§ 623. Preferences by legal proceedings as acts of bankruptcy. It is an act of bankruptcy to suffer or permit, while insolvent, any 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 the same. Each of the three elements must exist to constitute the act.2 Affirmative action by the debtor is not a requisite to his suffering or permitting a creditor to obtain a preference through legal proceedings. The debtor's intent is not an essential element. An actual preference must have been gained by the legal proceedings. The preference 114 Fed. 1011, 8 Am. B. R. 345; Remington on Bankruptcy, § 130; Alter v. Clark, 193 Fed. 153. § 623. 130 St. at L. 544, 546, § 3. It has been held that suffering an execution to be levied is not an act of bankruptcy if no sale has been made. Re R. L. Radke Co., 193 Fed. 735. The term "legal proceedings' covers all process by which a lien is obtained under State laws, Re Crafts-Riordon Shoe Co., 185 Fed. 931. The failure of an insolvent debtor to discharge the levy of an execution procured by the attorney for the petitioning creditors, for the purpose of laying the foundation for the bankruptcy proceedings, is not an act of bankruptcy. Re Weiss, 142 Fed. 279; Folger v. Putnam, C. C. A., 194 Fed. 793; Johnson Bros. Shoe Co. v. Alles, C. C. A., 197 Fed. 274, affirming Re Putnam, 193 Fed. 464. 2 Citizens Banking Co. v. Ravenna Nat. Bank, 234 U. S. 360. 3 Wilson Bros. v. Nelson, 183 U. S. 191, 46 L. ed. 147, 22 Sup. Ct. 74; Re Moyer, 93 Fed. 188; Re Cliffe, 94 Fed. 354; Re Rome Planing Mill, 96 Fed. 812, 3 Am. B. R. 123; Folger v. Putnam, C. C. A., 194 Fed. 793, affirming Re Putnam, 193 Fed. 464. A failure to prevent or to discharge such a preference is an act of bankruptcy. Ibid. Even, it has been held, when judg ment is entered and a levy made under execution, without the debtor's knowledge, in pursuance of a warrant of levy given, when he was solvent more than four months before. Wilson Bros. v. Nelson, 183 U. S. 191, 46 L. ed. 147; 22 Sup. Ct. 74; Re Moyer, 93 Fed. 188. 4 Wilson Bros. v. Nelson, 183 U. S. 191, 46 L. ed. 147; Re Rome Planing Mill, 96 Fed. 812, 3 Am. B. R. 123. Re Truitt, 203 Fed. 550. 5 Re Chapman, 99 Fed. 395. Re Crafts-Riordon Shoe Co., 185 Fed. 931. Where the levy was made only upon property, as to which the judg ment creditor had a previously existing contract lien, it was held that no act of bankruptcy was committed. Ibid. The preference must be over other creditors of the same class." Re Belknap, 129 Fed. 646; Remington on Bankruptcy, § 138. Thus, it has been held that a distraint by a landlord is not a preference, unless there are several landlords injuriously affected thereby. Re Belknap, 129 Fed. 646. It has of bankruptcy. Pittsburgh Laundry Supply Co. v. Imperial Laundry Co., C. C. A., 154 Fed. 662. Where the sale was under a judg ment, confessed by the insolvent, it was held that it was equivalent to a transfer of his property, and that the time within which a petition for that act of bankruptcy might be filed did not begin to run until the sale, although the petition might have been filed within five days before. Re Nusbaum, 152 Fed. 835. 