of the adjudication in bankruptcy, the bankrupt assigned its claim against the Motor Company to one of its creditors, Hoosier Harness Company, a partnership whose members are citizens of and residents. in Indiana. The Ford Motor Company and the partners are made defendants. The Motor Company admits the debt by its answer, and is willing to pay the money into court, as soon as it is determined whether the trustee or the Harness Company is entitled to it. The money has not been paid.

Under section 57, Judicial Code, an attempt at substituted service on the partners was made by the trustee, claiming that his suit was to enforce a lien upon and remove a cloud upon his title to the amount admitted owed by the Motor Company as personal property "within the district" where he brings the suit. The partners move to quash the service on the ground that the court has not acquired jurisdiction over them for any purpose.

As I understand the claims of the respective counsel, there is no dispute that this is a proper plenary suit, and that this court, as a court of bankruptcy, has jurisdiction of the subject-matter. The only question, then, is as to jurisdiction of the person to the extent of property in this district. The trustee's counsel claim that the fund is in custody of the court, because of the offer of the Motor Company to pay the money into court, and that, therefore, the res, as well as personal property, is “within the district."

It may be granted that a chose in action is personal property, and may be asserted by its owner wherever he may happen to be, if he can get proper service. But this begs the question, for the claim of the Harness Company also, on the assignment to it, is a chose in action which it may assert in any jurisdiction in which it can obtain proper service. The purpose of the suit is to determine whether the trustee or the Harness Company is the owner of the chose in action against the Motor Company.

It is clear that if the Motor Company had refused to pay the trustee, he must go where he can serve the Motor Company; and so, if the Motor Company had refused to pay the Harness Company it (the Harness Company) would have to go to Michigan and institute proceedings there, or in some other jurisdiction in which the Motor Company could be found. The effect of that company's position is to refuse to pay either party until the court determines to whom the money ought to be paid.

It is said in Chase v. Wetzlar, 225 U. S. 79, 89, 32 Sup. Ct. 659, 663, 56 L. Ed. 990, that the jurisdiction conferred by section 57 rests upon a real and not an imaginary and constructive basis; that the existence of the property within the jurisdiction is essentially necessary to the exertion of the power of the court to render a binding decree; and that the statute (225 U. S. 88, 32 Sup. Ct. 663 [56 L. Ed. 990]) “exclusively deals with property which is within the district where a suit is brought and which property is therefore capable of being made subject to the dominion and resulting control of the court."

This debt of the Motor Company to the trustee, or to the Harness Company, as the case may be, is not personal property within this dis

trict. This court has no possible control over it. On the bill and the answer of the Motor Company, justice to the latter, as well as to the Hoosier Harness Company, would not warrant a judgment against the Motor Company. The agreement of the Motor Company to pay the bankrupt for goods was a mere personal contract. The trustee may have the right to the money owed by the Motor Company, but the money is not within the district.

Of the many cases dealing with section 57, none seem to be exactly to the point; but one branch of Evans v. Scribner's Sons (C. C.) 58 Fed. 303, seems to contain the principle underlying this case. The complainant was a resident of the Northern district of Georgia and therein brought her bill against Scribner's Sons of New York and an insurance company of Wisconsin. One purpose of the bill was to set aside transfers to Scribner's Sons of insurance policies on the life of complainant's deceased husband, on the ground that they were obtained by duress and fraud. The insurance company in its answer acknowledged the existence of the policies and its indebtedness on the same, asked the protection of the court, and that the parties claiming it might be brought before the court before any action against it was had. It offered, when it should be so protected, to deposit in court the amount covered by the policies. Service was had under section 57 upon Scribner's Sons, who moved specially that the order of service and the service be set aside. It was said by Judge Newman (page 304):

"It appears that the policies are now in the state of New York, but the indebtedness is by a corporation of the state of Wisconsin. As to these policies, the suit does not seek to enforce any legal or equitable lien upon or claim to any property either real or personal'; neither does it seek to remove any incumbrance, lien, or cloud upon the title to any real or personal property.' Even if the insurance policies in issue could be said to be, in any fair sense, such personal property as is contemplated by the statute, the policies are in the state of New York, and not in this district."

