erty to its creditors. It appears from the return of the judge of the superior court to the alternative writ that the action came on for hearing on the 17th of January, 1899, and that the answer of the Seattle National Bank in said cause was deemed a plea to the jurisdiction of the court, and that the court held such plea sufficient, and dismissed the cause for want of jurisdiction. No proceedings in bankruptcy under the law of the United States which took effect on the 1st day of July, 1898, have ever been instituted, and all the proceedings in the action dismissed took place since the 1st of July, 1898. 1. Relator appears to have no plain, speedy, and adequate remedy by appeal, and, if the superior court had jurisdiction, mandamus is the proper remedy here to require that court to proceed and try the cause. The

prayed for an injunction against the defendants, restraining them from selling the property of the Skookum Box & Lumber Company, and that the mortgage of the Seattle National Bank be declared void, and the possession of the property of the lumber company be delivered to the receiver, and for general equitable relief. The defendant Seattle National Bank appeared and answered that the Skookum Box & Lumber Company was a corporation organized under the laws of this state engaged in manufacturing, trading, and mercantile pursuits, and, at all times in the complaint mentioned, owed debts to the amount of $1,000, and that the purpose and scope of the receivership proceedings in which the relator was appointed receiver was to declare the Skookum Box & Lumber Company an insolvent corporation, and to wind up and distribute all its prop-single question presented is: Did the enact

An assignee in insolvency may recover by a suit money paid by the debtor in fraud of creditors, notwithstanding bankrupt proceedings are pending under the laws of the United States. Bull v. Houghton (1884) 65 Cal. 422.

In Reed v. McIntyre (1878) 98 U. S. 507, 25 L. ed. 171, it was said that even if it were conceded that the assignment to C was an act of bankruptcy upon the ground that it was made with the intent to prevent the property from coming to the assignee in bankruptcy and from being distributed under the bankrupt act, it was not invalid except in reference to proceedings under the bankrupt statute to be instituted by the bankrupt or by some creditor for the purpose of bringing the bankrupt's effects into the bankrupt court.

en

In Smith v. Tighe (1880) 14 Jones & S. 270, it was held that an assignee for creditors having received assets could not defend an action for an accounting on the ground that since the assignment the assignor had been discharged in bankruptcy.

In Re Troth (1880) 1 Fed. Rep. 405, it was said that as voluntary proceedings in bankruptcy were begun within six months after the date of an assignment for creditors, it was not then indefeasible, but might have been declared invalid at the instance of the assignee in bankruptcy, under U. S. Rev. Stat. § 5129, avoiding conveyances made in violation of its provisions within six months of bankrupt proceedings.

In Re Pierce (1869) 3 Nat. Bankr. Reg. 258, the court said: Even where the assignment has been the sole foundation of the proceeding in bankruptcy, I have considered it not a void act, but an act voidable by the assignee in bankruptcy by a bill in equity filed for the purpose of avoiding it.

In Re Marter (1875) 12 Nat. Bankr. Reg. 185, in contempt proceedings in the Federal court for the violation by an assignee for creditors of an injunction restraining him from selling the property, it was held that in order for the assignee in bankruptcy to devest the assignee for creditors of possession and control of funds it must be by a suit at law or in equity. In this case it was said that if an assignment was valid the sale by an assignee passed a good title, although the bankrupt court had joined the assignee from selling, and the assignment would not be held void in the absence of a direct action by the assignee in bankruptcy. Where an assignment was made and the assignee failed to give bond, and the assignor was then adjudicated bankrupt and made a composition with his creditors, he could not then insist that his assignment was void and recover possession of property held as security by a creditor, as it was a valid assignment and did not fall under the condemnation of the bankrupt law. The court said that an assignee in bank-bankrupt act, and a fraud in law. ruptcy could not have recovered this property from a general assignee, and as there was no proceeding under the bankrupt law to take charge of the property the title remained in the assignee for creditors. Bigler v. National Bank, (1882) 26 Hun, 520.

