conveyances to National Banks, although made in excess of any legal authority given the bank by the law, can only be made by the Government in a direct proceeding, and will not defeat the vesting of the title in the bank when it takes a conveyance in good faith for a valuable consideration. National Bank v. Matthews, 98 U. S. 621; National Bank v. Whitney, 103 U. S. 99; Reynolds v. Crawfordsville First National Bank, 112 U. S. 405; Thompson v. Saint Nicholas National Bank, 146 U. S. 240; Schuyler National Bank v. Gadsden, 191 U. S. 451.

But without questioning the correctness of this conclusion, we are of opinion that the authority of the bank to make this purchase, or of the Comptroller to approve of it, or of the court to order the sale of this asset upon the petition of Baker, as receiver, need not necessarily be considered in determining the right to recover in this proceeding.

Upon the plainest principles governing the relation of the parties here, in view of the finding that there was a secret trust in Baker's favor in the transfer to Simpson, Baker could not be heard to question the authority by which he acquired the property ostensibly for the benefit of his trust, but in reality for himself in breach of his trust. To sanction this would be to permit Baker to take advantage of his own wrong. It is not for him to say that he can acquire title in fraud of his trust because the bank could not legally acquire it, or the Comptroller approve or the court authorize, its sale. As the facts are found, Baker assumed to act upon the understanding that the bank owned the contract of purchase and under an order invoked by him he undertook to sell it for the benefit of the trust, but in reality conveyed it to one who secretly held it for him. Under such circumstances, the trustee can take nothing by his wrongful act and can be compelled to restore the property to the authorized representative of the trust estate.

Plaintiff relies greatly upon Case v. Kelly, 133 U. S. 21, where certain officers of a railroad had procured conveyances of lands intended to be used in the construction of the road and had taken title to themselves personally, and the railroad was seeking to recover the lands although forbidden by its charter to take and hold title to such lands. In this case, Mr. Justice Miller, speaking for the court said:

"We need not stop here to inquire whether this company can hold title to lands, which it is impliedly forbidden to do by its charter, because the case before us is not one in which the title to the lands in question has ever been vested in the railroad company, or attempted to be so vested. The railroad company is plaintiff in this action, and is seeking to obtain the title to such lands. It has no authority by the statute to receive such title and to own such lands, and the question here is, not whether the courts would deprive it of such lands if they had been conveyed to it, but whether they will aid it to violate the law and obtain a title which it has no power to hold. We think the questions are very different ones, and that while a court might hesitate to declare the title to lands received already, and in the possession and ownership of the company, void on the principle that they had no authority to take such lands, it is very clear that it will not make itself the active agent in behalf of the company in violating the law and enabling the company to do that which the law forbids."

But the present case is not so. Here the State has parted with its title, and made the contract to convey to the bank at the instance of the receiver who now seeks to hold the title for his own benefit in breach of his trust.

As to the defense of laches, both courts below found that the facts show entire want of knowledge on the part of the present plaintiff or his predecessor in office of the secret arrangement by which Baker acquired the title to

the contract of purchase. Until knowledge of this fraudulent transaction, or facts equivalent thereto, was brought home to those authorized to act, there could be no laches in the failure to prosecute the suit.

Nor do we find merit in the contention that the sevenyear statute of limitations (Remington & Ballinger's Annotated Codes and Statutes of Washington, § 789), in favor of persons in the actual and notorious possession of lands under claim of title in good faith, has any application here. Under the facts found Baker does not come within the class protected by this statute.

Other points are urged but it is enough to say that we find no error in the decree of the Circuit Court of Appeals, and it is

Affirmed.

WILLIAM R. STAATS COMPANY ET AL. v. SECURITY TRUST AND SAVINGS BANK, TRUSTEE.

APPEAL FROM THE CIRCUIT COURT OF APPEALS FOR THE NINTH CIRCUIT..

No. 608. Motion to dismiss. Submitted January 10, 1917.-Decided March 6, 1917.

A suit brought by a trustee in bankruptcy under § 60b of the Bankruptcy Act to set aside an unlawful preference is a controversy arising in a bankruptcy proceeding.

In such. controversies, judgments and decrees of the Circuit Courts of Appeals which might otherwise have come within the general appellate powers of this court as defined by the Judicial Code are, by the Act of January 28, 1915, 38 Stat. 804, made final, and this court may review them only by certiorari.

Appeal to review 233 Fed. Ren 514. dismissed.

The case is stated in the opinion.

Mr. Jefferson P. Chandler and Mr. W. T. Craig for appellee, in support of the motion.

Mr. H. W. O'Melveny, Mr. Alexander Britton and Mr. Evans Browne for appellants, in opposition to the motion.

Memorandum opinion, by direction of the court, by MR. JUSTICE DAY.

This is a motion to dismiss the appeal in a suit brought originally in the United States District Court for the Southern District of California by the Security Trust and Savings Bank, as trustee in bankruptcy of the estate of Fielding J. Stilson Company, against William R. Staats Company and Title Insurance and Trust Company, the complaint alleging that the Stilson Company was adjudged a bankrupt on October 24th, 1912; that the Stilson Company made and delivered to the Title Insurance and Trust Company a deed of trust for certain realty, situated in the City of Los Angeles, to secure an indebtedness in the sum of $3,870.00, due by the Stilson Company to the Staats Company; that the effect of this conveyance was to enable the Staats Company to receive a greater percentage of its indebtedness than other creditors of the same class, and that the conveyance was made with a view to giving a preference, in violation of the Bankruptcy Act, and a decree was prayed declaring the conveyance void and of no effect.

The suit was brought by authority of § 60b of the Bankruptcy Act of 1898. On issues made, the case was referred to a special master, who found the conveyance by the Stilson Company to the Title Insurance and Trust Company to have been made and received as security for an indebtedness in the sum of $3,870.00, then due by the Stilson Company to the Staats Company and that the same was an unlawful preference within the meaning

of the Bankruptcy Act. Upon exceptions to the master's report, the District Court overruled some exceptions and sustained others, and dismissed the complaint. An appeal was taken to the Circuit Court of Appeals for the Ninth Circuit, which court reached the conclusion that the conveyance in question was a preference within the meaning of the Bankruptcy Act, reversed the decree of the District Court, and remanded the case to that court with directions to enter a judgment in favor of the complainant. 233 Fed. Rep. 514. Afterwards an appeal from this decree of the Circuit Court of Appeals was allowed to this court.

We think it is plain that this appeal must be dismissed. The decree of the Circuit Court of Appeals was made final by the Act of Congress of January 28, 1915, 38 Stat. 804, and the only right of review in this court is by writ of certiorari. This act provides: "That the judgments and decrees of the circuit courts of appeals in all proceedings and cases arising under the Bankruptcy Act and in all controversies arising in such proceedings and cases shall be final, save only that it shall be competent for the Supreme Court to require by certiorari, upon the petition of any party thereto, that the proceeding, case, or controversy be certified to it for review and determination, with the same power and authority as if taken to that court by appeal or writ of error; but certiorari shall not be allowed in any such proceeding, case, or controversy unless the petition therefor is presented to the Supreme Court within three months from the date of such judgment or decree."

The language of this act is very comprehensive, and embraces proceedings and cases arising under the Bankruptcy Act and controversies arising in such proceedings, and provides that the judgments and decrees of the Circuit Court of Appeals in such controversies, proceedings and cases shall be final. The case now under con