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Such portions of the assignment, and of the laws of Tennessee applicable to it, as necessarily conflicted with the bankrupt law, and excluded or denied or withheld such substantial rights and remedies of adminis tration as the creditors are entitled to under the bankrupt law, but no more, were displaced and superseded by the bankrupt law, upon the adjudication, and the creditors had the right to apply to the court in bankruptcy, and to have the assets and property embraced in the assignment, administered there through a trustee, under the terms and provisions of the bankrupt law.

57 S. W. 566 (Tex. Civ. App.) 59 S. W. | 340; Crapo v. Kelly, 16 Wall. 610, 21 L. ed. 297; Reed v. McIntyre, 98 U. S. 507, 25 L. 430; 2 Story, Const. § 1115. ed. 171; Mayer v. Hellman, 91 U. S. 502, 23 L. ed. 379; Simonson v. Sinsheimer, 37 C. C. A. 337, 95 Fed. 948; George M. West Co. v. Lea Bros. 174 U. S. 591, 43 L. ed. 1098, 19 Sup. Ct. Rep. 836; Re Gutwillig, 34 C. C. A. 377, 63 U. S. App. 191 92 Fed. 337; Davis v. Bohle, 34 C. C. A. 372, 92 Fed. 325; Leidigh Carriage Co. v. Stengel, 37 C. C. A. 210, 95 Fed. 638; Re Plotke, 44 C. C. A. 282, 104 Fed. 968; Bryan v. Bernheimer, 181 U. S. 188, 45 L. ed. 814, 21 Sup. Ct. Rep. 557. State legislation on the subject of general assignments, and on the subject of insolvencies, is abrogated or displaced by the bankrupt law only so far as there is necessary conflict between the state legislation and the bankrupt law.

Sturges v. Crowninshield, 4 Wheat. 122, 4 L. ed. 529; Ogden v. Saunders, 12 Wheat. 213, 6 L. ed. 606; Baldwin v. Hale, 1 Wall. 223, 17 L. ed. 531; Tua v. Carriere, 117 U. S. 201, 29 L. ed. 855, 6 Sup. Ct. Rep. 565; Butler v. Goreley, 146 U. S. 303, 36 L. ed. 981, 13 Sup. Ct. Rep. 84; Denny v. Bennett, 128 U. S. 497, 32 L. ed. 494, 9 Sup. Ct. Rep. 134; Brown v. Smart, 145 U. S. 457, 36 L. ed. 775, 12 Sup. Ct. Rep. 958; Geilinger v. Philippi, 133 U. S. 257, 33 L. ed. 618, 10 Sup. Ct. Rep. 266; Stewart v. Platt, 101 U. S. 731, 25 L. ed. 816; Smith v. Union Bank, 5 Pet. 518, 8 L. ed. 212; Cole v. Cunningham, 133 U. S. 107, 33 L. ed. 538, 10 Sup. Ct. Rep. 269; Walworth v. Harris, 129 U. S. 355, 32 L. ed. 712, 9 Sup. Ct. Rep. corporation was allowed by the referee in Re Lock-Stub Check Co. 5 Am. B. R. 106, note, compensation out of the estate as custodian for services in preserving the assigned property and carrying on the business, from the date of the assignment to the date of the possession by the trustee in bankruptcy.

Parmenter Mfg. Co. v. Hamilton, 172 Mass. 178, 51 N. E. 529; Tua v. Carriere, 117 U. S. 210, 29 L. ed. 858, 6 Sup. Ct. Rep. 565; Butler v. Goreley, 146 U. S. 303, 36 L. ed. 981, 13 Sup. Ct. Rep. 84; Boese v. King, 108 U. S. 379, 27 L. ed. 760, 2 Sup. Ct. Rep. 765.

Equity never allows a trust to fail for the want of a trustee. And in the application of this principle, it has frequently occurred that the courts, by construction, or interpretation, or in order to execute the trust and give it force and effect, have displaced one trustee and substituted another, for the purposes of the trust.