In Adams v. Hams (1881) 19 Blatchf. 487. it was said that an assignment for creditors was valid until it was attacked by an assignee in bankruptcy.

In a proceeding for involuntary bankruptcy it was said that an assignment ordered by the court of chancery to be made by the trustee. who misapplied the trust fund, was not void under the bankrupt act. U. S. Rev. Stat. 534, § 35; Re Meyers (1877) 2 Hughes, 230.

Where an assignee for creditors was also an assignee in bankruptcy in subsequent proceedings, and brought suit to have an intervening judgment removed as a cloud upon his title, it was held that until the assignment was set aside as void the title remained in the assignee under the general assignment, and whether the assignee in bankruptcy could sue himself as assignee under a voluntary assignment was not decided but in the present condition judgment was said to be no cloud. Belden v. Smith

(1878) 16 Nat. Bankr. Reg. 302.

But in Dolson v. Kerr (1877) 52 How. Pr. 481 (infra, III., b, 5), the court said that a general assignment without giving priority is superseded by proceedings in bankruptcy, and for the reason that it places the property beyond the power of the bankrupt court, if it stands, and this is contrary to the policy of the

3. Where the assignment was not attacked in time by bankrupt's assignee.

Where bankrupt proceedings were not taken in time, an assignee in bankruptcy could not avoid a prior assignment for creditors.

In Mayer v. Hellman (1875) 91 U. S. 496, 23 L. ed. 377, 13 Nat. Bankr. Reg. 440, the Supreme Court of the United States held that an assignment by an insolvent debtor of all his property for the benefit of creditors was not fraudulent, and that when executed six months before proceedings in bankruptcy were taken against the debtor it could not be assailed by an assignee in bankruptcy subsequently appointed. The court said that such an assignment, even though executed within six months of the filing of the petition, was not void, but

ment of the Federal bankruptcy law July | clare the corporation bankrupt, and take 1, 1898, suspend the right of the state possession of its assets, and the petition was court to appoint a receiver for an insolvent allowed, and the court observed: "It also corporation under the laws of this state? It seems clear to us that in so far as a state is conceded that the enactment of the gen- law attempts to administer on the effects of eral bankruptcy law by Congress superseded an insolvent debtor and distribute them and suspended all state insolvency laws. among creditors, it is to all intents and purWhile the industry of the learned counsel poses an insolvent law, although it may not upon each side in this controversy in the ci- authorize a discharge of the debtor from furtation of authorities is commendable, yet ther liability on its debts." It was also held we are unable to find one precisely in line in this case, and in Re Washington Marine with the facts here, and there is apparently Ins. Co. 2 Ben. 292, that the acquiescence of some conflict in the expressions of different the defendant in the appointment of the recourts. ceiver was an act of bankruptcy. The case Re Independent Ins. Co. Holmes, 103, arose under the bankruptcy act of 1867. It was there observed, citing from Griswold v. Pratt, 9 Met. 23: "When the power is exercised by Congress and a bankrupt law is in force, it does suspend all state insolvent that if an assignment for creditors was not attacked within six months thereafter through bankrupt proceedings it would be valid.

First noticing authorities presented by counsel for the respondent: In Re Merchants Ins. Co. 3 Biss. 162, an insurance company was declared insolvent, and a receiver appointed by the state court. Thereafter a petition was filed in the Federal court to dedeclined to express an opinion as to whether or not it was voidable.

In this case the court said that the bankrupt act does not suspend the operation of the Ohio act regulating the mode of administering assignments for the benefit of creditors, as the statute of Ohio is not an insolvent law and the assignment will be regarded as though the statute of Ohio in relation to assignments for creditors had not existed.

An assignee in bankruptcy could not avoid an assignment for creditors made more than twelve months prior to bankrupt proceedings, under bankrupt act 1867, § 35, providing that an assignment for creditors made within four months, where the assignee has reasonable cause to believe him insolvent, and within six months if made to prevent the property coming to the hands of the assignee or to defeat the act, are void. Re Arledge (1873) 1 Nat. Bankr. Reg. 644.

