In view of these adjudications upon the bankrupt act of 1867, we feel constrained to hold that it is only some action taken or order made in the bankruptcy proceeding itself which can be reviewed by an original petition addressed to this court, under subdivision "b" of section 24 of the bankrupt act, and that the power thereby conferred "to superintend and revise" the action of the district court does not extend to suits brought in that court by the trustee in bankruptcy against third parties to collect the assets of the estate, or to suits brought by third parties against the trustee, whether such suits are rightfully or wrongfully brought in that court, as to which point we express no opinion at this time. Such suits as those last referred to, whether at law or in equity, are not proceedings in bankruptcy, or "controversies arising in bankruptcy proceedings," within the meaning and intent of the law authorizing petitions for review, but they are suits which must be reviewed in the ordinary way, by appeal or writ of error, when they have reached a final determination in the court of first instance. We can discover nothing in the language or policy of the recent bankrupt act which would seem to require the various circuit courts of appeals to review every interlocutory order made or proceeding taken, in an ordinary action at law or in equity, in a suit between a trustee in bankruptcy and a third party, which happens to be brought in the district court, simply because the trustee's title to the property claimed, or his liability to be sued, is founded on the bankrupt act. Nor do we believe that such a construction of the act was within the contemplation of congress.

The final decree which may be rendered by the district court in the case which we are asked to review can be brought to this court by appeal, in the usual way, for the consideration of every question which may be decided therein, or, on such final determination of the case, the question relating to the jurisdiction of the district court to entertain the suit (the same being one of great moment, which ought to be speedily determined by the court of last resort) can be certified by the district court to the supreme court of the United States. McLish v. Roff, 141 U. S. 661, 12 Sup. Ct. 118, 35 L. Ed. 893; Bardes v. Bank (decided by the supreme court of the United States, Dec. 22, 1899) 20 Sup. Ct. 196, Adv. S. U. S. 196, 44 L. Ed. The petition for review is therefore dismissed, and this fact will be forthwith certified to the district court.

LEHMAN v. CROSBY et al.

(District Court, S. D. New York. February 9, 1900.)

1. CREDITORS' SUITS-LIMITATIONS-DISCOVERY OF FRAUD.

Under the ruling of the New York court of appeals, that the discovery by a creditor of a fraudulent transfer of property by his debtor does not start limitations running against a suit to subject the property, unless the creditor has already obtained judgment and issued execution thereon in the state, but that his right of action accrues only when he has taken such preliminary steps, where sufficient time has not elapsed thereafter to bar his suit, the time, manner, or circumstances of discovering the al

leged fraud are immaterial, and need not be alleged; such allegations being necessary only when the ordinary period of limitation is sought to be extended by reason of lack of knowledge of the fraud.

2. BANKRUPTCY-JURISDICTION-SUITS BY TRUSTEE.

Bankr. Act 1898, § 23b, providing that "suits by the trustee shall only be brought or prosecuted in the courts where the bankrupt might have brought or prosecuted them if proceedings in bankruptcy had not been instituted," is to be strictly construed, as being a limitation upon the general grant of jurisdiction to the courts of bankruptcy in other parts of the act; and this provision does not apply to a suit by the trustee to set aside an alleged fraudulent conveyance of property by the bankrupt, which is one the bankrupt could not have maintained, but the court of bankruptcy has jurisdiction of such suit.

In Equity. Suit by the trustee of a bankrupt to charge the proceeds of property alleged to have been fraudulently transferred by the bankrupt. On demurrer to bill.

• Putney & Bishop, for plaintiff.

Rich, Woodford, Bovee & Wallace, for defendants.

BROWN, District Judge. The complaint seeking to charge the proceeds of the alleged fraudulent transfer in the hands of the defendant Mathilda G. Crosby, with the payment of the judgment creditor's claim, is identical in principle with the case of Weaver v. Haviland, 142 N. Y. 534, 37 N. E. 641. In that case it was held that a discovery of fraud in the judgment debtor's transfer would not set the statute of limitations running within this state unless the creditor had already procured judgment and issued execution upon the debt within this state; that the cause of action does not accrue until this latter date, although the fraud was discovered before.

