November 8, 1917. The writ of error was applied for and allowed May 1, 1918.

The act of March 3, 1891 (26 Stat. 826, c. 517, § 11 [Comp. St. § 1647]), provides as follows:

"That no appeal or writ of error by which any order, judgment, or decree may be reviewed in the Circuit Court of Appeals under the provisions of this act shall be taken or sued out except within six months after the entry of the order, judgment, or decree sought to be reviewed: Provided however, that in all cases in which a lesser time is now by law limited for appeals or writs of error such limits of time shall apply to appeals or writs of error in such cases taken to or sued out from the Circuit Courts of Appeals."

[1] In view of the proviso, it is claimed by defendant in error that the time for taking appeals and suing out writs of error is now governed by the act of September 6, 1916 (39 Stat. 727, c. 448, § 6 [Comp. St. § 1228a]), which provides as follows:

"That no writ of error, appeal, or writ of certiorari intended to bring up any cause for review by the Supreme Court shall be allowed or entertained, unless duly applied for within three months after entry of the judgment or decree complained of."

In other words, it is contended that section 6 of the act of September 6, 1916, modifies section 11 of the act of March 3, 1891, because of the proviso contained in this latter section. In our opinon the contention is not well founded:

First. The language of section 6 of the act of September 6, 1916, is plain and unambiguous, and in terms applies to the Supreme Court

only.

Second. The proviso in section 11 of the act of March 3, 1891, applied solely to cases for which at that time a lesser period than six months for writs of error and appeals existed; the words of the proviso being:

"In all cases in which a lesser time is now by law limited for appeals or writs of error," etc. (Italics ours.)

The construction advocated by defendant in error would in effect make the proviso read:

"In all cases in which a lesser time is now (or shall hereafter be) by law limited for appeals or writs of error," etc.

Such interpolative construction is not in our judgment permissible. Further, the proviso was not without application at the time of its passage. A single example will suffice: Appeals as to certain matters in pending bankruptcy proceedings were still possible by reason of the saving clause in the Bankruptcy Repeal Act, and the time fixed by statute for taking such appeals was a lesser period than six months. See sections 4980, 4981, R. S. 1878; Act June 7, 1878, 20 Stat. 99, c. 160; Duff v. Carrier, 55 Fed. 433, 5 C. Č. A. 177.

Third. The act of September 6, 1916, is of a composite nature, containing sections relating to the Circuit Courts of Appeals as well as to the Supreme Court, and it is hardly to be supposed that, if Congress intended to lessen the time for bringing causes for review to the Circuit Courts of Appeals, it would have done so by the indirect method

(264 F.)

of inference suggested by the defendant in error, rather than by the direct method of clear and positive statement.

The writ of error in the case at bar was sued out within six months after the entry of judgment, and was in time. Motion to dismiss is denied.

[2, 3] Passing to the merits:

The evidence discloses that the plaintiff below on the evening of the 3d of March, 1917, was a passenger on one of the trains of the defendant, riding in company with his wife and daughter, from Fremont to North Bend, Neb. On arriving at destination, his wife and daughter alighted from the train, making use of a footstool provided by the brakeman. Plaintiff, after going to the platform of the car, went back into the car to get a bundle which had been forgotten. On returning to the platform, he went down the steps of the car, and without looking for the footstool stepped down, fell, and was injured. It appears from the testimony that the stool had been removed while plaintiff was going back on his errand into the car. Plaintiff testified that he had seen others get off the car steps, and thought, from the manner in which they got off, that the stool was there. Section 6052, R. S. Neb. 1913, reads as follows:

"Every railroad company shall be liable for all damages inflicted upon the person of passengers while being transported over its road, except in cases where the injury done arises from the criminal negligence of the persons injured, or when the injury complained of shall be the violation of some express rule or regulation of such road actually brought to his or her notice."