6 Re Reichman, 91 Fed. 624; Re Fisher, 219 Fed. 638. Not, it has been held liens acquired by legal proceedings more than four months before the petition in bankruptcy was filed, Re Ferguson, 95 Fed.. 429; Owen v. Brown, C. C. A., 120 Fed. 812; and the recovery of judg ment for the foreclosure of a lien more than four months old with a levy upon the land covered thereby, even when the judgment is general, provided that no levy is made upon any property not bound by the lien. Re Ferguson, 95 Fed. through legal proceedings means any proceeding in a court of justice, whether interlocutory or final, by which the property of the debtor is seized and diverted from his general creditors; 6 such as an attachment, irrespective of the question whether the attachment was made in time to give the attaching creditor a valid lien.7 Otherwise the mere failure to prevent the enforcement, within the four months' period, of a lien previously been said that suffering judgment upon a claim of a laborer, which is preferred by the statute, would not be an act of bankruptcy if there were enough property to pay all similar claims in full, unless it exceeded the limit of the preference, namely, three hundred dollars. Re Cement Co., 17 Am. B. R. 375; Remington on Bankruptcy, § 138. Where a person owing the debtor paid what was due to the sheriff holding an execution, Re Miller, 104 Fed. 764; or garnishee process, Re Harper, 105 Fed. 900; it was held that an act of bankruptcy was immediately committed; and that the limitation of five days did not apply. The consummation of the act of bankruptcy under this section is not the date of the execution sale, but the fifth previous day, if the bankrupt then fails to dissolve the levy. Re National Hotel & Cafe Co., 138 Fed. 947. The petition may be then filed, and upon a proper showing the sale may be enjoined; Re Rome Planing Mill, 96 Fed. 812, 3 Am. B. R. 123; Re Elmira Steel Co., 109 Fed. 456; but this cannot be done unless some time for the sale has been fixed if it has not taken place. Re Vetterman, 135 Fed. 443. Where the sale was advertised for August 22nd, it was held that the judgment debtor had the whole of the 17th of that month in which to discharge the execution before it would be guilty of an act Fed. Prac. Vol. III-71 429. 7 Parmenter Mfg. Co. v. Stoever, C. C. A., 97 Fed. 330; Re CraftsRiordon Shoe Co., 185 Fed. 931. It has been held that sufferance of an attachment not followed by a sale did not constitute a preference, see Re Windt, 177 Fed. 584. Re Murphy, 228 Fed. 1018. It was held that the surety in attachment proceedings could not force the debtor obtained is not an act of bankruptcy, nor it has been held is a failure to vacate a levy which by the State law is void.9 8 § 624. General assignments for the benefit of creditors as acts of bankruptcy. A general assignment for the benefit of creditors is an act of bankruptcy,1 irrespective of the insolvency of the assignor or his good faith, or whether or not he intends to prefer any creditors and irrespective of the validity into bankruptcy because the latter permitted four months, less five days, to expire without removing the lien. Re Windt, 177 Fed. 584. 8 Ibid.; Citizens Banking Co. v. Ravenna Nat. Bank, 234 U. S. 360; Colston v. Austin Run Min. Co., C. C. A., 194 Fed. 929; Re Deer Creek Water & Water Power Co., 205 Fed. 205; Re Superior Jewelry Co., 239 Fed. 373; Re D. F. Herlehy Co., 247 Fed. 369; Re McGraw, C. C. A., 254 Fed. 442. But see Parmenter Mfg. Co. v. Stoever, C. C. A., 97 Fed. 330. Where the sheriff had been instructed by the attorney for the judgment creditors to do nothing until further orders under executions on confessed judgments levied a year before, and the keeper who had been placed in charge was withdrawn, it was held that these executions became dormant and that new executions issued and levied under the same judgments constituted new acts of bankruptcy. Re Chapman, 99 Fed. 395. The issue of an alias execution does not affect the lien acquired by the execution previously issued, nor make the failure of the judgment debtor to procure the discharge of the former an act of bankruptcy. Re Superior Jewelry Co., C. C. A., 243 Fed. 368. 