It is true the court emphasized the fact that the policies were not within the district, but neither was the indebtedness, the money admitted to be due on the policies; nor did the court regard the offer of the insurance company to pay the money into court, as bringing the res within the control of the court. The same principle is found in Ellis v. Reynolds (C. C.) 35 Fed. 394, and in Non-Magnetic Watch Co. v. Association Horlogere Suisse of Geneva (C. C.) 44 Fed. 6, Jackson v. Hooper (C. C.) 171 Fed. 597, Stockbridge v. Phoenix Mut. Life Ins. Co. (D. C.) 193 Fed. 558, and Standard Gas Power Co. v. Standard Gas Power Co. (D. C.) 224 Fed. 990.

The trustee's right is transitory, not local, in nature, and his action upon it is transitory, and can be asserted anywhere where the proper defendants can be found. What he has may be personal property, as distinguished from real property, but the property he has is the rightif that right is established-to get the money upon the assertion of his right in a competent forum. If that right may be asserted anywhere where the one who owes the debt may be found, it is not personal property of such character within the district as to give the court exclusive dominion and control of it; hence his chose in action is not personal property within this district, and the court acquires no jurisdic

tion by the attempt at substituted service on the partners constituting the Harness Company.

Their motion to quash the order, and the service under it is therefore granted.

MUTUAL EXPORT & IMPORT CORP. v. MUTUAL EXPORT & IMPORT CORP. OF AMERICA.

(District Court, S. D. New York. March 13, 1917.)

No. 252.

1. CORPORATIONS 661(6)—FOREIGN CORPORATIONS-SUIT WITHIN STATERESTRAINING USE OF NAME.

The provision of General Corporation Law (Consol. Laws N. Y. c. 23) § 15, that no foreign corporation shall maintain any action in the state upon any contract made by it in the state, unless prior to making such contract it had procured a certificate of authority to do business, does not prevent a foreign corporation doing business in the state without authority from maintaining suit against a domestic corporation, subsequently incorporated with knowledge that the name adopted by it was similar to the name of the foreign corporation, to restrain the use of the name by the domestic corporation.

[Ed. Note.-For other cases, see Corporations, Cent. Dig. §§ 2539, 2542, 2544, 2564.]

2. CORPORATIONS 648-FOREIGN CORPORATIONS-FAILURE TO SECURE PERMIT-USE OF NAME BY DOMESTIC CORPORATION.

Under General Corporation Law N. Y. § 15, providing that no foreign stock corporation shall do business in the state without having first procured a certificate of authority, and that no such certificate shall be granted to any foreign corporation having the same name as an existing domestic corporation, or a name so nearly resembling it as to be calculated to deceive, a foreign corporation doing business within the state without a certificate is not entitled to the use of its corporate name within the state as against a subsequently incorporated domestic corporation having a similar name, which it adopted without knowledge that it was the name of the foreign corporation, since the foreign corporation's failure to comply with the law requiring it to procure the certificate of authority to do business prevented the domestic corporation from learning of the similarity of names.

[Ed. Note. For other cases, see Corporations, Cent. Dig. § 2516.]

In Equity. Suit by the Mutual Export & Import Corporation against the Mutual Export & Import Corporation of America to restrain the defendant from the use of its name. Complainant's bill for injunction sustained, and defendant's cross-bill for injunction dismissed.

Louis A. Sable, of New York City, for complainant.
Daniel Mungall, of Brooklyn, N. Y., for defendant.

It

AUGUSTUS N. HAND, District Judge. The defendant incorporated February 10, 1916, under the laws of Delaware, with the object of doing an import and export business in the state of New York. entered upon this business in New York immediately after its incorporation. The complainant incorporated in New York on March 10, 1916, and engaged in a similar business, without any knowledge of the

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prior incorporation of the defendant in Delaware. Each corporation has built up a substantial business in New York and has an office there, and each has acted throughout in good faith. The similarity of names of the two corporations has interfered with the business of each, and has caused letters, invoices, and bills of lading to be confused.

Section 15 of the General Corporation Law of New York provides that:

"No foreign stock corporation other than a moneyed corporation, shall do business in this state without having first procured from the secretary of state a certificate that it has complied with all the requirements of law to authorize it to do business in this state. No foreign stock corporation doing business in this state shall maintain any action in this state upon any contract made by it in this state, unless prior to the making of such contract it shall have procured such certificate. No certificate of authority

shall be granted to any foreign corporation having the same name as an existing domestic corporation, or a name so nearly resembling it as to be calculated to deceive.

