On the 16th of May, 1870, Engle & Son, merchants, doing business at Richmond as retailers, ■ sold their entire stock of goods to Lisberger. On the 17th June, following, Storrs Bros, and certain other creditors of Engle & Son commenced proceedings in bankruptcy against them in the district court for this district, and upon filing the petition obtained an order of court directing a seizure by the marshal of the goods sold, which were then in the possession *584of Lisberger at the store formerly occupied by Engle & Son. In obedience to tbis order tbe marshal took the goods into his possession, and thereupon Lisberger at once filed his petition in the bankrupt court, asking that they might be restored to him upon his giving bond with security, conditioned for the forthcoming of the goods or the value thereof, to abide such further order'as might be made in the premises.
The prayer of this petition was granted June 18th, and on the same day Lisberger, with the defendants, Rosenbaum, Waggoner, and Harvey as his sureties, executed the required bond in the penal sum of eight thousand dollars, and received the goods from the marshal. June 23d Engle & Son were adjudicated bankrupts, and in due time one Brown was appointed assignee. He instituted some proceedings against Lisberger-to set aside the sale and recover the goods or their value, but his conduct in the premises not being satisfactory to the creditors, he was removed by order of the court, and Garnett, the present complainant, appointed in his place, April 4th, 1871. On the 12th of April, Garnett filed in the district court a petition entitled Storrs Bros, et als. v. Engle & Son, in bankruptcy, and addressed to Hon. J. C. Underwood, district judge, setting forth the proceedings in bankruptcy, his appointment as assignee, the sale to Lisberger. with the necessary aver-ments to show that it was in fraud of the bankrupt law, the seizure of the goods by the marshal, and their subsequent restoration to Lisberger upon the execution of his bond, and concluding as follows: “Your petitioner therefore alleges the said sale, transfer, or conveyance to the said Lisberger to have been fraudulent under the bankrupt law, . . . null and void, and that the said stock or its value are assets in his hands for the purple discharging the indebtedness of Engle & Son, and he prays that the said lisberger be ordered to deliver up the said property or to pay the value thereof at the time of the conveyance to your petitioner, and in case of the delivery of the goods to make good the loss which has accrued by reason of sales subsequent to said fraudulent transfer or conveyance, and in default of said payment or delivery by the said Lisberger, that he and his sureties in the above-mentioned delivery bond, be required to pay the amount therein promised, but in this event your petitioner prays that the said Lisberger himself be required to pay in addition to the amount fixed in said bond, whatever additional value your petitioner shall be able to prove said stock of goods to have been worth at the time of said transfer to Lisberger, inasmuch as the penalty of said bond was fixed by the court upon ex parte affidavit, at a sum as your petitioner really thinks far below the actual value of the stock. Your petitioner finally prays that said S. Lisberger, M. Rosenbaum, J. J. Wag-goner, and Wm. G. Harvey be made parties defendant to this petition, and be required to answer the same on oath, and that such other and further relief be granted as is conformable to equity and the nature of his case.” Copies of this petition were served on each of the persons named as defendants, and they appeared and demurred, alleging for cause “that the petitioner has no right to proceed against the defendants by petition or any other form of summary proceeding, and that the remedy of said petitioner, if any he have, is by bill in equity or by action at law in the district and circuit courts.”
This demurrer was overruled by Judge Underwood, then the district judge, May 6th and, May 8th, Lisberger, not waiving the demurrer, filed an answer denying all the allegations as to the fraudulent character of the sale under the bankrupt Jaw. The case was several times tried by Judge Underwood with a jury, but upon every trial the jury disagreed. After the death of that judge and the appointment of Judge Hughes as his successor, a motion was made by Lisberger to dismiss the petition for want of jurisdiction, which was granted June 16th, for the reason that the matter in issue was not triable under a petition in the bankruptcy suit; but June 19th the assignee filed a petition for a rehearing of the motion. July 11th the court “being willing to entertain the motion of the assignee with a view to amending the said petition in bankruptcy so as to make it a bill in chancery, in order that it may be sent to rules to be proceeded in as a bill in chancery,” appointed July 10th for the hearing, and directed the service of a copy of the order thus made upon Lisberger and the counsel in the case. October Sth, 1874, a rehearing was granted, and “the court being satisfied that the said order of the 16th of June, 1874, entered at the instance of said Lisberger, dis-rai.-fing said petition, was erroneous in not directing it to be proceeded with as a bill in chancery, doth set aside the same, and, considering that the said petition of said assignee, filed on the 12th of April, 1871, is in substance a bill in equity, and ought, under the circumstances, in furtherance of justice, to be so regarded and treated, the court doth order that the same do stand and be proceeded in as a bill, and for that purpose that the cause be remanded to rules, and process be issued against the defendants and the cause regularly matured according to law.”