Field v. Arrowsmith, 3 Humph. 442, 39 Am. Dec. 185; Mills v. Haines, 3 Head, 332; Hughes v. Brown, 88 Tenn. 578, 8 L. R. A. 480, 13 S. W. 286; Brennan v. Willson, 71 Re Mays, 114 Fed. 600, deny any right of the assignee to compensation for his services, arises in view of this language from the opinion by Mr. Justice Holmes: "But the assignee is acting lawfully in what he does before proceedings in bankruptcy are begun, and, although it may be assumed that the avoidance of the assignment relates back to the date of the deed, still, so far as his services, or services procured by him, tend to the preservation or benefit of the estate, the mere fiction of relation is not enough to forbid an allowance for them."

An assignee for the benefit of creditors who, while bankruptcy proceedings were pending against his assignor, but prior to the adjudication, makes a sale for full value of the property in his hands which would have depreciated in value if not promptly sold, is entitled to re- In Re Kingman, 5 Am. B. R. 251, the referee tain out of the proceeds in his hands a reason- held that an assignee for the benefit of credable sum allowed by the state court as compen-itors under an assignment made with the exsation for his services and for those of his at- press understanding and agreement that it was torneys. Re Scholtz, 106 Fed. 834.

Only in unusual circumstances, however, can an allowance be made out of the bankrupt's estate to the attorneys of his assignee for the benefit of creditors. Re Pauly, 2 Am. B. R. 333; Re Bussey, 6 Am. B. R. 603.

liable to be rendered void by the institution of bankruptcy proceedings within four months from its date, who did nothing more than to take possession of the property, file an inventory, and make some effort to sell it, was not entitled to an allowance for such services or for attorneys' fees based upon services rendered in connection with the assignment, where voluntary bankruptcy proceedings were instituted within four months from the date of the assignment.

A distinction as to the time when such services were rendered has been drawn in some cases, and the conclusion reached that while services rendered by a general assignee in preserving the assigned estate subsequent to the institution of bankruptcy proceedings against In Re McCauley, 2 N. B. N. Rep. 1089, the his assignor may be compensated by an allow-referee held that a voluntary assignee for the anee out of the bankrupt's estate (Re Peter benefit of creditors, who accepts the trust Paul Book Co. 104 Fed. 786; Re B. H. Gladding Co. 9 Am. B. R. 171), no such allowance can be made for services rendered prior to the filing of the petition in bankruptcy. Ibid.; Wilbur v. Watson, 111 Fed. 493.

This question was not directly involved in RANDOLPH V. SCRUGGS, but grave doubt as to the soundness of the cases making such a distinction, as well as those which, like Stearns v. Flick. 103 Fed. 919; Re Tatum, 112 Fed. 50;

knowing that it is liable to be avoided by bankruptcy proceedings, cannot be allowed compensation for his services, at least where such allowance would lead to a duplication of charges.

Where the services of the assignee and of his counsel, instead of benefiting the estate, were injurious thereto, no compensation therefor will be allowed out of the bankrupt's estate. Sinsheimer v. Simonson, 106 Fed. 870.

N. Y. 502; Mark's Appeal, 85 Pa. 233; Price | bankruptcy, could no more relieve or imv. Parker, 11 Iowa, 144; Holtoquist v. pair the obligations of the Langstaff HardClark, 59 Minn. 59, 60 N. W. 1077; Brown ware Company to the appellants, as its credv. Parker, 38 C. C. A. 261, 97 Fed. 447; itors, than the death of a natural person Perry, Tr. §§ 38, 45, 240, 248, 427; Burrill, could relieve his representatives from the Assignm. § 240, 6th ed. payment of his debts out of his assets.

The requirement of uniformity in the Constitution does not prevent Congress leaving in force state laws on the subject of bankruptcies or insolvencies, or providing for the administration of the bankrupt system it has created through the courts of the several states, or permitting such administration through such courts either wholly, or to any prescribed extent.

Hanover Nat. Bank v. Moyses, 186 U. S. 181, 46 L. ed. 1113, 22 Sup. Ct. Rep. 857. Acts of Congress, where exclusive jurisdiction of their enforcement is not given to the Federal courts, may be enforced in the courts of the states of competent jurisdiction.

Bardes v. First Nat. Bank, 178 U. S. 524, 44 L. ed. 1175, 20 Sup. Ct. Rep. 1000; Hicks v. Knost, 178 U. S. 541; 44 L. ed. 1183, 20 Sup. Ct. Rep. 1006; Claflin v. Houseman, 93 U. S. 130, 23 L. ed. 833.

