erty, or where a creditor attempted to attach some of the property to satisfy his debt. See State Bank v. Cox (1906) 74 C. C. A. 285, 143 Fed. 91; Shawnee County v. Hurley (1909) 94 C. C. A. 362, 169 Fed. 92; Acme Harvester Co. v. Beekman Lumber Co. (1911) 222 U. S. 300, 56 L. ed. 208, 32 Sup. Ct. Rep. 96.

While, in Bailey v. Baker Ice Mach. Co. 239 U. S. 268, at page 275, 60 L. ed. 275, 286, 36 Sup. Ct. Rep. 50, 54, the Supreme Court of the United States, considering the effect of the 1910 Amendment, remarked: "When not otherwise specially provided, the rights, remedies, and powers of the trustee are determined with reference to the conditions existing when the petition is filed"-the opinion is careful not to say that the trustee takes title to the property of the bankrupt as of the date of the filing of the petition. This case, as we read it, only determined that the status given a trustee by the Amendment of 1910 is effective as of the date of filing the petition. Everett v. Judson (1913) 228 U. S. 474, 57 L. ed. 927, 46 L.R.A. (N.S.) 154, 33 Sup. Ct. Rep. 568, Acme Harvester Co. v. Beekman Lumber Co. 222 U. S. 300, 56 L. ed. 208, 32 Sup. Ct. Rep. 96, and Bailey v. Baker Ice Mach. Co. 239 U. S. 268, 60 L. ed. 275, 36 Sup. Ct. Rep. 50, in certain of their expressions, aid the argument of appellant, but none of these cases nor any of the others we have examined, decided since the 1910 Amendment, hold that it changed the law as to the time when the trustee actually takes title to the bankrupt's property.

In Gunther v. Home Ins. Co. (D. C.) 276 Fed. 575, where the bankrupt, after involuntary proceedings commenced, sued out claims against fire insurance companies, and received settlements from them, and where the trustee subsequently brought action and obtained a verdict, the latter's right to recover was sustained on the ground that the settlement with the bankrupt was not in good faith. The court there

said (page 576): "Defendants object to the sufficiency of the complaint, in that, in the interval between bankruptcy proceedings instituted and adjudication, a bankrupt in respect to his property has power to conduct suits, and, as a corollary, to settle and conclude them. This will be granted. Johnson v. Collier, 222 U. S. 539, 56 L. ed. 306, 32 Sup. Ct. Rep. 104. But the bankrupt's property is a trust fund for all creditors, and the bankrupt a trustee thereof. In consequence he and it are subject to the law of trusts and to the principles of equity applicable to trusts. Amongst these is that he, and all parties dealing with him in respect to the trust property, are bound to the utmost good faith and fair dealing; and though he have power to dispose of the trust property, if he does so to misappropriate the proceeds, the purchaser and all others with reasonable grounds to believe he intends misappropriation, who aid therein, are participators in his breach or devastavit, and equally with him liable to reimburse the beneficiaries."

Frederick v. Fidelity Mut. L. Ins. Co. 256 U. S. 395, 65 L. ed. 1009, 41 Sup. Ct. Rep. 503 (affirming 75 Pa. Super. Ct. 77), throws light on the question we are considering. There, after the trustee in bankruptcy qualified, the bankrupt died, and the insurer, in ignorance of the bankruptcy proceedings, paid the beneficiary in a life policy issued to the decedent the full amount of the insurance. The trustee had not known of the policy, but, learning of it, brought action against the company for the amount of the cash surrender value thereof. Judgment for defendant was affirmed, Mr. Justice Pitney saying, at page 398 of 256 U. S.: "Here the question is whether, after the death of the insured and payment of the stipulated amount to the beneficiary named in the policy in strict conformity to its terms, without notice of the bankruptcy or claim made by the

Although, as is stated in the reported case (STONE v. SUPERIOR F. INS. Co. ante, 248), there have been certain declarations by the Federal courts which afford some support for the proposition that payments of the kind under consideration in this annotation do not acquit the payer from further liability, the question not only has not been definitely settled by the Supreme Court of the United States, but there have been pronouncements which seemingly point to a contrary conclusion. In fact the only cases which have expressly passed upon the question since the enactment of the Federal Bankruptcy Act of 1898 are to the effect that a payment made to a bankrupt between the filing of the petition and the adjudication, if made in good faith and without knowledge of the bankruptcy, relieve the payer from further liability therefor at the suit of the subsequently appointed trustee in bankruptcy.

