agency. So far as any such claim might exempt these corporations from taxation, it was rejected by the court of appeals in the Case of the Mills Waterworks Co., 97 N. Y. 97. The language of Danforth, J., in delivering the opinion of the court in that case, seems to deny the exercise by such companies of any public functions whatever, or that the company's means are devoted to any public use, or other than simply to the earning of money for the corporation's own use. The general language employed seems to go beyond the requirements of the case. It is, however, well settled in other cases that such companies do subserve a public use so far as to justify the exercise of the right of eminent domain; and that the uses they subserve are none the less public, because procured through private enterprise. Water Co. v. Stanley, 39 Hun, 424, 426, affirmed in 103 N. Y. 650; Waterworks Co. v. Bird, 130 N. Y. 249, 259, 29 N. E. 246. And the same view has been frequently expressed in the federal courts. San Diego Land & Town Co. v. City of National City, 174 U. S. 739, 755, 19 Sup. Ct. 804, 43 L. Ed. 1154; New Orleans Gaslight Co. v. Louisiana Light & Heat Producing & Mfg. Co., 115 U. S. 650, 669, 6 Sup. Ct. 252, 29 L. Ed. 516; Walla Walla Water Co. v. City of Walla Walla, (C. C.) 60 Fed. 957, 960.

I do not attach much importance, however, to any quasi public character, more or less, that water companies may have in consequence of the public uses they subserve. For the franchises of this company, by its contract with the local authorities, are assignable; so that there is nothing to prevent the exercise of its functions by any transferree to whom its powers might pass through bankruptcy proceedings, if lawfully subject to the operation of the bankrupt act. For the reasons previously stated, however, I do not think this company is within the act, and the petition is, therefore, dismissed.1

1 A corporation whose business is mining and selling ore or metal obtained therefrom, or coal, cannot be made an involuntary bankrupt under B. A. 1898 Re Elk Park Mining Co., 101 Fed. Rep. 422; Re Victoria Zinc Mining Co., 102 Fed. Rep. 984; Re Rollins Gold & Silver Mining Co., 102 Fed. Rep. 982; Re Chicago-Joplin Lead & Zinc Co., 104 Fed. Rep. 67; Re Woodside Coal Co., 105 Fed. Rep. 56. Nor can a construction company, Re Minnesota, etc. Construction Co. (Ariz.) 60 Pac. Rep. 881. Nor a mutual insurance corporation, Re Cameron, etc. Ins. Co., 96 Fed. Rep. 756. Nor a corporation incorporated for giving theatrical performances. Re Oriental Soc., 104 Fed. Rep. 975. But a corporation operating a private hospital for profit was held within the terms of the act. Re San Gabriel Sanatorium, 95 Fed. Rep. 271.

SECTION V.

WAGE EARNERS AND FARMERS.

IN RE LUCKHARDT.

DISTRICT COURT FOR THE DISTRICT OF KANSAS, MAY 19, 1900.

[Reported in 101 Federal Reporter, 807.]

Hook, District Judge. This is a proceeding in involuntary bankruptcy, brought on January 9, 1900, by a number of mercantile firms and corporations, creditors of the alleged bankrupt. It is set forth in the petition, among other things, that Luckhardt is insolvent, and that on or about November 1, 1899, he conveyed, transferred, concealed, and removed a part of his property with intent to hinder, delay, and defraud his creditors, and that, while insolvent, he transferred a portion of his property to one or more of his creditors, with intent to prefer them over his other creditors. The alleged bankrupt has filed an answer, in which he does not deny the essential allegations in the petition, but sets up in bar to the relief prayed for by petitioners that from August 4, 1899, up to the filing of the petition he was, and is still, engaged chiefly in farming. Testimony has been taken on the part of the alleged bankrupt in support of his answer, and it is submitted to the court as upon a demurrer of the petitioning creditors to the evidence. It appears from the testimony that Luckhardt had been engaged in the retail boot and shoe business at Boonville, Mo., for about five years prior to March, 1899, and in that month he removed his stock of goods to North Topeka, Kan., and continued the same business there. In August, 1899, he determined to sell his stock, and quit the business, but he nevertheless continued the conduct thereof until the latter part of October, 1899. He continued to sell at retail in the usual and customary way, and to replenish his stock by purchases of new goods from time to time until the 26th of October, 1899. There was no apparent difference in the conduct of his business during the months of September and October from that of the previous period. The father-in-law of the alleged bankrupt died in April, 1899, seised of a farm in Missouri, consisting of 137 acres of land, which, upon his death, became the property of his widow, daughter, and two grandchildren, the offspring of a deceased son. The daughter is the wife of Luckhardt, the alleged bankrupt. About the 4th of August, 1899, Luckhardt and his family and his mother-in-law, who had come to Kansas, and lived with him, returned to Missouri, and went on the farm. He stayed there about a month, then returned to Topeka, where he remained a month. He then went back to the farm, and stayed a couple of weeks, and then returned to Topeka, where he remained until

