machinery, and organization, to manufacture merchandise to fill the Vandenboom and Sakolsky orders. To secure to appellant those advancements, bankrupt assigned “ any and all money due” bankrupt under, the two orders, the money so advanced to be repaid out of the first money collected. Appellant seems to be claiming nothing on account of the first contract, and it seems only material here, because the facts reflect upon the good faith of appellant's claim under the second contract. If appellant's representations are true, we must conclude that the moneys advanced by appellant under the first contract covered all materials and all pay rolls necessary to manufacture the furniture to fill the two orders aggregating $33,055. Apparently there was a profit of $12,000 on the two orders, all of which appellant received and still has. In addition thereto, bankrupt had gained in the transaction 200 dining room suites in various stages of completion.

On February 25, 1922, after the two orders had been fully completed there were 200 partially manufactured dining room suites in bankrupt's factory, which belonged to bankrupt. The record does not show any sales by bankrupt after February 25th. The property claimed by appellant covers all of the merchandise and material that came to the trustee and inventoried at $8,502.53. It is evident that, if all the money advanced by appellant after February 25th had gone into material, and none into pay rolls, only a little more than half of the property claimed could have been purchased with money advanced by appellant.

While the second contract "sold and assigned" 200 dining room suites to appellant, the only consideration for such alleged sale was an agreement by appellant to advance the necessary funds to purchase material and meet pay rolls and complete those suites. There could be no lawful sale of bankrupt's property to appellant while appellant was insolvent, without the payment of a fair consideration therefor; but, solvent or insolvent, the conveyance of 200 dining room suites, upon the sole consideration that appellant, to whom they were conveyed, would complete them, would be simply a gift of the furniture to appellant, and no sale could be presumed from such a transaction. What appellant claims is that it bought the furniture, under the second

contract from bankrupt, and that it employed the bankrupt to complete the manufacture of the furniture as its agent. The theory cannot be accepted, first, because the facts do not show it; and, second, because the taking of money from appellant to complete the manufacture of its own furniture in its own factory, with its own tools and organization, cannot be held to constitute the bankrupt as agent and appellant as principal. The parties made a contract in writing for a loan, at a time when both parties knew bankrupt was insolvent. Under the contract, .and under the other evidence in the case, the relation between the parties was that of debtor and unsecured creditor.

The decree of the court below is affirmed.

IN THE MATTER OF SAMUEL KRULL AND SAMUEL BALBOS, INDIVIDUALLY AND AS COPARTNERS TRADING AS KRULL & BALBOS, BANKRUPT.*

U. S. District Court, Eastern District of New York, November, 1923. JURISDICTION, PROCEDURE, EVIDENCE AND RULES IN GENERAL-CREATION AND JURISDICTION IN GENERAL-NO JURISDICTION TO STAY PROCEEDINGS BY LANDLORD AGAINST PURCHASER OF TRUSTEE'S INTEREST IN LEASE.

The bankruptcy court has no jurisdiction to restrain a landlord from prosecuting an action to oust the purchaser of the interest of a trustee in bankruptcy in a lease, from the premises covered by the lease. (See Collier, 13th Ed., p. 42; Am. B. R. Digest, § 13.)

Application of Jacob Friedrich and another for an order restraining Samuel Kopitofsky and another, as owners of certain premises, from prosecuting an action whereby they seek to oust petitioners. Motion denied.

Edward B. Thompson, for petitioners.

Isidor Block, for respondents.

William Austin Moore, for trustee.

295 Fed. 520.

GARVIN, District Judge:

This is an application for an an order restraining Samuel Kopitofsky and Julius Borowitz, owners of the premises, 106 Manhattan avenue, from prosecuting any action whereby they seek to oust Jacob Friedrich and Abraham Friedrich as tenants thereof.

In April, 1923, an involuntary petition in bankruptcy was filed against the bankrupts above named. In the course of the administration of their estate, on June 30, 1923, the trustee in bankruptcy sold various assets, including the unexpired term of a certain lease, dated October, 1919, between the bankrupts, as tenants, and Morris Miller and Benjamin Miller, as owners, of the premises, 106 Manhattan avenue. The lease began on May

1, 1920, and ran for a term of eight years. On June 20, 1923, the trustee served written notice upon said Morris Miller and Benjamin Miller that he elected to adopt the lease, with all its covenants and conditions. The sale of the assets, including the unexpired term of the lease, was made to Morris Feimer for the sum of $6,500, who thereafter duly assigned his bid to Jacob Friedrich and Abraham Friedrich, the moving parties. The said owners of the premises have transferred the title to said Kopitofsky and Borowitz, who are now seeking to oust Jacob and Abraham Friedrich therefrom.

The petitioners rely upon the case of In re Larkey (D. C., N. J.), 32 Am. B. R. 287, 214 Fed. 867, as authority for the proposition that this court has jurisdiction to grant the stay sought, but in that case the facts were quite different from those of the case at bar. In the Larkey Case certain petitioners applied for an order directing that certain premises, belonging to them and leased to the alleged bankrupt, be surrendered, because of alleged breaches of a covenant in the lease.

