"Actions for the recovery of any property, real or personal, or for the possession thereof, and all actions founded upon contracts, may be maintained by and against executors and administrators in all cases in which the same might have been maintained by or against their respective testators or intestates."

That law is the same now as it has been since the practice act. There has been no change in that law, and it is this provision of law that the supreme court passed on in the case of Meeks v. Olpherts; that is to say, that the right to sue or be sued with respect to an estate is one that is vested in the administrator during the term of administration, and, although the title passed to the personal representative for the purpose of administration in the original section 1384, the title passes to the heirs subject to administration in the amended section. It is simply a difference in the verbiage or construction of that particular section. In the first instance, the section provides that the title passes to the personal representative, and also provides what shall be done with it in the way of administration. In the amended section, the title passes to the heirs subject to the administration. As the law now stands, no question can be raised as to where the title remains after the death of the intestate and before the appointment of the administrator, or upon the death or resignation of an administrator or an executor; but I do not discover that there is any difference with respect to the liability of the person to be sued, respectively, in the one case or in the other. In both instances the bringing of the suit is provided for under section 1584 of the Code of Civil Procedure.

In this case, suit was brought by Mr. Lloyd, as assignee, against Mr. Pennie, the administrator of the estate of John Bensley, under this provision of section 1582; and, under that section, certain conveyances made by Bensley were declared fraudulent and void. What are the circumstances connected with those conveyances? After the adjudication in bankruptcy of John Bensley, and of the firm of Linforth, Kellogg & Co., Bensley and his wife, for the purpose of defrauding his creditors and the assignee in bankruptcy, and to secure a restoration to Bensley of his individual property, which had vested in the assignee by virtue of the bankruptcy proceedings, induced the assignee and creditors to enter into an agreement with him for a release to him, by the assignee, of all his individual property, and for his discharge from all his debts; and such an agreement was entered into, by the terms of which Bensley covenanted and agreed to pay any deficiency which might arise on the claims of the creditors after the firm assets of Linforth, Kellogg & Co. had been applied to the payment of such claims. This agreement was ratified and confirmed by the court, and Bensley discharged from his individual and co-partnership debts; and thereupon the assignee reassigned, transferred, and conveyed to Bensley all of his property and estate which before that had vested in the assignee by virtue of the bankruptcy proceedings. After the property had been restored to Bensley, instead of managing it, and appropriating the proceeds to the payment of the balance due the creditors of Linforth, Kellogg & Co., in accordance with the terms of his agreement with the assignee and creditors, he conveyed all his property to his wife and others, by fictitious convey

ances, and through fictitious persons, without consideration, leaving no assets at the time of his death, and nothing to pay the deficiency of $275,000 due the creditors of the bankrupts. It was to declare those transactions fraudulent and void that Lloyd, as assignee, brought the suit against Pennie, administrator; and, by the decree, the assignee resumed the title which Bensley had in his lifetime. That is precisely the effect of the decree, namely, the court canceled all the Bensley conveyances, and decreed that they were fraudulent and void, and conveyed nothing. The effect was, as just stated, that Lloyd resumed or took the title, which was conveyed to him by the register in bankruptcy during the lifetime of Bensley. I do not see how the heirs can come in now, and claim any rights, under these circumstances, or can claim they have any title to this property.

But it is said, on behalf of the respondents in this case, non constat but they have secured an afterwards acquired title; that Bensley may have acquired some other title; and the title they are now suing for in the superior court, as the heirs of John Bensley, may be a title he acquired after the property had been conveyed to him by the assignee. If that is the fact, they could set it up in this case; but they have not done so. It is not claimed they have any such title, as a matter of fact; so, as the case stands now on the complaint, the answer, and the testimony taken in the case, these people are suing Lloyd in the state court for this property which came to him from Bensley. They are claiming it because they are heirs of Bensley, and that fact alone is not sufficient to enable them to maintain these actions against the assignee.