*

The defendant, though it began business in New York prior to the incorporation of the complainant, has never obtained a license to do business there, and its name so nearly resembles that of complainant as to be calculated to deceive. More than that, the proof shows the close resemblance, and that defendant's name does in fact cause deception and confusion. The complainant seeks in this suit to restrain defendant from the use of its name within the state of New York, and the defendant in its answer asks for similar relief against the complainant.

[1] It is manifest that it is the policy of the state of New York that a business corporation should obtain a certificate from the secretary of state that it is authorized to do business in that state, and that no such license shall be given to any corporation having a name so similar to that of a domestic corporation as to cause confusion. The only penalty imposed by the statute upon the foreign corporation is that it cannot recover upon contracts made in New York. Hence a foreign corporation can restrain the use by a domestic corporation of a trade name similar to its own when such name is chosen by the domestic corporation with notice of the name and business of the foreign corporation, even though the latter has obtained no authorization to do business in New York. This is well settled and the equity is based upon the prevention of fraud. United States Light & Heating Co. of Maine v. United States Light & Heating Co. of New York (C. C.) 181 Fed. 182; Hoevel Sandblast Machine Co. v. Hoevel, 167 App. Div. 548, 153 N. Y. Supp. 35; General Film Co. of Missouri v. General Film Co. of Maine (C. C. A.) 237 Fed. 64.

[2] The situation in the case at bar, however, is quite different from that disclosed in the foregoing decisions. The defendant, in doing business in New York without a certificate, has acted contrary to the policy of the state, and neglected to furnish the complainant with record evidence of its name and rights, which would have existed if the statute had been complied with. Such an authorization would have automatically protected the complainant, and prevented it from obtaining a similar corporate name and building up a good business under that name. Both parties were innocent of any wrong purpose, but it is in

equitable that the complainant should lose the right to the use of its name in New.York and that the defendant should be allowed to mislead the public by the use of its name when a compliance with the statute would have obviated the difficulty.

The New York Appellate Division in the case of American Tarter Co. v. American Tarter Company, 57 App. Div. 411, 68 N. Y. Supp. 236, refused to enjoin a domestic corporation at the suit of a foreign corporation which was incorporated first, but had failed to obtain an authorization to do business in New York, from the use of its name. The real reason for such a decision was, not that the foreign corporation had not a right to sue, or to use its name where no rights of innocent third parties were prejudiced, but because it had neglected to comply with a statute which would have fully protected both the other party and the public. If a foreign corporation by reason of careless. and unlawful conduct has lost the right to protect its own name, conversely its competitor should be granted an injunction to prevent the use of a name which is misleading.

The complainant's bill for an injunction should therefore be sustained, and the defendant's cross-bill for an injunction should be dismissed, with costs.

SHAFFER v. MARKS et al.

(District Court, E. D. Oklahoma. February 10, 1917.)

No. 2256.

(Syllabus by the Court.)

"PROPERTY."

1. MINES AND MINERALS 56, 74-OIL AND GAS LEASE An oil and gas mining lease, under the laws of Oklahoma, whether a chattel real, an incorporeal hereditament, or whatever termed, is nevertheless a right or interest relating to real estate, and, although not arising to the dignity of an estate prior to entry by a lessee, is "property," and as such the subject of transfer and sale.

[Ed. Note.-For other cases, see Mines and Minerals, Cent. Dig. §§ 166, 202.

For other definitions, see Words and Phrases, First and Second Series, 'Property.]

2. COURTS 312(1)—UNITED STATES COURTS--JURISDICTION-❝SUIT TO RECOVER UPON A CHOSE IN ACTION IN FAVOR OF ANY ASSIGNEE."

An action in equity by the assignee of such lease to restrain others from operating the land for oil and gas is not a "suit to recover upon a chose in action by an assignee," within the provisions of section 24 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1091 [Comp. St. 1913, § 991]), prohibiting federal District Courts from entertaining suits to recover upon any promissory note or other chose in action in favor of an assignee.

[Ed. Note. For other cases, see Courts, Cent. Dig. §§ 873–875.] 3. COURTS 367-FEDERAL COURTS-FOLLOWING STATE COURT DECISIONS. The federal courts, in determining cases before them involving state laws and rights accruing under those laws, are guided by the rules announced by the Supreme Court in Kuhn v. Fairmount Coal Co., 215 U. S. 360, 30 Sup. Ct. 140, 54 L. Ed. 228.

[Ed. Note.-For other cases, see Courts, Cent. Dig. §§ 958, 959.]

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