amendment of 1903 to section 70e is that it confers jurisdiction upon the courts of bankruptcy, regardless of the consent of the defendants, in suits for purposes of recovery of property fraudulently transferred by the bankrupt, or the value of such property.

As said by Justice Van Devanter in Collett v. Adams, 249 U. S. 545, 43 Am. B. R. 496, 39 S. Ct. 372, 63 L. Ed. 764, the amendment to section 60b (Comp. St. § 9644), which in respect to words conferring jurisdiction is exactly like the amendments to 70e conferring jurisdiction:

"The amendments are couched in plain words and effect a material change in the jurisdiction of suits by trustees to avoid preferential transfers and recover the property or its value under § 60b. The exception engrafted on section 23b takes such suits out of the restrictive provisions of that section; the sentence added to section 60b makes them cognizable in the courts of bankruptcy, as well as in such state courts as could have entertained them if bankruptcy had not intervened.

In Flanders v. Coleman, 250 U. S. 223, 43 Am. B. R. 563, 39 S. Ct. 472, 63 L. Ed. 948, the court again held that the amendment to section 70e gave to the District Court jurisdiction to make void any transfer by the bankrupt of his property which any creditor might have avoided, giving the trustee the right to recover the same. Stellwagen v. Clum, 245 U. S. 605, 41 Am. B. R. 1, 38 S. Ct. 215, 62 L. Ed. 507. And in Weidhorn v. Levy, 253 U. S. 268, 45 Am. B. R. 493, 40 S. Ct. 534, 64 L. Ed. 898, the court recognized that jurisdiction is in the District Courts to proceed by plenary suit in equity to set aside a transfer made by a bankrupt in fraud of creditors and to subject the property to the administration of the court of bankruptcy. Stefan v. Raabe (C. C. A., 8th Cir.), 4 Am. B. R. (N. S.) 659, 1 F. (2d) 129; Frederick v. Surloff (D. C., Pa.), 4 Am. B. R. (N. S.) 463, 4 F. (2d) 589.

To apply the rule of those decisions to the present complaint: It is true the trustee seeks a money judgment, but he also asks that certain transfers made by the bankrupt in carrying out a conspiracy to defraud creditors may be set aside, and for an accounting with respect to quantities of personal property taken by defendants, and which has been mixed and confused beyond possible identification with the property of defendants, and for an injunction pendente lite against threatened removal or disposi

tion of certain property, part of which belongs to Cohn, but which has been confused with that taken, and for such further relief as he may be entitled to. Relief against such a situation calls for the exercise of the flexible jurisdiction of equity, to the end that the wrongdoers shall not profit by their wrongs and that innocent creditors shall not suffer by them.

There remains the question whether the trustee is limited to recover against defendant Cohn, alleged to be a conspirator, the value of property he actually manually received, or whether the trustee can recover from him the value of all property belonging to the bankrupt and fraudulently taken by fellow conspirators in pursuit of the conspiracy of which Cohn was a member, although part of the property so taken never actually passed into defendant's manual possession. We think the true principle is that, where there is evidence of a common design between several persons to defraud the creditors of one of them, and in carrying out the purpose there is an intentional intermixture of the goods. of the debtor with the goods of those acting in collusion with him, so that separation is practically impossible, all the inconvenience of the confusion is cast upon the one who permitted it, and it is for him to distinguish his own property satisfactorily or lose it, for the law will not distinguish it for him. The Idaho, 93 U. S. 575, 23 L. Ed. 978; McDowell v. Rissell, 37 Pa. 164.

It is also an established rule that, where two or more persons are associated for the same illegal purpose, all engaged in the alleged fraudulent common purpose are as one who has received the property, and each joint tort feasor has the burden of bearing the entire loss which he in cooperation with his fellows has inflicted. Bigelow v. Old Dominion Copper Co., 225 U. S. 111, 132, 32 S. Ct. 641, 56 L. Ed. 1009, Ann. Cas. 1913E, 875. It follows that remedy may be had against all the tort feasors, or any one of them, subject to the rule that satisfaction once obtained is a bar to further action. The Beaconsfield, 158 U. S. 303, 15 S. Ct. 860, 39 L. Ed. 993. The extent of the remedy may be for the recovery of all the property or its full value.

For the reason that the District Court erred in its view respecting its jurisdiction, and the injunction order it granted was based upon the erroneous premise, the order appealed from is reversed, and the cause remanded for further procedings, not

inconsistent with the views herein expressed. The power of the court being now defined, the extent of the injunction pendente lite is a matter resting in the sound discretion of the District Court. Reversed and remanded.

BENJAMIN A. SLAKOFF V. UNITED STATES OF AMERICA.*

U. S. Circuit Court of Appeals, Third Circuit, September 29, 1925.

No. 3286.