There is still a further objection to this proceeding against the assignee. The district court, as the court of bankruptcy, has absolute control over the estate of a bankrupt. There is no question

about that. All the cases where this question has been discussed distinctly hold that the court has control over the proceedings for the purpose of protecting the estate, determining its value, and for the purpose of distributing it to the creditors. It is true there are cases where suits have been brought against assignees in the state court for the purpose of ascertaining and determining certain rights. But it always has been done on application made to the court of bankruptcy for leave to proceed in the other court against the assignee. It never has been done, to my knowledge, without such permission. In this case there was no permission obtained from this court to sue the assignee. He is an officer of this court. He is carrying out a decree of this court. He is under the direction of this court in everything he does. The property is in custodia legis. He can neither sell nor dispose of it in any way without the direction of the court. The bankruptcy law never permitted a suit to be brought against an assignee under the circumstances of this case, and respondents have no right or authority under the law to proceed in the state court against Lloyd, and sue him for property that he holds for and under the direction of this court. So that, in any view of the law, this suit cannot be maintained against the assignee. A decree will, therefore, be entered in favor of the complainant in this case, and the injunction made perpetual.

MATHEWS v. COLUMBIA NAT. BANK OF TACOMA et al.

(Circuit Court, D. Washington, W. D. December 2, 1896.) NATIONAL BANKS-INCREASE OF STOCK-SUBSCRIPTIONS-COMPTROLLER'S APPROVAL.

The stockholders of the C. National Bank voted to increase its capital $300,000, and M. subscribed and paid for 23 shares of the proposed increase. Only $150,000 of such proposed increase was ever paid for, and the directors applied to the comptroller of the currency to approve the increase to the amount of $150,000, which was refused. Afterwards the stockholders voted an increase of $150,000, and applied for approval thereof, which was refused; but later the comptroller, on his own motion, on the eve of the bank's insolvency, approved this increase. M. sued the bank and its receiver to recover the amount paid by him under his subscription to the first proposed increase. Held, that the comptroller's refusal to approve the first increase to the extent of $150,000, nullified the vote for the increase and M.'s subscription to the stock, leaving him in the position of a creditor of the bank for the amount paid in, and the subsequent proceedings, he not having participated therein, could not reanimate his contract of subscription.

T. M. Hammond, for plaintiff.
Philip Tillinghast, in pro. per.

HANFORD, District Judge. The plaintiff, L. P. Mathews, claiming to be a creditor of the Columbia National Bank of Tacoma, has brought this action against the bank and Philip Tillinghast, its receiver, to establish his claim. The material facts alleged in his complaint are as follows: The bank was originally organized with a capital of $200,000. In the month of January, 1892, the shareholders of the bank voted to increase the capital to $500,000. The plaintiff, being at that time an owner of 23 shares, which he had paid for, subscribed for 23 shares of the proposed issue of the additional stock, and made full payment for said additional stock, at its par value. Only one-half of the amount of the proposed increased capital was ever paid in by the shareholders, and in July, 1895, the directors of the bank made application to the comptroller of the currency to approve the increase of stock to the amount of $150,000, which had been paid in, and said application was refused. In September, 1895, the shareholders voted an increase of capital to the amount of $150,000, and applied to the comptroller of the currency to approve such increase, which he refused. On October 23. 1895, without any renewal on the part of the shareholders or directors of the bank of the application for approval of an increase of capital, the comptroller, on his own motion, signed a certificate approving the increase voted for by the shareholders in September. The bank was at that time insolvent, and on the next day a receiver was appointed by the comptroller, who took immediate possession of the bank and its assets. The plaintiff's claim for the amount which he paid for 23 shares of additional stock has been disallowed by the receiver.

To this complaint the defendants have demurred, thereby raising the important question as to the validity of the action of the comptroller in assuming to approve the increase of the capital when there

