i uty ip cal od why De ey AyD ae é DN a ne i A , vin SNe i k iy tn M AMA A tia bt ae NN EN iis) oi a ih i Pea ey a Ma Ip a Y viv me Mr mn ise Ment We 2 \%s us oF ane mee in el . DOU Pain eee eas ee ; =e oe Ssh bd path mem, ms er Sie cee a a — ee cao a me ha te irk 4: be tate eae i Thea ii ie Neh Nha Sith ean Win a i aan y i atone AOI AAGR ANC th ty Gornell Law Schon! Library inive Tiina 8 I 1 A TREATISE ON THE LAW AND PRACTICE VOLUNTARY ASSIGNMENTS FOR THE BENEFIT OF CREDITORS, ADAPTED TO THE LAWS OF THE VARIOUS STATES, WITH AN APPENDIX OF FORMS. BY ALEXANDER M. BURRILL, AUTHOR oF A Law DIicTIONARY AND Grossary, A TREATISE ON CIR- CUMSTANTIAL EVIDENCE, A TREATISE ON PRACTICE, ETC. REVISED AND ENLARGED BY JAMES L. BISHOP. SIXTH EDITION REVISED AND ENLARGED AND AN APPENDIX OF STATE STATUTES ADDED BY JAMES AVERY WEBB, OF THE MempuHis, TENN., BAR. NEW YORK: BAKER, VOORHIS & CO., LAW PUBLISHERS, 66 NASSAU STREET, 1894. ‘B77372 Entered, according to Act of Congress, in the year eighteen hundred and fifty-eight, by ALEXANDER M. BURRILL, In the Clerk's Office of the District Court of the United States for the Southern District of New York. Copyright, 1877, by Baxrer, Voornis & Co. Copyright, 1882, by Baker, Vooruis & Co. Copyright, 1887, by Baker, Vooruis & Co. Copyright, 1893, by Baker, VoorHis & Co. ne ad B17 (81 PREFACE TO THE (REVISED) SIXTH EDITION. In the preparation of the sixth edition of this book I have en- deavored to better adapt it to the use of lawyers by some material changes which I have made in both its composition and arrange- ment. I have eliminated from the text all quotations from or references to state statutes, except where their retention either as illustrations or as the leading point in decisions of importance was deemed advisable, and have prepared, instead, a synopsis of the statutes of the several states and territories regulating voluntary assignments for the benefit of creditors, which is added to the text as Appendix I. The increased number and importance of such statutes in many of the states, and the fact that frequent calls are maade upon counsel relative to the assignment laws of foreign states, suggested this change, which, with the balance of the work, I have undertaken to perform as best I could amid the usual inter- raptions of the practitioner. I have revised the forms, and elimi- nated all the repealed statutes, the cases construing them, and overruled cases. I have examined and cited practically all the American and English cases decided since 1877, adding nearly one’ thousand in number to those cited in the fifth edition. This fre- quently necessitated the rewriting of the text to make it include and conform to the law as announced in the’ late cases, and a re- vision of the notes. The section names or paragraph head-lines have been increased in number and so arranged that the contents of each section or paragraph is indicated by its head-line, and the contents of each chapter by a table at its beginning. JuA. W. MEMPHIS, TENN., July 27, 1893. PREFACE TO THE FIFTH EDITION. My work in preparing this edition has been confined princi- pally to an examination of the cases which have been reported since the publication of the fourth edition, and to preparing notes referring to them. In a few instances additions have been made to the text, so that, with the notes, the number of pages in the volume has been increased by forty-one. About six hundred new cases have been cited. G. L. STERLING. New York, February 18, 1887. PREFACE TO THE FOURTH EDITION. Since the publication of the previous edition of this work, the Bankrupt Act has been repealed, and the system of voluntary assignments, with various modifications, now prevails to a greater extent than before throughout the United States. One may almost say that every new volume of reports contains at least some case bearing upon the questions treated in this book. In preparing the fourth edition, no alterations have been made in the arrangement of the matter, and none of im portance in the text except where statutes have rendered a change necessary. About seventy-five pages of new matter, scattered through the vol- ume, have been added, however, and nearly eight hundred new cases. The various state statutes, many of them recent and lengthy, have not been set out in full from lack of space, but it is hoped that enough has been given to furnish a reliable guide, and suggest to the reader the points