bankrupts towards the creditors represented by the assignee, is established by the decree of the district court of California; but, under the influence of a wish and inclination to help punish those frauds, we must be careful that we do not violate principles of law essential to the maintenance of justice. The defendant, Lewis, has a right to insist that he be brought into court as the law provides, and not otherwise. If he succeeds in escaping with his ill-gotten gains, it will not be the first time that adherence to established legal rules has resulted in enabling bad men to gain a temporary advantage. This motion, however, is made on behalf of the creditors of Lewis & Co., who may have at least an equal equity with the creditors represented by the assignee. For, according to the allegations of the bill, the property now in question is the property of Lewis, and does not appear to be any part of the goods fraudulently acquired by the bankrupts and Lewis from the creditors of the former. Nor is it alleged to have been acquired with the funds of which the defendant has been declared a trustee, if that could alter the case. The powers of courts of bankruptcy in the collection of assets can only be exercised pursuant to law, and whenever it becomes necessary for the assignee to sue a stranger to the bankruptcy proceeding he must proceed against him as any other plaintiff in a like case would have to proceed; that is to say, by a plenary suit at law or in equity. There is nothing in the bankrupt law which deprives parties claiming property of which they are in possession of the usual processes of the law in defence of their rights. So held where the bankruptcy court took property by a summary process out of the hands of one who claimed the right of possession under a lien, and admitted the general property to be in the bankrupt. Marshall v. Knox, 16 Wall. 551.

So, where one claims the absolute property in a fund as against the assignee, the assignee must litigate the claim in a plenary suit at law or in equity. Smith v. Mason, 14 Wall. 419.

The present is more clearly a case to be litigated in a plenary suit. The decree against Lewis in California can

only be made available in this district by obtaining a judgment here, as the plaintiff is seeking to do. The decree will be conclusive evidence, if there is no objection made to the jurisdiction of the court pronouncing it; but the defendant, Lewis, has a right to make that defence, and no personal judgment can be pronounced until he is served with process. The property can never be applied to the payment of the decree in California until it has been reduced to judgment in this court. An assertion that a thing is assets does not make it so; nor can any prima facie showing be so plain that a court will be justified in proceeding to determine a man's case in the absence of due notice to him.

Probably everything alleged in the bill touching the proceedings in California is true, but the defendant has a right to be heard upon that. He has a right to insist that he be duly served with process, and then he has a right to answer and deny the allegations of the bill. To proceed after he has objected his non-residence, and the service on him out of this district, would be a plain case of usurpation, as it seems to me, unless the fact that there is property here subject to the jurisdiction of this court justifies further proceedings. Such justification must be found, if at all, in section 738 of the Revised Statutes of the United States. That section provides: "When any defendant in a suit in equity to enforce any legal or equitable lien or claim against real or personal property within the district where the suit is brought, is not an inhabitant of nor found within said district, and does not voluntarily appear thereto, it shall be lawful for the court to make an order directing such absent defendant to appear," etc. Upon proof of the service of the order the court is authorized to proceed to the hearing and adjudication of the suit, to affect the property of the absent defendant in the district only.

In my judgment this section was only intended to reach those suits in equity in which it was sought to enforce some pre-existing lien or claim, legal or equitable, upon or to some specific property, real or personal, and not cases in which it is sought to reach and appropriate the general property of a

defendant to the payment of his debts. By the words "legal or equitable lien or claim against real or personal property," congress intended to reach every case in which there should be any sort of charge upon a specific piece of property, capable of being enforced by a court of equity. This is manifest to my mind from the section as it stands; but when we look to the act of March 3, 1875, which was evidently intended as a substitute for section 738, all doubt vanishes. Such expressions as were obscure in the latter section are by the former made clear.

Section 8 of the act of 1875 provides "that when in any suit commenced in any circuit court of the United States to enforce any legal or equitable lien upon, or claim to, or to remove any encumbrance or lien or cloud upon, the title to real or personal property within the district," etc.; following the language substantially of section 788, with a provision that the adjudication shall only affect the property "which shall have been the subject of the suit."

Nothing, it seems to me, can be plainer than this. In case the absent defendant does not appear, it is only the property "which shall have been the subject of the suit" which is to be affected. I must hold that there is nothing in these sections which helps the plaintiff here. Indeed, this latter section limits the jurisdiction, such as it is, to suits in the circuit court. Having reached the conclusion that since the appearance of the defendant to object to the jurisdiction this court cannot proceed further, there is no need to go on and decide the other points made on the motion. But I am constrained to say that it has seemed to me the assignee is not in a position to maintain this bill, which is a creditors' bill, he not having exhausted his legal remedy in this jurisdiction. That he has a legal remedy on the California judgment seems plain. An action will lie at law upon it, a judgment can be obtained here, and an execution can be issued against the property of the defendant now in the hands of the receiver; that is, there is no legal impediment to such a course. Whatever difficulties arise to prevent a successful pursuit of legal remedy come from the fact that Lewis is not a resident.

But for that fact a suit at law would lie against Lewis, with an attachment against this very property. As I now look at this case, stripped of its surroundings of bankruptcy and fraud in California, it becomes an attempt by an assignee to avail himself of the extraordinary powers of a court of equity for the purpose of appropriating the general property of a defendant, in the first instance, to the payment of his debts,a thing which, so far as I am informed, has never been done. I regret that, moved by a desire to aid the creditors who have been defrauded by the bankrupts and this defendant, Harris Lewis, I have made an order, which, upon full consideration, cannot stand.

Let an order be entered vacating the order of November 22, 1880, appointing R. L. Shainwald receiver in this case, and also dismissing the plaintiff's bill.

In re MAHONEY and RIDDLE.*

(District Court, E. D. Pennsylvania. January 14, 1881.,

1. BANKRUPTCY-APPOINTMENT OF ASSIGNEE-UNADMINISTERED ASSETS -DOUBTFUL RIGHT OF ASSIGNEE TO RECOVER.-Where, after the death of an assignee in bankruptcy, evidence of the existence of unadministered assets is produced, the court will appoint a new assignee, notwithstanding that his right to recover such assets may be doubtful, depending upon several disputed questions of law and fact.

2. SAME. The firm of A., B. & C. dissolved, C. becoming liquidating partner. A. filed a petition in bankruptcy in Pennsylvania under the bankrupt law of 1841. C. subsequently filed a petition in New Orleans. C.'s assignee sold the firm book accounts. Before the dissolution the firm had commenced an attachment suit in Philadelphia against a debtor and had summoned a bank as garnishee. This suit was never tried and no proceedings in it were had for 34 years, when A.'s assignee having died the firm creditors filed a petition for the appointment of a new assignee to carry on the attachment suit. Held, that the petition should be granted, and that the questions of law and fact on which the right of the assignee to recover would depend, could not properly be considered upon this application.

In Bankruptcy.

*Reported by Frank P. Prichard, Esq., of the Philadelphia bar.

This was a petition by creditors for the appointment of an assignee in place of a deceased assignee of M. B. Mahoney. The case was referred to a register in bankruptcy, (Sussex D. Davis,) who found the following facts: In June, 1837, the firm. of Jackson, Riddle & Co., composed of Jackson, Riddle, and Mahoney, became insolvent and dissolved, Jackson retaining the assets as liquidating partner. Prior to their dissolution. they had commenced a suit in foreign attachment against Warwick & Clegett, in which the Girard Bank of Philadelphia was summoned as garnishee. After the dissolution judgment was obtained in this suit against Warwick & Clegett, and a writ of scire facias issued against the garnishees. On September 2, 1842, Mahoney filed in this district, individually, and as a member of the firm of Jackson, Riddle & Co., a voluntary petition in bankruptcy, upon which he was adjudicated a bankrupt and subsequently discharged. On November 5, 1842, Riddle filed a similar petition and was afterwards discharged. On September 5, 1842, Jackson, individually and as a member of the firm, filed a similar petition in the district court for the eastern district of Louisiana, and in his schedules set forth the firm assets. His assignee subsequently sold all the book accounts of the firm to one Dyas, who afterwards assigned them to Jackson. In 1845 the Girard Bank, garnishees in the attachment suit, filed answers and a plea of nulla bona. Nothing further was done in this suit until 1879, when, Mahoney's assignee having died, the creditors of the firm of Jackson, Riddle & Co. filed this petition for the appointment of a new assignee to carry on the attachment suit. The register reported that the assets of the firm passed to Jackson's assignee and not to Mahoney's assignee, and that consequently there were no assets for an assignee. of the latter to collect. Other questions, including the effect of lapse of time on the right to prosecute the attachment suit, were discussed before the register and the court.

Arthur Biddle, W. Wynne Wister, C. M. Husbands, and George W. Biddle, for petitioning creditors.

R. M. Schick and Benjamin Harris Brewster, for the Girard Bank.