Petition for Revision of Proceedings of the District Court of the United States for the District of Oregon, in Bankruptcy.

The J. M. Acheson Company, a mercantile corporation, was, with its expressed consent, duly adjudged a bankrupt on June 2, 1908. Thereafter a receiver was appointed by consent, and all assets of the corporation were turned over to him for the benefit of all the creditors. The receiver was afterwards named as trustee. Among ihe claims filed against the estate was, one by the firm of Ginsburg Bros., of Chicago, who set forth in their petition filed with the referee that the J. M. Acheson Company owed them $2,-228.50 on an open account for merchandise delivered by the firm of Ginsburg Bros, to the said J. M. Acheson Company on consignment within two years last past before filing the claim, bills for which were annexed to ihe petition and made part thereof. Claimants further set fortlwthat ‘‘the agreed value of the goods shipped by deponent’s said firm to said bankrupt was $4,-212.23, and all of said goods were disposed of by said bankrupt, excepting goods to the value of 81,483.75, which goods were returned by order of this honorable court. Of the moneys received for said goods which were sold, said bankrupt has paid this deponent’s firm the sum of $500 only, leaving said balance of 82,228.50 due this deponent’s firm; that no part of said claim has been paid; that there are no set-offs or counterclaims to the same; and that: this deponent has not, nor has his said firm, nor has any person by their order, or to this deponent’s knowledge or belief, for their use, had ol“ received any maimer of security for said claim whatever; that no note lias, been received for said account nor any judgment rendered thereon; that said items of said claim became due as soon as sales of said goods were made by said bankrupt, and all funds received by said bankrupt from the sales of said goods which were not paid over to this deponent’s firm were to be held in trust By said bankrupt and said funds were trust funds. This deponent is; informed and believes and therefore says that said bankrupt failed to keep said trust fund sepárale and distinct from other funds, but wrongfully mixed and commingled the same with the money of said bankrupt, and said bankrupt has used said trust fund in payment of its employés and other running expenses, in paying other creditors, and in purchasing sundry other goods, wares, and merchandise which composed the assets of said bankrupt, which assets were taken charge of by the receiver appointed by this court. Said assets were disposed of by said receiver for the sum of-. Said receiver was thereafter selected and now is the trustee of said bankrupt, and still has in his possession funds received from the sale of said assets more than sufficient in amount to satisfy this claimant’s claim in full.” The prayer was that the claim be allowed in full.

The trustee filed a general demurrer to the petition, and, after hearing, the referee, without formal action upon the demurrer, disallowed the claim of petitioners as a preferred one, but directed that it be filed as a general claim.

Petitioners sought a review of the referee’s order. The District Court affirmed the order of the referee, and allowed the claim as a general one against the estate. Petitioners appealed to this court.