On Petition for Review of Certain Orders of the District Court oí the United States for the 'Southern District of ‘California, in Bankruptcy.

This matter has been brought into this court upon the petition of the trustee in bankruptcy to review two orders of the court below, — one granting leave to make the trustee in bankruptcy a party defendant to foreclosure proceeding's in ilie state court, and the other denying the petition of the trustee for an injunction to restrain said foreclosure proceedings. It appears that the property involved in the foreclosure proceedings, known as the “San Gabriel Sanaioi-ium.” and situated in the county oí Dos Angeles, state of California, was piior to December 14, 1897, owned by the respondent H. H. Markham; that on Unit date he sold said property to the International Pulmonary Company, a corporation, taking- a note in part payment thereof, and a mortgage :■.ecuring the same, covering all.of said property; that thereafter said mortgagor conveyed said property to the Sail Gabriel Sanatorium Company, a corporation, and said last-named corporation thereafter, to wit, on March 20, Í899, executed a deed of said property to one .1. W. McCauley, who entered into possession thereof. Within four moni Us after the execution of the deed to McCauley, to wit, on March 21, 1899, a petition in involuntary insolvency was tiled by certain creditors of the San Gabriel Sanatorium Company; and on dune 2(5, 1890, said company was adjudicated a bankrupt, on the grounds that a fraudulent preference was made on February 13, 1890, to the First National Dank of Pasadena, and that on March 20, 1899, it transferred its property io .1. W. McCauley, without consideration, to hinder, delay, and defraud Its creditors. On August 14-, 1809, the respondent H. H. Markham commenced an action in the state court to foreclose tile aforesaid mortgage upon the real and personal property of the bankrupt, and for the appointment of a receiver. A receiver was appointed the following day, August 15th, and orualiiied as such. This action was against the International Pulmonary Company (mortgagor). the First National Bank of Pasadena, and X W. McCauley. The meeting of creditors of the said bankrupt to elect a trustee was begun on July 22, 1899. and continued until August 28, 1899, when the petitioner, Gregory Perkins, Jr., was appointed as trustee of the estate of the San Gabriel Sanatorium Company, bankrupt. It appears that this ('state consisted solely of the property known as the “San Gabriel Sanatorium,” — a large institution for the cursi of consumptives and other invalids, and for hoarding and providing the inmates (hereof with hotel accommodations. On August 29, 1899, the trustee tiled a petition in the state court for leave to sue the said receiver for the recovery of all the property involved in said foreclosure action to the estate of said bankrupt. This petition was granted, and thereupon a suit was instituted in the United States district court against said II. H. Markham, the First National Bank of Pasadena, and J. W. McCauley. On September 8Hi following;, the respondent Markham applied to the United States district court for permission to make said trustee a party to the foreclosure proceeding in the slate court. The First National Bank of Pasadena tiled a petition in the United State's district court September (i, 1899, setting forth that on February 13, 1899, it took a note from the said bankrupt, secured by a chalí el mortgage on personal property in said sanatorium, and that it desired to hie a cross bill in said foreclosure suit brought by the respondent Markham In tlie state court, and also prayed leave to make ihe said trustee a party defendant therein. On Oclobcr 10. 1889, the United States district court granted these applications. This action of 1lie court is the first error assigned by the petitioner. On October 13, 1899, the trustee filed a further petition, setting forth, in addition to the above matters, lit at, if said mortgages of Markham and the bank are permitted to be foreclosed in the state court, a large amount of expense will be incurred, and by reason of tbe embarrassments concerning the title to said property in consequence of the several transfers, mortgages, and conflicting claims, the interests of said bankrupt estate and of all parties interested will be better subserved, guarded, and protected by a sale of the property free and clear of all liens thereon, due provision being made for the rights of Markham, the bank, McCauley, and others, by transferring the same to the proceeds derived from said sale; that, under the law and course of procedure in the state of California, it is impossible for the trustee to litigate and have adjudicated in said foreclosure proceeding the conflicting interests between him and said McCauley regarding the illegal transfer under which said McCauley claims all of the equity of redemption in the property aforesaid. And the petitioner prays that Markham and the First National Bank of Pasadena be restrained from further prosecuting said foreclosure proceedings, and for an order directing and authorizing the sale of the said property free and clear of all liens and incumbrances and conflicting claims of title by the trustee, the bank, McCauley, Markham, and the receiver. On October 21, 1899, the judge of the court below entered an order refusing to grant the foregoing petition. This action of the court is also assigned as error by the petitioner.