pliedly admitted the jurisdiction by pleading that there was no common property and that "therefore" the separation should be denied. After the matter had been adverted to by the trial judge and the joinder declared proper it was dealt with as legitimate by the Supreme Court and upon a petition for rehearing the only objections urged by the defendant concerned matters of detail. There is every reason that the local practice sanctioned in this case by the local courts should not be disturbed.

The next error alleged in argument also was not assigned. It is that Judge Norris who first heard the evidence having resigned, Judge McCabe, of the Court of First Instance, who finally decided the separation of conjugal property, was designated by Judge Ross (before whom otherwise the case would have come), on the ground that the latter was disqualified; and that Judge Ross had no power to do so under the Code of Civil Procedure then in force. Upon this point again we should not disturb the course adopted by the local tribunals without stronger reasons than are offered here and therefore do not discuss the question at length. The parties could have agreed in writing upon a judge and they did agree in writing at a later stage that Judge McCabe should decide the case without waiting for the action of the assessors whom the law provides to assist upon matters of fact. This objection like the preceding seems not to have been even suggested to the Supreme Court of the Philippines. To listen to it now would be not to prevent but to accomplish an injustice not to be tolerated except under the most peremptory requirement of law.

The next point argued, again not assigned as error, is that it seems from the opinion of the judge of first instance that the trial was had upon the evidence that had been offered before Judge Norris. If we are to assume the fact, it is a most extraordinary suggestion that, even though the parties seem to have assented to the course

pursued, due process of law forbids a hearing upon a transcript of evidence formerly heard in court. We shall say no more upon this point.

The errors that were assigned may be disposed of with equal brevity. The first one is the taking of July 5, 1902, the date of the decree of divorce, afterwards affirmed, as the date for liquidating the wife's claim. It is urged that there was no formal decree of separation of the property and that until such an order had been made the court had no right to enter a judgment. It also is argued that there was no such inventory as was required by law. But the testimony and other evidence are not before us, and, apart from our often stated unwillingness to interfere with matters of local administration unless clear and important error is shown, there is nothing in the record sufficient to control the opinion of the Supreme Court of the Islands that 'the method adopted by [the judge of first instance] in liquidating the assets of the conjugal partnership was substantially in accord with the method prescribed in the code.' We disallow the

attempt to reopen some questions of detail such as a charge of estimated profits, upon this and other grounds. See Piza Hermanos v. Caldentey, 231 U. S. 690.

The only remaining item is charging interest on the judgment from July 5, 1902. But that was the date at which but for the delays of the law the wife would have received her dues, the husband has had the use of the money meanwhile, and we are not prepared to say that it was not at least within the discretion of the court to allow the charge, notwithstanding the success of the husband in reducing the amount on appeal. Stoughton v. Lynch, 2 Johns. Ch. 209, 219. Hollister v. Barkley, 11 N. H. 501, 511. See Barnhart v. Edwards, 128 California, 572. McLimans v. Lancaster, 65 Wisconsin, 240. Rawlings v. Anheuser-Busch Brewing Co., 69 Nebraska, 34. A discretion is recognized even in actions of tort. Eddy v.

Lafayette, 163 U. S. 456, 467. Frazer v. Bigelow Carpet Co., 141 Massachusetts, 126. The judgment upon the appeal will be affirmed and the writ of error dismissed. De la Rama v. De la Rama, 201 U. S. 303. Gsell v. Insular Collector of Customs, 239 U. S. 93.

Writ of error dismissed.
Judgment affirmed.

JOHNSON, TRUSTEE IN BANKRUPTCY OF WARREN CONSTRUCTION COMPANY, v. ROOT

MANUFACTURING COMPANY.

ERROR TO THE CIRCUIT COURT OF APPEALS FOR THE SEVENTH CIRCUIT.

No. 308. Argued April 18, 1916.-Decided May 1, 1916.

An agreement was made by way of compromise more than four months before the petition was filed to pay from a fund of which the bankrupt was entitled to the residue all lienable claims, including claims of one who had waived the right to file liens, but had subsequently filed claiming the right so to do owing to failure of bankrupt to fulfil contract, and to whom payments were made from the fund within four months of the filing of the petition which the trustee brought suit to recover as preferential. Held that the earlier agreement created an equitable lien in favor of all parties thereto having color of right, and the payments thereunder did not become preferential because the amounts were not ascertained and liquidated until within the four-month period.