to be observed and looked for in the stat- utory regulations affecting voluntary assignments. G. L. STERLING. New York, November 1, 1882. PREFACE TO THE (REVISED) THIRD EDITION. Mr. Boreriy’s “Trearise on Assignments” is well known to the profession as a work of high order of merit, and requires at this time no formalintroduction. The present edition, however, in which some changes have been made in the structure as well as in the substance of the work, may properly call for a few words of ex- planation. During the period which has elapsed since the appearance of the last edition — now nearly twenty years — the bankrupt law has been enacted, many statutes relating to voluntary assignments have been passed in the several states, and upwards of a thousand cases illustrating the questions discussed have been reported. The matter available in preparing a new edition was therefore exten- sive as well as important. The plan upon which the work was originally prepared by the learned author included, in some in- stances, a very full discussion of the cases, with copious extracts from statutes, many of which have since been repealed or amended. Hence it was feared that mere notes of reference to the modifica- tions and changes which have taken place in the law might prove unsatisfactory. The editor has therefore undertaken the delicate task of revising as well as annotating the text. The design has been to make as few alterations in the language of the original work as possible, although in some instances, for the sake of brevity, the order of chapters, paragraphs and sen- tences has been changed. Thus the first, third and twelfth chap- ters, which treated respectively of “ assignments in general,” “ as- signments distinguished from other modes and instruments of transfer,” and “assignments directly to creditors,” have been con- densed into the first chapter. In like manner the fourth, sixteenth and twenty-ninth chapters of the original, treating of “ what may be assigned,” “the amount assigned,” and “what passes by an assignment,” are here found under the sixth chapter, entitled “ of the assigned property.” So the ninth, eighteenth and nineteenth are here condensed into one chapter, treating of the “form of the assignment.” % vi PREFACE TO THE (REVISED) THIRD EDITION. A new chapter, on voluntary assignments considered in connec- tion with the bankrupt law, has been added, and it should here be remarked that several important cases touching upon the questions discussed in that chapter, but which have been reported since it was put in print, are to be found in the addenda of cases, at page 719. The chapter on the dex loct has been partially rewritten, in accord- ance with the intention of the learned author, and partly from notes left by him. The perplexing questions which formerly arose in relation to preferences and releases are now of little or no interest, and the portions of the work which treat of these subjects have received the least attention, while the chapters which refer to the creation of the trust, and the duties of the trustees, have been more care- fully considered. The work has been, throughout, divided into sections with catch- words for convenience of reference. The forms which are annexed are not expected to supply the wants of practitioners under the various state statutes, but are in- serted rather as general guides. They have been selected, in every instance, from instruments which have stood the test of judicial criticism. It was the desire of the editor to distinguish, in some suitable manner, the additions and alterations which have been made in this edition, lest any error or failure on his part should seem to mar the well-deserved reputation of the distinguished author for thorough accuracy and reliability; but the changes were necessarily so numer- ous, and of such a character, that no acceptable plan suggested itself, and the purpose was reluctantly abandoned. In presenting the edi- tion in this form, therefore, the editor must justly be held responsi- ble for any errors or shortcomings which appear in the following pages. The difficulties of the task will be apparent to the reader, and need not be dwelt upon. If the result shall prove in any degree serviceable at a time when attention is being universally recalled to the subject of voluntary assignments, all that was anticipated will have been accomplished. J. L. B. New York, January, 1877, PREFACE TO