that the net proceeds of the partnership property shall be appropriated to the payment of the partnership debts, and any surplus added to the assets of the individual partners, and the net proceeds of the individual estate of each partner shall be appropriated to the payment of his individual debts, and any surplus to the payment of the partnership debts. It authorizes the partnership estate to prove against the individual estates, and vice versa, and directs the assets of the partnership estate and the individual estates to be marshaled so as to prevent preferences, and secure the equitable distribution of the property of the several estates. It further provides that the property of a partnership shall not be administered in bankruptcy when less than all the members are adjudged bankrupt; and in that event the partner not adjudged bankrupt is to settle the partnership business expeditiously, and account for the interests of the adjudged bankrupt. The last provision applies to a proceeding by or against one partner, or any number less than all, and means that the bankruptcy of one partner shall not preclude the other from settling the partnership business, and, like those immediately preceding it, is merely declaratory of a recognized equitable principle of administration in bankruptcy. Amsinck v. Bean, 22 Wall. 403, 22 L. Ed. 801; Murray v. Murray, 5 Johns. Ch. 60; Colly. Partn. 854.

We are of the opinion that it is the scheme of these provisions to treat the partnership as an entity which may be adjudged a bankrupt by voluntary or involuntary proceeding, irrespective of any adjudication of the individual partners as bankrupt, and upon an adjudication to draw to the administration the individual estates of the partners as well as the partnership estate, and marshal and distribute them according to equity. The assets of the individual estates and the debts provable against them can be ascertained without adjudicating the individual partners bankrupt. The language does not require such an adjudication. The section is silent respecting a discharge of the partners individually. It does not, by terms or by implication, preclude an adjudication of the individual partners as bankrupt in the partnership proceeding; and, if there is such an adjudication, there is nothing to prevent the partners from receiving a discharge individually, if they are otherwise entitled to it under the act. But, as the commission of an act of bankruptcy is indispensable to jurisdiction in an involuntary proceeding, the individual members cannot be adjudged bankrupts in such a proceeding who have not committed, or been participants in committing, one of the enumerated acts.

Section 5 differs significantly in its phraseology from that of the former acts in regard to the bankruptcy of partners. It takes the place of section 14 of the bankruptcy act of 1841, and of section 36 of the bankruptcy act of 1867. These sections of the earlier acts authorized an adjudication of bankruptcy of "persons who are partners in trade," instead of "a partnership"; and, while providing for the administration of the joint and separate estates substantially like section 5, provided, as section 5 does not, for granting or refusing a discharge to each partner. By the language of these acts,

it was a prerequisite that all the persons comprising the partnership should be adjudged bankrupt before the warrant could issue entitling the assignee to administer the joint estate, and the provisions respecting a discharge show that such an adjudication was contemplated.

The differences indicate that congress intended that a partnership should be, for the purpose of the bankrupt act, in all respects “a person," as defined by section 1, entitled to a discharge under section 14, and subject to be adjudged a bankrupt in involuntary proceedings if it has committed any of the acts of bankruptcy specified in section 3. There are many provisions in the act which refer to the personal immunities and duties of bankrupts, and are not applicable to an entity like a partnership, but these are equally inapplicable to a corporation.

Under the former acts, there could not be an adjudication of all the partners unless a joint act of bankruptcy had been committed, and consequently there could be no administration of the joint effects (see Redmond v. Martin, 9 N. B. R. 408, Fed. Cas. No. 11,632); and cases arose in which creditors were without an adequate remedy. It may have been the purpose of congress in the present act to cure the defect. As we interpret it, the present case affords an illustration of the better efficacy of its provisions; for, if it were necessary that Dickinson be adjudged, he could not be, as he did not participate in making the assignment, and consequently the partnership could not be adjudicated.

