complainants (appellees) the sums ascertained by the report. On the appeal from this last decree, the appellees contended that the decree of October 27, 1886, was a final decree. This contention was rejected, the court asserting its clear opinion that that decree was interlocutory and of such character that no appeal would lie therefrom.

In Craighead v. Wilson, 18 How. 199, 15 L. Ed. 332, the syllabus

reads:

"Where a case in chancery was referred to a master to state accounts between the plaintiffs and defendants, to ascertain how much property remained in the hands of the latter, and how much had been sold, with the prices, to make allowances to the defendants for payments made or incumbrances discharged, and to ascertain what might be due from either defendant to the plaintiffs, this was not such a final decree as could be appealed from to this court.

"Although the decree settles the equities of the bill, yet the amount to be distributed amongst the parties depends upon the facts to be reported by the master; and, until the allotment to each one of the share to which he might be entitled, the decree cannot be considered as final."

And in the opinion it is said:

"To authorize an appeal, the decree must be final in all matters within the pleadings, so that an affirmance will end the suit."

In Beebe v. Russell, 19 How. 283, 285, 286, 15 L. Ed. 668, a case of an appeal from a decree settling the equities of the case and referring the cause to a master for an account, it is said:

*

"When a decree finally decides and disposes of the whole merits of the cause, and reserves no further questions or directions for the future judgment of the court, so that it will not be necessary to bring the cause again before the court for its final decision, it is a final decree. But the reference of a case to a master, to take an account upon evidence, and from the examination of the parties, and to make or not to make allowances affecting the rights of the parties, and to report his results to the court, is not a final decree, because his report is subject to exceptions from either side, which must be brought to the notice of the court before it can be available. It can only be made so by the court's overruling the exceptions, or by an order confirming the report, with a final decree for its appropriation and payment."

See, also, Perkins v. Fourniquet, 6 How. 206, 12 L. Ed. 406; Barnard v. Gibson, 7 How. 650, 675, 12 L. Ed. 857; Farrelly v. Woodfolk, 19 How. 288, 15 L. Ed. 670; Crosby v. Buchanan, 23 Wall. 420, 453, 23 L. Ed. 138; Green v. Fisk, 103 U. S. 518, 26 L. Ed. 485; Keystone Iron Co. v. Martin, 132 U. S. 91, 10 Sup. Ct. 32, 33 L. Ed. 275; Lodge v. Twell, 135 U. S. 232, 10 Sup. Ct. 745, 34 L. Ed. 153; National Enameling Co., Ex parte, 201 U. S. 156, 163, 26 Sup. Ct. 404, 50 L. Ed. 707; Pittsburg R. Co. v. B. & O. R. Co., 61 Fed. 705, 708, 10 C. C. A. 20-all of which are analogous to the case at bar.

As the case before us is not a mortgage foreclosure, it seems quite unnecessary to discuss such cases as Whiting v. Bank, 13 Pet. 6, 10 L. Ed. 33, Railroad Co. v. Simmons, 123 U. S. 52, 8 Sup. Ct. 58, 31 L. Ed. 73, and cases there cited.

Nor is it necessary to discuss cases such as Forgay v. Conrad, 6 How. 201, 12 L. Ed. 404, supra, Thompson v. Dean, 7 Wall. 342, 19 L. Ed. 94, and Winthrop v. Meeker, 109 U. S. 180, 3 Sup. Ct. 111, 27 L. Ed. 898, in which the equities were settled and property ordered to be delivered by the decree appealed from. The case at bar is readily

discriminated from such cases by the fact that the cross-appellant is not directed by the decree appealed from to pay any sum of money to the complainants below; he is not directed to surrender any property, and the decree is clearly merely preparatory to a further decree. Of the decree in Winthrop v. Meeker, supra, the Supreme Court said (page 183 of 109 U. S., page 133 of 3 Sup. Ct. [27 L. Ed. 898]): "The whole purpose of the suit has been accomplished." Assuredly this cannot be said of the decree here, as between Marquet and the complainants below.

It follows that this court has no jurisdiction of the cross-appeal of Marquet against the complainants below, appellants here, and that said cross-appeal must be dismissed.

(2) In so far as the appellants, complainants below, claim to be aggrieved by the decree below, it seems to us to be final. e decree orders that the complainants pay the notes to the bank and to Scott and directs that on default the stock held by the bank as collateral security be sold. All matters of dispute between the complainants below and the defendants, other than Marquet, are finally determined by this decree. If the decree had not in this respect been superseded, the collateral would have been sold before this time. No judicial action is required of the special master who is ordered to sell the collateral; he is to perform a purely ministerial duty, by way of executing the decree. We perceive no reason why the decree in this respect is not final in the sense that it is appealable. See Hill v. Railroad Co., 140 U. S. 52, 11 Sup. Ct. 690, 35 L. Ed. 331; National Enameling Co., Ex parte, 201 U. S. 156, 165, 26 Sup. Ct. 404, 50 L. Ed. 707; Kemp v. Bank, 109 Fed. 48, 50, 48 C. C. A. 213; Morrison v. Burnette, 154 Fed. 617, 622, 83 C. C. A. 391; Standley v. Roberts, 59 Fed. 836, 839, 8 C. C. A. 305.