219 Fed. Rep. 397, affirmed.

THE facts, which involve the right of a trustee in bankruptcy to recover an alleged preferential payment made by the bankrupt within four months of the filing of the petition under an agreement made more than four months before the filing, are stated in the opinion.

241 U. S.

Argument for Defendant in Error.

Mr. W. H. Thompson, with whom Mr. W. H. H. Miller, Mr. C. C. Shirley, Mr. S. D. Miller, Mr. Fred H. Atwood, Mr. Frank B. Pease, Mr. Charles O. Loucks and Mr. Vernon R. Loucks were on the brief, for plaintiff in error:

The action was to cover an alleged unlawful preference. The judgment of the District Court did not depend upon diverse citizenship alone.

The defendant in error waived its lien. The right to file a lien may be waived before lien accrues. No equitable lien was created by agreement of January 12, 1912. There was no equitable lien in this case.

Preferences in ordinary course of trade are voidable. Accounts receivable may be disposed of in violation of the Bankruptcy Act. The payment was made out of bankrupt's funds.

Numerous authorities, state and Federal, support these contentions.

Mr. Frank S. Roby and Mr. Elias D. Salsbury for defendant in error submitted:

The payment was not preferential; the agreement of January 12, 1912, was more than four months prior to the petition and created liens and was otherwise legal.

In support of these contentions see Albrecht v. Foster Lumber Co., 126 Indiana, 318; Brzezinski v. Neeves, 93 Wisconsin, 567; 67 N. W. Rep. 1125; Carson-Payson Co. v. C., C., C. & St. L. Ry. Co. (Ind. App. Ct.), 105 N. E. Rep. 503; Closson v. Billman, 161 Indiana, 610; Cushing v. Hurley, 112 Minnesota, 83; 127 N. W. Rep. 441; Continental & Commercial Tr. & Sav. Bank v. Chicago Title & Tr. Co., 229 U. S. 435; Coder v. Arts, 213 U. S. 223, 229; In re Dismal Swamp Contr. Co., 135 Fed. Rep. 415; Early v. Atchison &c. Co., 167 Mo. App. 252; 149 S. W. Rep. 1170; In re Ft. Wayne Electric Corp., 99 Fed. Rep. 400; Globe Bank & Tr. Co. v. Martin, 236 U. S. 288; Grant v.

Strong, 18 Wall. 624; Greey v. Dockendorff, 231 U. S. 513; In re Great Western Mfg. Co., 152 Fed. Rep. 123, 127, 128; Hewitt v. Berlin Machine Works, 194 U. S. 296; Johnson v. Hanley, 188 Fed. Rep. 752; Kelly v. Johnson, 251 Illinois, 135; 95 N. E. Rep. 1068; 36 L. R. A. (N. S.) 573, 577; Kertscher v. Green, 205 N. Y. 522; 99 N. E. Rep. 146; Ketcham v. St. Louis, 101 U. S. 306, 315; Knapp v. Milwaukee Tr. Co., 216 U. S. 545; Long v. Caffrey, 93 Pa. St. 526; Long v. Farmers State Bank, 147 Fed. Rep. 360; 9 L. R. A. (N. S.) 585; Ludowici Roofing Tile Co. v. Pa. Inst. &c., 116 Fed. Rep. 661, 662; McCabe v. Rapid Transit Co., 127 Fed. Rep. 465; McDonald v. Daskam, 116 Fed. Rep. 276; McHenry v. Knickerbacker, 128 Indiana, 77.

MR. JUSTICE HOLMES delivered the opinion of the court.

This is a suit to recover an alleged preference from the defendant in error. The Circuit Court of Appeals reversed a judgment recovered by the plaintiff and ordered judgment for the defendant. 219 Fed. Rep. 397; 135 C. C. A. 139. This writ of error was taken out before the passage of the Act of January 28, 1915, c. 22, § 4, 38 Stat. 803, 804.

The facts are these: On May 9, 1910, the Warren Construction Company, the bankrupt, had contracted to do some construction for a railroad company, receiving monthly payments on account, and agreeing that if at any time there should be evidence of any lien for which the railroad might become liable and which was chargeable to the Warren Company the railroad might retain an amount sufficient to indemnify it. Should there prove to be such a claim after the payments were made the Warren Company agreed to refund all moneys the railroad might be compelled to pay in discharging any lien made obligatory in consequence of the Warren Company's default. The Warren Company gave a bond with sureties for the performance of this contract. Later it made a