facturing, trading, printing, publishing, mining, or mercantile pursuits (banking corporations excepted),23 owing debts to the amount of one thousand dollars or over, may be adjudged an involuntary bankrupt.

"By 'mercantile pursuits' is meant the buying and selling of goods or merchandise, or dealing in the purchase and sale of commodities, and that, too, not occasionally or incidentally, but habitually as & business': In re New York and Westchester Water Co., 98 Fed. (D. C.) 711, 714; In re Tontine Surety Co., 116 Fed. (D. C.) 401, 402. See, also, In re Cameron Town etc. Ins. Co., 96 Fed. (D. C.) 756.

The words "trading and mercantile pursuits" are to have a restricted meaning, and are not to be so broadened as to cover the whole field of commerce or commercial pursuits: In re Philadelphia and Lewes Transp. Co., 114 Fed. (D. C.) 403.

The term "trader' cannot be enlarged beyond its technical legal meaning: In re Surety Guarantee etc. Co. (C. C. A., 7th Cir.), 121 Fed. 73, 75; In re H. J. Quimby Freight etc. Co., 121 Fed. (D. C.) 139, 140-141.

"Selling merely the natural products of one's own land. . . . does not constitute trading or a mercantile pursuit, even though some yearly purchases may be made by the seller in order to keep up his regular supply." 'These terms are restricted, also, to dealings in merchandise, goods, or chattels, the ordinary subjects of commerce. Mere incidental purchases or sales by a person not otherwise a trader, will not make him such."' "Thus, the principal business of a water company being merely to convey the water from its source to the consumer cannot be called trading or mercantile pursuit": In re New York and Westchester Water Co., 98 Fed. (D. C.) 711, 714, 715 (affirmed, under the name, In re Morris, 102 Fed. 1004, 43 C. C. A. 91).

A corporation chartered as a common carrier of property or persons, whose actual business was chiefly that of a common carrier, and in less degree that

of letting teams by the hour, day, or week, with a subordinate business of taking horses to board (the corporation also having bought horses, hay, grain, wagons, harnesses, etc., and now and then sold horses and wagons, but only as an incident of its general business), is not a trader: In re H. J. Quimby Freight etc. Co., 121 Fed. (D. C.) 139.

A corporation engaged in the carriage of passengers and goods for hire is not engaged in trading or mercantile pursuits: In re Philadelphia and Lewes Transp. Co., 114 Fed. (D. C.) 403.

A corporation engaged in buying and selling stocks, bonds, and other securities is not a trader: In re Surety Guarantee etc. Co. (C. C. A., 7th Cir.), 121 Fed. 73, 74, 75.

A corporation whose principal object is social intercourse is not engaged in trading: In re Fulton Club, 113 Fed. (D. C.) 997.

A corporation engaged in keeping a saloon and restaurant is not in trading or a mercantile pursuit. Such a business is like a hotel business without the feature of lodgings: In re Chesapeake Oyster etc. Co., 112 Fed. (D. C.) 960.

In Re Chesapeake Oyster etc. Co., and other cases the conclusion reached in Re San Gabriel Sanatorium Co., 95 Fed. (D. C.) 271, that a private hospital run for profit, and that reached in Re Morton Boarding Stables, 108 Fed. (D. C.) 791, 794, that a boarding stable is trading or a mercantile pursuit, is disapproved.

Mining. Before the amendment of 1903 a corporation engaged principally in mining was not subject to the act: In re Elk Park Min. etc. Co., 101 Fed. (D. C.) 422; In re Rollins Gold etc. Min. Co., 102 Fed. (D. C.) 982, 983-985; In re Chicago-Joplin Lead etc. Co., 104 Fed. (D. C.) 67; In re Woodside Coal Co., 105 Fed. (D. C.) 56; In re Keystone Coal Co., 109 Fed. (D. C.) 872.

