Number to be Chosen - Cross-references. [Ch. V. duties (subd. b), provides (subd. k) that 'If any trustee fail to give bond he shall be deemed to have declined his appointment, and such failure shall create a vacancy in his office.' 'There is a vacancy,' therefore, within the second clause of section 44 relating to vacancies whenever the trustee chosen refuses to accept or fails to qualify or is disapproved by the court, whether the office has been previously filled or not; and in such cases the court cannot appoint until after opportunity is afforded creditors for a new election, where that is practicable. In order to prevent the delay incident to the call of a new meeting of creditors, under General Order 25. it is advisable that the consent of the proposed trustee should be obtained if practicable before his election; and if objections to a trustee elected are reserved by the referee, the meeting should be adjourned to a future day, when a new election can be had, in case the previous choice is disapproved." It is very clear that where the creditors fail to select, the referee as well as the judge may appoint a trustee inasmuch as the word "court" in the Bankruptcy Act includes the referee as well as the judge. (Section 1 [7].) (See In re Kuffler, 3 Am. B. R. 162; 97 Fed. 187; in re Brooke, 4 Am. B. R. 50; 100 Fed. 432.) G. O. 13 provides that the appointment of a trustee shall be subject to be approved or disapproved by the referee or judge but that he shall be removable by the judge alone. Number to be Chosen.-The act authorizes creditors to choose one or three trustees. There is no authority given them to choose two or more than three. The act evidently contemplates that such a number shall be chosen as will prevent any possible deadlock. If three are chosen, the assent of at least two of them is necessary to the validity of any act concerning the administration of the estate. (Section 47b.) Whether when one of three trustees has died, it may be said that a vacancy has occurred which should be filled, quaere. Section 46 authorizes the survivor to continue the prosecution or defense of any pending action and would seem to imply that the vacancy need not be filled. Cross-references.-As to time and manner of election, as to all proceedings at the first meeting of creditors, as to the number necessary to constitute a quorum and as to adjournments of the meeting, compare section 55. As to voters and their qualifications, 45-1 Qualifications of Trustees - Who May be Trustee. as to the mode of voting and the right of creditors to appear by proxy or by agents or attorneys in fact, compare section 56. In connection with the appointment of the trustee, G. O. 14 and G. O. 15 should be read. They are as follows: XIV. NO OFFICIAL OR GENERAL TRUSTEE. No official trustee shall be appointed by the court, nor any general trustee to act in classes of cases. XV. TRUSTEE NOT APPOINTED IN CERTAIN CASES. If the schedule of a voluntary bankrupt discloses no assets, and if no creditor appears at the first meeting, the court may, by order setting out the facts, direct that no trustee be appointed; but at any time thereafter a trustee may be appointed, if the court shall deem it desirable. If no trustee is appointed as aforesaid, the court may order that no meeting of the creditors other than the first meeting shall be called. SEC. 45. Qualifications of Trustees.-a Trustees may be (1) individuals who are respectively competent to perform the duties of that office, and reside or have an office in the judicial district within which they are appointed, or (2) corporations authorized by their charters or by law to act in such capacity and having an office in the judicial district within which they are appointed. Analogous Provisions of Former Acts.- Who May Be Trustee.-The present act, in making one eligible to election as trustee, even though he does not reside within the judicial district in which he is appointed, provided he has an office therein, differs from the former law. There are no express statutory restrictions as to who may be trustee, other than those herein given. Any person of sufficient capacity and residing in or having an office in the judicial district may be chosen. A creditor may be appointed, but when he has received a preference which is or might be voidable, he should not be chosen as his Who May be Trustee [Ch. V. duties as trustee are incompatible with his interests as preferred creditor. And the director of a corporation which has received a preference should not be chosen. (In re Powell, Fed. Cas. 11,354; 2 N. B. R. 45.) An attorney for a creditor may be chosen. (In re Barrett, Fed. Cas. 1,043; 2 N. B. R. 533.) An attorney of the bankrupt may be chosen, but in that case he cannot be permitted to continue to act as attorney for the bankrupt; his duties in the two positions might become inconsistent. (In re Clairmont, Lowell, 230; s. c. Fed. Cas. 2,781; 1 N. B. R. 276.) In the case of In re Lewensohn (3 Am. B. R. 299; 98 Fed. 576), the charges under which the trustee selected by the creditors was sought to be removed, was that he had a hostile animus. against the bankrupt and had caused him to be dogged by private detectives. In holding that the trustee should not be removed for this reason Judge Brown says: "If it is theoretically possible that such a state of hostility might exist between the bankrupt and the person elected as to make him an improper person to act as trustee (In re McGlynn, 2 Low. 127, 16 Fed. Cas. 122), it should be at least clear that this bias was not through the bankrupt's own fault. Under the statute (sec. 45), incompetency for the performance of their duties. and non-residence, are the only grounds of disapproval, and with these mere bias or hostility to the bankrupt, except in extreme cases, can have little to do. The choice of creditors ought not to be interfered with on slight grounds (Robinson on Bankruptcy. 