9 Re Moark-Nemo Consol. Mining Co., 219 Fed. 340; Re Vetterman, 135 Fed. 443; Pittsburgh Laundry Supply Co. v. Imperial Laundry Co., C. C. A., 154 Fed. 662; Re D. F. Herlehy Co., 247 Fed. 369. § 624. 1 As to what is not such an assignment, see Re McGraw, 254 Fed. 444; Re Ambrose Matthews & Co., C. C. A., 236 Fed. 539; reversing Re Ambrose Matthews & Co., 229 Fed. 309. The preparation of a deed or assignment before its execution is not. Re Federal Lumber Co., 185 Fed. 926.. Such an assignment may be voluntary or statutory. Re Berthoud, 231 Fed. 529, made in or without the United States. Ibid. Any act of a debtor by which he parts with the title and possession of all of his property for the benefit of his creditors to be disposed of by a trustee or assignee selected by him independent of the Bankruptcy Law is such an act of bankruptcy. Re Heleker Bros. Mercantile Co., 216 Fed. 963; Re Cutler & John, 228 Fed. 771. It may be committed in the form of a mortgage, Re Heleker Bros. Mercantile Co., 216 Fed. 963, or by an application for a receiver made by a creditor on behalf of the bankrupt, Re Muir, 212 Fed. 495, or by a vote of the stockholders to dissolve the corporation which appoints its directors, trustees to liquidate its affairs. Moody-Hormann-Boelhauwe V. Clinton Wire Cloth Co., C. C. A., 246 Fed. 653. 2 George M. West Co. v. Lea Bros., 174 U. S. 590, 43 L. ed. of the conveyance. So are a general assignment by the officers of a corporation under the authority of a resolution of its board. of directors in pursuance of a vote at a stockholders' meeting, although against the objection of a minority of the stockholders,* and a confession of judgment to a trustee for all of the confessed creditors.5 § 625. Appointments of receivers or trustees as acts of bankruptcy. A debtor has committed an act of bankruptcy when, being insolvent,1 he has applied for a receiver or a trustee of his property; or because of insolvency a receiver or a trustee has 1098, 19 Sup. Ct. 836. Re Utley, 235 Fed. 905. 8 Griffin v. Dutton, C. C. A., 165 Fed. 626; Canner v. Webster Tapper Co., C. C. A., 168 Fed. 519; Re Courtenay Mercantile Co., 186 Fed.. 352, aff'd, C. C. A., 194 Fed. 368; Re Federal Lumber Co., 185 Fed. 926; Re Ambrose Matthews & Co., 229 Fed. 309; Re Berthous, 231 Fed. 529; Re Louis Neuburger, C. C. A., 240 Fed. 947. 4 Clark v. American Mfg. & En. Co., C. C. A., 101 Fed. 962. 5 Re Green, 106 Fed. 313. See also, Davis v. Stevens, 104 Fed. 235, 241, 242. § 625. 1 When the application is made by the debtor, it is not an act of bankruptcy unless he was then insolvent. Re Spalding, C. C. A., 139 Fed. 244; Hill v. Western Electric Co., C. C. A., 214 Fed. 243. But if he was then insolvent, the ground for the appointment of a receiver is material. Exploration Mercantile Co. v. Pacific H. & S. Co., C. C. A., 177 Fed. 825. But when the appointment was made at the application of creditors, because of insolvency, it is immaterial whether the debtor actually was insolvent; Re Spalding, C. C. A., 139 Fed. 244. When the insolvency of the debtor is the criterion, 3 he must be insolvent in accordance with the definition in the bankruptcy act. Re Douglas Coal & Coke Co., 131 Fed. 769, 773, 12 Am. B. R. 539; Re Electric Supply Co., 175 Fed. 612, holding that the corporation was insolvent. The recital in the order appointing a receiver that the appointment was made because of insolvency is conclusive; Greenwood Gum Co. v. Zimmerman, C. C. A., 240 Fed. 637; although subsequently to the filing of the petition in bankruptcy, the State court modifies its order so as to recite that the appointment was made for another reason. Re Wenatchee Heights Orchard Co., 204 Fed. 674. 