23 Except Banking Corporations.-Bankrupt Act, section 4b, second sentence: "Private bankers, but not national banks or banks incorporated under state or

39. Persons Embraced Within Operation of State Insolvent Law.24

Any corporation except a banking corporation,25 for six months a resident of California,26

territorial laws, may be adjudged involuntary bankrupts.''

"A private banker is a person or firm, not a corporation, engaged in banking without having special privileges or authority from the state. . . . We are

of opinion that the 'private banker' of the bankruptcy act does not include a corporation": In re Surety Guarantee etc. Co. (C. C. A., 7th Cir.), 121 Fed. 73, 74.

24 All Persons not Embraced in the Operation of the Federal Law are Subject to the State Law.-In R. H. Herron Co. v. Superior Court, 136 Cal. 279, 282, 283, 68 Pac. 814, the court said: "The Bankruptcy Act passed by Congress in 1898 is not operative upon all classes of creditors or upon all classes of corporations." "It follows that it [a corporation which at all times since its organization has been engaged in the business of mining in this state, and has never been engaged in manufacturing, or trading, or printing, or publishing, or mercantile pursuits of any character] is not subject to the Bankruptcy Act of 1898, and that, consequently, the provisions of the insolvent law of this state applicable to such corporations have not been suspended, but are in full force. Under section 40 of that act its provisions apply to all corporations, and the action of the superior court [in declaring the corporation an involuntary corporation] was therefore within its jurisdiction."

25 Except Banking Corporations.-Section 11 of the Bank Commissioners' Act (Stats. 1877-78, p. 740, c. 481, as Amended Stats. 1887, p. 90, c. 80, was intended by the legislature to provide for every case involving the winding up of the business of a banking corporation, and necessarily supersedes the pro visions of the Insolvent Act of 1880 so far as this

owing debts exceeding in amount the sum of three hundred dollars, may, on his petition, be adjudged a voluntary insolvent under the state insolvent law; and any wage-earner who works for hire at a rate of compensation not exceeding fifteen hundred dollars a year, any person chiefly engaged in tillage of the soil, any farmer, and any corporation except a banking corporation25 not embraced within the operation of the federal bankrupt law, owing debts in this state amounting to not less than five hundred dollars, may be adjudged an involuntary insolvent.

class of corporations is concerned: People v. Superior Court, 100 Cal. 105, 114, 34 Pac. 492; Crane v. Pacific Bank, 106 Cal. 64, 70, 39 Pac. 215.

This act was repealed by Stats. 1903, March 2, p. 73, c. 65, but the same purpose was accomplished by Stats. 1903, March 24, p. 365, c. 266, section 10 thereof providing that the bank commission shall have charge of any bank which becomes insolvent or unsafe.

26 Corporation Must be Resident.-Only corporations which are residents of a county for six months are entitled to avail themselves of the provisions of the California Insolvent Law of 1895 in respect to voluntary bankrupts. A foreign corporation is never a resident of the state-at any rate when it has not complied with the conditions upon which foreign corporations may sue and defend in this state, and in such case cannot become a voluntary bankrupt: Keystone Driller Co. v. Superior Court, Cal., March 31, 1903.

ARTICLE 2.

BANKRUPTCY UNDER FEDERAL LAW.

Subdivision 1. Validity of Encumbrance in Case of Bankruptcy.

40. Encumbrances generally not affected by bank.

ruptcy.

41. Contractual encumbrance for present consideration not affected.

42. Encumbrances against exempt property not affected.

44.

secure antecedent

Contractual encumbrance to
obligation deemed preference.

45. Contractual encumbrance when money knowingly used to confer preference voidable.

46.

When made to hinder or delay or defraud creditors void.

47. When declared void by state laws void in bankruptcy.

48.

Waiver of exemptions to encumbrancer inures to estate when encumbrance void.

49. Undisclosed encumbrance lost by indistinguishable mingling of property.

Subdivision 2. Possession of Encumbered Property. 50. Encumbrancer in possession at time of filing petition may retain possession.

51. When bankrupt in possession at time of filing petition trustee entitled to possession.