The scope and construction of this statute have been recently passed upon by this court in Jones v. Railway, 260 Fed. 929, — C. C. A. - Following that decision we hold (1) that plaintiff in case at bar was clearly within the class mentioned in the statute, "passengers while being transported," and this is conceded by the railway company; (2) that upon the evidence it cannot be held that a case of criminal negligence within the meaning of the statute was made out, as a matter of law, but the question was for the jury under proper instructions. The statute has been frequently construed by the state court. Omaha & R. V. R. Co. v. Chollette, 33 Neb. 143, 49 N. W. 1114; Railway Co. v. Baier, 37 Neb. 235, 55 N. W. 913; C., B. & Q. Ry. Co. v. Hague, 48 Neb. 97, 66 N. W. 1000; Chicago, etc., Ry. v. Zernecke, 59 Neb. 689, 82 N. W. 26, 55 L. R. A. 610; Chicago, etc., Ry. v. Sattler, 64 Neb. 636, 90 N. W. 649, 57 L. R. A. 890, 97 Am. St. Rep. 666.

Judgment is reversed, and cause remanded for a new trial.

KANGAS v. ROBIE.

(Circuit Court of Appeals, Eighth Circuit. March 1, 1920.)

No. 202.

Bankruptcy 399 (3)-Bankrupt not entitled to homestead purchased to defraud creditors.

Where a bankrupt, contrary to his previous practice, in order to accumulate the sum of $13,000, which he placed in a homestead, discontinued his usual custom of making deposits in bank from day to day, and ceased to make further payments on his trade obligations, but retained proceeds of merchandise sold or of bills receivable, and purchased the homestead with nonexempt assets so realized on, and moved his family into the property with intent to defraud his creditors, the homestead exemption must be denied.

Petition to Revise Order of the District Court of the United States for the District of Minnesota; Page Morris, Judge.

In the matter of the bankruptcy of Eli Kangas. E. G. Robie, trustee of the bankrupt's estate, opposed said bankrupt's claim to property as a homestead exemption, and action of the referee denying the exemption having been approved by the District Court, the bankrupt petitions to revise that order. Petition dismissed.

O. J. Larson, of Duluth, Minn. (C. A. Marsch, of Portland, Or., and George B. Sjoselius, of Duluth, Minn., on the brief), for petitioner. Henry G. Middaugh, of Duluth, Minn. (Fred T. Cuthbert, C. W. Stilson, and Hugh J. McClearn, all of Duluth, Minn., on the brief), for respondent.

Before SANBORN, Circuit Judge, and LEWIS and MUNGER, District Judges.

LEWIS, District Judge. This petition asks for revision and reversal of an order of the Court of Bankruptcy denying bankrupt's claim to certain property as his homestead exemption under the laws of Minnesota. Complying with section 24b of the Bankruptcy Act (Comp. St. § 9608), the petition, with exhibits attached, makes and presents the question or matter of law in this way: On denial of the claim by the trustee exceptions were taken and the question went to the referee, who heard testimony pro and con and on it found, that the bankrupt was a merchant and obtained the money ($13,000) paid on the purchase price for the property out of that business, and within two weeks after the purchase made an assignment for the benefit of his creditors, who would receive a very small per cent. of their claims if the exemption were allowed; that bankrupt, in order to accumulate the $13,000 discontinued, some weeks before closing the transaction for the purchase of the property, his usual custom of making deposits in bank from day to day, and ceased to make further payments on his trade obligations, as he had theretofore done, but on receiving payments for merchandise sold or on bills receivable would put the proceeds in his safe in the store or retain the currency

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(264 F.)

upon his person; that the bankrupt made the purchase with nonexempt assets so realized on, and moved his family into the property within one month prior to the filing of the petition against him on which he was adjudged a bankrupt; that

"the said bankrupt acted in bad faith with the corrupt design and intent to cheat and defraud his creditors by attempting to put the money realized from the collection of said accounts, and the sale of said merchandise, beyond the reach of his creditors by claiming that the property purchased with said money was exempt under the laws of the State of Minnesota," and "was a fraudulent attempt on the part of said Kangas to put the money realized from the collection of said accounts, and the sale of said merchandise, beyond the reach of the creditors from whom he received said merchandise on credit by attempting to claim" the purchased property as exempt.

The referee denied the claim of exemption. On certification to the District Judge, he found that the bankrupt

"set out with the corrupt purpose and design of defrauding his creditors; that he purchased the property which he is claiming as a homestead with money derived from the sale of goods which he had obtained on credit from his creditors, which money was much the larger part of his assets; and that he made the purchase, moved into the property, and is now claiming it as a homestead to accomplish that purpose and design."

