1. Corporations 559 (6)-Appointment of receiver for corporation held not to prevent corporation from suing or being sued.

Under Rev. Laws Hawaii 1925, § 3487, providing for appointment of receiver for insol

vent corporation, appointment of receiver did not prevent corporation from suing or being sued, in absence of injunction or restraining order.

2. Corporations 560(10)-Receiver of corporation held proper, but not necessary, party to action against corporation,

Where appointment of receiver for corporation did not prevent corporation from suing or being sued under Rev. Laws Hawaii 1925, § 3487, receiver, though proper party, was not necessary party, to proceeding against corpora

tion as executor.

3. Courts

406 (1)-Finding by Supreme Court of Hawaii, sustained by evidence, is conclusive on Circuit Court of Appeals.

Finding by Supreme Court of Hawaii, sustained by evidence, is conclusive on appeal to Circuit Court of Appeals.

4. Appeal and error 185(1)—Jury 28(1) -Surety on executor's bond, appearing and participating in proceedings, waived right to jury trial, and objection to jurisdiction made in Circuit Court of Appeals was too late.

Where surety on executor's bond appeared in probate court, and had petition amended to include surety in citation, and thereafter participated in proceedings, it waived jury trial, and its objection that court had no jurisdiction to render judgment against it, raised for first time in Circuit Court of Appeals, was too late. 5. Courts 405 (3)-Construction of Hawaiian statute by Supreme Court of Hawaii will

not be disturbed by Circuit Court of Appeals,

unless clearly wrong.

Construction of Rev. Laws Hawaii 1925, § 2509, providing for appeals from circuit judges

in chambers, by Supreme Court of Hawaii, and practice adopted thereunder, should not be disturbed by Circuit Court of Appeals, unless clearly wrong.

6. Executors and administrators 528(5)Surety held liable for executor's debts to estate, due prior to appointment of receiver for executor.

Where corporate executor, up to time of appointment of receiver for it, was able to pay note due estate, surety was liable for notes due prior to appointment of receiver, under common law as in force in Hawaii.

Appeal from the Supreme Court for the Territory of Hawaii.

In the matter of the estate of Manuel Branco, deceased. From a decree of the Supreme Court of Hawaii, modifying a decree in favor of George H. Vicars, administrator de bonis non of the estate of Manuel Branco, deceased, and another, entered on exceptions to executor's final accounting, the United States Fidelity & Guaranty Company, surety on the executor's bond, appeals. Af

firmed.

The appellant was the surety on the executor's bond filed September 1, 1921, by the Security Trust Company, Limited, as the executor of the last will and testament of Manuel Branco, deceased. The executor was indebted to the decedent in the sum of $82,000 on promissory notes, all of which were payable on demand, except a $7,000 note which was due March 3, 1922. In the inventory of the assets of the decedent the executor included the notes at their face value, and attached to the inventory was the verification of an officer of the executor, affirming the truth of the valuation of each item therein. On April 19, 1922, the executor filed its final account, and 10 days later filed an inventory of all remaining assets of the estate, in which were included its unpaid notes above mentioned. On June 16, 1922, at the instance of the testator's widow, the

waii.

The majority of that court, on the appeal, held that, where a debtor of the testator is appointed executor of the latter's will and testament, the debt which he owed the decedent is to be treated as realized assets in accordance with the common-law rule and regarded the same as debts due from other sources, that an executor is bound to exercise such diligence in the collection of debts due the estate of his decedent as would be exercised by an ordinarily prudent man in his own business affairs, and that when the executor is also a debtor it is his duty to pay his debt to the estate, without regard to his inability to pay his other debts, even if such payment might force him to suspend his business, and that the surety is liable to the extent of his principal's ability to pay such indebtedness. The court also found that the executor could have paid this particular debt, and held that, when part of the executor's debt to a decedent is not yet due, and before its maturity a receiver is appointed of the executor's property, the surety is not liable for the executor's failure to pay such undue debt prior to its maturity, and held that the surety was responsible for all of the notes, except the $7,000 note, which fell due after the receiver's appointment.

Robertson & Castle, of Honolulu, Hawaii, and Horace W. B. Smith and P. R. Lund, both of San Francisco, Cal., for appellant. W. H. Smith, of Hilo, Hawaii, for appellee.

