enacted statutes authorizing and providing for the removal of, such cases from state to federal courts, which statutes have been uniformly recognized as valid and enforced by the courts. But no oue contends that the federal courts can be authorized to divest a state court of its jurisdiction, once regularly acquired, of a suit between citizens of the same state, unless it involves title to lands claimed to have been acquired from different states, or affects ambassadors, ministers, or consuls, or is a case arising under the constitution or a. law of the United States. Any statute professing to authorize such a. transfer of such suit would be an encroachment upon the reserved rights of the state, in conflict with the national constitution, and void. And yet this is, in effect, the principle contended for in this case. It is true, the plaintiff and defendant were .citizens of different states when the suit was begun, and it is cleadhat as long as this diversity of dtizenship continued the suit was removable under said act; .and had defendant availed himself of his right to remove it in time, the jurisdiction of this court could not have been divested or its efficiency impaired by any subsequent action of the plaintiff. But defendant took 1:.0 steps for its removal uutil after the plaintiff became a citizen of Ohio. We think his application for the removal came too late. The act of 1875 is not susceptible of the construction contended for by defendant. If it was so expressly provided upon its face, it would, to that extent, exceed the constitutional authority of the legislative department, and would, therefore, be void. The case will be remanded and judgment entered against defendant for the costs of this court.
(Districe Oourt, 8.
York. November 18,1881.)
CREDITORS' BILL-FRAUDULENT JUDGMENT AND TRANSl"EH-REV. ST. § ASSIGNEE-INJUNCTION DISSOLVED.
Judgment creditors, after the return of execution unsatisfied, on filing a bill to reach property of the debtor conveyed by a fraudulent transfer, or a fictitious judgment and sale on execution thereon, acquire an equitable lien on all the property fraudulently transferred, as against the parties to the suit; but thi,9 lien, before the appointment of a receiver, will not prevail as against the levy of a subsequent execution on such of the properLy as is subject to levy, nor against an assignee in bankruptcy who stands in a similar situation. 8uch a suit having heen commenced before proceedings in bankruptcy, and a stay of that suit having been afterwards procured in hankruptcy, and the assignee having knowledge of all the facts more than three years ago, and failing
to take any actionj\.Ssailing the alleged fraudulent t.!'ansfer by thc bankrupt, held, that his time for so doing, under section 5057, had expired, and that the
stay upon the prosecution of the judgment cl'editors' bill heretofore granted should, therefore, be dissolved.
In Bankruptcy. Motion to dissolve injunction. Wm. H. Sloan, for judgment creditors. O. Whittaker,. for assignee. BROWN, D. J. The bankrupt filed his voluntary petition in hankruptcy 011 the twenty-seventh day of July, 1878; adjudication of bankl"Uptcy was made August 29, 1878, and an assignee appointed. The oonkrupt had previously carried 011 a grocery store at Kingston,and on January 30, 1878; his brother, Henry H. Pitts, recovered a ment against him,by default, for $6,246.01, upon which execution .was immediately issued to the sheriff, and his stock of goods sold out thereunder on February 6, 1878, to Henry, the judgment creditor, who took possession and continued the same bns1ness; The;eafter, many of the creditors of the bankrupt, who had sold him more or less of this stock of .goods on credit, suits against him, pro.cured his arrest therein .for fraud, and recovered judgments upon their claims. In July, ]878, so'me weeks previous to the commencement of proceedings in bankruptcy, several of these judgment creditors had united in filing a bill in equity, on behalf of themselves and all other judgment creditors of the bankrupt, against .Hem.y and Charles Pitts, for the purpose of having the judgment recovered by Henry H. Pitts, and the execution and sale thereunder, set aside as fraudulent and void. The complaint alleged that the said judgment was upon a false and fictitious claim; 'that the whole proceedings under it were for theprirpose of cheating and defrauding the bankrupt's creditors; and prayed that the goods on hand be applied upon executions on the plaintiffs' judgments, and that Henry H. Pitts be also required to account to the judgment creditors for the proceeds of all goods sold by him, in the business, since he took possession on February 6th. The bankrupt, having filed his petition in bankruptcy 'on'July 27, 1878, on the sixth of August obtained an injunction against the prosecution of the above suit in equity, to await the determination of this court on the question of his discharge. A motion is now made to vacate this injullction anC: permit the suit in equity to proceed, Two prior motions have been made in this court for the same purpose,-one in November, 'l878, and one in April, 1879. Both were denied; the latter on the ground 'that at that time the assignee in bankruptcy was the only person who