In the present case the partnership made a general assignment for the benefit of creditors, and by section 3 such an assignment is an act of bankruptcy, although made without preferences, without actually intending to defraud creditors, and without insolvency. In re Gutwillig, 34 C. C. A. 377, 92 Fed. 337; West Co. v. Lea, 174 U. S. 594, 19 Sup. Ct. 836,

As the assignment purported to transfer all the property of the partnership, it was a general assignment by the partnership, though, as it purported to transfer only their joint, and not their individual, property, it was but a partial assignment by the individual partners. Whether, having been made by one partner only, it was valid, void, or voidable is immaterial. Apparently the partner who did not join has ratified, by acquiescence, the act of the partner who executed it. However this may be, in denominating the making of a general assignment for the benefit of creditors an act of bankruptcy, congress did not make any distinction between valid or invalid instruments, but used terms which would reach the execution of any instrument which is, or purports to be, a general assignment. The majority of the court are of the opinion that the making of the assignment by Meyer, being an act of bankruptcy of which he was the author, entitled the creditors to an adjudication against him individually.

The appellees have insisted that the appellants are not entitled to be heard upon the questions which have been discussed. The appellants Marcuard, Krauss & Co. are creditors of the partnership; and, by the terms of section 18, any creditor may appear and plead to the petition in involuntary bankruptcy. The other appellant,

Sparhawk, the assignee under the general assignment, was certainly entitled to contest the adjudication, as his title may be prejudiced by the proceeding. In re Mendelshon, 12 N. B. R. 533, Fed. Cas. No. 9,420; In re Hatje, 12 N. B. R. 548, Fed. Cas. No. 6,215; In re Bergeron, 12 N. B. R. 385, Fed. Cas. No. 1,342; In re Jack, 13 N. B. R. 296, Fed. Cas. No. 7,119; In re Williams, 14 N. B. R. 132, Fed. Cas. No. 17,706; In re Scrafford, 14 N. B. R. 184, Fed. Cas. No. 12,557. The court below permitted the appellants to intervene and be heard, and they have an undoubted right to review an adverse decision. The adjudication of the district court is affirmed, with costs.

(98 Fed. 981.)

In re EMPIRE METALLIC BEDSTEAD CO.

(Circuit Court of Appeals, Second Circuit. December 7, 1899.)

No. 88.

1. BANKRUPTCY-ACTS OF BANKRUPTCY-VOLUNTARY APPLICATION BY CORPORATION FOR RECEIVER.

Where a corporation, under the provisions of a state statute, files in a state court its voluntary application for dissolution, and for the appointment of a receiver to wind up its affairs and distribute its assets, on the ground of its insolvency, and procures the appointment of a receiver thereon, such application is not "a general assignment for the benefit of its creditors," within the meaning of Bankr. Act 1898, § 3a, cl. 4, providing that such an assignment shall constitute an act of bankruptcy.

2. SAME.

Such a proceeding cannot be held to be an act of bankruptcy on the ground that it produces results equivalent to those brought about by a general assignment for creditors; for the acts of bankruptcy enumerated and classified by the statute cannot be enlarged by construction so as to include transactions similar or analogous to, but not identical with, those specified.

Appeal-from the District Court of the United States for the Northern District of New York.

This is an appeal from a decree dismissing a petition in involuntary bankruptcy brought against the appellee by the appellant and other creditors. 95 Fed. 957.

Tracy C. Becker and George L. Lewis, for appellants.
William L. Marcy, for appellee.

Before WALLACE, LACOMBE, and SHIPMAN, Circuit Judges.

SHIPMAN, Circuit Judge. The Empire Metallic Bedstead Company, a manufacturing corporation, organized under the laws of the state of New York, and established in Buffalo, in that state, brought its petition before the supreme court of New York, under the provisions of the Code of Civil Procedure, for the dissolution of the corporation and the appointment of a receiver of its property, upon the ground of its insolvency, which petition was granted and a temporary receiver was appointed on or about April 27, 1899. Within four months after the date of this petition, the Bourne-Fuller Company

and sundry other creditors of the bedstead company brought their petition before the United States district court for the Northern district of New York, averring its insolvency, and that within four months next preceding it had committed an act of bankruptcy, in causing, upon its petition to the state court, the appointment of a receiver because of insolvency, which proceeding, under the laws of the state of New York, was averred to operate as, and to be equivalent to, a general assignment of the property of the said bedstead company for the benefit of its creditors. The answer denied that any act of the corporation was an act of bankruptcy. After a reference to the referee, who reported that in his opinion the act of the insolvent was equivalent to an assignment for the benefit of creditors, the question came before the district court for decision, which dismissed the petition. This appeal is from the decree of dismissal.