PETITION AND PROCEEDINGS THEREON-SCHEDULE-USE

AS EVIDENCE

SCHEDULES OF BANKRUPT ADMISSABLE ON CRIMINAL PROSECUTION. Section 7(9) of Bankruptcy Act, which provides that no testimony given by bankrupt shall be offered in evidence against him in any criminal proceeding, refers to oral testimony and not to his schedules in bankruptcy. (See Collier, 13th Ed., p. 360; Am. B. R. Digest, § 253.)

In error to the District Court of the United States for the Eastern District of Pennsylvania.

Criminal prosecution by the United States against Benjamin A. Slakoff. Judgment of conviction, and defendant brings error. Affirmed.

Before BUFFINGTON, WOOLLEY, and DAVIS, Circuit Judges.

Henry W. Braude (of McEvoy & Braude), for plaintiff in

error.

George W. Coles, U. S. Atty., and L. Le Roy Deininger, Asst. U. S. Atty., for defendant in error.

DAVIS, Circuit Judge:

Benjamin Slakoff, defendant below, was indicted, tried, and convicted for having devised a scheme and artifice to defraud and for obtaining property by means of false and fraudulent representations, and for using the mails for the purpose of * 8 F. (2d) 9.

executing the scheme, in violation of section 215 of the United States Criminal Code (Comp. St. § 10385).

He was engaged in manufacturing and selling clothing at the southeast corner of Twenty-second and Arch streets, Philadelphia, Pa., under the name of B. A. Slakoff & Co. The indictment contains eight counts. In the first, second, third, and sixth he was charged with sending through the mails to prospective creditors a statement of which the following is a copy, representing his net worth to be $49,098.45 on December 30, 1922:

STATE OF FINANCIAL CONDITION AS OF DECEMBER 30, 1922.

Assets.

Cash on hand and in bank (National Bank of Commerce)..

$ 4,287.60 31,012.19

Accounts receivable

Inventory

Machinery and fixtures.

28,614.23

9,849.06

In the fourth, fifth, seventh, and eighth, he was charged with sending through the mails a similar statement representing his net worth to be $57,006.95 on September 1, 1923. The first statement was sent out on January 6 and February 19, 1923, and the second on September 6, October 29, November 2, 3, and 6, 1923.

The statements were admittedly false, in that they did not correctly represent the assets, liabilities, and net worth of the defendant when they were made. Both statements contained an overstatement of his assets--the first one by $18,000 and the second by $17,000.

2-N. S. VOL. VII.

On the basis of these statements, credit was extended to him. He seeks to relieve himself of the consequences of his alleged wrongdoing by the plea of ignorance, that he did not knowingly and wilfully devise the scheme. His counsel, summing up the substance of the testimony, said "that he was an illiterate man, not capable of dictating a letter, and that when a letter or statement was to be sent out he gave her (his bookkeeper) a general idea what to write, and either she or the stenographer wrote the letter, copied a statement, if one was to be sent out, and then defendant signed it. * *It did not appear he fully realized their contents. He relied upon the figures given him. He was incapable of making up the statement himself, and it is doubtful if he fully understood it when presented to him for signature."

*

That the defendant did the acts charged is not, and cannot be, denied, but he may not be convicted and punished unless he knowingly and wilfully did them with the intent to defraud and obtain credit and property. An incorrect statement, grossly misrepresenting facts, does not amount to fraud in law, unless the false representation was knowingly and wilfully made with fraudulent intent. Gilpin v. Merchants' National Bank (C. C. A., 3d Cir.), 21 Am. B. R. 429, 165 F. 607, 91 C. C. A. 445, 20 L. R. A. (N. S.) 1023; Cooper v. Schlesinger, 111 U. S. 148, 4 S. Ct. 360, 28 L. Ed. 382. It was the defendant's duty- however, to make such investigation as was necessary to enable him honestly to sign and send out the statements. If he did not do this, but acted with such gross carelessness and indifference to the truth of the representations contained in the statements as to warrant the conclusion that he acted fraudulently, then his conviction may stand. Kaplan v. United States, 229 F. 389, 143 C. C. A. 509; Yusem v. United States (C. C. A.), 8 F.(2d) 6.

The evidence, however, tended to establish that the defendant himself was responsible for the statements. He himself prepared them in part and furnished the bookkeeper with the figures which she put into them. If he did this, knowing the representations to be false, he was guilty of the crime charged. Whether or not he knew the falsity of the statements, and made and sent them out with fraudulent intent, are questions upon which there was sufficient evidence, if the jury believed it, to sustain the verdict. The evidence was correctly submitted to the jury. The court