In the instant case, the trustee has sold the interest of the bankrupts in the unexpired term of a lease. Presumably the purchaser acquired certain rights as a result of his purchase. Those rights he has assigned to the present applicants. The bankruptcy court has no further control over them, and if the title of the applicants is attacked in another tribunal, this court has no jurisdiction to prevent that tribunal from proceeding to an

orderly determination of the rights of the parties. The trustee in bankruptcy has appeared, and states that, if the assignment of the lease is invalid, he will be called upon to return the moneys received as a result of the sale of the assets. It is not clear to the court why such a result follows, if there was indeed a sale of all the trustee's right, title, and interest; but, even if this be true, it cannot give the court the right to assert a power which it lacks.

Motion denied.

SAMUEL PETT V. MAX SPIEGEL.*

New York Supreme Court, Special Term, New York County, November, 1923. RIGHTS, DUTIES AND LIABILITIES OF BANKRUPT SUITS BY AND AGAINST BANKRUPT-ADJUDICATION ALONE DOES NOT STAY PENDING SUITS.

An action against one who is thereafter adjudicated a bankrupt does not abate upon such adjudication or upon the appointment of a trusteee. (See Collier, 13th Ed., pp. 420, 693; Am. B. R. Digest, § 909.) SAME SUITS BY AND AGAINST BANKRUPT CONTINUANCE OF SUITS WHERE BANKRUPT IS DEFENDANT-TRUSTEE NOT OBLIGED TO INTERVENE IN PENDING SUITS.

The trustee in bankruptcy is not obliged to intervene or be substituted in a pending action against the bankrupt and the plaintiff in such action cannot compel such intervention and substitution.

(See Collier, 13th Ed., p. 420; Am. B. R. Digest, § 915.)

Motion to confirm report of referee. Motion granted.

The following is the report of the referee:

I, James W. Hyde, referee appointed by the interlocutory decree of this eourt made and entered in the above-entitled action and bearing date May 9, 1922, to hear and determine the account of the defendant, to take testimony with reference to such accounting, to take and state said account and report the same with my opinion thereon and the amount due to the plaintiff from the defendant, and which decree directed me, in making up the said account and in determining the amount due to plaintiff, to include the following items, namely:

"" (a) Common stock of Mitchell H. Mark Realty Corporation of the par value of $171,000, of which stock the referce shall determine the actual value

202 N. Y. Supp. 650.

and shall include in the said account as a portion of the amount due the plaintiff herein two thirds of such actual value of said stock.

(b) All dividends received by the defendant upon the common stock of the Mitchell H. Mark Realty Corporation up to the time of the stating of the account herein, of which dividends said referee shall include in said account two-thirds together with interest upon such two-thirds from the date of payment to the defendant of each item thereof.

"(c) The sum of $16,666.66, being two-thirds of the commissions paid by the Sutphen estate to Seton and Perpente, with interest thereon from the date of such payment by the Sutphen estate."

I respectfully report as follows:

Before proceeding to a hearing of the matters so referred to me, I took the statutory oath which is hereto annexed. Upon the several hearings of the said reference, I was attended by Russell W. Leary, Esq., attorney for the plaintiff, and by George Edwin Joseph, Esq., attorney for the defendant.

By stipulation of said attorneys, the reading and the subscription by the witnesses of the testimony taken at such hearings were duly waived. All of the said testimony and evidence are submitted with this report.

On December 14, 1922, the attorney for the defendant suggested for the record that said defendant had been committed as an insane person at Stamford, Conn.

On December 19, 1922, the attorney for the defendant suggested for the record that he had learned that in the United States District Court for the Southern District of New York, Sol Brill and Edward Hymes had been appointed receivers in bankruptcy for defendant, and that the order appointing said receivers enjoined creditors from prosecuting their claims against said defendant, and, in addition thereto, he had learned from the public prints that defendant's commitment as an insane person was made after judicial hearing before Judge Keating in Stamford, Conn., and that Eugene L. Falk, Esq., and Dr. Leo Spiegel had been appointed a committee of said defendant. It subsequently developed, however, that the order appointing said receivers in bankruptcy by said United States District Court contained no clause enjoining creditors from prosecuting their claims against defendant, and thereafter Leo Oppenheimer, Esq., attorney for the said receivers, made a formal application to said United States District Court for an order "staying the prosecution of the action of Samuel Pett v. Max Spiegel, now pending in the Supreme Court of the State of New York," with the result that said United States District Court made its order dated February 13, 1923, as follows:

“It is hereby ordered, that the accounting pursuant to the interlocutory decree entered in the Supreme Court of the State of New York, in the action of Samuel Pett, Plaintiff, v. Max Spiegel, Defendant, be and the same is hereby stayed for the period of 30 days from the date of this order, upon the following conditions, namely, that for the purpose of voting for the trustee at the first meeting of the creditors of the above-named bankrupt, the claim of the said Samuel Pett shall be provisionally allowed in the sum of $100,000. "If by reason of objections by other creditors of said bankrupt to said