Why does not the rule apply to bankruptcy which has been applied to foreign

and interstate commerce?

Until some inconsistent action, in the form of legislation, is taken by Congress in the exercise of its power to regulate foreign and interstate commerce, the legislation of a state, not directed against commerce in any of its regulations, but relating generally to the rights, duties, and liabilities of citizens, as of obligatory force within its territorial jurisdiction, although it may directly and remotely affect the operations of foreign and interstate commerce, or persons engaged

therein.

Cooley v. Philadelphia Port Wardens, 12 How. 299, 13 L. ed. 996; Sherlock v. Alling, 93 U. S. 99, 23 L. ed. 819; Munn v. Illinois, 94 U. S. 113, 24 L. ed. 77.; Peik v. Chicago & N. W. R. Co. 94 U. S. 164, 24 L. ed. 97; Mobile County v. Kimball, 102 U. S. 691, 26 L. ed. 238.

Even if the general assignment is adjudicated to have been void, and is set aside, the appellants are entitled to compensation for their services.

Williams v. Gibbes, 20 How. 535, 15 L. ed. 1013; Douglas v. Bank of Commerce, 97 Tenn. 133, 36 S. W. 874; Lassiter v. Travis, 98 Tenn. 330, 39 S. W. 226; Knower v. Cen tral Nat. Bank, 124 N. Y. 552, 27 N. E. 247; McBlair v. Gibbes, 17 How. 232, 15 L. ed. 132; Williams v. Gibbes, 17 How. 239, 15 L. ed. 135; Pullman's Palace Car Co. v. Central Transp. Co. 171 U. S. 138, 43 L. ed. 108, 18 Sup. Ct. Rep. 808.

It was the plain duty of the assignee to see that no adjudication of bankruptcy was made against the assignor except upon a petition presenting a case within the jurisdiction of the court, and setting forth with sufficient accuracy a cause of bankruptcy sufficient to support the petition.

Re Meyer, 39 C. C. A. 368, 98 Fed. 980. The bankruptcy, or the adjudication of

Winchester v. Heiskell, 16 Lea, 556, 119 U. S. 450, 30 L. ed. 462, 7 Sup. Ct. Rep. 281, 120 U. S. 273, 30 L. ed. 464, 7 Sup. Ct. Rep. 562; Jeffries v. Mutual L. Ins. Co. 110 U. S. 305, 28 L. ed. 156, 4 Sup. Ct. Rep. 8; Wylie v. Coxe, 15 How. 415, 14 L. ed. 753; 2 Morawetz, Priv. Corp. §§ 1010, 1035; Wait, Insolvent Corp. §§ 199, 236, 277, 305, 486; Burrill, Assignm. 6th ed. § 349; Perry, Tr. 1st ed. §§ 231, 907; Fewlass v. Keeshan, 32 C. C. A. 8, 60 U. S. App. 133, 88 Fed. 573; Kinsey v. McDearmon, 5 Coldw. 392.

As the trustee is "vested with the title of the bankrupt" and hence takes no greater interest in, or better title to, the property than the bankrupt had at the date of the adjudication, except only as to the property disposed of by the bankrupt, in fraud of the bankrupt law, the trustee can claim no more than the bankrupt had, and in the same condition in which he had it.

Donaldson v. Farwell, 93 U. S. 631, 23 L. ed. 993; Yeatman v. New Orleans Sav. Inst. 95 U. S. 766, 24 L. ed. 589; Stewart v. Platt, 101 U. S. 738, 25 L. ed. 816; Porter v. Lazear, 109 U. S. 84, 27 L. ed. 865, 3 Sup. Ct. Rep. 58; Dudley v. Easton, 104 U. S. 103, 26 L. ed. 668; Adams v. Collier, 122 U. S. 388, 30 L. ed. 1208, 7 Sup. Ct. Rep. 1208; Loveland, Bankruptcy, § 149, p. 285.

Taking the title the bankrupt had, the trustee also takes such title subject to all equities, liens, or encumbrances, whether created by operation of law, or by the act of the bankrupt, which existed against the property in the hands of the bankrupt, except in cases of judicial liens created against the property within four months preceding the commencement of the proceedings in bankruptcy, and except in cases where the disposition of the property by the bankrupt is declared by the law to be fraudulent and void.