And an assignment made more than three months prior to involuntary bankrupt proceedings could not be set aside by the assignee in bankruptcy under bankrupt act 1867, amended by act of Congress June 22, 1874, prohibiting transfers within three months of bankrupt proceedings. Re Kimball (1877) 16 Nat. Bankr. Reg. 188.

In this case it was said that as to the six months' clause as it existed prior to June 22, 1874, the supreme court in Mayer v. Hellman, (1875) 13 Nat. Bankr. Reg. 440, 91 U. S. 496, 23 L. ed. 377, held that a voluntary assignment | by an insolvent debtor more than six months prior to filing a petition was valid against the claims of an assignee in bankruptcy. The same rule applied to the time of three months.

Where an assignee for creditors took possession of the assets before bankrupt proceedings, and sold and distributed the same to the creditors before the assignee in bankruptcy brought suit against him, he was not liable to the assignee in bankruptcy for the value of the property. Cragin v. Thompson (1873) 2 Dill. 513.

And a Federal marshal seizing property under a warrant in bankruptcy was not protected by the fact that an assignment for creditors was made more than two months prior to bankrupt proceedings, under bankrupt act 1867, amended June 22, 1874, rendering void assignments made in contemplation of bankruptcy within two months of filing proceedings. Mathews v. Stewart (1880) 44 Mich. 209.

In Re Cohn (1870) 6 Nat. Bankr. Reg. 379, and Re Damon (1879) 70 Me. 153, it was said

4. Where the assignment was attacked in time by bankrupt's assignee.

Under the bankrupt act of 1867, and the amendment of 1874, where bankrupt proceedings were instituted after a general assignment for creditors was made, and the assignment was attacked in time, most of the cases held that the assignment was void as against the assignee in bankruptcy. There is some conflict of authority on this question. The exceptional cases were on the ground that the assignment was made in good faith and with no intent to defeat the operation of the bankrupt law. The following cases held that an assignment was void as against an assignee in bankruptcy, and that he was entitled to the assets. Burkholder Stump (1871) 8 Phila. 172, 4 Nat. Bankr. Reg. 597; Adams v. Hyams (1881) 19 Blatchf. 487; Alexander v. Galt (1881) 9 Fed. Rep. 149; Hobson v. Markson (1871) 1 Dill. 421; Re Moses (1880) 1 Fed. Rep. 845; Ostrander v. Meunch (1881) 12 Fed. Rep. 562.

V.

And a deed of assignment made March 2, 1869, was held void at the suit of the assignee in bankruptcy where proceedings for involuntary bankruptcy were filed April 7, 1869, and the title of the assignee vested as of the day of filing the petition in bankruptcy, under bankrupt act, § 14, providing that the assignment to the assignee and the conveyance to him of the title to the property and estate of the bankrupt relate back to the commencement of proceedings in bankruptcy. Clark v. Marx (1872)

6 Ben. 275.

And an assignment for creditors was held void as against an assignee in bankruptcy. Globe Ins. Co. v. Cleveland Ins. Co. (1876) 14 Nat. Bankr. Reg. 311.

This was on the ground that the assignment was contrary to the policy of the bankrupt law. This is a leading case on this question. The opinion reviewed the authorities approving the English rule, and claimed that we should adopt the same, as the bankrupt act followed the wording of English decisions. The ground was also taken that as insolvent laws were suspended it would be absurd to allow an insolvent to defeat

the operation of the bankrupt act by selecting his own assignee and choosing his own local court to administer his property to the prejudice of foreign creditors.