was no application therefor pending, and after he had once exercised his power in the premises by refusing to sanction such increase. Section 5142 of the Revised Statutes of the United States provides for increasing the capital stock of national banks, and it is therein provided that three things must concur, to constitute a valid increase, viz.: First, the association must, by a vote of two-thirds of its stockholders, assent to the increase; second, the entire amount of increase must be paid in; third, the comptroller must, by a certificate, approve the increase, and certify to the fact of its payment. The attempt to increase the capital of the Columbia National Bank to $500,000 failed for lack of two of these essentials; for the amount of the proposed increase was not paid in, and the comptroller did not grant the necessary certificate. In support of the demurrer, the defendants claim that it was in the power of the comptroller to approve an increase to any amount not in excess of the amount assented to by the shareholders, and that his action approving an increase for $150,000 is effective against all who were subscribers to the increased capital authorized by the original vote of the shareholders in January, 1892, and that they are liable as shareholders, although no certificates of stock were issued; and they cite the following decisions of the supreme court: Delano v. Butler, 118 U. S. 634, 7 Sup. Ct. 39; Aspinwall v. Butler, 133 U. S. 595, 10 Sup. Ct. 417; Bank v. Eaton, 141 U. S. 227, 11 Sup. Ct. 984. In deference to these decisions, I should feel constrained to overrule this demurrer if the facts of this case brought it within the rules therein laid down. But in this case the comptroller, instead of complying with the application for his approval to an increase towards which the complainant had subscribed, did the contrary; that is to say, he refused his approval, and thereby nullified the vote of the shareholders for an increase of capital, and canceled the complainant's subscription for 23 shares of the increased capital. This left the complainant in the position of a creditor of the bank for the amount of money which he paid in for stock which he did not get. The subsequent action of the shareholders, in which he did not participate, in making a new application to increase the capital, cannot, by any rule of law, operate to reanimate the complainant's contract of subscription; and I hold that it is contrary to the principles of justice, and beyond the power of the comptroller, to change the rights of the complainant from that of a creditor of the bank to that of a shareholder liable to assessment for the benefit of other creditors, by a mere fiat, after the bank had become insolvent, and after all attempts to increase its capital, whereby it might have been saved from ruin, had failed by reason of the exercise of his power in refusing to approve such increase. The demurrer will be overruled.

NORTHWESTERN MUT. LIFE INS. CO. v. KEITH et al.

SAME v. ROBY et al.

(Circuit Court of Appeals, Eighth Circuit. November 16, 1896.)

Nos. 764, 765.

MORTGAGE FORECLOSURE-DEFICIENCY JUDGMENT.

When, in a suit in the United States circuit court for the foreclosure of a mortgage, the proceeds of the mortgage sale are less than the amount due on the mortgage, the complainant is entitled, under equity rule 92, to a deficiency judgment, as a matter of right.

Appeals from the Circuit Court of the United States for the District of Kansas.

A. B. Jetmore and A. P. Jetmore filed briefs for appellants.

A. H. Vance and M. T. Campbell filed brief for Wilson Keith and Mary I. Keith.

F. G. Hentig filed brief for Henry W. Roby and Sara E. Roby. Before CALDWELL, SANBORN, and THAYER, Circuit Judges.

THAYER, Circuit Judge. These cases were suits in equity which were brought by the Northwestern Mutual Life Insurance Company, the appellant, against Henry W. Roby and Sara E. Roby in the one case, and against Wilson Keith and Mary I. Keith in the other, for the purpose of foreclosing mortgages on real estate situated in the city of Topeka, Kan. A decree was rendered in favor of the complainant in each case. The mortgaged property was duly sold under and by virtue of the provisions of the decree, by a special commissioner, and the amount realized in each case was found to be insufficient to satisfy the mortgage debt. The circuit court confirmed the reports of sale, but refused to render a judgment against the respective mortgagors for the amount due on the respective mortgages over and above the proceeds of the mortgage sale, which deficiency amounted in the one case to $633.75, and in the other to $974.74. The complainant below appealed, assigning for error in each case the refusal of the circuit court to render a judgment for the deficiency. The sole question to be considered, therefore, is whether the appellant was entitled, as a matter of right, to a judgment for the deficiency found to exist in the respective cases, or whether it was discretionary with the trial court to render such a judgment. Equity rule No. 92 provides:

"That in suits in equity for the foreclosure of mortgages in the circuit courts of the United States, or in any court of the territories having jurisdiction of the same, a decree may be rendered for any balance that may be found due to the complainant over and above the proceeds of the sale or sales, and execution may issue for the collection of the same as is provided in the eighth rule of this court regulating equity practice where the decree is solely for the payment of money."

The rules promulgated by the supreme court regulating the practice in chancery cases were adopted in pursuance of authority conferred by an act of congress (Rev. St. U. S. § 917), and for that reason they have the force and effect of law. No district or circuit court of