where he left the disposition of securities transferred by the bankrupt to a bank to the absolute discretion of the bank, the proceeds if sold to stand in the place of the securities, the trustee, entitled to avoid the transfer as a preference under the bankruptcy act, is only entitled to a return of the securities and an accounting as to any dividends or interest collected in the meantime; he cannot hold the bank liable for a depreciation in the market value of the securities. Ernst v. Mechanics' & Metals Nat. Bank (C. C. A. 1912) 201 Fed. 664. A trustee in bankruptcy, who has sued to recover securities as transferred by way of preference, cannot elect