And assignments for creditors were held void as against an assignee in bankruptcy, where the

would entirely defeat the operation of that law." Some of the cases heretofore noticed are cited, and the court continues: "But this view is contradicted by a considerable body of authorities."

laws applicable to like cases, and that this effect follows the enactment of such bankrupt law, and does not require the actual institution of proceedings in bankruptcy to produce such result." But the Massachusetts case goes furcher than any of the other au- Of relator's citations: The case of Boese thorities. In Re Reynolds, 9 Nat. Bankr. v. King, 108 U. S. 379, 27 L. ed. 760, was Reg. 50, by Bradley, Ch. J., the exclusive where an assignment was made under the supremacy of the bankruptcy courts is an- state insolvency law of New Jersey, entitled nounced, whether the state statute is in the "An Act to Secure to Creditors an Equal and nature of an insolvency or a bankruptcy act. Just Division of the Estates of Debtors Who Black on Bankruptcy, p. 128, observes: Convey to Assignees for the Benefit of Cred"Several cases are found in the reports of itors." The act provided, among other the inferior Federal courts wherein it is held things, that every conveyance or assignment that, although an insolvent corporation is by a debtor of his estate, real or personal or in the hands of a receiver appointed by a both, in trust, to an assignee for the benefit state court, this will not deprive the nation- of creditors, shall be made for their equal al courts of jurisdiction in proceedings benefit, in proportion to their several deagainst the corporation under the bankrupt- mands to the net amount that shall come cy law; for it is said any other construction to the hands of the assignee for distribution; assignment was made with the intent to pre-, act. Stobaugh v. Mills (1873) 8 Nat. Bankr. vent the property from being distributed under the bankrupt act. Re Temple (1876) 17 Nat. Bankr. Reg. 345, 4 Sawy. 92.

And so where it was held that as the result was to prevent the property from being distributed under the bankrupt act, the assignment was held to have been made with that view, and was void as against the assignee in bankruptcy. Macdonald v. Moore (1876) 15 Nat. Bankr. Reg. 26, 1 Abb. N. C. 53; Harding v. Crosby (1879) 17 Blatchf. 348; Re Cohn (1870) 6 Nat. Bankr. Reg. 379.

And an assignment for creditors was held void as against the assignee in bankruptcy on the ground that the assignment deprived the creditors of the selection of the assignee, and of the aid of the Federal court. Re Walker (1877) 18 Nat. Bankr. Reg. 56.

And where an assignment was held to have been made with intent to defeat the bankrupt law, it was void as against the assignee in bankruptcy. Linder v. Lewis (1879) 4 Fed. Rep. 318; Jackson v. McCulloch (1871) 1 Woods, 433, 13 Nat. Bankr. Reg. 283; Re Beisenthal (1878) 10 Ben. 42, 18 Nat. Bankr. Reg. 120, (1877) 14 Blatchf. 146, 15 Nat. Bankr. Reg. 228.

as

Some cases avoided the assignment against the assignee for creditors on the ground that such conveyances were attempts to defeat the bankrupt act, and were also a fraud upon the bankrupt law. Re Stubbs (1870) 4 Nat. Bankr. Reg. 376.

So, an assignment by a creditor, made within six months of bankrupt proceedings, was void as against an assignee in bankruptcy, as the bankrupt must have contemplated the results of his acts, which were a fraud upon the law. Re Cohn (1870) 6 Nat. Bankr. Reg. 379.

And where an assignment for creditors, made within six months of bankrupt proceedings, was attacked by an assignee in bankruptcy in time, it was held void, as contemplating a distribution of his property otherwise than as provided by the bankrupt law, and as an attempt to defeat its operation and evade its provisions, and was a fraud upon the bankrupt law. Barnewall v. Jones (1876) 14 Nat. Bankr. Reg. 278.

A deed of assignment to pay certain debts preferentially, made within four months prior to voluntary proceedings in bankruptcy, the amount assigned being insufficient to pay all debts in full, was prima facie void as against an assignee in bankruptcy as an apparent attempt to defeat the bankrupt law, and was held to have been made in fraud of the bankrupt

Reg. 361.

An assignment for creditors was held void as against an assignee for creditors as a fraud upon the bankrupt act. Re Meyer (1869) 2 Nat. Bankr. Reg. 422.