2 This is the case when the application is made in the name of another at the debtor's instigation. Doyle-Kidd Dry Goods Co. v. Sadler-Lusk Trading Co., 206 Fed. 813; Re Muir, 212 Fed. 495; Re Maplecroft Mills, 218 Fed. 661; James Supply & Hardware Co. v. Dayton Coal & Iron Co., C. C. A., 223 Fed. 991; Graham Mfg. Co. v. DavyPocahontas Coal Co., C. C. A., 238. Fed. 488. But see Re Wm. S. Butler & Co., C. C. A., 207 Fed. 705; Re Valentine Bohl Co., C. C. A., 224 Fed. 685; Hansen v. Uniform Seamless Wire Co., C. C. A., 243 Fed. 177; Re Big Pines Lime & been put in charge thereof under the laws of a State or Territory of the United States. Whether the appointment of the receiver was made because of insolvency is to be determined from the record of the court which made it.5 The appointment of a tempo Transportation Co., 257 Fed. 141. It has been held that the consent by a corporation to the appointment of a receiver, upon the application of others, is not equivalent to having "applied for a receiver." Re Gold Run. Min. & Tunnel Co., 200 Fed. 162. Contra, Exploration Mercantile Co. v. Pacific H. & S. Co., C. C. A., 177 Fed. 825; Re Pickens Mfg. Co., 158 Fed. 894. Nor resolutions of the stockholders authorizing the execution of a general assignment by the directors, Re Hartwell Oil Mills, 165 Fed. 555, or by an officer of the company. Re Federal Lumber Co., 185 Fed. 926. Such an act of bankruptcy is committed by a firm when performed by one of the partners, although the others do not participate in the same. Yungbluth v. Slipper, C. C. A., 185 Fed. 773. 3 The insolvency must be one covered by the definition of the Bankruptcy Law. Re Wm. S. Butler & Co., C. C. A., 207 Fed. 705; Maplecroft Mills v. Childs, C. C. A., 226 Fed. 415. See Re Rankin, 210 Fed. 528; Stewart Petroleum Co. V. Boardman, C. C. A., 264 Fed. 826. It is not an act of bankruptcy when the appointment of a receiver is made because the corporation is in imminent danger of insolvency. Maplecroft Mills v. Childs, C. C. A., 226 Fed. 416; or because the corporation is unable to pay its current indebtedness as its debts mature, Re Edward Ellsworth Co., 173 Fed. 699; Re Wm. S. Butler & Co., C. C. A., 207 Fed. 705; Re Valentine Bohl Co., C. C. A., 224 Fed. 685; Maplecroft Mills V. Childs, C. C. A., 226 Fed. 415; Re Butte Duluth Mining Co., 227 Fed. 334; or because of the failure of the bank with which it had transacted business, Schumert & Warfield v. Security Brewing Co., 199 Fed. 358; or because of mismanagement by the persons in control of the corporation, Re Boston & Oaxaca Min. Co., 181 Fed. 422. 432 St. at L. 797; quoted supra, § 620. Where the application was not made by the debtor, and the appointment was not made on the ground of insolvency, it is not an act of bankruptcy. Re Douglas Coal & Coke Co., 131 Fed. 769, 12 Am. B. R. 539; Moss Nat. Bank v. Arend, C. C. A., 146 Fed. 351; Re Spalding, C. C. A., 139 Fed. 244, for example, when made in a suit to foreclose a mortgage, Re Douglas Coal & Coke Co., 131 Fed. 769, 12 Am. B. R. 539, or to prevent conveyances of property in fraud of a judgment creditor, Re Spalding, C. C. A., 139 Fed. 244, or to wind up the affairs of a partnership, there being no insolvency alleged, Moss Nat. Bank v. Arend, C. C. A., 146 Fed. 351. 5 Doyle-Kidd Dry Goods Co. v. Sadler-Lusk Trading Co., 206 Fed. 813; Re Maplecroft Mills, 218 Fed. 659; Greenwood Gum Co. v. Zimmerman, C. C. A., 240 Fed. 637. Where the decree or order states the ground for the appointment such statement is conclusive. Blue Mountain Iron & Steel Co. v. Port |