395; Collier on Bankruptcy, 247). In the case of In re Funkenstein, 9 Fed. Cas. 1004. Hoffman. Justice, says: Until the court has before it clear and positive evidence that the parties nominated are commercially dishonest or disreputable in the commercial community, it seems to me it would be my duty to recommend their approval.' In the case of In re Barrett. 2 N. B. R. 533. 2 Fed. Cas. 909. Jackson, J. observes: What, then, is cause sufficient to justify the judge in withholding his assent? Manifestly, it must be for want of capacity or integrity in the party selected.' To the same effect are In re Grant 2 N. B. R. 106, 10 Fed. Cas. 973; In re Clairmont, 1 N. B. R. 276, 5 Fed. Cas. 810. The cases cited as to the desirableness of amicable relations (McPherson v. Cox, 96 U. S. 404; May 7. May, 167 id. 310) refer to the relations between the trustee and his beneficiaries. In bankruptcy, however, the beneficiaries are not the bankrupt. but the creditors. For that reason the law gives to them alone the choice of trustee. The bankrupt has no part in it, because. presumably, he has no interest in it and it is scarcely consistent with that situation that the bankrupt, who has no voice in the election, and whose business dealings § 46.] Death or Removal of Trustees — Death of One of Three Trustees. may have been most reprehensible, should be allowed to defeat the creditors' unanimous choice on the ground that the trustee elected was unfriendly to himself—an objection which would naturally be strongest when the bankrupt's own demerits were greatest. The trustee's duties are administrative, not judicial. It is not his special duty to hold an even hand or an unbiased mind' towards the bankrupt, but to make the most possible out of the assets, and in the performance of this duty mere bias or unfriendliness toward the bankrupt must be rarely, if ever, material. Considering the number and frequency of fraudulent bankruptcies in the past, a zealous watch and scrutiny of an insolvent's transactions cannot be looked upon as a demerit, or as indicative of a lack of competency' in a trustee. And unfounded suspicions and prejudices even may be met by the honest merchant without fear." SEC. 46. Death or Removal of Trustees.-a The death or removal of a trustee shall not abate any suit or proceeding which he is prosecuting or defending at the time of his death or removal, but the same may be proceeded with or defended by his joint trustee or successor in the same manner as though the same had been commenced or was being defended by such joint trustee alone or by such successor. Analogous Provisions of Former Acts. R. S., section 5042; act of 1867, section 18. As to removal of the assignee by the court: R. S., section 5036; act of 1867, section 13; also R. S., section 5039; act of 1867, section 18. As to removal of assignee by vote of the creditors in meeting assembled; R. S., section 5039; act of 1867, section 18. Death of One of Three Trustees.-Compare section 44 and section 47b as to whether the death or removal of one of three trustees creates a vacancy which must be filled. Removal of Trustees.-The power to remove a trustee is given by section 2 (17), which provides that the courts may, upon complaints of creditors, remove trustees for cause, upon hearings and after notices to them." The matter is left to the discretion of the judge; his action cannot be reviewed and reversed by the Circuit Court. (In re Adler Brothers, Fed. Cas. 82; 2 Woods. 571; compare in re Perkins, 5 Biss. 254; s. c. Fed. Cas. 10,982; Resignation-Removal by Vote of Creditors - Duties of Trustees. [Ch. V. 8 N. B. R. 56.) So in England it has been held that the exercise of this discretion will not be interfered with upon appeal, unless it is perfectly clear that there has been an abuse of discretion (Ex p. Bates, 21 L. J. Bank, 20; 16 Jurist, 459); but the discretion is a judicial discretion, to be exercised only when there is sufficient cause. (In re Mallory, Fed. Cas. 8,990; 4 N. B. R. 153.) It must be shown that the removal is expedient or necessary. The statute does not say that a bankrupt may ask for the removal of his trustee. There is little possibility of there being any surplus in such proceedings, and he can have little interest in the matter; yet in England his petition for the removal of the assignee will be entertained (Ex p. Baker, 2 Mont. D. &. D. 60); and there would seem to be no reason under our statute why he should not have a similar right. Indeed this right seems to be recognized in the case of In re Lewensohn. For a discussion as to what reasons will warrant the removal of a trustee see that case as quoted at length under sections 44 and 45. Resignation. This statute nowhere gives the trustee the right to resign. After he once accepts the office, he cannot do so without the consent of the court; if he is permitted to resign as a favor to himself, he must pay the costs of the proceedings, but where he is removed by the court for the benefit of the estate without any fault or dereliction of his own, he is entitled to have all his costs and all the expenses which he may have incurred, paid to him out of the estate. (Ex p. Watts, I Deac. & Chitt. 22; Ex p. James, 1 Deac. & Chitt. 372.) Removal by Vote of Creditors.-The present statute does not give to creditors the right by vote to remove a trustee with the approval of the court; in this respect the statute differs from the former act. SEC. 47. Duties of Trustees.-a Trustees shall respectively (1) account for and pay over to the estates under their control all interest received by them upon property of such estate; (2) collect and reduce to money the property of the estates for which |