THE FIRST EDITION. Tue importance of the subject of voluntary assignments for the benefit of creditors, in a mercantile community like the United States, will hardly need any special remark by way of introduction to the following work. The frequency with which these transfers are resorted to, and the magnitude of the consequences which they often involve, render them matters of constant practical interest to the merchant and trader; while the importance of the principles by which they are regulated, and the great variety of questions to which they have given rise, impart to them a peculiar prominence as ob- jects of professional attention and study. Of the law of voluntary assignments it may indeed be said that it has been subjected in this country to so much modification, by legislative enactment and | otherwise, as to have assumed, in many respects, a distinctively American character. Several of its leading principles, it is true (including some very important statutory provisions), have been borrowed from the law of England, and occasional illustrations and analogies have been and still are derived from the same source; but the great body of its rules, and much of what may be called its practice, have been established on quite independent grounds. The difficulties by which the subject is or has been distinguished claim a further word of remark in this place. The leading doc- trines of this branch of the law of transfer have not been established without severe and repeated contests between the interests of debtor and creditor, which they so largely affect. Insome of these contests, the considerations addressed to the courts have been so nearly balanced as to lead to conflicting decisions, even in the same state, leaving eminent judges sometimes at a loss to determine on which side lay the preponderance. In other states, the current of decisions, after having been for some time uniform in one direction, has gradually inclined in another, leading ultimately to quite oppo- site conclusions. The difficulties arising from these sources have been increased bv the diversities always inseparable from the ad- ministration even of the same general system of laws by numerous independent tribunals; and still further, by sectional differences Vili PREFACE TO THE FIRST EDITION. growing out of long-established modes of transfer peculiar to cer- tain states. The right of a debtor to give preferences to certain creditors over others, in an assignment of his property; his right to annex conditions to the assignment; to reserve benefits to him- self or his family, or to reserve any control over the assignment, the assignee or the property itself; the necessity of the assent of creditors to the validity of the transfer; the necessity of a deliv- ery of possession of the assigned property — all prominent points in the law of assignments, together with the great question which may be said to comprise them all— what renders an assignment fraudulent and void against creditors? — have been, in a most em- phatic sense, “ vexed questions; ” and some of them, to a consider- able extent, still remain so. — The only work in which the principles of this branch of Ameri- can law have been professedly treated and reduced to anything like a system! is the “Summary” of Mr. Angell, which appeared in 1835. This was a very acceptable manual to the profession, comprehending, within a small compass, much valuable matter conveniently arranged. Since the date of its publication, however, the law of assignments has not only spread itself over a vastly wider field, but has assumed in many respects a new character. The very numerous decisions which have been made in the state and federal courts have not only established many new rules, but have materially modified some that had been previously settled. Another and more obvious feature of difference is presented in the statutes which have been enacted in several of the states, with express reference to voluntary assignments; settling some impor- tant principles of law affecting their form and operation, and reg- ulating, often with minuteness, the practical course of proceedings under them. Under these circumstances, a new work being called for, the present treatise was undertaken, not without hesitation on the part of the author, in view of the difficulties which have been men- tioned. The subject seemed to require a mode of treatment which should present a view, first, of