Yeatman v. New Orleans Sav. Inst. 95 U. S. 764, 24 L. ed. 589; Jerome v. McCarter, 94 U. S. 734, 24 L. ed. 136; Donaldson v. Farwell, 93 Ú. S. 631, 23 L. ed. 993; Cook v. Tullis, 18 Wall. 332, 21 L. ed. 933; Gibson v. Warden, 14 Wall. 244, 20 L. ed. 797; Stewart v. Platt, 101 U. S. 731, 25 L. ed. 816; Hauselt v. Harrison, 105 U. S. 401, 26 L. ed. 1075; Re Blair, 108 Fed. 529; Loveland, Bankruptcy, § 149, pp. 285, 286.

There is no room for the operation of the doctrine of relation under the very terms of the act itself. But if there was room for the operation of such doctrine, it could not be applied to defeat any right or claim of the appellants in this case, as the courts apply such doctrine only to subserve the ends of justice, and to protect parties deriving their interests from the claimant, pending the proceedings for the confirmation of his title.

Lynch v. Bernal, 9 Wall. 317, 19 L. ed. 714.

The Langstaff Hardware Company had the (b.) For general advice and coun

power, and the right, to employ the appellants as its counsel and attorneys, to perform the services they rendered, and to bind

its assets by the contract contained in the *(c.) general assignment for their payment.

See Graham v. La Crosse & M. R. Co. 102 U. S. 160, 26 L. ed. 111; Hollins v. Brierfield Coal & I. Co. 150 U. S. 385, 37 L. ed. 1113, 14 Sup. Ct. Rep. 127; First Nat. Bank v. Lumber & Mfg. Co. 91 Tenn. 12, 18 S. W. 400; McClaren v. Union Roller Mills & Elevator Co. 95 Tenn. 696, 35 S. W. 88. No counsel for appellee.

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"(1.) That the Langstaff Hardware Company is a mercantile corporation, organized under the general law of Tennessee, providing for the organization of such corporations, which was engaged in carrying on a general hardware business at Memphis, in the western district of Tennessee.

(2.) Being embarrassed, it, on the 13th day of August, 1900, made a general deed of assignment, under the general-assignment law of Tennessee, by which it conveyed to one C. W. Griffith, as assignee, all its corporate property of every kind, for the equal benefit of all its creditors. The assignee accepted the trust and qualified by executing bond and taking the oath prescribed by the Tennessee statute, and entered into possession of all the assigned estate. This deed of assignment provided that the assignee should pay reasonable counsel and attorneys' fees for preparing this deed and for advice and service to be furnished and rendered him in the course of the administration of the trust hereby created.' Within four months after this deed of assignment the Langstaff Hardware Company, upon a petition by its creditors, was adjudicated a bankrupt, and this deed set aside as in contravention of the bankrupt law. A trustee was duly chosen, who has taken possession of the assigned assets of the bankrupt.

"(3.) The appellants filed a claim against the bankrupt estate for professional services rendered the bankrupt in preparing the said deed of general assignment, and the assignee thereunder in advising and counsel ing him in respect of his duties, and in defending a suit brought to wind up the corporation in a state chancery court, and for services rendered the assignee in resisting the adjudication of bankruptcy.

"The items of this claim were as follows:

(a.) For services rendered the corporation in preparing the general assignment

.......

sel to the assignee in respect to the duties of his trust..

For legal services in defense of a suit brought in a state court wherein it was sought to have the corporation wound up as an insolvent corporation, and its assets distributed under the orders and decrees of the court..

(d.) For services rendered by employment of the assignee in resisting an adjudication of bankruptcy against the Langstaff Hardware Company

250 00

100 00

300 00

"The appellants asserted and claimed that each of said items constituted a prior charge upon the assets, and asked to have same paid by the trustee in preference to the unsecured creditors. The trustee and certain creditors excepted to each item of this account.

"The referee, upon the evidence, found and certified that the services had been rendered as claimed, and were reasonably worth the amount claimed, but that the same did not constitute expenses allowable as a preference, and were not otherwise a lien. He allowed the item of $500.00 as an unsecured claim against the bankrupt, but disallowed the other items as not being debts of the bankrupt. His order was duly excepted to and the questions certified to the court in due form. The district judge sustained the referee so far as he held the claim to be non-preferential and adjudged that none of the items constituted a debt, provable for any purpose against the bankrupt estate. From this judgment the appellants have appealed and assigned error.

