portant to apply the basic axiom that "reason is the soul of the law" than when a rule of law, apparently applicable to a set of facts, results in seeming injustice. This necessity is accentuated when the set of facts under consideration is not merely vagrant and unusual, but is typical of a large and important class of frequent recurrence. The reason and history of this rule require examination to determine whether a situation possibly within its letter is within its real intent and spirit.

Sedgwick in his work on Damages (9th Ed.) § 111b, has well said that

"The legal distinction between what is proximate and what is remote is not a logical one, nor does it depend upon relations of time or space; it is purely practical, the reason for distinguishing between proximate and remote causes being a purely practical one."

The practical reason for treating the intervention of a wrongdoer as an insulation breaking the causal connection is that such wrongdoer is nearer to the resulting injury, may himself be held in damages therefor, and the plaintiff should not be given a duplicate recovery. The origin and usual application of this rule connect it with the common character of tort where the injury is a single occurrence, as harm to person or property. As so applied this rule ordinarily accords well with the demands of justice. We are not concerned here with instances where the fault of the intervening wrongdoer was simply non-action in failing to nullify the effect of the wrongful act before it reached the plaintiff. However, a well-known exception or parallel rule is that where the original wrongdoer intended the result actually brought about by the intervening wrongdoer he is liable. The considerations of practical justice forming these rules seem to be as follows: That plaintiff should be allowed one complete recovery for an injury wrongfully inflicted; that this requisite is ordinarily sufficiently afforded when it is given against the active wrongdoer nearest in the causal sequence to the injury without looking further back; that it is unjust to permit a wrongdoer, who intended the injury and foresaw the intervention of the later wrongdoer, to escape liability. Keeping in mind these practical reasons for practical rules designed to work justice, the application of those rules to the tort of defamation may be tested. Having in view cause and effect, this tort is often unlike any other. Unless the entire claimed damage is special, the plaintiff is seeking to recover for the general damage done to his reputation. Knowing, as reasonable men, that this depends largely upon how widely the defamation has been spread, how can the jury intelligently gauge that damage, or how can the court later rule upon the justice of the amount of verdict if there be denial of all evidence upon that point? How is the plaintiff to be accorded his complete recovery, or how is the defendant to be protected against excessive recovery if neither party can show the extent of the injury? Another suggestion bearing upon the practical, substantial justice of the situation is this: The wider the circulation, the greater the damage, yet there is a correspondingly increasing difficulty, often impossibility, of the plaintiff being able to locate, for purposes of legal sat

isfaction, all or any appreciable number of the talebearers whose busy tongues have been set wagging to his grievous injury by defendant's act. Leonard, C., in Bassell v. Elmore, 48 N. Y. 561, 568. So that, if the theory of the rule that responsibility ceases with the injury to his reputation in the minds of those to whom defendant communicated the defamation is really carried into practice, the plaintiff could require of the defendant but a minimum of the injury he had received. Yet every one knows that none of this entire injury would have been received had not the defendant set rolling the growing ball of defamation which has finally crushed the fairest one of plaintiff's possessions. The publication may have been made under circumstances designed and shaped to prevent or confine its further circulation, and such are for the jury to consider. On the other hand, if intent is to govern, why exclude the operation of a fundamental principle used throughout the law in determining intent, namely, that one is presumed to know and to intend the natural and probable consequences of his act. The question here is not of punitive damages and evil motive, but of compensatory damages and legal intent. Since the defamer must know what all men know, that the natural and probable consequence of publishing a defamation is its repetition and wide circulation, het should be held to intend that result and be held responsible for it. If he is thus responsible the measure of that responsibility lacks a gauge of fact, unless the extent of that repetition or circulation can be shown.

Here an honorable man has been, the jury found, falsely and maliciously branded as a felon by his employer and in connection with that employment. The charge meets him when he seeks employment, shames his children among their schoolmates, ruins his credit, and blights the well-earned reputation of a lifetime. Defendant made the statement to seven different persons, of whom four testified affirmatively that they did not believe the charge, one denies hearing such a charge, and two were not witnesses. If defendant is liable only for the injury done plaintiff's reputation in the minds of these seven persons, the court would be puzzled, even under the existing liberal rule as to amount of verdicts in defamation cases, in upholding the jury assessment of $22,500. The effect upon these seven hearers is not the gist of plaintiff's injury. It is: That having before borne a good name, thereafter this charge originated by defendant became common rumor, so that it was widely known that defendant had made such an accusation, and that because thereof, he (plaintiff) sought employment in vain, he suffered anguish on account of his children being shamed among their schoolmates, his credit was ruined, and his reputation besmirched. Whether this rule be applicable where the defendant is a mere conveyor of the defamation as distinguished from the originator thereof we need not inquire, because here the defendant was the originator. Nor do I think it necessary that the testimony show that any of the particular persons named in the petition as hearing the slander repeated it to others. Defendant is shown to have. been the originator of the slander, and the repetitions covered by the testimony gave him as the origin. He sent out the poison, and it