the principles constituting what may be denominated the general American law of voluntary as- signments, combined with adequate references to the local law of the states; and, secondly, of the practice under these transfers — both being reduced, so far as the multifarious character of the ma- 1The author does not here overlook the valuable note to the case of Thomas v. Jenks and Grover v. Wakeman, contained in the first volume of the Ameri- ican Leading Cases, in which the latest law on the subject is digested in a clear and able manner. PREFACE TO THE FIRST EDITION. ix terials would permit, to something like a uniform system possess- ing both general and local utility. The latter branch of the sub- ject was wholly untouched by Mr. Angell, and has not hitherto been illustrated by any American writer. It has been found, how- ever, to possess so much importance that it has been principally had in view in the arrangement of the whole work. The following pages present, it will be seen, not only a sum- mary of the principles upon which voluntary assignments are con- structed, and by which their operation is regulated, but also a his- torical view of the proceedings, in the order in which they occur in practice, from the first drafting of the instrument to the close of the trust created by it; thus placing before the reader, succes- sively, first, the acts of the debtor in making and completing the assignment; secondly, the acts of the assignee in carrying it into effect; and lastly, the acts of the creditors in acceptance or re- jection of the provisions made by it. In the treatment of the subject according to the plan here in- dicated, regard has been had not only to the convenience of prac- ticed and professional readers, but to the wants of students and such non-professional persons as may consult the work. This will serve to explain what perhaps might otherwise be considered a too frequent reference to familiar rules, and repetitions of matter which might have been dispensed with. As to any omissions or misstatements which may be discovered, particularly in reference to the statute law of the states, the author relies on the indulgence of those whose familiarity with the subject best enables them to appreciate the difficulty of attaining at once entire fullness and ac- curacy where the sources of information are numerous and not always conveniently accessible. The forms presented in the Appendix embrace examples of the principal varieties of assignments in most frequent use; and, it is hoped, will be found convenient as general guides to the draftsman, or as illustrations to the reader. They are not intended, however, to dispense with a constant reference to the rules laid down in the body of the work; and are, of course, always to be taken subject to modification by local law or usage. The collection might have been considerably extended; and it was the author’s design, had time permitted, to have included examples of all the most impor- tant varieties of assignments in use throughout the, United States. These will be supplied on -a future occasion, should a revision of the work be found necessary. New York, June 18, 1853, CONTENTS. PAGE, TABLE OF CaSES CITED . 3 3 i ‘ 3 : é ~ . Xvii CHAPTER I. Assignments in general — Voluntary assignments for the benefit of cred- itors defined and distinguished from other modes and instruments of transfer ‘ . . . . ‘ é . @ ‘ 3 ‘ 1 CHAPTER IL The right to assign — Statutory provisions restricting the right to assign, and regulating the operation of assignments . ‘ . . 7 19 CHAPTER III. Voluntary assignments considered in connection with the bankrupt law . 25 CHAPTER IV. Who may make an assignment . 5 : : 5 . . . . 58 CHAPTER V. To whom an assignment may be made — Qualifications of assignees . 7 92 CHAPTER VI. The assigned property; the amount assigned ; what may be assigned; what passes by the assignment. F s 3 é . . é . 97 CHAPTER VII. For whose benefit an assignment may be made . . is . . - 116 CHAPTER VII. Form of the assignment . 7 : : : ; A . . - 122 CHAPTER IX. Partial assignment . . ‘ . é * 5 z e xii CONTENTS. CHAPTER X. Assignments with preferences . 5 i . . . ° . . CHAPTER XI. Assignments with special provisions . 1, Stipulations for the release of the debtor asa wcondition of the as- signment . ; . . . . . 2. Reservations of benefit to the ‘debtor 8. Appropriations of assets in assignments by firms and their | mem- bers. 7 . s 2 4, Stipulations for the continuance of. assiztor 8 "business . é . 