a party to the suit or assert any claim to the fund. Rather, he conceded the claim of the appellant and was content to permit it to sustain the burden of the litigation, and because of its claim to vindicate any right that he, Fred, might have had in and to the fund. Even though up to that time he might have revoked or rescinded the contract under which the deposit was made (and we express no opinion in that regard), yet surely thereafter he could not do so. He was in any event, thenceforth estopped to deny the right of the appellant to the fund. And it is to be remembered that he has at no time since asserted, and is not now asserting. any claim for himself. That claim is now made by his judgment creditor.

The respondent contends that the provision imposed by the garnishee bank when it accepted the deposit that "a certified copy of the judgment entered in said cause together with the certificate of the clerk that the cause is finally determined will be its warrant and justification for making such payment" constituted a condition precedent which the appellant was bound to perform before it could acquire any rights under the agreement of deposit. We think that there is no good ground for this contention. What was the purpose of the provision? To protect the garnishee as against any responsibility to Goeschel, and nothing else. There were under the agreement two parties to whom the money might be paid back to Goeschel, if the attack on his title to the land by the Montana suit was sustained; otherwise to the appellant. When the Montana suit was decided favorably to Goeschel, his interest. in the moneys ceased. Thenceforth he had no concern as to what became of them. To protect itself the garnishee bank required proof of that fact; so the provision. But the garnishee might waive such proof. Surely the respondent may not rely on the failure to make it. The right to the money was fixed by the fact -the happening of the contingency. The proof required was merely to satisfy the garnishee of that fact.

The respondent further contends that the rights of the respective parties herein were litigated and determind in the former suit (McCormick, Trustee, v. Union Farmers' State Bank, supra); that in that action it was adjudged that the moneys on deposit with the garnishee bank were the property of Fred Schultze, and that the judgment therein concludes the appellant

from any claim to such moneys; that the position now taken by the appellant is inconsistent with its position in the former suit. We think the respondent has misconceived the effect of the judg ment in the McCormick Case. That judgment simply determined that the moneys here in question, when deposited with the garnishee, were the property of Fred Schultz; that by depositing them with the garnishee for the use and benefit of the appellant there was no preference as against the other creditors of Max Schultze; that, so far as the parties to that suit were concerned, the moneys were deposited for the use and benefit of the appellant and belonged to it. We can see no inconsistency in the position as assumed by the appellant in that suit, and that taken in the instant case. It was not precluded by the judgment in that suit from thereafter asserting and litigating its claim to the moneys so deposited as against Fred. In fact, its position in the instant case is predicated on the determination in the former suit.

The respondent also urges that prior to the happening of the contingency on which the money became payable to Fred, Max filed his voluntary petition in bankruptcy, and listed the indebtedness to the appellant, and Fred approved of such action with reference to such indebtedness, thus indicating positively a revocation or rescission of the arrangement whereby the debt was to be paid with the money. Not only that, says the respondent, but the appellant assented thereto, proved the claim, shared in the estate, and Max was discharged. Is there any basis for such contention that thereby Fred and Max revoked and rescinded the arrangement, and the appellant assented thereto? We think not. It must be borne in mind that when these things were done the contingency had not happened. Max wanted to be discharged from his obligations through bankruptcy. To do so he had to list those obligations. Under his arrangement with Fred, if the money here in question became payable from Goeschell, it was to be used in paying the debt to the appellant, and Max was to reimburse Fred. But the contingency had not happened, so Max was owing the appellant, and not Fred. Therefore it was necessary for Max to list the indebtedness to the appellant for his own protection and to accomplish the purpose of his bankruptcy. Likewise, and because of the same facts, Fred had only a contingent claim against Max, and could not prove it as such in bankruptcy.

And likewise, for its own protection, the appellant must needs prove its claim, since the deposit with the garnishee was available in satisfaction of that claim only upon the happening of the contingency. In fact, it was the duty of the appellant to prove the claim as well for the benefit of Fred as for its own benefit. Fred, by his contract made by Max, had agreed contingently to pay the debt of Max to the appellant. We think that he thereby came within the purview of section 57i of the Bankruptcy Act of 1898 (30 U. S. St. at L. 544 [U. S. Comp. St., § 9641]), providing:

"Whenever a creditor, whose claim against a bankrupt estate is secured by the individual undertaking of any person, fails to prove such claim, such person may do so in the creditor's name, and if he discharge such undertaking in whole or in part he shall be subrogated to that extent to the rights of the creditor."'

