Sec. 79. Preferred Creditor Must Surrender Preference

A creditor who has received a voidable preference must surrender it, and may then prove his claim.

159. In re Haskell, (D. C. Mass.) 228 Fed. 819.

160. Matter of Slomka, 122 Fed. 630.

161. United States v. National Surety Co., U. S. Adv. Opinions, 1920-21 p. 21.

162. Marshall v. People of State of New York, U. S. Adv. Op. 1920-21 page 157.

163. Id.

We have heretofore noted what a voidable preference is. A creditor who has been preferred, knowing that a preference was intended cannot prove any claim which may be yet unpaid until he surrenders his preference. If he is compelled to surrender his preference, he may then prove the claim and receive a dividend on it even though he did not surrender until the trustee compelled him by suit to do so.164

A creditor having received a preference in good faith may keep it, as we have seen. In such a case if any balance is still owing him, he cannot prove up as to it. "As we have already said, if the preference exceed the share of the bankrupt's estate which the creditor would be entitled to, he may keep the preference. If it be less he may surrender it and share equally with the other creditors. If the purposes of the statute are to be considered this is certainly not punishment, but benefit."165