Page:Federal Reporter, 1st Series, Volume 9.djvu/835

820 PEDEHAL BEPOBTBE. �that is, he can rely on his security, or he can give it up and prove liis claims as a general unsecured creditor, — and as he eleets he nnust stand or falh The original act of congress of March 2, 1867, appli- cable to this case, is in the following words, viz. : �"Any person who, after the approval of this act, shall have accepted any preference, having reasonable cause to believe tiiat the same was made or given by the debtor contrary to any provision of this act, siiall not prove the debt or claim on account of which the preference was made or given, nor shall he receive any dividend thereupon until be sliall flrst have surrendered to the assignee all property, money, beneflt, or advantage received by him under such preference." Section 23. �Now, in point of fact, Swan, Clark & Co. did not make such sur- render as was required by the act of congress, but appealed to the decision of the circuit court for this district as to theirright to retain the same as their own property; and, as has already been said, the decree of that court was against them on this point. Any surrender, or attempted surrender, of the security after the decree of the court had been announced against them, — and such decree was within the knowledge of the respondents, — is not such a surrender as is contem- plated by the act, and would not let in the respondents to prove their claims; and while some of the cases cited go very far in allowing parties to surrender their securities even after judgment or decree has been rendered in a contested suit, yet none of them go to the extent of allowing such a surrender after a decree made has corne to the knowledge of the parties before an actual entry of such decree on the record. As long as there is doubt as to the decree or judgment there may be a locus penitentia, but after that doubt is removed, and a knowledge of the decree or judgment is brought home to the parties, the opportunity of surrender is gone. �We think the resuit of the authorities cited is to establish the prop- osition that no surrender of the security upon which a preference has been sought to be obtained can be made after a recovery, so as to let in the respondent to the proof of his claim ; at least, this is the resuit of the modern authorities, and appears to me to be more con- formable to reason and the prinoiples on which the bankrupt law is founded than the earlier conflicting decisions to the contrary. See particularly In re Cramer, 13 N. B. E. 225, — decision by Judge Nel- son, in 1876, after the decree "the locus penitentiœ had passed" the contesting party could not surrender. See also In re Riorden, 14 N. B. E. 335, by Judge Blatchford, in which, by inference, he holds ��� �