Under this order, subpoena was issued January 7th and served on the defendants, Lis-berger and Rosenbaum, January 11th, 1875. No new service was made upon the other defendants. At the March rules, 1875, an order that the bill be taken pro confesso in default of appearance and answer, was duly entered in the order book. November 1st, 1875, the order of the district court under date of October, 1S74, was affirmed by this court upon a petition for review, filed by Lisberger under the supervisory jurisdiction. March 7th, 1876, Harvey and Waggoner, two of the defendants, appeared, and by leave of the court filed *585an answer setting up a discharge in bankruptcy subsequent to their execution of the ■delivery bond. To this a general replication was filed by the assignee. On the same day Lisberger appeared by counsel and, on leave, filed a paper in the cause, which is styled a demurrer, plea, and answer. In this paper it is insisted by way of demurrer, “that the petition does not present such a case as entitles the complainant to relief in equity;” and by way of plea, “the limitation [two years] prescribed by section 5056 of the bankrupt act.” Then, without waiver of his demurrer or plea, he answers denying all the allegations in the petition of fraud in the sale. For this purpose he adopted his answer, filed May 8th, 1871, previous to the order transferring the cause to the equity side of the court. He denied his liability upon the bond for want of consideration, and insisted that all proceedings in the cause since June 17th, 1874, were irregular and without authority of law.
The complainant joined in the demurrer, and replied generally to the answer proper and to the answer in the nature of a plea. Depositions were taken, and, May 10th, 1876, after hearing, the district court overruled the demurrer and plea, and, upon the merits, entered a decree avoiding the sale and directing the payment of $5,61SiVioo, the ascertained value of the goods, with interest from May 16th, 1870, by Lisberger to the assignee. No mention is made of the bond in the decree, and no order was made in respect to any of the defendants except Lisberger. Both parties have appealed from this decree.
I am entirely satisfied, after a careful examination of the evidence, that the sale to Lis-berger was void under the bankrupt law. Indeed, the counsel for the defendants, in their arguments here, have not seriously contended to the contrary. It is unnecessary, therefore, to consider the case at length in that aspect. The real controversy is as to the defence of the statute of limitations; and that depends entirely upon the time when the suit was commenced. If this was April 10th, 1S71, when the petition was filed, the defence fails. If, however, it was January 11th, 1S75, when the subpoena was served on Lisberger and Itosenbaum, or even as early as October 8th, 1S74, when the order was made setting the cause down for hearing upon the equity side of the court, the statute does operate as a bar.
The pleading filed in the district court April 12th, 1S71, was in an appropriate form for a petition for relief under the summary jurisdiction of the court sitting in bankruptcy. It was entitled as of the principal suit in bankruptcy, and was addressed to the district judge generally, without specifying the particular jurisdiction invoked. It was, however, equally good, in substance, as a bill in equity. It needed no amendments to make it available under the order of October Sth, 1S74, for it contained a full statement of the cause of action and a sufficient prayer for complete relief in equity. Although for a time the court acted upon the petition as if addressed to its jurisdiction while sitting in bankruptcy, and the complainant insisted that this was the correct practice, upon further consideration it was decided that the case was one to be determined only as a suit in equity, under the special jurisdiction for that purpose conferred by the bankruptcy law. Accordingly, it was assigned for hearing in that branch of the court. No new process was necessary, for the parties were already in court by their appearance under the notice already served. The question decided did not relate to the commencement of a new suit, but to the mode of procedure in one that had been already commenced. In Stickney v. Wilt, 23 Wall. [90 U. S.] 150, decided by the supreme court in November, 1874, just after the order of October 8th, 1874, was made in this case, the petition was in all matters of form the same as this. It was entitled as of the bankrupt suit, was addressed generally to the judge of the district court, and had no prayer for subpoena.