1. The above decision and others therein cited to the same effect, seem to me decisive of the present demurrer, so far as relates to the long lapse of time since the transfers were made, and the lack of explanation as to when and how the alleged fraud was discovered. For the only state statute of limitations applicable to this action, is that of the state of New York, and that must be construed as determined by the highest court of the state. Until the recovery of the judgment in Massachusetts in May, 1898, based upon the Indiana judgments of 1874, there was never any judgment against the debtor upon which a creditors' bill could have been maintained anywhere, except in the state of Indiana, where the debtor never resided. The statute, therefore, never began to run within this state. Nor was the right of action ever barred in Illinois, where the defendant at one time resided (Code N. Y. § 390); since, for the above reason, it never even accrued there, and the statute of limitations therefore did not begin to run. The present action could not be maintained here without a new judgment and execution in this state, except for the fact that in favor of a trustee in bankruptcy the recovery of the additional judgment is not necessary.

In cases like the present, therefore, where, so far as it appears from the complaint, the cause of action has not accrued, nor the statute of limitations commenced, prima facie, to run, I think the

requirement of any detailed statement as to the time, manner or circumstances of discovering the alleged fraud (Pearsall v. Smith, 149 U. S. 231, 236, 13 Sup. Ct. 833, 37 L. Ed. 713; Jones v. Smith [C. C.] 38 Fed. 380) is unnecessary. That is only required when the ordinary period of limitation is sought to be prolonged through lack of knowledge of the alleged fraud. This ground of demurrer should, therefore, be overruled.

2. As respects the right of the trustee to maintain an action like the present in this court under the bankruptcy act of 1898, I adhere to my previous rulings. There are so many reasons for the exercise of jurisdiction by this court in cases of fraud, that I think section 23b should not be enlarged by construction beyond its terms, and its apparent purpose. In terms it applies only to such actions as the bankrupt himself could have brought but for the institution of bankruptcy proceedings. This action is not of that kind. By no possibility could the bankrupt have maintained an action to set aside his own fraudulent dealings. There is a broad and proper field for the operation of section 23b as it reads; namely, in its application to the collection of the ordinary debts owing to the bankrupt, to collect which in the usual course of proceeding he would be required to seek his debtors in the counties where they reside, and where usually it would be far more convenient and just that such litigations should be had, rather than to bring the defendants often over long distances to the federal district court. This I think is the purpose of subdivision "b." Its terms do not include actions like the present, which are therefore, as I think, rightly brought in this court under section 2, subd. 7. See Murray v. Beal (D. C.) 97 Fed. 567, and cases there cited. The demurrer is overruled.

In re WILLIAMS.

(District Court, D. Washington, E. D. February 2, 1900.) BANKRUPTCY-JURISDICTION-DOMICILE OF Bankrupt.

A court of bankruptcy has jurisdiction of a voluntary petition for adjudication in bankruptcy, filed by a debtor who has had his domicile within the district for the preceding six months, although, during the greater portion of that time, he has resided abroad, provided there was no abandonment of the original domicile, nor acquisition of a new one, and the debtor returned to the district, before the filing of the petition, with the intention of making his permanent home there.

In Bankruptcy. On review of order of referee in bankruptcy dismissing a voluntary petition for adjudication.

Judson & Geraghty, for the bankrupt

HANFORD, District Judge. This is a case of voluntary bankruptcy, in which the referee has raised a question as to the jurisdiction of the court on the ground that upon examination of the petitioner it was made to appear by his testimony that he has not had his place of business, resided, or had his domicile within the terri