early in November. He then again returned to the farm, and has re-
mained there ever since. During his absence from Kansas his boot
and shoe business was left in charge of a clerk. On the 26th of
October he sold his entire stock of merchandise, which invoiced $6,370
in bulk, for $2,870 in cash and 160 acres of land in Kansas, which was
taken by him at $3,500. This land he sold to his wife, but it does not
appear what he received for it. Luckhardt testified that the proceeds
of the sale received by him were in part disposed of as follows: $628
was paid on a note held at Boonville, Mo., upon which his father,
mother, and wife were suretics; $200 was paid to his brother upon a
note held by the latter; $500 was paid to his mother, who lives in
Oregon, Mo.; and from $60 to $75 was paid to a man in Topeka, Kan.
None of his merchandise creditors were paid. During the cross-
examination of Luckhardt, in which counsel for the petitioning cred-
itors evidently desired to show an absence of good faith in the defence
set up in the answer, he declined to testify as to what he did with the
remainder of the money received by him, saying that he could not
answer without his books. Upon being requested to produce his books
so that he could answer, his counsel objected to a postponement of the
taking of the depositions to enable him to do so, and the notary sus-
tained the objection. He also said that he could not even approximate
the amount of his indebtedness, and that he could not tell how long it
would take to figure it up.
The farm of which his father-in-law died
seised, and upon which he claims to be engaged in his farming opera-
tions, had been rented to a tenant for one-half of the crop raised
thereon. Luckhardt did not know whether the term of the tenant had
expired when he went on the farm on the 4th of August, 1899. He
says he leased the farm from his mother and wife verbally, and that
the terms of the arrangement were that he should give them one-half
of the crop raised on the place. He immediately sublet to the former
tenant all of the tillable land except a portion for oats, for half of the
crop raised thereon. When he received the crop rent from the tenant,

he was to turn it over to his wife and mother-in-law on account of the
rent due from him to them. He retained for the use of his family and
himself the house and about 35 acres of pasture and meadow land, and
some of the cultivated land for oats. It is upon this situation and
under these circumstances that the alleged bankrupt claims immunity
from the proceeding against him.

The bankrupt act provides that "any natural person except a wage earner or a person chiefly engaged in farming or the tillage of the soil... may be adjudged an involuntary bankrupt," etc. Section 4 b. The act is remedial in its nature and purposes, and is, therefore, not to receive a strict interpretation, but is rather to be construed reasonably, and with a view to effect its objects and to promote justice. The exemption from involuntary proceedings in favor of wage earners and persons engaged chiefly in farming or the tillage of the soil is not intended as a means of escape for insolvents whose property was

D

acquired and whose debts were incurred in other occupations recently engaged in. If the right of the creditors to institute involuntary proceedings may be thus defeated by the debtors within the period allowed for the commencement of such proceedings, it could be defeated by a change of occupation made coincidently with the commission of an act of bankruptcy, and an insolvent debtor would thus be permitted to dispose of his stock of merchandise or other property, distribute the proceeds thereof in such manner as pleased him, immediately become for the time being a tiller of the soil, or a wage earner "at a rate of compensation not exceeding $1,500 per year," and so avoid the operation of the bankrupt act. Such a result is not in accord with the purpose nor within the spirit of the law. A petition in an involuntary proceeding must be filed within four months after the commission of the act of bankruptcy relied on, and if an insolvent, who is engaged in an occupation which is within the purview of the law, has committed an act rendering him amenable to its provisions, and desires within such period to adopt one of the callings favored by the law, and exempted from its operation in respect of involuntary proceedings, he should not be permitted to carry with him the property previously accumulated, to the defrauding of pre-existing creditors. The excepted occupations are not designed as a refuge for insolvent debtors laden with property and fleeing from other callings. The right of the creditors to proceed within the period limited after the commission of an act of bankruptcy cannot be thus defeated by the debtor. This interpretation is in entire harmony with the spirit and object of the law, and is in accord with the plain principles of right and justice, and it prevents the perversion of provisions designed for the favor and protection of those who are in good faith wage earners or tillers of the soil. Let an order be entered adjudging the said William Luckhardt to be a bankrupt.1

1 A person engaged chiefly in raising cattle and hogs is a farmer within the statute. Re Thompson, 102 Fed. Rep. 287.

An involuntary petition should state the defendant's business, or that he is not a farmer or wage earner. Ke Taylor, 102 Fed. Rep. 728 (C. C. A.).

DISTRICT COURT FOR THE DISTRICT OF MASSACHUSETTS, SEPTEMBER,

1870.

[Reported in 1 Lowell, 470.]

BANKRUPTCY. These petitions for involuntary bankruptcy against the several defendants were tried together by consent of the parties. The defendant, James F. Alexander, bought out the stock in trade of F the petitioner, O'Connell, in February, 1869, for about twenty-four hundred dollars; of which five hundred dollars was paid down, and for the remainder the two defendants gave their joint and several promissory notes on one, two, three, and four years, with interest at eight per cent a year, payable semi-annually, secured by a mortgage on the stock in trade. William B. Alexander, the father of the other defendant, had no interest in the purchase, but joined in the notes for the greater security of the petitioner, and, as between the two defendants, was a surety only.

In February, 1870, the first note became due and was paid, together with the interest on the whole debt. The next note will be payable in February, 1871. On the thirteenth of February, 1870, the father conveyed his dwelling-house and land at East Boston to his wife. He was not and never had been a trader, and he had no other estate or effects liable to seizure on execution, and owed no debts excepting to this petitioner. In March the son conveyed to his wife a dwelling-house and Tand which had stood in his name for about two years. Evidence was admitted, de bene, to show that he held the house by gift from his father-in-law, upon an oral trust or understanding that it should be used, enjoyed, and conveyed for the benefit of the grantor's family, including the defendant's wife. The conveyance to the wife was made without the consent or knowledge of the father-in-law, who heard of it but lately, not long before this petition was filed, and testified that he acquiesced in the arrangement. This defendant owed no debts of any consequence, excepting the mortgage debt, and one to his aunt, of whom he borrowed the five hundred dollars paid out in the first instance

.

1 A portion of the opinion, in which it was decided that the gift made by W. B. Alexander to his wife was an act of bankruptcy, and in which the court suggested that the parties compromise, is omitted.