Upon consideration of the merits of this branch of the case we find no reason for disturbing the decision below. Careful study of the evidence leads us to the same conclusion reached by the learned trial judge. See Swift v. Tyson, 16 Pet. 1, 10 L. Ed. 865; Goodman v. Simonds, 20 How. 343, 15 L. Ed. 934; Murray v. Lardner, 2 Wall. 110, 121, 17 L. Ed. 857; Brown v. Spofford, 95 U. S. 474, 481, 24 L. Ed. 508; Swift v. Smith, 102 U. S. 442, 444, 26 L. Ed. 193; Lytle v. Lansing, 147 U. S. 59, 70, 13 Sup. Ct. 254, 37 L. Ed. 78; Wilson v. Denton, 82 Tex. 531, 18 S. W. 620, 27 Am. St. Rep. 908, 911: Second National Bank v. Morgan, 165 Pa. 199, 30 Atl. 957, 44 Am. St. Rep. 652, 653; 1 Daniel Negot. Insts. (3d Ed.) §§ 770-775; 7 Cyc. 944.

The decree of the trial court of September 29, 1908, in so far as it is in favor of the First National Bank of New Cumberland and Porter M. Scott, is affirmed, with costs; the cross-appeal of Wm. Marquet against complainants below is dismissed; and this cause is remanded for such further proceedings as may be proper.

STROHEIM et al. v. LEWIS F. PERRY & WHITNEY CO. et al.

(Circuit Court of Appeals, First Circuit. January 4, 1910.)
No. 830.

1. BANKRUPTCY (§ 76*)-INVOLUNTARY PETITION-PETITIONING CREDITORSASSIGNED CLAIMS.

Where the owner of certain notes against an alleged bankrupt assigned one of them without substantial consideration to S., in order to enable her brother to use S. as a petitioning creditor on an involuntary bankruptcy petition, and B. came into possession of another note from the same source, under the same circumstances, and for the same reason, neither was qualified to join as petitioning creditors.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. §§ 99, 100; Dec. Dig. § 76.*]

Where a creditor of an alleged involuntary bankrupt had assented to an assignment for the benefit of creditors, and there was no evidence that it was induced to act by fraud, it was not qualified to join as petitioning creditor.

[Ed. Note.-For other cases, see Bankruptcy, Cent. Dig. §§ 99, 100; Dec. Dig. § 76.*]

3. BANKRUPTCY (§ 77*)-INVOLUNTARY PETITION-CREDITORS-QUALIFICATIONS -ASSIGNEES.

Since an involuntary bankruptcy petition relates to the date of its commencement, an intervening creditor, who became such by taking an assigned claim after the petition was filed, could not be counted in determining whether enough creditors had joined to sustain the petition.

[Ed. Note. For other cases, see Bankruptcy, Cent. Dig. § 102; Dec. Dig. § 77.*]

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

In the matter of the Lewis F. Perry & Whitney Company, alleged bankrupt. From a decree denying the involuntary petition of Salo J. Stroheim and others for adjudication (172 Fed. 745), certain petitioners appeal. Affirmed.

George W. Anderson (Joseph B. Jacobs and Philip W. Jacobs, on the brief), for appellants.

Lee M. Friedman (Charles E. Haywood, on the brief), for appellees McGaw and others.

Reginald L. Robbins (Lauriston L. Scaife, on the brief), for appellee Dennison Manufacturing Co.

Before COLT and PUTNAM, Circuit Judges, and ALDRICH, District Judge.

See, also, 172 Fed. 744, 752.

PUTNAM, Circuit Judge. This is a case of an involuntary petition in bankruptcy against the Lewis F. Perry & Whitney Company. The petition was dismissed by the District Court on the ground that not sufficient creditors joined therein to satisfy the requirement of the statute. Thereupon the petitioners, or some of them, appealed to us.

*For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r indexes

As the case stood, the statute required that three creditors should unite in the petition. Apparently three did so unite at the outset, Stroheim & Romann, one Skelly, and one Beaumont. The answer denied that Skelly and Beaumont were bona fide creditors. Subsequently, under the statute, one Dodman, Perkins & Co., Incorporated, the Dennison Manufacturing Company, and one Leahy intervened as additional creditors. On this appeal the respondents below classified these alleged creditors as follows: They do not question Stroheim & Romann or Dodman, leaving one other creditor to be found. They maintain that Skelly and Beaumont merely collusively accepted nominal transfers of parts of a claim for the purpose of enabling one creditor to appear as three. In other words, they maintain that Skelly and Beaumont really came in under cover of Stroheim & Romann. The Dennison Manufacturing Company and Perkins & Co., Incorporated, they maintain are estopped, having assented to the assignment for the benefit of creditors which is charged in the petition as the sole act of bankruptcy. To Leahy they make several objections, one of which only we find it necessary to consider.