In this case the bankrupt was insolvent when be made the assignment, and the assignee then had reasonable cause to believe him to be insolvent, and that he was contemplating going into bankruptcy, and that a fraud on the bankrupt act was intended. It was also held that an assignment not made in the usual and ordinary course of business was prima facie fraudulent under the bankrupt act, § 35.

An assignment for creditors was held void as against an assignee in bankruptcy on the ground that it was a fraud on the bankrupt law, defeating its operation, because providing for a different administration. Platt v. Preston (1879) 19 Nat. Bankr. Reg. 241.

In Re Randall (1869) Deady, 557, it was said that an assignment for creditors would be presumed to have been made with the intention of defeating the bankrupt act of 1867.

An assignment for creditors was held vold in a suit by an assignee in bankruptcy against the assignee for creditors. Waring v. Buchanan (1879) 19 Nat. Bankr. Reg. 502.

In this case the court said that "the general assignment was clearly void as against the assignee in bankruptcy under the well-settled rule of construction of the bankrupt law as applied in this court."

And an assignment was held void at the suit of the assignee in bankruptcy on the ground that the assignee for creditors knew the assignor to be insolvent at the time the assignment was made. Wald v. Wehl (1889) 6 Fed. Rep. 163, 18 Blatchf. 495.

In this case it was said that the assignment was not avoided for fraud, but because contrary to the statute.

In Re Kurth (1878) 17 Nat. Bankr. Reg. 573, an assignee for creditors was compelled to pay to the assignee in bankruptcy the proceeds of property in his hands.

In Re Frisbee (1877) 14 Blatchf. 185, it was said that a general assignment without preferruptcy within the time limited by statute. ence could be avoided by the assignee in bank

In Rc Skoll (1877) 16 Nat. Bankr. Reg. 175, it was said that an assignment for creditors was voidable, and that creditors could by bankruptcy proceedings set it aside.

While the weight of authority was that an assignee in bankruptcy might avoid a deed of assignment if attacked in time, there were some

|

ing the general conduct of the assignee, were | bankrupt act for the purpose of securing the not inconsistent with, nor were they neces- administration of the property in the banksarily suspended by, the act of 1867; further, ruptcy court, the assignment, having been that the New Jersey statute did not create made without intent to hinder, delay, or dethe right to make voluntary assignments for fraud creditors, was valid, for at least the the equal benefit of creditors, but was only purpose of securing an equal distribution of restrictive of a previously existing right, the estate among all the creditors of Locke, and imposed, for the benefit of creditors, in proportion to their several demands." The salutary safeguards around its exercise. following authorities also seem to be analoConsequently, had the whole of the New Jer- gous: Watson v. Citizens' Sav. Bank, 2 Hughes, sey statute been superseded, the right of a 200; Re National L. Ins. Co. 6 Biss. 35; debtor to make a voluntary assignment Smith v. Buchanan, 8 Blatchf. 153; Watson would still have existed. The assignment, as v. Citizens' Sav. Bank, 5 S. C. N. S. 159; a transfer of the debtor's property, was Eyster v. Gaff, 91 U. S. 521, 23 L. ed. 403; therefore upheld as in harmony with the Buchanan v. Smith, 16 Wall. 277, 21 L. ed. general object and purposes of the bankrupt 280; Collier, Bankruptcy, pp. 19, 20; Reed act, unassailable by reason merely of the fact v. Taylor, 32 Iowa, 209, 7 Am. Rep. 180. that some of the provisions of the local statute may have been suspended by the act of 1807." "We are of opinion that, except as against proceedings instituted under the to the provisions of the bankrupt act, and the assignee in bankruptcy had obtained a decree setting it aside upon this ground, the judgments of the several creditors would not have been liens upon the real estate;" and following Everett v. Stone (1844) 3 Story, 446, which was a case under the bankrupt act of 1842.

The Beisenthal Case refused to foliow Macdonald v. Moore (1876) 15 Nat. Bankr. Reg. 26, 1 Abb. N. C. 53, and McLean v. Meline (1843) 3 McLean, 199. The latter case was a decision under the bankrupt act of 1842.