The district court having directed the sale of certain property by the assignee, free from all incumbrance set up by Wilt, he filed in the circuit court a petition for review under its supervisory jurisdiction. The circuit court, after hearing, reversed the order of the district court, sent the cause back with instructions to allow the claim of Wilt and proceed accordingly. From this action • of the circuit court an appeal was taken to the supreme court, where it was decided that notwithstanding the form of the petition filed in the district court, it contained all the essential elements of a bill in equity, and as the subject-matter of the action was one cognizable only by the district court, under that provision of the bankrupt law which gave it jurisdiction of suits at law and in equity in respect to the property of the bankrupt, that court must be considered, in the absence of anything expressly appearing to the contrary, to have acted under that jurisdiction when it granted the relief complained of. For this reason it was held that the remedy of Wilt was by appeal to the circuit court, and not by petition for review under its supervisory jurisdiction, and that the action taken by the circuit court was irregular and of no effect, because of the want of power in the court to proceed in that manner with such a case. As, however, what the court did was under an assumed supervisory jurisdiction, the supreme court did not dismiss the appeal, but sent the cause back with instructions to the circuit court to dismiss the petition for review for want of jurisdiction, and suggesting to the district court the propriety of entertaining a bill of review in equity for the purpose of correcting any errors that might be found in the decree as originally entered there.
As it seems to me, that case is decisive of *586this. There, as the suit was one properly cognizable in equity only, the supreme court presumed it was heard and determined as such. Here the court at first proceeded summarily with the cause, treating it as a part of the principal suit in bankruptcy; but before it was finally disposed of, corrected the supposed error and set the matter down for hearing as a suit in equity. Thus was expressed what might have been implied under the ruling in Stickney v. Wilt [supra]. It is not necessary to inquire whether the court was correct when it decided that it could not take jurisdiction of the case upon a petition filed under the suit in bankruptcy. It is sufficient for all the purposes of this appeal that such was the decision, dnd that it was made at the instance of the defendant, Lisberger, himself. Certainly power to proceed in that way did not divest the court of its jurisdiction in equity; and if it did proceed in equity Lisberger cannot complain, because it was at his instance that this power of the bankrupt court was not employed.
[See Cases Nos. 12.003. 13.493, and 13,494.1It is, however, contended that the case was finally disposed of and the defendants discharged from further attendance when the order of dismissal was entered on the 16th of June. That order was avowedly made in the bankrupt suit. The motion was entered in that suit by Lisberger to dismiss the case from that jurisdiction. Any order made in the progress of such a suit could be vacated or modified by the bankrupt court upon proper showing at any time before the suit was finally disposed of, provided rights had not become vested under it which would be disturbed by the change. The supreme court has so decided in Sandusky v. First Nat. Bank, 23 Wall. [90 U. S.] 293. Here, no such rights had intervened, and the bankrupt court, upon application duly made, and after notice, vacated the order as one improvidently entered. This left the case in the district court to be proceeded with in such manner as might be proper. Lisberger certainly made himself a party to the bankrupt suit for all purposes connected with his motion, and was consequently amenable to any process that might be necessary to correct errors in the action which he in that way secured for his own benefit. I conclude, therefore, that the defence of the statute of limitations cannot be sustained, and that the case was properly in the district court for adjudication, as a suit in equity, when the decree was rendered.
One further suggestion only, made by the defendants against an affirmance of the decree, remains to be considered. It is claimed that before there can be a recovery against the defendants, the amount of debts owing by the bankrupt must be ascertained. This I do not consider necessary. The schedules which are filed as evidence show an indebtedness far in excess of the value of the goods. This certainly makes a prima facie case for recovery. The presumption is that all debts will be proved if there are assets for distribution. But, be that as it may, as the sale is void under the bankrupt law, and some debts have been proven, the assignee is entitled to his decree, leaving the defendant to make good his claim, if any he has, to any surplus that may remain after the debts are satisfied. It follows that the decree must be affirmed under the appeal of Lisberger.
The complainant has, however, appealed, and insists that the value of the goods was greater than was found by the district court. The evidencé upon this branch of the ease is quite unsatisfactory. It consists almost exclusively of the estimates of witnesses which are to my mind very unreliable. If the case had not been so long pending I would send it to a master, but it is very doubtful whether at this late day any more satisfactory testimony could be obtained than that which is now here. There is nothing to show what the general character of the stock was, whether new or shopworn; but when the order for its restoration to Lisberger was made, the goods were in the possession of the marshal, and subject to the inspection of all parties interested. At that time a bond with a penalty of eight thousand dollars was considered sufficient to protect the creditors against loss. Under these circumstances I am inclined to concur in the opinion of the district judge, and to adopt' the valuation fixed for the purpose of the sale as the amount of the recovery.
As it seems to be conceded that the goods cannot be restored to the assignee, let a decree be prepared finding the sale to Lisber-ger void under the bankrupt law. and ordering him to pay the assignee $5,618iVioo, with interest from May 16th, 1S70, as the value of the goods in lieu of their delivery; and, in default, that execution issue as at law. As to the other defendants, the bill is dismissed without prejudice to the right of the complainant to proceed against them at law upon the bond in case it shall become necessary. Lisberger to pay all costs below and here.