Question.—We made a sale to a firm who became embarrassed and offered a compromise to their creditors. We accepted the settlement offered, 25 per cent. cash and 25 per cent. by note at one year. The note given us was not paid and after some delay the concern now goes into bankruptcy. Please inform us whether our claim in the bankruptcy proceedings would be the note only or the full amount due under the original sale?

Reply: The compromise in this case, in so far as it has not been carried out, will probably be set aside and all the bankrupt’s estate be held liable to his creditors under the bankruptcy proceedings. It has been held that “an adjudication of bankruptcy at the instance of the bankrupt’s creditors on the ground of a general assignment, avoids such assignment and subjects the property assigned to the jurisdiction of the bankruptcy court to be administered under the Bankruptcy Act which the creditors have invoked.”

Opinion No 14.