the bankrupt had a large amount of money and personal property, which, with the knowledge and connivance of his voluntary assignee, and to defraud his creditors, he was permitted to use as his 'own in continuing his business. That part of his property, if any, which he did deliver to the voluntary assignee was delivered in form only, and really remained subject to the control and use of the bankrupt in his business, the assignee permitting the money to be deposited in a bank account opened in his name as assignee, and to be drawn out by or for the use of the bankrupt, and for the bankrupt's own business purposes. The bank account of the assignee was, on the case made, a mere blind for creditors. . This state of things continued till the assignee died, having rendered no account, and having to his credit, in the bank, only about $500. A new assignee has, since his death, been appointed by the court, having jurisdiction of the trust, on the application of the present petitioners. The moneys and property now alleged to be in the hands of the bankrupt are the proceeds and result of the business so carried on, or, perhaps, partly the very money which the bankrupt failed to deliver to his voluntary assignee. Upon this case I am clearly of opinion, if the facts shall be established by the evidence, that the bankrupt should be compelled to pay over and deliver the money and property to the assignee in bankruptcy. Whatever money or property is in the possession of the bankrupt at the time of filing his petition, which he is actually using and holding as his own, passes to his assignee in bankruptcy, and he cannot set up in defence to the claim of the assignee a title in a third person, merely for the purpose of holding on to it himself. If third persons have the possession this court cannot, on summary petition, order it to be delivered to the assignee. But if the bankrupt has it, it passes to the assignee, subject to the liens or rights of third persons, whatever they may be. After the assignee gets the property any third person may, by petition or suit, assert his rights in it. II the bankrupt has property which he is using as his own the court will not be curious to inquire how he came by it.
IN BE WM. B. COBWIN.
The case of In re Beal, 2 N. B. R. 587, is directly in point. and was not so strong a case for the creditor as the present. In that case Judge Lowell says: "The question is one of fact whether this bankrupt had, at the time of his bankruptcy, any estate or effects which he has concealed. If he had such de facto, though by a defeasible title, he must set them out in his schedules, and give them to his assignee. It is not for him to rely on the title of a. third person which he has not himself respected. The presumption is that he surrendered all his property in 1866; but that is a presumption of fact, and if he did not it is not important whether his motives were good or bad-whether his acts were done with the consent or concurrence, or against the will of his then assignees. and in fraud of their rights. The possession of assets, in the use and enjoyment of the bankrupt, makes a sufficient title for his assignee, until the earlier assignees shall dispute it." Let an order be entered referring it to the register to take the proofs.
THE MATTER OF WILLIAM
(District Court, S. D. New York.
BAmtRUPTCy-SPECIFICATlONS IN OPPOSITION TO DISCHARGE Oll' BANXRUPT - NEWLY DISCOVERED EVIDENCE - REV. ST. § 5120.-Section IH20 of the Revised Statutes does not authorize a rehearing or new trial upon specifications filed in opposition to the discharge of a bankrupt heard and determined before the discharge, even if the opposing credo itor can adduce new facts, happening since the discharge, which would . be competent evidence if a new trial were authorized by the statute.
Starr X Hooker, for petitioners. H. E. Howland, for bankrupt. CHOATE, J. This is a petition under Rev. St. § 5120, to vacate the discharge of the bankrupt. It was filed within two years after the discharge was granted. It appears by the petition that these petitioners filed specifications in opposition to the discharge, which were tried, and resulted in a
decision in favor of the bankrupt. The petition sets forth, as grounds for avoiding the discharge, some of the same specifications only. It also alleges facts which, if true, tend to show that certain acts of the bankrupt since he obtained the discharge would, if the trial of the specifications were now had, be competent evidence in proof of the specifications. The petition does not allege that the petitioners had no knowledge of the acts alleged in the specifications as grounds for avoiding the discharge before the same was granted. The bankrupt has appeared and objects that the petition states no case against him, under section 5120, which he should be required to answer. I think it is clear that section 5120 does not authorize a rehearing or new trial upon specifications heard and determined before the discharge, even if the opposing creditor can adduce new facts, even the conduct of the bankrupt happening since the discharge, which would be competent evidence in case of a new trial, or a discovery since the discharge of new evidence, tending to support the specifications. The evident purpose of section 5120 was to give creditors who had failed to oppose the discharge, for the reason that they had no knowledge before the discharge that the grounds now alleged for opposing it existed, an opportunity within two years to make the necessary charges and to prove them. The privilege given is not so broad as the right to a new trial on newly discovered evidence, and I think it cannot be claimed that a creditor, who, before the discharge, filed specifications setting forth, by way of charge against the bankrupt, fraudulent acts, had no knowledge of those acts. He necessarily had such knowledge of them that he was able to allege them; and it mU8t be assumed as again..,t him that he alleged them in good faith, and upon such information as jus:ified him in .doing so. This section does not provide that the .creditor must have had no knowledge of all the evidence which may be produced to support the charges, but no knowl. edge of the fraudulent acts charged. It is based on the theory that if the creditor knows of the fraudulent acts, then, with the power given by the a.et to examine the bankrupt