torial jurisdiction of this court for the six months next preceding the date of filing his petition, or the greater portion thereof; and the case has been certified by the referee for the opinion of the court upon that question. The facts shown by the testimony are as follows: The petitioner did reside and had his domicile in this state, and was for a time engaged in business at Fairhaven, in Whatcom county, and at Everett, in Snohomish county, and while engaged in business at said places contracted the debts for which, by his petition, he is now asking to be discharged. He closed up his business at Everett in the year 1893, and went to Spokane in search of employment. Being unable to obtain employment there, he went to British Columbia the same year, where he was for a time employed in mining, and afterwards engaged in business with a partner as a hardware merchant, and continued in that business until the fall of 1899, when he closed up his business, and removed to Spokane, purchased a home, and established a permanent residence there. His petition to be adjudged bankrupt was filed in this court in less than one month after the date of his removal to Spokane. The petitioner is a citizen of the United States, and did not at any time while sojourning in British Columbia exercise or claim the rights of a citizen of that country, nor have an intention to change his domicile, or to permanently reside there; and each year during said time he returned to this state, looking for employment, or a business opening, and had a definite intention to return and reside permanently in this state whenever circumstances, from a business point of view, should favor his return. At the time of taking up his residence in Spokane, he would have been willing to go to Montana, or elsewhere, if he found opportunities for business, but he did not actually resolve to locate anywhere outside of this state. Under the provisions of the second section of the bankruptcy law it is essential to the jurisdiction of this court for the petitioner to have had a domicile within the state during the greater part of the six months preceding the date of filing his petition. "By 'domicile' is meant that residence from which there is no present intention to remove, or to which there is a general intention to return. The domicile of a bankrupt does not depend on citizenship, nor on residence, but on the concurrence of two elements: First, residence in a place; and, second, the intention, for the present, to make that place his home. A person cannot be without legal domicile somewhere. The domicile of a person may be changed. To constitute a new domicile, two things are indispensable: First, residence in a new locality; and, second, the intention to remain there. The change cannot be made except facto et animo. Both are alike necessary. Mere absence from a fixed home, however long continued, cannot work the change. There must be animus to change the prior domicile for another. Until the new one is acquired, the old one remains." Loveland, Bankr. p. 335. The statement of the law to be applied in deciding the question contained in the above quotation is fully sustained by the following decisions of the supreme court of the United States, cited by the author: Mitchell v. U. S., 21 Wall. 352, 22 L. Ed. 584; Desmare v. U. S., 93

99 F.-35

U. S. 610, 23 L. Ed. 952; Morris v. Gilmer, 129 U. S. 328, 9 Sup. Ct. 289, 32 L. Ed. 690. See, also, 10 Am. & Eng. Enc. Law (2d Ed.) pp. 7, 11, 14, 15. Under the law, as I find it declared by the highest court of this country, the petitioner did not change his domicile when he went to British Columbia in 1893, nor afterwards, because he did not have the intention to remain there, and he did have a definite intention to return to this state. The order made by the referee that the petition be dismissed will be vacated, and the case will proceed in the usual course.

COX v. WALL et al.

(District Court, W. D. North Carolina. January 15, 1900.)

1. BANKRUPTCY-JURISDICTION-SUITS BY TRUSTEES.

Bankr. Act 1898, § 23b, providing that "suits by the trustee shall only be brought or prosecuted in the courts where the bankrupt might have brought or prosecuted them if proceedings in bankruptcy had not been instituted," is a limitation upon the jurisdiction of the circuit courts of the United States, and does not affect the jurisdiction in bankruptcy conferred upon the district courts by other clauses of the act; and a court of bankruptcy has jurisdiction of a suit in equity by a trustee to recover property alleged to have been fraudulently conveyed or transferred by the bankrupt, although the trustee, the bankrupt, and the defendant are all citizens of the same state.

2. SAME-JURISDICTION OF STATE COURTS.

State courts have jurisdiction, concurrent with that of the courts of bankruptcy, of actions by a trustee in bankruptcy to collect the assets of the estate or to set aside alleged fraudulent transfers or conveyances by the bankrupt; and whichever court, state or federal, first takes cognizance of such an action will have the right to dispose of the case finally and conclusively.

3. SAME REMEDY AT LAW.

A bill in equity, brought by a trustee in bankruptcy to set aside a sale of a stock of goods made by the bankrupt in fraud of his creditors and in fraud of the bankruptcy act, will not be dismissed on the theory that complainant has a plain and adequate remedy at law, equity being the appropriate forum for such a suit.

4. SAME-PARTIES-THE BANKRUPT.

A bankrupt is not a necessary party to a suit in equity by his trustee to set aside an alleged fraudulent transfer or conveyance by the bankrupt to the defendant.

5. SAME-APPOINTMENT OF RECEIVER.

On a bill in equity by a trustee in bankruptcy to set aside a sale of a stock of merchandise by the bankrupt to the defendants, alleged to have oeen fraudulent as to creditors, and asking for the appointment of a receiver, it appeared that the bankrupt, while in embarrassed circumstances, had secured an extension from his creditors, executing notes in large amounts, had then proceeded to make large purchases of stock, had offered his stock in trade at a price below its alleged cost, and, upon effecting its sale to defendants, had immediately left the state; that the stock consisted of goods subject to deterioration and fluctuation of price, and had not been inventoried, so that its value could not be correctly estimated; and that the defendants were probably not worth much more than the amount of their debts. Held, that a receiver should be appointed to take possession and control of the property in question, and sell it, depositing the proceeds in a designated depository.