had the right to set aside the judgment and recover the property, (Glenny v. Langdon, 98 U. S. 20; Trimble v. Woodhead, 102 U. S. 647; Moyer v. Deu'ey, 103 U. S. 301,) and that the plaintiffs in the creditors' bill had not acquired any lien which could then prevail against the assignee. Johnson v. Bogers, 15 N. B. R. l. In the case last cited, Wallace, J., reviewed the adjudications in this state as to the effect of a creditors' bill in securing a lien where no receiver has been appointed, and pointed out that by the law of this state such a lien does not prevail as against purchasers or other execution creditors levying upon goods or chattels, but is effective upon choses in action or equitable interests not subject to levy and sale on execution; and he held that an assignee in bankruptcy, representing the general creditors, is entitled to stand in the situation of an execution creditor as respects goods and chattels subject to execution. That the plaintiffs in the creditors' bill enjoined in this case obtained by the commencement of that suit an equitable lien as against the defendants themselves, upon the goods or their proceeds, is plain. Lawrence v. Bank of the Republic, 35 N. Y. 320, 323; Lansing v. Easton, 7 Paige, 364; Storm v. Waddell, 2 Sandf. Ch. 494; Sedgwick v. Menck, 1 N. B. R. 675. A portion of the proceeds, also, were doubtless equitable assets, not subject to levy and sale on execution against Charles Pitts, and have been all the while subject to the equitable lien acquired by filing the creditors'bill against him and Henry. Lawrence v. Bank of the Republic, 35 N. Y. 321. The right ofthe assignee in bankruptcy to recover so much as remained of the property originally transferred to Henry Pitts could only be enforced by a suit instituted for that purpose under section 5046 or section 5129. In re Pitts, 8 FED. REP. 263; Cragin v. Thompson, 12 N. B. R. 81; Sparhawk v. Drexel, Id. 450; In re Biesenthal, 15 N. B. R. 228. His right to maintain such a suit is suhject, however, to the two years' limitation prescribed by section 5057, (Bailey v. Glover, 21 Wall. 342,) which is to be computed from the time of discovering the fraud. The assignee in this case had knowledge of all the matters alleged in the creditors' bill in 1878, and has been notified of the proceedings on these motions since the fil'£t motion in November, 1878, now three years ago. He has not instituted any suit on behalf of the creditors to recover the property, and, though having notice of this motion, states no intention or desire of doing so, and his time for doing so has expired. So long as his right to maintain snch an action existed, and so long as the equitable lien of the plaintiffs in the creditors' suit upon the goods
IN BE ELMENDORF.
remaining was subordinate to his superior right, it was proper to continue the injunction. But as his rights are now barred by section 5057, no benefit to the estate of the bankrupt can possibly arise from a longer continuance of the injunction, and it would be unjust to deprive the judgment creditors of whatever right may still remain to them to prosecute to judgment the bill for equitable relief which was filed before the proceedings in bankruptcy were begun. To continue the injunction when it can serve no useful purpose to the bankrupt's estate, would be to turn the process of this court into a shield against the investigation of alleged frauds. It is for the court in which that action is brought to determine ultimately what rights still remain to the plaintiffs in the pending suit, and no impediment should be longer interposed by the injunction of this court. An order may be entered dissolving all injunctions and stays upon the prosecution of that suit.
(District Court, 8. D. New York.
BANKRUPTC1-DEPOSITS UNDER REV.
ST. § 5124. The bankrupt is entitled to be reimbursed for a deposit made with the clerk under the provisions of section 5124 of the Revised Statutes, provided it did not form a part of his estate.
In Bankruptcy. W. H. Jforrison, for bankrupt. W. H. Gibson, for assignee. BROWN, D. J. This is an application by the bankrupt for an order directing the assignee to repay to him, out of the assigned estate, certain fees and disbursementB necessarily paid by him to the clerk, marshal, etc., in the course of the proceedings in bankruptcy, or for disbursements which those officers would have necessarily incurred. Among the items so asked to be repaid to the bankrupt is the sum of $50, deposited with the clerk, pursuant to section 5124, on April 30, 1878, prior to the issuing of the warrant, to the repayment of which the assignee objects. The bankrupt's voluntary petition was filed April 13, 1878. Rule 29 of the general orders in bankruptcy provides that "the fees of the register, marshal, and clerk shall be paid or secured in all casea v.9,no.9-35