Thus, in the reported case (STONE v. SUPERIOR F. INS. Co.), it was expressly held that, in view of the provisions of the Act of 1898, which gives the trustee title as of the date of the adjudication (rather than as of the date of the filing of the petition, as was the fact under the Bankruptcy Act of 1867), a fire insurance company which in entire good faith, and without notice that a petition in bankruptcy has been filed against the insured, has paid a loss to him prior to the actual adjudication in bankruptcy, cannot be compelled again to pay the

amount of the insurance to the trustee in bankruptcy, although the insured. has absconded with the money. And again, in Mersfelder v. Peters Cartridge Co. (1910) 32 Ohio C. C. 187, where a debtor made a payment to a bankrupt after the petition was filed, but long before adjudication, it was held that, the payment having been made in good faith, the trustee in bankrupty, under the Law of 1898, could not recover the amount thereof from the debtor.

But where the settlement with the bankrupt is not in good faith, the party so paying the bankrupt is not relieved of liability to the trustee. Thus, in Gunther v. Home Ins. Co. (1923) 286 Fed. 396, reaffirming on "rehearing or new trial" (1921) 276 Fed. 575, it was held that an insurance company, which, between the filing of a petition in bankruptcy against the insured and the date of the adjudication, settled a claim and paid over the amount to the bankrupt, having at the time reasonable grounds for believing that he intended to convert the same, was not relieved from liability to the bankrupt's estate. This was upon the ground that the insurance company was a party to the conversion.

For cases involving the closely analogous question of the liability of a bank which pays checks after the filing of a petition in bankruptcy against the drawer, see annotation following Citizens' Union Nat. Bank v. Johnson, post, 256. G. J. C.

ing New York County Nat. Bank v. Massey, 192 U. S. 138, 146, 48 L. ed. 380, 383, 24 Sup. Ct. Rep. 199, and Studley v. Boylston Nat. Bank, 229 U. S. 523, 527, 57 L. ed. 1313, 1316, 33 Sup. Ct. Rep. 806) that the bank had the right of set-off as to the existing deposit balance when the petition in bankruptcy was filed. We further held that the right of set-off did not extend to subsequent deposits.

We think a conclusion that the bank is liable for payments made to third parties in good faith and in ignorance of the bankruptcy pro

Bank-payment of bankrupt's checks-liabil

ity.

ceedings is not well founded. Its effect would be that the bank could not protect itself against liability to a trustee in bankruptcy subsequently appointed, on account of payments made in good faith and in the regular course of business, and in ignorance of the bankruptcy proceedings-except through the impossible course of keeping itself advised not only daily, but momentarily, of the filing of petitions for adjudication of bankruptcy against its depositors in any competent jurisdiction. In our opinion the bankruptcy works no such result. True, broadly speaking, the adjudication when made relates back to the commencement of bankruptcy proceedings for the purpose of adjudicating rights and equities generally. Acme Har

vester Co. v. Beekman Lumber Co. 222 U. S. 300, 56 L. ed. 208, 32 Sup. Ct. Rep. 96; Everett v. Judson, 228 U. S. 474, 57 L. ed. 927, 46 L.R.A. (N.S.) 154, 33 Sup. Ct. Rep. 568; Toof v. City Nat. Bank, supra. But we think that both on principle and authority the rule referred to does not make the banker liable for goodfaith payments to third persons made before adjudication upon depositors' checks in the regular course of business and without knowledge or notice of bankruptcy. Re Zotti (C. C. A. 2) 108 C. C. A. 196, 186 Fed. 84, Ann. Cas. 1914A, 240, certiorari denied in 223 U. S. 718, 50 L. ed. 628, 32 Sup. Ct. Rep. 522. And see Johnson v. Collier, 222 U. S. 538, 56 L. ed. 306, 32 Sup. Ct. Rep. 104; Re Perpall (C. C. A. 2) 271 Fed. 466, 468. For its general bearing, see Frederick v. Fidelity Mut. L. Ins. Co. 256 U. S. 395, 398, 65 L. ed. 1009, 1011, 41 Sup. Ct. Rep. 503.

The order of the District Court is reversed so far as it required the bank to repay to the trustee in bankruptcy any sum beyond the moneys received on deposit by the bank after bankruptcy proceedings were begun, and which were applied by the bank upon its own note against the bankrupt, and the record remanded for further proceedings not inconsistent with this opinion. Appellant will recover its costs of this court.

The closely analogous question of payment between the filing of a petition in bankruptcy against the one to whom payment is made and his adjudication, in bankruptcy as an acquittance of the one making the payment is treated in the annotation following Stone v. Superior F. Ins. Co. ante, 254.

The decision in the reported case (CITIZENS' UNION NAT. BANK V. JOHNSON, ante, 255), to the effect that a

bank is not liable to the bankruptcy trustee for the payment of a check made in good faith in the regular course of business, and without notice of the prior filing of a petition in bankruptcy against the drawer, but before the actual adjudication,-is supported by the only other case which a search reveals as having passed squarely upon the question. Thus, in Re Zotti (1911) 108 C. C. A. 196, 186 Fed. 84, Ann. Cas. 1914A,