When taxes due to the city shall become due and payable by any person who has been adjudged bankrupt under the laws of the United States, the assessor and collector of taxes of the city is hereby authorized and directed to deduct all penalties and interest accruing on such taxes from and after such adjudication in bankruptcy and to accept in full satisfaction thereof all taxes, penalties and interest due to the city at the date of such adjudication. (Code 1941, Art. 149-14)