traveled everywhere under the sanction of his name. I cannot doubt that the rumors and reports which injured plaintiff are parts of the stream of which he alone was the source. To hold that this cannot be shown, nor defendant be held responsible therefor, does not meetmy ideas of justice. As said by Leonard, C., in Bassell v. Elmore, 48 N. Y. 561, 568:

"A slanderous charge gets in circulation and is many times repeated until it often becomes impossible to trace it so that it shall appear to have been carried directly from the slanderer to the person from whom the pecuniary injury has been sustained by the party complaining. The rule is entirely too favorable for the malicious slanderer. He should be held responsible when it can be proven, as in this case, that the slander uttered did come to the knowledge of some person, who acted upon it to the pecuniary injury of the plaintiff."

It is suggested that in this regard there is a difference between libel and slander, which justifies a difference in rule. No case suggests such a difference, and I see no basis therefor. Material divergencies. based on differences between libel and slander should be sparingly made, and only where the basis therefor is very clear, because, as said by Judge Cooley in his work on Torts (3d Ed.) p. 366, “Slander and libel are different names for the same wrong accomplished in different ways." Also see Newell's Slander and Libel (3d Ed.) $ 29.

(260 Fed. 89)

MARTIN et al. v. OLIVER.

(Circuit Court of Appeals, Eighth Circuit. June 28, 1919.)

No. 196.

1. COURTS 497-CONFLICTING JURISDICTION-PRIORITY OF JURISDICTION. The general rule is that the legal custody of specific property by one court of competent jurisdiction withdraws it, so far as is necessary to accomplish the purpose of that custody, until the purpose is completely accomplished, from the jurisdiction of every other court.

2. BANKRUPTCY 199-LIENS OBTAINED THROUGH JUDICIAL PROCEEDINGS— INSOLVENCY OF DEBTOR.

Under Bankr. Act, § 67f (Comp. St. § 9651), providing that all levies and other liens obtained through judicial proceedings against a person who is insolvent at any time within four months prior to the filing of a petition in bankruptcy against him upon which an adjudication is made shall be null and void, and the property affected shall pass to the trustee, the insolvency of such person at the time the levy is made or the lien attaches, and the admission or proof of that insolvency, are indispensable conditions of an avoidance of such a levy or lien.

3. BANKRUPTCY 288(2)—SUMMARY JURISDICTION OF COURT-ADVERSE CLAIM

ANTS.

A creditor who caused a levy to be made on personal property or a bankrupt seven weeks prior to the bankruptcy, and a receiver appointed on his petition by a state court of competent jurisdiction who took possession of the property and held it at the time of the adjudication, both claiming the validity of the levy, held adverse claimants, with a right to have their claim adjudicated in the plenary action.

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

4. BANKRUPTCY 391(1)—EFFECT ON SUIT IN STATE Court.

A state court, having jurisdiction of the parties and subject-matter in a suit pending before it, in which property of the defendant had been levied upon and was in the hands of a receiver appointed by the court, and issue had been joined on the question of defendant's right to hold the property as exempt, held not deprived of jurisdiction to proceed to a determination of such issue by the filing of a petition in bankruptcy by defendant, where the bankruptcy proceedings were not brought to its attention by proper notice and pleadings.

5. BANKRUPTCY 20(1)—COURTS OF BANKRUPTCY-EQUITABLE PRINCIPLES. A court of bankruptcy is a court of equity, and ought not to permit itself to be used for the purpose of perpetrating a fraud or attaining an inequitable result which a state court is successfully endeavoring to prevent.

Stone, Circuit Judge, dissenting.

Petition to Revise Order of the District Court of the United States for the Western District of Arkansas; Frank A. Youmans, Judge. In the matter of Lula M. Oliver, bankrupt. On petition of G. W. Martin and another to revise an order of the District Court. Reversed.