Before GILBERT, RUDKIN, and McCAMANT, Circuit Judges.

the facts as above). [1,2] The appellant GILBERT, Circuit Judge (after stating contends that the decree of the circuit court, as modified by the Supreme Court, is wholly void, for the reason that prior to the date thereof the Security Trust Company had gone into the hands of a receiver, and the receiver was not a party to the proceedings; that the appointment. of a receiver effects a dissolution of a corporation under the Hawain statutes (Rev. Laws 1925, § 3487), which empower the treasurer of the territory, on becoming satisfied that a corporation has become insolvent or that its capital has become impaired, to apply to a court of competent jurisdiction for its winding up, and the appointment of a receiver to take possession of its records, books, and assets, collect all debts due it, and sell all its property under the direction of the court, and make final disposition of the assets. As declaring the effect of such statutes, the appellant cites 8 A. L. R. 449, where it is said: "Where the effect of an appointment of a receiver for a corporation is to extinguish the existence of the corporation as a body corporate, except as a receiver may have the right to use the corporate name in actions at law or in equity necessary in winding up the affairs of the corporation, the effect of the appointment of the receiver is to abate actions against the corporation pending at the time of the appointment, and likewise to preclude the commencement of actions against the corporation."

But such is not, in general, the effect of the appointment of a receiver. In 8 A. L. R. 456, it is said: "The mere fact that a receiver is appointed for a corporation under the state insolvency laws, for the purpose of administering the assets of the corporation, or for the purpose of winding up its affairs, does not have the effect of precluding actions against the corporation, unless as a result of such proceeding the legal existence of the corporation is virtually extinguished, except as it may be represented by the receiver." And in 7 R. C. L. 718, it is said: "The appointment of a receiver to take and distribute among the creditors and stockholders all the property of a corporation may with sufficient accuracy be called, as it has been, a virtual dissolution of the corporation; but it does not extinguish its franchise, terminate its legal existence, or render it incapable of being sued at law or in equity."

The statutes of the territory of Hawaii so referred to are not substantially different from the federal statute providing for the appointment of receivers of national banks. As to that statute the Supreme Court has held that the appointment of a receiver by the Comptroller to wind up the affairs of a national bank does not work a dissolution of the corporation or affect suits pending against it, or prevent it suing or being sued. Bethel First National Bank v. Pahquioque Bank, 14 Wall. 383, 20 L. Ed. 840. The court there said: "Beyond doubt the appointment of a receiver supersedes the power of the directors to exercise the incidental powers necessary to carry on the business of banking, as the receiver is required to take possession of the books, records and assets of every description of the association; but the corporate franchise of the association is not dissolved, and the association, as a legal entity continues to exist." The same was held in National Bank v. Insurance Co., 104 U. S. 54, 26 L. Ed. 693. The appellant cites Pendleton v. Russell, 144 U. S. 640, 12 S. Ct. 743, 36 L. Ed. 574, but in that case the corporation had ceased to have legal existence. It had been dissolved, and its franchises, rights, and privileges declared forfeited by a decree of the Supreme Court of New York. Said the court: "The judgment was therefore no more valid against a nonexisting corporation than it would have been if rendered for a like amount against a dead man."

In brief, it seems to be well settled that in order to show that a corporation in the hands of a receiver has no capacity to sue or be sued it must appear that some statutory provision expressly so declares or that an injunction or restraining order so provides in addition to the appointment of a receiver. Folger v. Columbian Ins. Co., 99 Mass. 267, 96 Am. Dec. 747; American Waterworks Co. v. Farmers' Loan Co., 20 Colo. 203, 37 P. 269, 25 L. R. A. 338, 46 Am. St. Rep. 285; Milwaukee Mut. F. Ins. Co. v. Sentinel Co., 81 Wis. 207, 51 N. W. 440, 15 L. R. A. 627; Leonard v. Hartzler, 90 Kan. 386, 133 P. 570, 50 L. R. A. (N. S.) 383. Doubtless the receiver would have been a proper party to the proceeding and upon its application it might have been admitted as a party, but it was not a necessary party. Denton v. Baker, 79 F. 189, 24 C. C. A. 476; Anglo-American Land M. & A. Co. v. Cheshire Prov. Inst. (C. C.) 124 F. 464; Continental Securities Co. v. Interborough R. T. Co. (C. C.) 165 F. 945, 965; Allen v. United States (C. C. A.) 285 F. 678.