5. Provisions respecting the time for executing the trust . . . 6. Limitation of time for creditors to become parties, or assent . %. Provisions respecting the sale of the property assigned . s . 8, Special powers and directions to assignees. . ; . . 9. Stipulations for the benefit of assignees : ‘ . % ‘ 10. Reservations of powers to assignors ‘ 7 . . . . CHAPTER XII. Consideration of assignments . ‘ : ‘ ‘ e . . . CHAPTER XIII. Trusts of assignments s 3 @ is ‘ . . . = . CHAPTER XIV. Execution of the assignment. ‘ . ‘ i < s % é CHAPTER XV. Record or registry of the assignment . e a s é * 6 ‘ CHAPTER XVI. Delivery of the assignment . . . . . . ° . . CHAPTER XVIL Amenaments and additions to assignments . f e . . ‘ CHAPTER XVIII. Acceptance by the assignee ‘ . 2 . ‘i ‘ a z * CHAPTER XIX, Delivery of possession of the property assigned . . e ° . ‘. CHAPTER XX, Assent of creditors . . . . 5 s ‘ . . . ‘ 162 193 197 217 234 242 249 251 266 272 273 277 280 285 292 801 804 809 CONTENTS, CHAPTER XXI. Time when the assignment takes effect. e . . . ° . CHAPTER XXII. Operation of an assignment ike Mey i. . . . . . . CHAPTER XXIII. The lex loci in its application to assignments. é . e ° ° CHAPTER XXIV. Construction of assignments ‘ A . . si . . 7 CHAPTER XXV. Fraudulent and void assignments 2 : : . . . 7 é CHAPTER XXVI. Assignments considered in connection with other transfers by the assignor CHAPTER XXVII. Revocation and cancellation of assignments Z j a . : CHAPTER XXVIII. Proceedings by the assignee in execution of the trust — General outline of the proceedings, and of the duties, powers and liability of assignees CHAPTER XXIXx. Notice of the assignment . : { : . , . . . é CHAPTER XXX. Taking possession of the property assigned ‘ ‘ . . ° . CHAPTER XXXI. Inventory and appraisement of tle property — Bond by the assignee . CHAPTER XXXII. Rights, duties and powers of the dssignee . 3 i ° . . ° CHAPTER XXXII. To what extent the assignor’s business may be continued by the assignee . xiii 849 352 857 881 399 450 459 463 466 468 476 478 490 Xiv CONTENTS. CHAPTER XXXIV. Collection of debts and recovery of property — Actions by the assignee « 494 CHAPTER XXXV. Sale of the assigned property . 5 : : . = . . - 505 CHAPTER XXXVI. Bpondes of the trust and compensation to the assignee . ° e « 518 CITAPTER XXXVIL Distribution among creditors . s . 7 3 ‘ * . - 528 CHAPTER XXXVIII. Disposition of the surplus remaining after distribution e . ° - 551 CHAPTER XXXIX. Final accounting and close of the trust by the assignee. e . . 554 CHAPTER XL. Liability of assignees . E ‘ “ ‘ 5 . 3 . ° - 561 CHAPTER XII. Proceedings in case of the death, removal, non-acceptance, resignation, misconduct, insolvency or incapacity of an assignee . * . - 574 CHAPTER XLIL Proceedings of creditors — Coming in under the assignment . . - 580 CHAPTER XLII. Release by creditors . ‘ 3 . : 5 6 ai ‘ ‘i « 588 CHAPTER XLIVv. Proceedings by creditors to enforce the trust — Suits against assignee . 592 CHAPTER XLv. Proceedings of creditors in opposition to the assignment and in avoidance - of it’. * 5 7 - z . < x . y 3 . 599 “North Carolina . é - 2 ; » CONTENTS. xv APPENDIX I. SYNOPSIS OF THE STATUTE LAWS OF THE SEVERAL STATES AND TERRITORIES REGULATING VOLUNTARY ASSIGNMENTS FOR THE BENEFIT OF CREDITORS. Alabama . % : . » - 2 : : é * . 609 Arizona . , 7 é é 7 7 é . ‘i . 609 Arkansas 3 4 - é 3 . : $ - 612 California . : ‘ ‘ - ‘ $ < ‘ . . . 618 Colorado. 3 " s e 7 2 3 ‘ ‘ 5 5 - 615 Connecticut z ‘ : : , < ‘ é “ é - 617 Delaware . ‘ ‘ 5 J Z ji : ‘ ‘i . 619 District of Columban : P “ ‘ : c 3 é ‘ ‘ . 619 Florida ‘ a - E s ‘6 é - 620 Georgia 3 < é . - : é . < é . 621 Idaho ‘ . ‘ ‘ : i : : s = - 622 Tllinois é : : P ‘i is ‘ - 622 Indiana 3 3 « ‘ : . * . : - 624 Indian Territory . é ‘ ‘ 3 . . ‘ - 627 Iowa F 6 a J ‘ ‘ a ‘ A 5 6 : . 627 Kansas a a : 3 é ‘ . . 3 . ey . » 629 Kentucky . 7 ; z 3 ‘ , ‘i ‘ . 8 . - 633 Louisiana . ‘ . é * ‘ ‘ s @ ‘ é . 634 Maine is . . 5 . ‘ ‘< ‘ 4 7 5 . 2 14. Schedules . 3 ‘ 5 ‘ : 3 a F . 2 15. Classification ‘ ‘ “ “ 3 3 ‘ 16. Affidavit to inventory enti sciadules 7 P is “ ‘ 17%. Assignee’s bond on assignment Se ; ‘ ' : 18. Affidavit to obtain order authorizing assignee to advertise for claims . 5 . 19. Order of publication of notice to creditors s s 7 ei A 20. Notice to creditors 4 Z . : ei . : . 21. Proof of debt a ‘ 2 : a < . 