that the court has no jurisdiction of the case. (In re Williams, 14 N. B. R. 132; Fed. Cas. 17706; In re Mendelsohn, 12 N. B. R. 533; 3 Sawy. 342; Fed. Cas. 9420; In re Burton et al., 17 N. B. R. 212; 9 Ben. 324; Fed. Cas. 2214.) He may also contest the question as to the number and amount of creditors, as well as any other material fact in the case (In re Scrafford, 14 N. B. R. 184; 3 Cent. Law J. 252; Fed. Cas. 12557); and he may take advantage of any defense available to the debtor. (In re Williams, 14 N. B. R. 132; Fed. Cas. 17706.) He has a right to intervene after default of the debtor and contest the commission of the alleged act of bankruptcy. (In re Jonas, 16 N. B. R. 452; Fed. Cas. 7442.) Where a creditor has obtained an attachment after filing of petition and issue of the order to show cause, he has no right to intervene and oppose adjudication. (In re Vogel et al., 18 N. B. R. 165; Fed. Cas. 16981.)

Intervention by partners.-One member of a firm died and his administrators allowed the surviving partner to continue the business under the same firm name, but without any new partnership agreement. He became a bankrupt, and the court held that, in the absence of a new agreement, the administrators of the dead partner could only come in as any other creditor, the surviving partner having converted the property of his dead partner to his own use with the knowledge and consent of the administrators. (In re Mills, 11 N. B. R. 74; Fed. Cas. 9611.) Upon the return day of the order to show cause, certain creditors, not petitioning creditors, moved for leave to intervene and contest the adjudication upon the ground that the voluntary assignment was void, being executed by only three of the five partners personally and in the name of one of the partners signing as attorney in fact for the firm, and alleging that such partner had no power of attorney for that purpose; it was held that the motion must be denied, as a case of fraud or collusion had not been shown. (In re Lawrence et al., 18 N. B. R. 516; 26 Pittsb. Leg. J. 143; Fed. Cas. 8133.) A voluntary petition in bankruptcy was filed by partners, an adjudication had, and the property conveyed to an assignee. Nearly two years afterwards a creditor of the firm filed a bill alleging that two persons not named in the petition were copartners with the petitioners, and asked the court to order their joinder in the bankruptcy proceeding. Held, that the creditor could not supply the omission, but could have the same remedies against such parties as they would have had before the petition was filed. (Citizens' Nat. Bank v. Cass et al., 18 N. B. R. 279; 6 Weekly Notes Cas. 371; 6 Reporter, 579; 19 Alb. Law T. 119; 26 Pittsb. Leg. T. 25; Fed. Cas. 2732.)

g. A voluntary or involuntary petition shall not be dismissed by the petitioner or petitioners or for want of prosecution or by consent of parties until after notice to the creditors.

Creditors must have at least ten days' notice by mail of the proposed dismissal of bankruptcy proceedings. (Sec. 58, a.)

Where petitioning creditor abandons or fails to proceed.—When a petitioning creditor abandons the proceeding, any other creditor may intervene, and on his application the court may proceed to an adjudication. Such right of intervention cannot be defeated by any arrangement between the bankrupt and any creditor, and any action of the court defeating such right of intervention is in violation of the statute. (In re Lacy, Downs & Co., 10 N. B. R. 477; Fed. Cas. 7965.) The pendency of a petition to discontinue proceedings in bankruptcy, instead of depriving creditors of the right to intervene, is notice to them that the original creditor did not intend to prosecute further the matter, confers upon them the very right to intervene and prosecute. (In re Buchanan, 10 N. B. R. 97; Fed. Cas. 2073.) Another creditor may intervene and be permitted to prosecute the original petition where the court is satisfied that the original petitioning creditor does not intend to prosecute the matter further, and the pending application of the original creditor to discontinue the proceedings is sufficient evidence in that regard. (In re Buchanan, 10 N. B. R. 97; Fed. Cas. 2073.) The adjourned day on which, if the petitioning creditor does not appear and proceed to an adjudication, another creditor may appear and prosecute, is any day to which the proceedings on the order to show cause may be adjourned for the purpose of inquiring into the allegations of the acts of bankruptcy. (In re Lacy, Downs & Co., 10 N. B. R. 477; Fed. Cas. 7965.) Where the petitioning creditors omit or decline to proceed, any other creditor representing more than the requisite amount of debts may continue the proceeding. (In re Sheffer, 17 N. B. R. 369; 4 Sawy. 363; 1 San Fran. Law J. 117; Fed. Cas. 12742.) Where a bankrupt gives a receipt and releases under seal to his assignee in a settlement out of court, and a stipulation is filed discontinuing the bankruptcy proceedings, the bankrupt court has power to set aside the stipulation on proof that it was obtained from the bankrupt by fraud, or given under a mistake of fact; but such court will not do so until the bankrupt has sought relief in a court having jurisdiction to set aside the release for fraud, or to award damages (In re Beiler, 7 N. B. R. 552; Fed. Cas. 1394); and the court may permit a creditor to assign his claim after having joined in the petition, even if it results in defeating the proceedings. (In re Western Savings & Trust Co., 17 N. B. R. 413; 4 Sawy. 190; Fed. Cas. 17442.) If all the creditors express a desire to dismiss the proceeding, they should as a rule be allowed to do so, or creditors who have been misled by false representations will be allowed to withdraw upon discovering the truth, if the court is satisfied they were misled, (In re Heffron, 10 N. B. R. 213; 6 Chi. Leg. News, 358; Fed. Cas. 6321; In re Miller, 1 N. B. R. 105; 1 Amer. Law T. Rep. Bankr. 121; Fed. Cas. 9553.) A motion for leave to dismiss the proceedings and to settle with the debtor comes too late if filed after the debtor