The District Judge approved the action of the referee.

This is the petitioner's case, and on the facts thus presented as the basis of his right to be heard and obtain here what was denied him by the Bankruptcy Court, he asserts that there was error in the matter of law in denying his claim and refusing to set off the property to him as his homestead; because, he says, the Supreme Court of Minnesota, in construing the state statute, holds that the homestead exemption must be allowed, notwithstanding the fraud, and that this court is bound by that construction of the local statute. He relies on Jacoby v. Parkland Distilling Co., 41 Minn. 227, 43 N. W. 52. The opinion in that case does not support the contention. The court went no further than to announce the general rule which has been expressly recognized by this court in Bank v. Glass, 79 Fed. 706, 25 C. C. A. 151; in Huenergardt v. Dry Goods Co., 116 Fed. 31, 53 C. C. A. 505; in Amundson v. Folsom, 219 Fed. 122, 135 C. C. A. 24, and in Crawford v. Sternberg, 220 Fed. 73, 135 C. C. A. 641, i. e., the right to exemption cannot be denied solely on account of the fact that the purchase price paid, or other property given in exchange for the property claimed as exempt, was, in either contingency, non-exempt, although the necessary result would be that non-exempt property theretofore belonging to the debtor would thus be put beyond the reach of his creditors. Jacoby, while insolvent, moved into and made his dwelling in property constituting a large part of his assets, which he then and for some time theretofore had owned, for the express purpose of holding it as a homestead, and the legal effect of so doing was to withdraw it from the reach of his creditors. There was no charge or claim of actual fraud against him. He had no intention or design of beating his creditors, and was not charged with any fraudulent act to accomplish that end. The court was not called on to consider the effect of conduct of that character on the part of a debtor. It was held that

Jacoby merely put his property into a shape in which it would be the subject of a beneficial provision for himself, which the law recognized and allowed. That he exercised a right which the law gave him, and subject to which everyone had given him credit, and fraud could not be predicated on an act which the law permitted. The case has no application to the facts presented here. The situation which petitioner presents to us is a confession of bad faith on his part, that the purpose with which he took title to the property which he now claims as exempt was to defraud his creditors, and we must decline to give it our approval. We are persuaded that the Supreme Court of Minnesota would also refuse to approve such conduct and make it a basis on which to allow the exemption. That court, in Esty v. Cummings, 75 Minn. 549, 554, 78 N. W. 242, 244, has expressed itself in this language:

"While the homestead right is a valuable one, and the protecting arm of the law should be carefully used in guarding it, it was never intended, and it should never be permitted, to operate as a vehicle for fraud and rank injustice."

See also Small v. Anderson, 139 Minn. 292, 166 N. W. 340. This is in accord with what we held in Huenergardt v. Dry Goods Co., supra, and Amundson v. Folsom, supra. The Court of Bankruptcy did not err in matter of law. The petition must be dismissed at petitioner's cost.

It is so ordered.

LINDSEY V. UNITED STATES.

(Circuit Court of Appeals, Fourth Circuit. January 12, 1920.)

No. 1747.

1. Intoxicating liquors ~236(20)—Evidence held to show interstate transportation of whisky.

Labels on packages and bottles of whisky, which defendant and others were loading into an automobile near a wharf, and the identity in marks and other respects with other whisky found in a scow near the wharf, held to justify a finding that the whisky was transported from without the state into the state of Virginia.

2. Intoxicating liquors 223(1)-Proof of interstate transportation from particular point charged unnecessary.

Under an information charging defendant with transporting whisky from Baltimore, Md., to Norfolk, Va., it was not necessary to prove the transportation of the whisky from Baltimore, where there was evidence to support a finding that it was transported into Virginia from a point outside that state.

3. Intoxicating liquors 236 (5)-Possession of whisky Illegally transported into state justifies inference of participation.

The possession by defendant and his associates of whisky transported by them from a wharf to a nearby automobile, with nothing to show any intervening possession or control, justifies the legitimate inference that they transported it into the state, where other evidence supports a finding that it had been transported into the state by some one.

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