[3] Error is assigned to the Supreme Court's finding that the Security Trust Company at the time of its appointment as executor, and up to the time of the appointment of the receiver, was fully able to pay its notes then due to the estate, and it is contended that in fact the executor at the time of its appointment could not pay its debts in the ordinary course of business and that at no time between that date and the appointment of the receiver did it have funds sufficient to pay said debt, nor would there have been sufficient funds to pay it had a liquidation of the executor's assets been made. There was evidence, however, to sustain the conclusion which the Supreme Court reached upon the question of the executor's ability to pay and we accept the finding as conclusive upon this appeal.

[4] It is contended that the decree rendered against the surety in the probate proceeding on a surcharge of the principal is void as to the surety, for the reason that it was without the jurisdiction of the probate court, that in Hawaii a circuit judge sitting in probate is controlled by the principles applicable to probate court jurisdiction and has commonlaw powers only, and that at common law a probate court was without power to cite a surety to appear or to render judgment against him on an accounting by an executor or administrator. To this it is to be said: Section 2248, par. 3, R. L. 1925, recognizes as among the jurisdictional powers of the circuit judges sitting in probate the power "to compel executors, administrators and guardians to perform their respective trusts and to account in all respects for the discharge of their official duties; to remove any executor, administrator or guardian; to determine the heirs at law of deceased persons and to decree the distribution of intestate estates." In Carter v. Gear, 16 Haw. 242, concerning the distinction between the powers of the circuit court and the powers of the circuit judge at chambers, it was said: "Whether the court of the judge at chambers is the same as the circuit court or a different court, it is a court, and it is a court of record."

In the Estate of Afong, 26 Haw. 337, the court said: "The jurisdiction and procedure of the courts and the judges at chambers is not all defined by statute. Much of it is covered by statute only in a very general way. Much as to jurisdiction and procedure is governed by what may be considered Hawaiian common law-that has grown up without the aid of statute or has

paid balance of subscriptions to its stock which amounted to $100,000, as assets of the Security Trust Company and the failure of said company to make any effort to collect the same, which the court regarded as utter failure to exercise the diligence which the law required of it in satisfying its indebtedness. And the appellant points to the testimony of its treasurer, who placed the valuation on the unpaid subscription stocks at only $40,680. Aside from the fact that error is not assignable to the reasoning of the court's opinion, we are not convinced that the liability of the stockholders, which had been regularly listed as of the value of $100,000 upon the statements of the Security Company's resources and liabilities in June and December, 1921, as sworn to by its secretary, should have been disregarded by the court, even in the face of testimony that its value was but $40,680. The court accepted that estimate of its value, and rightly, we think, regarded it as an asset that should have been used by the trust company toward payment of its debt to the estate.

4. Limitation of actions 127(11)—Amendment introducing different cause of action does not relate back to beginning of action, so as to stop running of statute.

Amendment to petition, introducing different cause of action, does not relate back to beginning of action so as to stop statute, but is equivalent to fresh suit on new cause of action.

5. Bankruptcy 81 (4)-Averment of act of bankruptcy in language of statute is insufficient.

Averment of act of bankruptcy in language of statute is insufficient.

6. Bankruptcy 84-Acts of bankruptcy, not alleged in original petition, cannot be charged by amendment filed more than four months after commission of acts of bankruptcy.

Acts of bankruptcy, not alleged in original petition, cannot be charged by amendment filed more than four months after commission of such acts of bankruptcy.

cause to be set up, and determine whether the original and amended pleading refer to same cause of action.

8. Limitation of actions 127(2)—Amended pleading, setting up no new cause of action, ought to relate back to date of filing of original pleading.

Where original pleading is sufficiently specific to identify cause of action, and amended pleading introduces no new cause of action, then amendment to pleading ought to relate back to date of filing of original pleading.

9. Bankruptcy 84-Amendment to petition in bankruptcy held not to relate back to original petition.

Amendment to petition in bankruptcy held not to relate back to original petition, which alleged acts of bankruptcy in general language of Bankruptcy Act, § 3a, subds. (1) and (2), being Comp. St. § 9587.

Petition to Revise Order of the District Court of the United States for the District of Minnesota; William A. Cant, Judge.

Petition in bankruptcy by the Farmers' State Bank of Christine, N. D., and others, against A. M. Hovland. Order of District Court overruling plea in abatement and plea in bar, and defendant petitions to revise. Order overruling plea in abatement affirmed, and order overruling plea in bar reversed, with direction.

L. H. Joss, John N. Ohman, R. H. Fryberger, and W. G. Parker, all of Minneapolis, Minn., for petitioner.