has been adjudged a bankrupt. (In re Sherburne, 1 N. B. R. 155; Fed. Cas. 12758.)

Dismissal of bankruptcy proceedings.-The stockholders of a bankrupt corporation who have bought up all the floating debt of the corporation, except a few insignificant claims, may dismiss the proceedings and be permitted to take possession of its property and effects, upon giving security for the payment of the remaining claims. (In re Indianapolis, Cincinnati & Lafayette R. R. Co., 8 N. B. R. 302; 21 Pittsb. Leg. J. 4; Fed. Cas. 7023.) Under the act of 1867 it was held that a petitioning creditor might, at any time before adjudication, discontinue the proceedings and have his petition dismissed without notice to other creditors, who, if they desire to continue proceedings, should apply, on the day to which proceedings have been adjourned, for leave to be substituted, or file a new petition. (In re Camden Rolling Mill Co., 3 N. B. R. 146; Fed. Cas. 2338.)

Withdrawal of creditor.- Creditors cannot withdraw after having in good faith joined in an involuntary petition (In re Sargent, 13 N. B. R. 144; 1 N. Y. Wkly. Dig. 435; Fed. Cas. 12361; In re Rosenfields, 11 N. B. R. 86; 3 Amer. Law Rec. 724; 1 Cent. Law J. 583; Fed. Cas. 12061); and permission to withdraw will be denied whenever necessary in the furtherance of the objects of the Bankrupt Act. (In re Sheffer, 17 N. B. R. 369; 4 Sawy. 363; 1 San Fran. Law J. 117; Fed. Cas. 12742.) But when his name has been signed to the petition without his knowledge, he may repudiate the proceedings and the petition will be dismissed as to him (In re Rosenfields, 11 N. B. R. 86; 3 Amer. Law Rec. 724; 1 Cent. Law J. 583; Fed. Cas. 12061); or if he join therein through misrepresentation, he may be allowed to withdraw at any time before adjudication. (In re Sargent, 13 N. B. R. 144; 1 N. Y. Wkly. Dig. 435; Fed. Cas. 12361; In re Heffron, 10 N. B. R. 213; 6 Chi. Leg. News, 358; Fed. Cas. 6321.) If, however, the misrepresentation was not substantial or intentionally false, they will not be entitled to withdraw. (In re Vogel et al., 18 N. B. R. 165; Fed. Cas. 16981.) Where one of the creditors who joined in a petition in involuntary bankruptcy sought to withdraw, alleging that he had the same right to withdraw that a plaintiff has to discontinue a suit, the court held that he could not, as the rights of his co-petitioners would have been affected. (In re Vogel et al., 18 N. B. R. 165; Fed. Cas. 16981.) A party having once appeared cannot withdraw appearance on the ground that the court has no jurisdiction, but must raise such question by demurrer. (In re Ulrich et al., 3 N. B. R. 34; 3 Ben. 355; Fed. Cas. 14327.)

Sec. 60. Preferred creditors.-a. A person shall be deemed to have given a preference if, being insolvent, he has procured or suffered a judgment to be entered against himself in favor of any person, or made a transfer of any of his property, and

the effect of the enforcement of such judgment or transfer will be to enable any one of his creditors to obtain a greater percentage of his debt than any other of such creditors of the same class. 77 Pac. 689

See subdivision b of this section for analogous provision in the act of 1867.

More than all else, this provision is conducive of a calm and dispassionate examination by the creditors of a debtor's financial condition, before crushing out his financial existence by compulsory process. Left without the inhibition against preferences, the least suspicion of insolvency causes the diligent creditor to institute attachment proceedings, soon to be followed by an indiscriminate onslaught by other creditors, early resulting in the debtor closing his place of business. As under this law all share alike in the settlement of an estate, nothing is gained by being first in the institution of attachment proceedings, and, as a result, the debtor and his creditors are enabled to meet and counsel together, which will result in a better understanding between the two classes and have a tendency to prevent commercial failures. While the statute does not make intent an essential part of the preferences, in some instances it must exist in order to create one. (Sec. 3, a.)

