IN RE FT. WAYNE ELECTRIC CORP.
the purpose of defrauding creditors or of obtaining any advantage over them. The three instruments that are assailed were executed by the bankrupt to Hobbs at about the same time, and are so nearly connected together that the court is of opinion that they were all executed with the same fraudulent purpose. Hobbs knew at and before the time that the instruments were executed, and at and befQre the time that he took possession of the leasehold property, that Goodykoontz was hopelessly insolvent. The court is of opinion that the instrument under which Hobbs took possession of the leasehold premises, and his possession of the same, were in fraud of the bankrupt law, and taken with the view and intent of obtaining an advantage over other creditors,.and that the possession of the leasehold property must be held to be fraudulent and void as against creditors, the same as the real estate and chattel mortgage.. The court is of opinion that the defendant Hobbs ought to be charwith profits and gains received by him from the use of the leasellold property in the sum of $2,277, and that he is entitled to a credit for expenses and disbursements made by him in the conduct of the brick business on the leasehold property in the sum of $1.944.65, and that he ought to pay to the trustee, the plaintiff in this case, the sum of $:332.35, as gains and profits received by him in fraud of the bankrupt law. An order will therefore be entered that the two mortgages mentioned in the complaint, as well as the agreement for the leasehold interest, be adjudged invalid and set aside as fraudulent and preferential, and that the plaintiff shall have judgment in the sum of $:3:32.35 for gains and profits received by the defendant Hobbs on account of the use and possession of the leasehold premises. So ordered, and the clerk will prepare a decree accordingly.
In re FT. WAYNE ELECTRIC CORP. (District Court, D. Indiana. No.7. 1.
BANKRUPTCY-COMMISSIONS OF REFEREE-DIVIDENDS.
May 16, 1899.)
A referee in bankruptcy is not entitled to receive commissions on partial payments made by the estate in bankruptcy on the claims of secured creditors; such payments not being "diVidends," within the meaning of the law, and the referee not performing any of the services required of him by law in the declaration and distribution of dividends. ,Vhere the property of a bankrupt corporation, sold by order of the court, was bought by a lien creditor, who paid part of the price in bonds of the corporation held by him, and the balance in cash, held, that crediting the purchaser with the amount of such bonds was not the declaration and payment of a dividend in his favor, so as to entitle the referee to receive the percentage allowed him by the bankruptcy law "on sums to be paid as dividends and commissions," but was the payment pro rata of a secured claim.
In Bankruptcy. Augustus A. Chapin, referee in bankruptcy, presents his petition, showing that on the 18th day of April, 1899, Samuel L. Morris and Charles H. 'Worden, as receivers of this court, sold
94 .FEDERAL REPORTER.
the'ootitie prop of rty fOr $356,000; that they, i rooeived in, t therefQr.the IilUij1 ()of $185,000 ,in the bonds of saidcorpol'ation, which were: held by the purchaser, the General Electric ,Company, and $171,400in money; and the referee claims that the receipt of said sum in bonds was a dividend paid on a preferred' claim, and that he is entitled to 1 per cent. thereon, as his commiSsi'()D, under the bankruptcy law. tition of BAKER, DistMct Judge, It doelllnot :appear from the p thereitleree'thaf any'services wererendernd by him in the declaration and payment; of any dividend herein.>, He is allowed by the bankruptcYi'ta which have been . before him olleper centum; on all 8umstobe paid as dividends and commissions." 30 Stat. 556, § 40, subd. a. In section':39, subd. a, he is required to "detilare dividends,' and: prepare and deliver to trustees dividend sheets sh(}wlng the dividends declared and to whom payable." Id, 555. These services involve a 'computation of the per centum to which the creditdrsat'e entitled,and a computation of the ,amount to which each creditor if! entitled according to such per centum. He is also required by rule!!of the sapreme ecmrt and this court to countersign all checks for tdividends, and other payments by' the trustee. ,None of these services has been p rformed by the referee in :this case. The "diviis claimed to have been paid in this case was really a paymenf, pro rata on a secured claim. Such a paymellt is expressly ex-ceptedJromthe definition. of a dividend, as it is furnished by the bankruptcy law. The law provides that "dividends of an equal per centumsha11 be declared and paid 0'11 all allowed claims except such as have priority or are secured!' 30 Stat. 563, § 65, subd. a. It also provides that "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, cOIllpromise, 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." In other words, "dividends," within the meaning of the law, are not declared and paid on secured claims. A dividend, within the mean· ing of the law, is declared and paid on unsecured claims only. It follows that the petition of ,the referee must be disallowed. So ordered.
In re STEVENSON.' (District Court, D. Delaware. May 16, 1899.) No.5.
1. BANKRUPTCy-TIME OF :FILING PE1'ITION.
The four month's after the commission of an act of bankruptcy withIn Which, under the provisions of the bankrupt act of July 1, 1898, a petition to be so computed as to exin inVoluntary bankruptcy must be clude the day on which such act was' committed; hence, where the act of bankruptcy was committed October 20, 1898, the petition couId properly have been filed February 20, 1899.'