In Re Beisenthal (1878) 10 Ben. 42, 18 Nat. Bankr. Reg. 120, where the sheriff had subsequently obtained a judgment in the state court that this assignment was fraudulent, the Federal court then held that the sheriff was entitled to the proceeds as against the assignee in bankruptcy, as the judgment operated as an estoppel and the assignee in bankruptcy was a privy in title.

In Hunker v. Bing (1881) 9 Fed. Rep. 277, it was said that if the assignment "had been a valid assignment under the state law, these executions would not have attached, and upon the decree in this action setting aside the voluntary assignment, the benefits of the decree, it is settled, would have inured only to the assignee in bankruptcy, and the execution creditors would have remained without lien or preference as before."

In Re Croughwell (1878) 9 Ben. 360, where a voluntary assignment was made December 20, 1877, and an execution levied January 5, 1878, and a petition in bankruptcy filed against the debtor January 9, and the assignee in bankruptcy obtained possession of the property, the court refused the application of the sheriff to subject the property to the execution, who claimed that the assignment was void for failure to file an inventory in time, and the court held that the assignee would be allowed an opportunity to avoid the assignment and recover the property on any ground which might exist.

But in Dolson v. Kerr (1877) 52 How. Pr. 481, it was held that an assignee for creditors could not recover property sold under an intervening execution where the debtor was subsequently adjudged a bankrupt. In this case the assignee for creditors had by an instrument in writing surrendered his rights to the assignee in bankruptcy, and the court held that he could not recover for himself or for the benefit of the assignee in bankruptcy, saying: "You can't recover for the benefit of the assignee in bankruptcy, simply and only because the general assignee in bankruptcy does not take priority

2. The test of insolvency under the Federal bankruptcy law of 1898 is thus stated: "A person shall be deemed insolvent, within the provisions of this act, whenever the agover the judgment and execution creditor." This statement is contrary to the weight of authority on this question.

In Macdonald v. Moore (1876) 15 Nat. Bankr. Reg. 26, 1 Abb. N. C. 53, it was held that an intervening execution was a lien superior to the claim of an assignee in bankruptcy where the assignment was avoided at the suit of an assignee in bankruptcy. But a note to this case in the Federal Cases, No. 8763, says that on this point the case was reversed by the circuit court July 1, 1878.

The authority of this case was denied in Re Steele (1877) 7 Biss. 504, 16 Nat. Bankr. Reg. 103.

6. Allowances to assignee for creditors where the assignment was avoided.

It

In regard to the expenses and allowances due an assignee for creditors where the assignment was set aside at the instance of an assignee in bankruptcy, the courts differed as to whether any allowance should be made to the assignee for creditors, and if so what should be allowed. seems that the weight of authority was that compensation for the assignee's services in acts contrary to the bankrupt act, and compensation. for his attorney's fees, should not be allowed, but that he was entitled to compensation for such acts as were for the interest of the creditors in preservation of the property.

Where a Federal court set aside a deed of assignment for creditors made within six months before proceedings in bankruptcy, it was held that an allowance of the expenses and charges of the assignee for creditors should not be made where it could not be guarded so as to prevent duplicate charges. and no allowance should be made to include any reservation for the expense of a future settlement in the state court. Burkholder v. Stump (1871) 8 Phila. 172, 4 Nat. Bankr. Reg. 597.

This case was approved in Platt v. Archer (1876) 13 Blatchf. 351, where the question was as to a receiver's fees as against an assignee in bankruptcy.

And compensation for services of an assignee for creditors was refused where an assignment was avoided. Re Stubbs (1870) 4 Nat. Bankr. Reg. 376; Re Kurth (1878) 17 Nat. Bankr. Reg. 573.

And an allowance for attorney's fees was refused. Re Con (1872) 6 Nat. Bankr. Reg. 379.

An assignee for creditors should be allowed for disbursements made legitimately for collections, as this was beneficial to the estate. But