It is considered an act of bankruptcy for any person to transfer, while insolvent, any portion of his property to one or more of his creditors with intent to prefer such creditors over his other creditors, or to permit or suffer a creditor to obtain a preference through legal proceedings, and not having, at least five days before a sale or final disposition of any property affected by such preference. vacated or discharged such preference. (Sec. 3, a.) A person is deemed “insolvent " whenever the aggregate of his property, exclusive of any property which he may have conveyed, transferred, concealed or removed, or permitted to be concealed or removed, with intent to defraud, hinder or delay his creditors, shall not, at a fair valuation, be sufficient in amount to pay his debts. (Sec. 1-15.) In connection with this, section 67, relating to "liens," should be consulted.

When a preference constitutes fraud.— It constitutes fraud for a debtor to give preference to a creditor within four months prior to the filing of the petition in bankruptcy, the debtor being insolvent and the creditor having reasonable cause to believe him so. (Kohlsaat v. Hoguet et al., 5 N. B. R. 159; 4 Ben. 565; Fed. Cas. 7919; In re Lewis et al., 2 N. B. R. 145; Sharpe, Ass., etc. v. Philadelphia Warehouse Co., 19 N. B. R. 378; Waring, Ass., v. Bichanan, 19 N. B. R. 502; Fed. Cas. 17176; Sedgwick, Ass, v. Place et al., 5 N. B. R. 168; 5 Ben. 184; 3 Chi. Leg. News, 409; 6 Amer. Law Rev. 151; Fed. Cas. 12620; In re Tonkin & Trewartha, 4 N. B. R. 13; 3 Amer. Law T. 221; 1 Amer. Law T. Rep. Bankr. 232; Fed. Cas. 14094; In re Rosenfeld, 1 N. B. R. 161; 7 Amer. Law Reg. (N. S.)

618; 1 Amer. Law T. Rep. Bankr. 81; Fed. Cas. 12058.) Pressure in making assignment to one creditor does not ameliorate the fact that it is a preference over other creditors. (In re Batchelder, 3 N. B. R. 37; 1 Lowell, 373; Fed. Cas. 1098.) Whether a preference is voluntary or involuntary, or by reason of threats or coercion, is wholly immaterial. (Strain v. Gourdin et al., 11 N. B. R. 156; 2 Woods, 380; Fed. Cas. 13521.) There is nothing dishonest or illegal in a creditor securing a debt due him from a failing debtor. Actual fraud does not embrace the act of a creditor who attempts by proper and ordinary effort to secure an honest debt, which act may afterwards become a legal fraud by reason of the filing of a petition and adjudication in bankruptcy. A mere fraud on the bankrupt law by accepting a preference in violation of its provisions is not an actual fraud. (In re Bousfield & Poole Mfg. Co., 16 N. B. R. 489: Fed. Cas. 1703.)

What payments are preferences.- When a debtor's liabilities exceed his assets and he has ceased to meet his indebtedness as it falls due and has thus become in law and in fact insolvent, every payment made by him is a preference of the creditor so paid (In re Warner et al., 5 N. B. R. 414; Fed. Cas. 17177); as a payment made by a debtor who knows that he is insolvent, by procuring an order for material from a creditor for the express purpose of discharging the indebtedness (Farrin v. Crawford et al., 2 N. B. R. 181; 7 Chi. Leg. News, 343; Fed. Cas. 4686); and a payment by debtors, being insolvent and contemplating bankruptcy, is a fraudulent preference and an act of bankruptcy, notwithstanding it is made on a fiduciary debt (In re Dibble, 2 N. B. R. 185; 3 Ben. 283; 1 Chi. Leg. News, 355; Fed. Cas. 3884); also payment of rent in full by an insolvent, even to prevent the forfeiture of a valuable lease, is a technical act of bankruptcy. (In re Merchants' Ins. Co., 6 N. B. R. 43; 3 Biss. 162; 20 Pittsb. Leg. J. 32; 4 Chi. Leg. News, 73; Fed. Cas. 9441.)

If a bankrupt having a deposit with a bank which holds his note gives a check for the amount so deposited, which is credited on the note, this is a preference and is void (Traders' Nat. Bank v. Campbell, 6 N. B. R. 353; 14 Wall. 87); and payment of wages to employees, in contemplation of insolvency, is an act of bankruptcy. The preferred wages of an employee must be secured through the proceedings in bankruptcy. (In re Kenyon & Fenton, 6 N. B. R. 238.) By an arrangement between the A. bank and the B. bank, the former acted as agent for the latter for clearing-house purposes. When the A. bank found it was going to fail, it notified the B. bank, and after banking hours it paid to the B. bank the full amount of its deposits. Held, that such payment was a preference and that the amount could be recovered by the assignee in Lankruptcy of the A. bank. (Phelan, Ass., v. Bank, 16 N. B. R. 308; 4 Dill. 88; 5 Cent. Law J. 351; Fed. Cas. 11069.)

Where an insolvent debtor honestly believes that he will be able to go on in his business, and with such belief pays a just debt without a design to give a preference, such payment is not fraudulent, although bank