"Upon this state of facts this court desires the instruction of the Supreme Court, that it may properly decide the questions of law thus arising:

[535]

"(1) Is a claim for professional services rendered to a bankrupt corporation in the preparation of a general assignment, valid under the law of Tennessee, entitled to be paid as a preferential claim out of the estate of the corporation in the hands of a trustee in bankruptcy, when the corporation within four months after the *making of the [536} was adjudicated an involuntary bankrupt assignment, and the assignment set aside as in contravention of the bankrupt law? (2) Is a claim for professional advice and legal services rendered such an assignee, prior to an adjudication of bankruptcy against the assignor, the assignment providing that the costs and expenses of administering the trust should be first paid, entitled to be proved as a preferential claim against the bankrupt estate?

66

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(3) Is a claim against such an assignee for legal services rendered at his employment in resisting an adjudication of invol$500 00 untary bankruptcy against the assignor al

536-538

lowable as a preferential claim, when the | has been taken by state decisions with refnecessary effect of the adjudication would erence to similar questions raised by credbe to set aside the assignment under which itors or under state insolvent laws. Bigelow v. Baldwin, 1 Gray, 245, 247; White v. the assignee was acting?

66

(4) If not entitled to be allowed as pref-Hill, 148 Mass. 396, 19 N. E. 407; Clark v. erential claims, may either of the items de- Sawyer, 151 Mass. 64, 23 N. E. 726; Wakescribed in the foregoing questions be proved man v. Grover, 4 Paige, 23, 43, 11 Wend. as unsecured debts of the bankrupt corpo- 187, 226, 25 Am. Dec. 624. See also Mayer v. Hellman, 91 U. S. 496, 500, 501, 23 L. ed. 377, 378.

ration?"

The appellants do not stop here, however, but argue that the avoidance of the voluntary assignment goes only to the administration of the property, and not to the title; that the trustee simply succeeds the privately chosen assignee in the administration of the trust under the deed. Of course the object of this contention is to uphold the provision in favor of the appellants for pre

It is admitted that a general assignment
for the benefit of creditors, made within
four months from the filing of a petition in
bankruptcy, is void as against the trustee
in bankruptcy, so far as it interferes with
his administering the property assigned.
This could not be denied. George M. West
Co. v. Lea Bros. 174 U. S. 590, 595, 43 L.
ed. 1098, 1099, 19 Sup. Ct. Rep. 836; Boese
v. King, 108 U. S. 379, 385, 27 L. ed. 760,
762, 2 Sup. Ct. Rep. 765; Bryan v. Bern-paring the deed and for service to be ren-
heimer, 181 U. S. 188, 45 L. ed. 814, 21
Sup. Ct. Rep. 557. It hardly is necessary
to discuss whether such an assignment
should be held to be embraced in the ex-
press avoidance of conveyances made with
intent to hinder, delay, or defraud creditors
(30 Stat.
in § 67e, of the bankruptcy law.
at L. 565, chap. 541, U. S. Comp. Stat. 1901,
It is possible to say that con-
P. 3450.)
structively a genral assignment falls under
that description. Re Gutwillig, 90 Fed. 475,
34 C. C. A. 377, 63 U. S. App. 191, 92 Fed.
337; Davis v. Bohle, 34 C. C. A. 372, 92 Fed.
325. One ground for such a construction
would be that making the assignment is de-
clared an act of bankruptcy by § 3. As it
could not have been intended that the very
conveyance which warranted putting the
grantor into bankruptcy should withdraw
all his property from distribution there, it
seems sufficient to rely upon the necessarily
implied effect of § 3. At all events, if such
a conveyance be called constructively fraud-
ulent, it would be severe to deduce conse-
(537]quences as *to the validity of the appellants'
claim from that circumstance alone.

dered the assignee. It does not seem to us
If by
to need much argument to show that this
artificial refinement cannot stand.
declaring the assignment an act of bank-
ruptcy, the statute means that the convey-
ance shall not be effectual against the bank-
ruptcy proceedings, as is agreed, the natural[538]
and simple construction is that it means
that the deed shall be avoided as a whole
when the trustee takes the goods. The cases
which we have cited and others under in-
solvent and bankruptcy laws evidently take
It follows that the appellants
that view.
can assert no preference by way of lien un-
der the deed.

now.