Putting on the claims of Skelly and Beaumont the best face possible for the petitioning creditors, the facts are as follows: The petition was filed on September 23, 1908. On September 10, 1908, a sister of Stroheim held several notes of the debtor. At that time she transferred to Skelly one note without any substantial consideration, for the sole purpose of enabling her brother's copartnership to secure a sufficient number of creditors to proceed with the bankruptcy petition. Beaumont came into possession of another note under the same circumstances and for the same reason. Evidently they were not creditors when they joined the petition, because evidently the whole transaction was purely colorable, and the notes still belonged to Stroheim's sister. Therefore they could not lawfully make the required oath to the involuntary petition. We concur fully with the conclusion of the learned judge of the District Court so far as these two signatures are concerned.

The assignment for the benefit of creditors was assented to by the clerk of the Dennison Manufacturing Company in its name and for its behalf. The proofs show that the clerk had done this on some several previous occasions without any objection from the corporation, and with its implied approval. In addition to this, the Dennison Manufacturing Company made attempts to withdraw from the assignment, giving various reasons why it might lawfully so do. In all this, however, they made no attempt to repudiate the authority of its clerk to execute the assignment. Therefore, so far as that is concerned, it is evident that the original execution of the assignment must stand. In these proceedings by the Dennison Manufacturing Company an effort was made to bring the case within Canner v. Webster Tapper Co. (decided by us on March 11, 1909) 168 Fed. 519, 93 C. C. A. 511. There we permitted a creditor who had become a party to a general assignment to withdraw his assent thereto on the ground that he had been induced to assent by fraud. There is not a particle of evidence in this case of any existing fraud preceding or contemporaneous with

the act of the Dennison Manufacturing Company in executing the assignment; and the latter remark applies to Perkins & Co., Incorporated, who also executed the assignment, and afterwards undertook to repudiate it.

This leaves only Leahy. For the purpose of securing a sufficient number of creditors, Leahy purchased a claim against the alleged bankrupts from another creditor, who owned it when the involuntary petition was filed on September 23, 1908. Leahy offered to intervene on February 25, 1909. The statutes in bankruptcy fix no time with reference to these interventions; yet, of course, as proceedings in bankruptcy are of an equitable nature, the court might well apply to them the ordinary rules of laches. But the steps which brought the original claim from the owner of it to Leahy took place after the petition was filed. It is said that Leahy never in fact owned the claim, and, therefore, stood like Skelly and Beaumont; but we can safely rest our conclusion on broader grounds. The general rule is that every legal proceeding of an adverse character relates to the date at which it is commenced. There are some exceptions to this; but they are strictly exceptions, supported by either some statutory provision. or some settled practice of a peculiar nature. Neither of those things exist here; and most substantial reasons lead to the ordinary result, because nothing can be more injurious to a person or a corporation of the classes subject to proceedings in bankruptcy than to have affairs held up by a continuous series of doubtful events, following one another. It is necessary for every person transacting business and requiring credit to be able to say at some fixed period whether or not he is his own master; and the entire frame of the bankruptcy statutes is intended to help in this direction, and secure prompt action. The opinion filed by Judge Brown in behalf of this court in Moulton v. Coburn (decided on July 6, 1904) 131 Fed. 201, 66 C. C. A. 90, is in this line. There it was said that the court found nothing in the bankruptcy statutes to contravene the ordinary rule of law that the allegations of a declaration, bill, or petition are to be disposed of as of the time of filing or beginning the suit. The opinion continues that the court finds nothing in the statutes "to indicate that creditors whose debts are created after the filing of the petition are entitled to join." Indeed, while we do not criticise the motives of the parties to this proceeding, nor undertake to discredit their purpose to obtain an adjudication in bankruptcy against a debtor whose estate they evidently thought should be disposed of in accordance with the statutes relating thereto, we observe that the whole of the case presented to us is in contravention of the broad principles stated by us in Leighton v. Kennedy (decided on April 14, 1904) 129 Fed. 737, 741, 64 C. C. A. 265, 269. There we speak of what we found to be an attempt to create artificially a new condition for the specific purpose of defeating the carefully prepared scheme of the bankruptcy statutes, and we said:

"An attempt to create such a condition, and thus by indirect methods to defeat the scheme of the statutes, is unlawful and void, and so clearly so that we need not elaborate the proposition."