22. Petition for citation for final accounting ‘ é “i 5 . 23, Order for citation ‘é - - ‘= is @ . « 24. Citation for accounting ; i é - - a : 25. Order of reference Fi A is : o , 26. Referee’s report ‘ s 7 . : > : . ; 27. Final decree i 5 . ‘. : s 7 . a . 695 695 696 699 701 703, 704 705 706 708 709 709 710 710 712 WM12 7138 W114 W15 116 716 U7 718 718 719 "19 720 721 721 722 124 729 TABLE OF CASES. References are to pages. Aaronson v. Deutsch, 442, 612. Abbot v. Burbage, 32. Abbott v. Am. Hard Rub. Co., 65, 512, 518, Abbott v. Chaffee, 476, Abbott v. Stearns, 487. Abbott v. Treatt, 427. Abercrombie v. Bradford, 226, 255, 259, 325, 338, 885, 421. Aberdeen R. R. Co. v. Blaklie Bros., 510. Abraham v. Plestoro, 361, : Acker v. Leland, 605. Ackers v. Rowan, 62. Acton v. Woodgate, 128, 279, 340, 588. Adams, Matter of, 531, 581. Adams vy. Alexander, 182. Adams v. Blodgett, 7, 103, 279, 844, Adams v. Bradey, 503. Adams v. Davidson, 442, 469, 502. Adams v. Houghton, 285, 286, 290. Adams v. Humes, 517, Adams v. Hyams, 53, Adams v,. Lewis, 480. Adams v. Ryan, 95. Adains v. Thornton, 85, Adams v. Woods, 132, 2 Addison v. Burckmyer, 478, 482. Adee v. Cornell, 67, 85, 86. Adler v. Ecker, 421. Adlum v. Yard, 215, 246, 254, 586, 559, 586, 602. Agnew v. Dorr, 590. Ahl’s Appeal, 6, 527. Ahl v. Rhoads, 65, 355, 501, Aiken v. Price, 207. ‘4 Ainslee v. Boynton, 479, 500. Akers v. Rowan, 518, 680. Albany, etc., Co. v. Southern Ag. Works, 621, “shh ah. Alderson v. Temple, 80, 82, 64, Alexander v, Cana, 502, Aldrich v. Arnold, 678, Allen, Matter of, 57. Allen v. Brown, 496, Allen v. Gardner, 172, 188, 206, 212, Allen v. Montgomery, 54, 335, Allen v. Massey, 52. Allen v. Wheeler, 319. Allemand v, Russell, 149, 172, 580, 583. Alnutt v. Leper, 602. Alpaugh v. Roberson, 460, 576, Alsop, Ex parte, 34. American v, Frank, 297, 303, 349, 627. American Bank v. Doolittle, 200. Am. Exchange Bank v. Inloes, 176, 261, 492, Am. Ice Machine Co, v. Patterson St. Fire Eng. & Mach. Co., 185. Ames v. Blunt, 444, 448, 567, 581, 607.. Ames v. Downing, 518. Amory v. Francis, 549, Anderson v, Fuller, 284, 318. Anderson vy. Hook, 118, 445, 447, Anderson v. Lachs, 260. Anderson v. Tompkins, 68, 72, 78, 80; 81, 84-88, 105, 286, 355. Anderson v. Tydings, 167, 428, Anderson v. Wilson, 54, Andress v. Miller, 239, Andrews v, Carr, 3, Andrews v. His Creditors, 378, Andrews v. Hobson’s Adm’r, 514, Andrews v. Herriot, 367. Andrews v. Ludlow, 147, 200, 520, 526. Angel v. Rosenbury, 60, 93, 94. Anon. v. Gelpcke, 498, 582, 566, Ansley v. Patterson, 54, Ansted v, Bentley, 688, xviii TABLE OF CASES. References are to pages. Antignance v, Central Bank of Georgia, 600. Archer v. O’Brien, 22, 165. Archer v. Long, 95. Arledge, In re, 44, 51, 52. Armstrong v. Byrne, 203, 213. Armstrong v. Campbell, 514. Armstrong v. Fahnstock, 89. Armstrong v. Morrill, 309. Armstrong v. Pratt, 594, Armitage v. Rector, 526. Arnold v. Bailey, 460. Arnold v. Brown, 68, 513. Arnold v. Grimes, 478. Arnold v. Hagerman, 410. Arnold v. Maynard, 37, Arthur v. The Commercial, ete, Bank, 65, 228, 246, 249, 415, 419, Ash v. Savage, 319. Ashley v. Robinson, 538, 337, 460. Ashton v. The Atlantic Bank, 503; Ashurst v. Martin, 150, 198, 217, 250, 255, 259, 270, 335, 397. Askew v. La Cygne Bank, 359, 375. Aspinwall v. Jones, 600. Association, etc. v. Beekman’s Adm’r, 503. Astor v. Lent, 110. Atherton Co. v. Ives, 372. Atkinson v. The Farmers’ Bank, 165, Atkinson v. Brindall, 32. Atkinson v. Jordan, 164, 168, 170, 207, 209, 210, 606. Atkinson v. Tomlinson, 179. Attorney-General v. Lord Dudley, 511. Atwood v. Protection Ins, Co., 295, 377. Aubrey v. Osterman, 67, 85, 185, 234, Aultman v. Seiberling, 669. Austin v. Bell, 159, 201, 205, 232, 444, Austin v. Morris, 602, 680. Averill v. Longfellow, 109. Averill v. Loucks, 151, 155, 188, 190, 274, 281, 443, 567, Avery v. Fisher, 58, Babb v. Clemson, 317, : Babcock v. Dill, 586, Backer, In re, 460. Backer, Matter of, 40, 57. i Backhaus v. Sleeper, 691, Backrack v. Norton, 92. Bagley v. Bowe, 269, 382, 429, 481, 483. Bholen v. Cleveland, 327, 474. Bailey, Matter of. 538, | Bailey v. Bergen, 562. Bailey v. Kansas Mfg. Co., 135. Bailey v. Mills, 172, 280, 412, Baker, In re, 555, 623, 690. Baker v. Crookshank, 224, |: Balderston v. Mauro, 328. Baldwin v. Buckland, 60, 63, 95, 442, Baldwin v. Ely, 105. Baldwin v. Patton, 467. Baldwin v. Peet, 98, 101, 158, 208, 212, 272, 420-422. Baldwin v. Short, 443. Baldwin v. Tynes, 67, 84, 286, 290, Ball v. Bowe, 