Under this section it was the liability of Max to the appellant which had to be proved, and not the contingent liability of Max to Fred. Both claims, that of the appellant and that of Fred, could not be proved. If the appellant failed to prove its claim, then only could Fred prove it in order to protect himself. And when Fred paid the claim he was subrogated to the rights of the appellant. See Collier on Bankruptcy (13th Ed.), p. 1163 et seq., Insley v. Garside (C. C. A., 9th Cir.), 10 Am. B. R. 52, 121 Fed. 699, 58 C. C. A. 119; Rosenthal v. Nove, 175 Mass. 559, 56 N. E. 884, 78 Am. St. Rep. 512; 7 C. J. 298; 3 R. C. L. p. 248. However, if what we have last above said be right, it follows as a necessary consequence, since the appellant was entitled to the moneys deposited with the garnishee bank, and since it proved its claim in bankruptcy for the indebtedness thus to be paid by such moneys, that Fred was entitled to be subrogated to the right of the appellant to any dividends that might be paid on account thereof from the bankrupt's estate, or, if the appellant received dividends from the estate, then its claim to the moneys in the hands of the garnishee must be diminished to the extent of the dividends received on account of that part of the debt of the bankrupt so paid by Fred; and in that event the rights of the respondent judgment creditor attached to the same extent to such moneys. Although it does not clearly appear from the record in this case as to what dividends were paid to or received by the

appellant, there is some proof that a dividend was allowed and paid. So, while it appears that Fred thereby had an interest in the moneys held by the garnishee, it is impossible from the present record to ascertain the extent of that interest.

Therefore the judgment of the District Court will be reversed, and the case remanded for further disposition in accordance with this opinion.

BRONSON, C. J., and JOHNSON, CHRISTIANSON and BIRDZELL, JJ., concur.

W. J. GEARY, TRUSTEE IN BANKRUPTCY OF THE ESTATE OF JOHN A. GREENWALT, PLAINTIFF-APPELLANT, V. JAMES A. SCHWEM, DEFENDANT-APPELLEE.*

Pennsylvania Supreme Court, May, 1924.

SUITS AND ACTIONS BY AND AGAINST TRUSTEE-TRUSTEE'S RIGHT OF ACTION -CONDITIONS PRECEDENT-TRUSTEE MAY BRING ACTION TO AVOID FRAUDULENT TRANSFER WITHOUT FIRST OBTAINING JUDGEMENT AGAINST BANKRUIT.

A trustee in bankruptcy may maintain an action to recover moneys paid by the bankrupt when insolvent, for liquor purchased in violation of the National Prohibition Act, without first obtaining a judgment against the bankrupt and issuing an attachment sur judgment, summoning the defendant as garnishee.

(See Collier, 13th Ed., p. 1776; Am. B. R. Digest, § 635.) FRAUDULENT TRANSFERS-FORM OF TRANSACTION-TRUSTEE'S RIGHT ог ACTION-TRUSTEE MAY MAINTAIN ACTION TO RECOVER MONEYS PAID FOR LIQUOR ILLEGALLY PURCHASED.

A trustee in bankruptcy of an insolvent vendee may maintain an action against a vendor to recover moneys paid by the vendee while insolvent for liquor purchased in violation of the National Prohibition Act.

(See Collier, 13th Ed., p. 1770; Am. B. R. Digest, §§ 561, 634.)

Appeal by plaintiff from judgment in favor of defendant. Reversed and procedendo awarded.

Argued before MOSCHZISKER, C. J., and WALLING, Simpson, SADLER, and SCHAFFER, JJ.

124 Atl. 630.

A. M. Liveright and A. A. Geary and George F. Whitmer, for appellant.

W. C. Miller and H. B. Hartswick for appellee.

SIMPSON, J.:

Plaintiff appeals from a judgment for defendant on questions of law raised by the affidavit of defense. Under such circumstances all the averments of the statement of claim must be taken as true, and the judgment should not be sustained, unless, from the facts averred, it appears, as a conclusion of law, that plaintiff cannot possibly recover; Rhodes v. Terheyden, 272 Pa. 397, 116 Atl. 364. In this light we will determine the appeal.

Before the passage of the Eighteenth Amendment of the Constitution of the United States, and of the National Prohibition Act (U. S. Comp. St. Ann. Sup. 1923, § 1013814 et seq.), defendant had been selling liquor at wholesale, and Greenwalt vending it at retail. Subsequently, in direct violation of both Constitution and statute, defendant sold a quantity of liquor to Greenwalt, and received payment for it. Under the statute this was a . criminal act. During all the time covered by those sales and payments Greenwalt was insolvent; he was subsequently adjudicated a bankrupt, and later discharged from his debts; and plaintiff, as his trustee in bankruptcy, was duly authorized to bring the present suit to recover from defendant the moneys thus paid to him by Greenwalt. Plaintiff's claim is based upon paragraph (e) of section 70 of the Bankruptcy Act, which provides that:

"The trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value, from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication." U. S. Comp. St. § 9654.

The court below correctly overruled defendant's contention that, assuming a liability existed, the only method by which plaintiff could recover would be by obtaining a judgment against the bankrupt, and issuing an attachment sur judgment, summoning defendant as garnishee. This is one of the methods open to a creditor, if a payment or transfer was fraudulent (Heath v. Page, 63 28-N. S. VOL. IV.