It does not follow, however, from the avoidance of the deed, that the service of preparing it did not raise a valid debt. There is no sufficient reason why it should not when once it is decided that the servRe Lains, 16 Nat. ice for which the debt is alleged was lawful when it was rendered. Bankr. Reg. 168, 170, Fed. Cas. No. 7,989. The more difficult question is how to deal with the services rendered to the voluntary assignee. The claim for them must be The assignment was not illegal. It was worked out through the assignee, and canpermitted by the law of the state, and can- not be put higher than his claim for alnot be taken to have been prohibited by the lowances, supposing that they had been bankruptcy law absolutely in every event, paid. We may assume that there is no queswhether proceedings were instituted or not. tion of form before us, and that whatever Re Sievers, 91 Fed. 366; Re Romanow, 92 the appellants properly might have been Fed. 510. It had no general fraudulent in-paid by the assignee they may prove for tent. It was voidable only in case bankruptcy proceedings should be begun. At the time when it was made the institution of such proceedings was uncertain. It seems to us that it would be a hard and subtle construction to say, as seems to have been thought in Bartlett v. Bramhall, 3 Gray, 257, 260, that when they were instituted they not only avoided the assignment, but made it illegal by relation back to its date, when, if they had not been started, it would have remained perfectly good. No doubt the corporation had notice of the bankruptcy law, but it could not go into bankruptcy by voluntary petition, and there is no objection to a debtor's distributing his property equally among his creditors of his own motion, if bankruptcy proceedings do not intervene. The view we take is that which

See Central R. & Bkg. Co. v. Pettus, 113 U. S. 116, 124, 125, 28 L. ed. 915, 918, 5 Sup. Ct. Rep. 387; Mason v. Pomeroy, 151 Mass. 164, 167, 7 L. R. A. 771, 24 N. E. 202. But it has been held that the assignee, even of a corporation, cannot be allowed anything for his services before the filing of the petition in bankruptcy. See e. g. Re Peter Paul Book Co. 104 Fed. 786. So far as this opinion rests on constructive fraud, we have indicated above that it does not command our assent. The case would be different if the assignee were party to an actual fraud. Hastings v. Spencer, 1 Curt. C. C. 504, 507, Fed. Cas. No. 6,201; Smith v. Wise, 132 N. Y. 172, 178, 30 N. E. 229; Perry-Mason Shoe Co. v. Sykes, 72 Miss. 390, 401, 28 L. R. A. 277, 17 So. 171. But the assignee is acting 190 U. S. lawfully in what he does before proceedings

390, 398, 28 L. R. A. 277, 17 So. 171; *T. T.[540]
Haydock Carriage Co. v. Pier, 78 Wis. 579,
582, 47 N. W. 945; Clark v. Sawyer, 151
Mass. 64, 23 N. E. 726.
(1)

We answer the questions as follows:
No. (2) Not under the deed, but, so far as
the assignee would be allowed for payment
of the claim, the claim may be preferred in
the right of the assignee. (3) Not on the
facts appearing in the certificate. (4) The
charge for the preparation of the deed may
be proved as an unsecured claim.

Err.,

บ.

LANDA COTTON OIL COMPANY.