689. Ball v. Dunsterville, 345. Ball v. Loomis, 322, 469. Ball v. Slafter, 112, 488, Balt. & Ohio R. R. Co. v. Glenn, 228, 357. Ballou, Petition of, 678. Bamberger v. Halberg, 593, Bamford v. Baron, 82, 51. Bancroft v. Blizzard, 421. Bancroft v. Snodgrass, 92, Bank v. Cox, 115, Bank v. Hackett, 689, Bank v. Holmes, 312, 351, Bank v. Knox, 499. Bank v. Newton, 164, Bank v. Noe, 124, 681. Bank v. Partee, 346. Bank v. Versailles Woolen Co., 617. Bank of Alexandria v. Payne, 111, Bank of Bellows Falls v. Derring, 342. Bank of Beloit v. Beale, 498. Bank of Commerce v. Payne, 99, 412, 477, 586. Bank of Harlem v. Bayonne, 332, Bank of Marietta v. Pindall, 3, Bank of Metropolis v. Guttschlick, 309. Bank of Mobile v. Dunn, 382, 389. Bank of Montreal v. Salt & Lumber Co., 18. Bank of Newberry v. Walker, 586. Bank of New Brunswick v. Hassert, 319. TABLE OF CASES. xix References are to pages. Bank of Orange Co. v. Fink, 323. Bank of Pennsylvania v. Gratz, 589, 59%. ‘ Bank of Pennsylvania v. McCalmont, 387, 548. Bank of Silver Creek v. Talcott, 115, 150, 393, 410, 441, Bank of United States v. Huth, 65. Bankmay-Fouche v. Brower, 65, Banks v. Barb Wire Co., 453. ‘Banks v. Clapp, 103, 221. Banks v. Wilkes, 569. i, Banning v. Sibley, 5,11, 230. “ws Barber v. Buffalo, 98, Barber v. Rogers, 39. Barber v. Spencer, 500. ‘Barbour v. Conn, Mut. Life Ins, Co., 400. Barbour v. Everson, 151. Barcroft v. Snodgrass, 85, 254, 309, 311, 813, 575. Barhydi v. Perry, 426. Barings v. Dabney, 51. Barker v. Hall, %, 14, 169, 171. t Barker v. Harlan, 462, Barker v. Smith, 480. Barkman v. Simmons, 145, Barnard v. Duncan, 516. Barnes v. Fisher, 479. Barnes v. Rettew, 27, 29, 40, 44, 51, Barnewell v. Dunn, 52. Barney v. Griffin, 148, 175, 180, 195, 223, 229, 280, 256, 257, 259, 419, 430, 438, 440, 568. Barney v. Saunders, 523, 527. Barnitz v. Rice, 157, 159, 199, 216. Barnum v. Hempstead, 116, 186, 188, 189, 268, 283, 387, 444. Barr v. Boyles, 423. Barr v. Hatch, 319, 326. Bartlett v. Reids, 207, 606. Barroilbet v. Fisch, 615, Bartholomew v. Leach, 513, Bartlett v. Blake, 319, 427, Bartlett v. Pearson, 105. Bartlett v. Teah, 3, 255, 612, Bartlett v. Williams, 326. Barton v. Brent, 23, 24, 164, Bascom v, Rainwater, 23. Bason v. Harden, 530, 563, Bassett v. Parsons, 105. Bate v. Graham, 603. Bateman v. Conner, 501. Bates v, Ableman, 60, 64, 101, 152, 158, 442, Bates v. Bradley, 54. Bates v. Cos, 15, 17, 167, 169, 178, 452, 458. Bates v. Simmons, 189, 146, 472, 688. Batesville Institute v. Kauffman, 576. Batten v. Smith, 443. Battles v. Forbes, 287, 582, Baum v. Pearce, 882. Baxter v.. Wheeler, 225. Bay v. Cook, 318.. Bayles v. Staats,.578. Baylor County v. Craig, 208. Bayly v. Scofield, 61. : Bayne v. Denny, 208. Bayne v. Wylie, 205, 217, 271, 282. Beach v. Beston, 5, 10. Beach v. The Fulton Bank, 534, 585, Beadle, In re, 41. Beamish v. Conant, 472, Bean v. Amsink, 41, 52, 53, Bean v. Brookmire, 52, Beans v. Bullitt, 5, 181. Beard v. Kimball, 143, Beaston v, Farmers’ Bank of Delaware, 65, 854, 541. Beattie v. Robins, 318. Beatty v. Davis, 172, 178, 267. Bebb v. Preston, 10. Beck v. Barker, 39. Beck v. Burdett, 102, 230, 231. Beck v. Burns, 108. Beck v. Parker, 24, 441. Becker v. Rardin, 9. Becker v. Shayne, 684. Beckwith v. Brown, 172, 206, 395, Beckwith v. Union Bank, 111, 461, 479, 499. Becton v. Ferguson, 107. Bedell v. Janney, 597. Bedell v. Scruton, 363, Bedford v. Penney, 353. Beers v. Lyon, 8, 171. | Beeson v. Beeson, 513, | Beisenthal, In re, 41, 47, 58, 56, | Beidler v. Crane, 231. xx TABLE OF CASES. References are to pages. Bell v. Wilson, 448, Belden v. Smith, 41, 51. Belding v. Franckland, 142, 386, 681. Belk v. Massey, 427. Bell v. Dudnit, 669. Bell v. Fleming’s Ex’rs, 545, Bell v. Holford, 307. Bell v. Lond. & N. W. Railway Co., 105. Bell v. Thompson, 172, Bellamy v. Bellamy’s Adm’r, 104, 127, 189, 172, 882, 886, 448, 485, 514, 592. Bellingsley’s Adm’r v. Bunce, 227. Bellows v. Partridge, 187, 252, 263, 264, 269. Belmont v. O’Brien, 574. Benedict v. Huntington, 2538, 265, 428. Benedict v. Morse, 146, 516. Benedict v. Parmenter, 369. Benne v. Schencko, 435. Bennett, Ex parte, 511, 512, 515, Bennett v. Cocks, 299. Bennett v. Denny, 640. Bennett v. Ellison, 191, 259, 270, 481, 482, Bennett v. Union Bank, 246, 247. Benning v. Nelson, 3387. Bentley v. Shreve, 522. Bentley v. Thrasher, 24, Bentley v. Whittmore, 375, Benton v. Snyder, 259. Benss v. Shaughnessy, 266. Bernheim v. Christal, 435, Berry v. Cutts, 