J. H. Evans and C. I. Evans, both of Booneville, Ark., for petitioners.

W. B. Rutherford, of Perryville, Ark., for respondent.

Before SANBORN and STONE, Circuit Judges, and TRIEBER, District Judge.

SANBORN, Circuit Judge. G. W. Martin and W. A. McNeill have presented to this court a petition to revise an order of the District Court which affirmed an order of the referee made on February 15, 1918, in the matter of the estate of Lula M. Oliver, a bankrupt, denying the motion of the petitioners to modify the order of the referee made February 8, 1918, wherein he determined that the bankrupt was entitled to certain personal property of the value of $459.50 as her exemptions, and ordered "that the said articles be delivered to the bankrupt forthwith" by striking from it the order for the delivery of the property to the bankrupt. When this order of delivery was made, and when Lula M. Oliver filed her petition in bankruptcy and was adjudged a bankrupt, this property was in the legal custody of the chancery court of Logan county, Ark., and in the actual possession of its receiver, Martin. A brief statement of the material facts disclosed by the record will aid in the consideration of the questions of law here presented.

On December 30, 1915, Lula M. Oliver and V. E. Oliver, her husband, were indebted and gave their promissory note to the Bank of Magazine for $412.60, and mortgaged certain town lots in Magazine to secure this debt. At the same time, without consideration and for their accommodation, the petitioner, W. A. McNeill, signed this note as their surety. On September 10, 1917, in a suit brought by the bank against Lula M. Oliver, V. E. Oliver, and W. A. McNeill For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

in the chancery court for the Southern district of Logan county, of the subject-matter of and the parties to which that court had jurisdiction, that court rendered a decree of foreclosure of that mortgage, of a sale of the mortgaged property, and of the issue of an execution against the defendants therein for any balance of the judgment not paid by the sale. The lots were sold and the proceeds applied, but there remained unpaid a balance of $272.27. On the 1st day of November, 1917, McNeill caused the bank to issue an execution on the judgment, and to levy it upon the personal property of Lula M. Oliver, including that here in controversy. On November 8, 1917, McNeill presented to the chancery court of Arkansas in the foreclosure suit a petition in which he alleged that, on the same day on which the decree of foreclosure was rendered, Lula M. Oliver made a chattel mortgage of all her personal property to one Kent Ruble, for the fraudulent purpose of hindering and delaying the collection of her debt to the bank; and that on the 1st day of November, 1917, when the levy was made, she and her husband were loading a car at Magazine with all their visible property, billing it in the name of Meade Oliver, a brother of her husband, and shipping it permanently out of the state of Arkansas with the fraudulent intent of defeating the collection of the balance of the judgment from this property, and compelling McNeill, her accommodation surety, to pay it. He prayed for the appointment of a receiver of all this personal property, and that at the final hearing the fraudulent mortgage of Kent Ruble be set aside, and all the property be sold to pay the balance of the judgment. On this petition the Arkansas chancery court appointed W. M. Martin receiver of this personal property on the 8th day of November, 1917, and ordered him to keep it safely, subject to the further order of that court. He immediately took possession of it and still holds it. Lula M. Oliver answered this petition of McNeill that all the property levied on and in the hands of Martin, the receiver, was exempt from levy or sale, but she did not deny any of McNeill's averments of her intents and attempts to defraud him and the bank. On February 8, 1918, upon the pleadings and proceedings in the main suit, the petition of McNeill, the answer of Lula M. Oliver, and oral testimony of witnesses while "V. E. Oliver and Lula M. Oliver were present in person and by their solicitor," as its decree recites, the chancery court of Arkansas found and decreed that on November 1, 1917, Lula M. Oliver and V. E. Oliver were shipping all their property, in the name of Meade Oliver, permanently out of the state, with the fraudulent intent and purpose of defeating the collection of the balance of the judgment therefrom, and compelling McNeill to pay it; that they made the chattel mortgage to Kent Ruble on February 10, 1917, for the fraudulent purpose of delaying and hindering the collection of the judgment; that Lula M. Oliver was not entitled to hold the property in question as exempt, and that her claim of its exemption was disallowed; that the mortgage to Ruble was set aside and held for naught; and that Martin the receiver should proceed to sell the property and apply the proceeds to the payment of the balance of the judgment.