in bankruptcy are begun, and, although it | may be assumed that the avoidance of the assignment relates back to the date of the deed, still, so far as his services, or services procured by him, tend to the preservation or benefit of the estate, the mere fiction of relation is not enough to forbid an allowance for them. See Lynch v. Bernal, 9 Wall. 315, 325, 326, 19 L. ed. 714, 716. This is the doctrine of the state courts with reference to the operation of insolvent laws upon voluntary assignments, and of the better-con39]sidered decisions under *the bankrupt laws. Platt v. Archer, 13 Blatchf. 351, Fed. Cas. No. 11,214; Havemeyer v. Loeb, 5 Abb. N. C. 338, 345; Macdonald v. Moore, 15 Nat. GLOBE REFINING COMPANY, Plff. in Bankr. Reg. 26, Fed. Cas. No. 8,763; Wald v. Wehl, 18 Blatchf. 495, 6 Fed. 163, 169; Hunker v. Bing, 9 Fed. 277; Re Kurth, 17 Nat. Bankr. Reg. 573, Fed. Cas. No. 7,948; Re Scholtz, 106 Fed. 834; White v. Hill, 148 Mass. 396, 19 N. E. 407; Clark v. Sawyer, 151 Mass. 64, 23 N. E. 726; Wakeman v. Grover, 4 Paige, 23, 43, 11 Wend. 187, 25 Am. Dec. 624; Collumb v. Read, 24 N. Y. 505, 515; T. T. Haydock Carriage Co. v. Pier, 78 Wis. 579, 47 N. W. 945; Perry-Mason Shoe Co. v. Sykes, 72 Miss. 390, 28 L. R. A. 277, 17 So. 171. See Williams v. Gibbes, 20 How. 535, 15 L. ed. 1013; Internal Improvement Fund v. Greenough, 105 U. S. 527, 532, 26 L. ed. 1157, 1160; Thompson v. Phenix Ins. Co. 136 U. S. 287, 294, 295, 34 L. ed. 408, 412, 10 Sup. Ct. Rep. 1019; Woodruff v. New York, L. E. & W. R. Co. 129 N. Y. 27, 29 N. E. 251. If beneficial services are allowed for they are to be regarded as deductions from the property which the assignee is required to surrender, and in that way they gain a preference. Platt v. Archer, 13 Blatchf. 351, Fed. Cas. No. 11,214; Re Scholtz, 106 Fed. 834; White v. Hill, 148 Mass. 396, 19 N. E. 407; Clark v. Sawyer, 151 Mass. 64, 23 N. E. 726.

We are not prepared to go further than to allow compensation for services which were beneficial to the estate. Beyond that point we must throw the risk of his conduct on the assignee, as he was chargeable with knowledge of what might happen.

(See S. C. Reporter's ed. 540-547.) Damages-breach of seller's agreement to deliver-pleading-sufficiency of allega tions to show jurisdictional amount involved.

1.

2.

Mere notice to a seller of some interest or probable action of the buyer is not enough necessarily and as matter of law, to charge the seller with special damage on that account if he fails to deliver the goods.

The amount of the damages involved in an action for the breach of a written contract to deliver oil at a specified price f. o. b. buyer's tanks at seller's mill is not increased, for jurisdictional purposes, over and above the difference between the contract and market value by allegations in the petition that the seller had notice that the buyer would be compelled to send its tanks from distant points to the seller's mill; that in so doing transportation charges were incurred and the use of the tanks lost for thirty days; that seller was well aware that buyer had contracts over, and "had contracted to that end" with buyer; and that seller, contemplating the breach of its contract, maliciously caused the buyer to send the tanks a specified distance at a specified cost.

[No. 241.]

1, 1903.

Decided June

IN ERROR to the Circuit Court of the

of Texas to review a judgment sustaining a plea that the damages had been unduly magnified for the purpose of conferring jurisdiction, and dismissing the cause. Affirmed.

The facts are stated in the opinion.

It does not appear how far the services to Submitted April 16, 1903. the assignee were beneficial. Therefore the questions of the circuit court of appeals cannot be answered in full. But the principles as to which it desired instruction may be stated sufficiently for the disposition of the case upon a subsequent finding of facts. None of the claims is entitled to preference under the deed. The charge for the preparation of the assignment properly may be proved as an unpreferred debt of the bankrupt. The services to the voluntary assignee may be allowed so far as they benefited the estate, and, inasmuch as he would be allowed a lien on the property if he had paid the The measure of damages is either such as sum allowed, the appellants may stand in may fairly and reasonably be considered as his shoes, and may be preferred to that ex- arising naturally or such as may reasonably tent. No ground appears for allowing the item for services in resisting an adjudica-breach of a contract to deliver goods-see notes NOTE.--48 to the damages recoverable for the tion of bankruptcy. See Platt v. Archer, to Osgood v. Bauder (Iowa) 1 L. R. A. 655; 13 Blatchf. 351, 354, Fed. Cas. No. 11,214; Shepherd v. Hampton, 4 L. ed. U. S. 369, and Perry-Mason Shoe Co. v. Sykes, 72 Miss. Telfener v. Russ, 36 L. ed. U. S. 800.

Mr. C. W. Ogden submitted the cause for plaintiff in error. Mr. J. D. Guinn was with him on the brief:

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