The petition did not allege that the corporation's application was with intent to hinder, delay, or defraud its creditors, but placed the averment of an act of bankruptcy solely upon the ground that the petition and the appointment of a receiver at its instance because of insolvency were equivalent to a general assignment of its property for the benefit of creditors; and whether such a procedure is an act of bankruptcy, because equivalent to a general assignment, is the only question to be determined upon this appeal.

The argument for the appellant is, in substance, that the appointment of a receiver takes the assets of a corporation beyond the reach of creditors, and places them in the hands of a trustee whom they did not appoint; that for this reason a general assignment for the benefit of creditors is a fraud upon the bankrupt act, and would be held an act of bankruptcy, if it had not been expressly declared to be such; and that the act of the corporation in promoting the appointment of a receiver has, in its substantial results, the same effect as an assignment, in this: that the trustee is not designated by the creditors. It is true that the application was for the purpose of an equal distribution of the avails of the assets by a trustee appointed by the court, and in whose appointment the creditors were not represented by themselves or by a person of their own selection; and, if it had been averred that the act of the corporation was an act to hinder or delay creditors in their rights and remedies under the bankrupt law, a different question might have arisen. When the statute declares that a general assignment for the benefit of creditors. is an act of bankruptcy, can it be construed to include an act which is not a general assignment? We think that it cannot, because the term has a universally understood and recognized meaning throughout the different states, and means a transfer and conveyance by a person of all his property to a named person upon a trust which is to be worked out in some states by a court of probate and insolvency, in some states by a court of common law, and in some states by a trustee, subject only to the supervision to which any trustee is subjected. It is a deed or conveyance which the grantor makes voluntarily, or sometimes by compulsion, at the instance of a court of insolvency. A petition for the appointment of a receiver is not that proceeding which is universally recognized as an assignment, and its

"equivalency" of result, if equivalency exists, is not important. The bankruptcy statute has said that the one is an act of bankruptcy, and has said nothing about the other, in direct terms; and when acts of bankruptcy are classified, as they are in the statute of 1898, it is not the province of a court to enlarge the classification because the omitted class seems to partake of the sin of the named class. Why the legislature did not specifically mention acts of corporations which would have the effect of a general assignment, but which are of a different character, it is unnecessary to surmise; for it is, in our opinion, sufficient to say that these other acts are not assignments, and were not particularly specified, and that, if they are acts of bankruptcy, it is because they are included in the general language of one of the other subdivisions of section 3 of the act. The order of the district court is affirmed, with costs.

(98 Fed. 983.)

THE LAURADA.

UNITED STATES v. THE LAURADA.

(Circuit Court of Appeals, Third Circuit. January 2, 1900.)

No. 2.

NEUTRALITY LAWS-VIOLATION-FORFEITURE OF VESSEL.

To bring an American vessel within the provisions of Rev. St. § 5283, which subjects to forfeiture any vessel fitted out and armed within the limits of the United States, or commissioned within the territory or jurisdiction of the United States, with intent that such vessel shall be employed in violation of the neutrality laws, it must be shown that the employment of the vessel in the prohibited service was pursuant to an intention formed within the limits of the United States; and the formation of such intention after she has left the jurisdiction of the United States, and while she is on the high seas, cannot be construed, because of her nationality, to be within such limits.

Appeal from the District Court of the United States for the District of Delaware.

Lewis C. Vandegrift, for appellant.

Andrew C. Gray and H. H. Ward, for appellee.

Before ACHESON and DALLAS, Circuit Judges, and KIRKPATRICK, District Judge.

DALLAS, Circuit Judge. The court below was asked to condemn and forfeit the American steamship Laurada under section 5283 of the Revised Statutes, which is as follows:

"Sec. 5283. Every person who, within the limits of the United States, fits out and arms, or attempts to fit out and arm, or procures to be fitted out and armed, or knowingly is concerned in the furnishing, fitting out or arming, of any vessel with intent that such vessel shall be employed in the service of any foreign prince or state, or of any colony, district, or people, to cruise or commit hostilities against the subjects, citizens or property of any foreign prince or state, or of any colony, district or people, with whom the United States are at peace, or who issues or delivers a commission within the territory or juris