183, 453, Berry v. Hayden, 266. Berry v. Matthews, 260. Berry v. Riley, 159, 232, 245, Berryman v. Sullivan, 601. Besley v. Lawrence, 187, 548, 549, 587. Beste v. Burger, 90. Bethune v. Dougherty, 309, 312, 314, 576. Bettis v. Weir Plow Co., 685. Betton v. Valentine, 604, Betts’ Estate, 506. Bidwell v. Bidwell, 57, Bigelow v. Baldwin, 400, 448, Bigelow v. Stringer, 230, 431, Bigelow v. Wilson, 103, 106. Bigler v, National Bank, 40, 57, ‘ sei, Billings v. Billings, 260, 426, 482. Billings v. Russell, 421. Billingsley’s Adm’r v. Bunce, 431. Bills v. Smith, 32. Billups v. Sears, 17, 446, 605. Bingham v. Claflin, 54. Bingham v. Tillinghast, 432. Birchell v. Strauss, 144. Birdsey v. Vansands, 617. Birdseye v. Ray, 167. Birdwell v. Cain, 103. Biscoe v. Royston, 352. Bishop v, Chamberlin, 568, Bishop v. Hart’s Trustees, 124, 125, 519, 568, 600. Bishop v. Houghton, 561, 593, Bissell v. Besson, 65, 164, Bittenger v. Railroad Co., 132, Black, Matter of, 513, Black’s Appeal, 240, Black v. Terrin, 52. Black v. Weathers, 153, 624, Black v. Zacharie, 365, Blackburne’s Appeal, 563, 676. Blackford v. Hurst, 296. Blackington v. Goldsmith, 186, Blain v. Pool, 441. Blake v. Hubbard, 347, 448, 601. Blake v. Williams, 361, 367, Blakey’s Appeal, 22, 132, 168, 167, 168, 169. Blalock v. Kernersville Mfg. Co., 183. Blanchard v. Russell, 359. Blank v. German, 10, 133. Blank, etc, Co. v. Walker, 67, Blauvelt v. Ackerman, 511, 518, 514, 564. Blennerhassett v. Sherman, 10, Blight v. Schenck, 515. Bliss v. Cottle, 497. Block v. Peter, 278. Bloom v. Noggle, 18, 16, 179, Bloomingdale v. Stein, 667. Blount v. Davis, 106, Blow v. Gage, 62, 63, 147, 148, 427, 472, 518. Blum v. Welborne, 421. Boardman y. Halliday, 174, 188, 189, Boardman v, Keeler, 318, Boardman v. Mosman, B71. TABLE OF OASES. XX1 References are to pages. Boardman v, Willard, 311, . Bobbitt v. Rodwell, 99. Bock v. Perkins, 188, 142, Bodenhamer v. Welch, 106. Bodley v. Goodrich, 129, 147, 200, 249, 400, 448, 525. Boedefeld v. Reed, 39, Boegler v. Eppley, 525. Boeppler v. Menown, 108, 482. Boese v. King, 40. Bogert v. Haight, 229, 427, 428, 458, 605. Bohart v. Atkinson, 513. Bohlen v, Cleveland, 377. Boker v. Crookshank, 100, 148, Boland, Ex parte, 165. Boling v. Howell, 22, 166. Bolling v. Munchus, 52. ‘Bones v. Booth, 413. Bonner v. Hodges, 434, Booker v. Crookshank, 676, Boone v. Hall, 53. Boos v. Marion, 236. Booth v. Conn. Mut. Ins, Co., 566. Booth v. Grant, 227. Booth v. McNair, 266. Boston Iron Co. v. Boston Locomotive Works, 361. ‘Bostwick v. Berger, 567. Bostwick v. Burnett, 40, 41, 477, Bostwick v. Menck, 607. ‘Boswell v. Green, 68. Botcherly v. Lancaster, 28, 33. Bothick v. Purdy, 104. Bouchaud v. Dias, 124, 541, 548, Boughton v. Bradley, 359. Boughton v. Crosby, 89, 388, 480, Bourdilon v. Dalton, 475. Bourne, Ex parte, 32, 33, 50, ‘Bousman’s Appeal, 100. Bouton v. Dement, 112. Bowe v, Arnold, 600. ‘Bowen vy. Brainridge, 420. Bowen v. Hadden Blue Stone Co., 180, Bowen v. Lease, 355, Bowen v, Parkhurst, 259, Bowker v. Burdekin, 155, 302, Bowles v. Bowles’ Ex’r, 478, Bowman v. Draughan, 414. Bowman v, Rainteaux, 571, 575, Box v. Goodbar, 13. Boyce, Matter of, 557, Boyd v. Boyd, 569. Boyd v. Dunlop, 347, Boyd v. Hawkins, 514, 528, Boyd v. Haynie, 208. Boyd v. Meyers, 518, 567. Boyd v. Rockford Mills, 368, Boyden v. Moore, 129, 281, 319. Boyden v. Partridge, 503. Boynton Furnace Co. v. Lorensen, 688, Brackenridge v. Holland, 513, Brackett v. Barney, 301. Bradford v. Tappan, 448, Braddock v. Watson, 411. Bradley v. Bischel, 67, 99. Bradley Fertilizer Co. v. Fuller, 497. Bradley v. Kroft, 688, 689, __ Bradshaw v. Klein, 52, 53, Bradley v. Norton, 106. Brahe v. Eldridge, 28, 307, 461, 689. Brahmstadt v. McWhirter, 92, 266, 427. Brainard v. Dunning, 116, 117. Branch Bank v. Robertson, 548, Brandon v. Rogers, 182. Brannock v. Brannock, 118, 120. Brashear v. West, 123, 141, 152, 163, 172, 205, 210, 212, 315, 832, 384, 346, 552. Breck v. Cole, 191. Breedlove v. Stump, 337, 576. Brennan v. Wilson, 92, 311, 314, 516. Brenneman, Ex parte, 36, 168, 181, 401. Brent v. The Bank of Washington, 541, Brent v. Shouse, 367. Bresson v. Musselman, 9. ; Brevard v. Neely, 298, 302, 803, 812, 3138, 337, 460, 461. Brice’s Appeal, 522. Brice v. Stokes, 569, 570, 571. Brichta v. New York Lafayette Ins, Co., 105. Bridges v. Hindes, 133, Bridges v. Miles, 63. Bridges v. Wood, 159, 199, 212, 443, Bridgford v. Barbour, 482. Brigee v. Starbuck, 504, 667, 668, Briggs v. