through legal proceedings and fail to vacate or discharge the preference thus obtained at least five days before a sale of his property, that this was the act of bankruptcy, and that as the sale was December 22, 1905, the act of bankruptcy was committed five days before that date, or December 17, 1905, more than four months prior to the filing of the involuntary petition in bankruptcy. When the alleged bankrupt, Philip Nusbaum, being insolvent, voluntarily confessed judgment in favor of certain of his creditors with intent to hinder, delay, and defraud his other creditors, and also with the intent to prefer such creditors over his other creditors, and permitted them, as he knew they would and as they did, to issue executions thereon and levy upon and sell all his property by virtue thereof, and put the proceeds of such sale of such property in their pockets in payment and satisfaction of their respective debts, as he knew they would and intended they should, he transferred same while insolvent, with intent to hinder, delay, and defraud his other creditors, and with intent to prefer the creditors in whose favor he confessed such judgments. It was not a sale by him in form, but it was "a different mode of disposing of or parting with property, or the possession of property absolutely," and "as a security" first, and then, second, "as a payment" to such preferred creditors. It was an act of bankruptcy under both clause 1 and clause 2 of subdivision "a" of section 3 of the act, irrespective of clause 3 thereof. It was a "transfer" within the plain definition of the term found in clause 25 of section 1 of the act. The act of bankruptcy was consummated, the transfer made, when the executions were issued and the sale by virtue thereof actually made, and the petitioning creditors were in time if they filed their petition within four months after such sale, as it is alleged they did. It was a transfer made by the alleged bankrupt who confessed the judgments that executions might be issued, levies made, sales made, and his property or its proceeds conveyed or transferred to his preferred creditors in payment of their debts. It was done to hinder, delay, and defraud his other creditors.

But, while these facts are stated in the brief, I find no proof or admission that Nusbaum confessed the judgments and set on foot the transfer. The case is sent back to the special master to take proof of all the facts in this regard as to when and how and where the judgments were confessed, the execution issued, the sale advertised and made, etc., as it is very doubtful that the petition was in time on the mere ground of a preference through legal proceedings. These petitioners should not be sent out of court because of failure to present their case as it actually is. The petitioners may file an amended petition nunc pro tunc alleging an act of bankruptcy under all three clauses of subdivision "a" of section 3.

The following cases indicate, and one of them holds, that the act of bankruptcy under claim 3 is consummated the fifth day prior to the sale and that the limitation of four months then commences to run. The failure to vacate and discharge a judgment and levy on execution thereunder at least five days before the sale or day fixed for sale is an act of bankruptcy, and hence the petition may be filed before the sale. In re Rung Furniture Co., 139 Fed. 526, 71 C. C. A. 342; Bogen

& Trummel v. Protter, 129 Fed. 533, 64 C. C. A. 63; Wilson v. Nelson, 183 U. S. 191, 22 Sup. Ct. 74, 46 L. Ed. 147; White et al. v. Bradley Timber Co. (D. C.) 119 Fed. 989; In re National Hotel & Café Co. (D. C.) 138 Fed. 947; Parmenter Mfg. Co. v. Stoever, 97 Fed. 330, 38 C. C. A. 200; Seaboard S. C. Co. v. W. R. Trigg & Co., 124 Fed. (D. C.) 76, 77. In Re National Hotel & Café Co., supra, Holland, District Judge, held that the act of bankruptcy is consummated and complete on the fifth day prior to the sale. This holding makes the fact of a sale immaterial. If a sale under the levy is advertised, the act of bankruptcy is complete. Judge Holland says:

"In other words, it seems to me that it was the intention to fix the consummation of the act of bankruptcy upon an alleged bankrupt five days before the day of sale, if at that time he had failed to lift a levy on his property. A petition can then be filed before the sale, and the property administered in bankruptcy for the benefit of all the creditors. While this precise question has never been determined, so far as I have been able to ascertain, the reasonings in the following cases sustain the above conclusions: In re Aaron Meyers, 1 Am. Bankr. Rep. 1; Metcalf Bros. & Co. v. Barker, 187 U. S. 165, 23 Sup. Ct. 67, 47 L. Ed. 122, 9 Am. Bankr. Rep. 36; Parmenter Mfg. Co. v. Stoever et al., 97 Fed. 330, 38 C. C. A. 200; Collier on Bankruptcy (5th Ed.) p. 42.”

The syllabus in Parmenter Mfg. Co. v. Stoever et al., 97 Fed. 330, 38 C. C. A. 200, is misleading. First, all the court was called upon to decide was that the four months does not run from the time property is attached in a suit before judgment. That ended that case. What the court did say in addition is as follows:

"The petition in bankruptcy was filed on February 1, 1899. This was more than four months after the attachment was made. but within four months from the times of seizure and sale on execution. * * Regard, however, must

be had to the whole of clause 3; and, in view of that, what the appellant 'suffered or permitted' was the sale of its property through legal proceedings. This was clearly the true act of bankruptcy within the contemplation of the statute, although the statute is somewhat awkwardly expressed. In like manner, as the failure to vacate the execution before the sale was the act of bankruptcy, it is clear that the four months period runs, not from the attachment, but from a date connected with the proceedings after the judgment."

The following extract from the opinion of the court is directly opposed to the syllabus, to repeat:

"What the appellant suffered or permitted was the sale of its property through legal proceedings. This was clearly the true act of bankruptcy within the contemplation of the statute."

All the cases hold that an act of bankruptcy is committed on the failure to discharge the lien of the levy five days before the sale. In all but one a sale was made. In only one case did the question of the limitation arise. Duncan v. Landis, 106 Fed. 839, 45 C. C. A. 666, is opposed to Wilson v. Nelson, 183 U. S. 191, 22 Sup. Ct. 74, 46 L. Ed. 147. I am of the opinion that, while such failure to discharge a levy five days before the sale is an act of bankruptcy, such failure four and three and two days and one day before the sale are also distinct acts of bankruptcy as is the failure on the day of sale: In Bradley Timber Co. v. White et al., supra, it was held that the petitions may allege and prove any number of acts of bankruptcy, and it is far better, if petitioners are so advised, that they set up and prove all the facts.

I am disposed to give them the opportunity, and hence the matter is sent back to the special master for proceedings in accordance with this opinion. The amendment suggested may be made under the authority of Hark v. C. M. Allen Co. (C. C. A.) 146 Fed. 665,

In re JERSEY ISLAND PACKING CO.

(District Court, N. D. California. March 15, 1907.)
No. 4,821.

1. BANKRUPTCY-COMPOSITION-PETITION TO VACATE-LIMITATIONS.

Under the express provisions of Bankr. Act July 1, 1898, c. 541, § 13, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3427], a petition to set aside a composition with a bankrupt's creditors not filed within six months after the composition was confirmed held barred by limitation.

2 SAME-EXTENSION OF TIME.

Bankr. Act July 1, 1898, c. 541, § 15, 30 Stat. 550 [U. S. Comp. St. 1901, p. 3428], providing that a judge, on application of the parties in interest, who have not been guilty of undue laches filed within a year after a discharge shall have been granted, may revoke it if on the trial it shall appear that it was obtained through the bankrupt's fraud, etc., does not apply where the discharge results by operation of law from the confirmation of the bankrupt's offer of composition.

8. SAME-CONFIRMATION OF COMPOSITION-EFFECT.

So long as an order confirming a composition with a bankrupt's creditors stands, it is effective to discharge the bankrupt from his debts other than those agreed to be paid by the terms of the composition and those not affected by a discharge as provided by Bankr. Act July 1, 1898, c. 541. § 14, subd. "c," 30 Stat. 550 [U. S. Comp. St. 1901, p. 3428].

[Ed. Note. For cases in point, see Cent. Dig. vol. 6, Bankruptcy, § 610.]

H. A. McNoble, A. H. Carpenter, and L. T. Freitas, for petitioner. Jellett & Meryerstein, for trustees.

DE HAVEN, District Judge. This is a petition to set aside and annul an order of this court made on the 23d day of February, A. D. 1906, confirming a composition offered by the bankrupt, and the discharge resulting therefrom, upon the alleged grounds of fraud in its procurement, and because the offer did not conform to the requirements of section 12, Bankr. Act July 1, 1898, c. 541, 30 Stat. 549 [U. S. Comp. St. 1901, p. 3426]. The petition was filed on February 21, 1907. The trustees named in the offer of composition and in the order confirming the same have appeared and moved to strike the petition from the files, as sham, irrelevant, and trifling, and upon other grounds stated in the notice of motion. They have also demurred to the petition upon the ground 'that the said petition is barred by the provisions of section 13 of the acts of Congress relating to bankruptcy." Section 13 of the Bankruptcy Act provides:

"The judge may, upon the application of parties in interest filed at any time within six months after a composition has been confirmed, set the same aside and reinstate the case if it shall be made to appear upon a trial that fraud was practiced in the procuring of such composition, and that the

knowledge thereof has come to the petitioners since the confirmation of such composition."

In view of this section, there does not seem to be any escape from the conclusion that the present petition was not filed within time, and that the demurrer thereto must be sustained for that reason. The fact that the petitioner also asks that the bankrupt's discharge resulting by operation of law from the confirmation of the composition referred to may also be set aside and annulled does not bring this proceeding within section 15 of the bankruptcy act, which provides that a judge may, "upon the application of parties in interest who have not been guilty of undue laches, filed at any time within one year after a discharge shall have been granted, revoke it, if upon a trial it shall be made to appear that it was obtained through the fraud of the bankrupt," etc. This section does not apply in a case such as this, where the discharge of the bankrupt results by operation of law from the confirmation of the bankrupt's offer of composition. So long as the order confirming the composition stands, it must have the effect given it by subdivision "c," § 14, of the bankruptcy act, viz., the discharge of the bankrupt from his debts, "other than those agreed to be paid by the terms of the composition and those not affected by a discharge," and the order of confirmation can only be set aside within the time limited by section 13 of the bankruptcy act above quoted.

Having reached this conclusion upon the demurrer, it is unnecessary to consider the motion to strike the petition from the files.

The demurrer will be sustained, and the petition dismissed.

'ANSLEY LAND CO., Limited, v. H. WESTON LUMBER CO.

(Circuit Court, E. D. Louisiana. March 16, 1907.)

No. 13,269.

1. CORPORATIONS-SALES OF LAND-POWER OF PRESIDENT.

Where it was not shown to be the custom of a corporation to permit its president to make sales of the corporation's lands, without authority of the board of directors, he had no power to sell such lands without a special or general resolution of the board of directors conferring such authority.

[Ed. Note.-For cases in point, see Cent. Dig. vol. 12, Corporations, § 1629.]

2. SAME-FORGED RESOLUTIONS-VOID Deed.

Where no resolution of the board of directors of a corporation was ever passed at any time authorizing a sale of the corporation lands by the president, and the corporation's other officers and stockholders knew nothing of a deed to such lands executed by the president, to which was attached an alleged copy of a resolution conferring on the president authority to make the deed, which copy also bore the forged signature of the corporation's secretary, the deed was void.

In Equity.

Dinkelspiel & Hart and T. M. & J. D. Miller, for plaintiff.
Chaffe & Bowers, for defendant.

SAUNDERS, District Judge. The bill herein demands the cancellation and annulment of a deed of sale of certain real estate belonging to the complainant company executed on November 19, 1903, by M. E. Ansley, president of the company. It is averred that this deed of sale is signed by M. E. Ansley, as president, and purports to be signed by Charles D. Stuart, as secretary of the complainant company, by virtue of a pretended resolution of the board of directors of the complainant company attached to the act. It is averred that the signature of the said Stuart, the secretary, is a forgery, and the pretended resolution attached to the act is also a forgery; that no such resolution was ever passed; and that there was no meeting of the stockholders held on the day upon which the resolution purports to have been passed. It is also averred that the deed of sale was wholly unauthorized, and that no part of the price ever came into the possession of the complainant, and that the complainant did not hear of the execution of this deed. until several months after it had been executed, and thereupon this suit was brought.

The answer avers that M. E. Ansley, who executed the deed, was authorized by virtue of his office and by the known custom of the complainant company to make sales of the company's property and to execute acts of sale, without any special resolution of the board of directors. The evidence was taken by consent out of court, and the case has been submitted without any note of evidence or oral argument or written brief.

The testimony shows that Mr. Weston, as president of the Weston Lumber Company, negotiated for the purchase of the timber on a cer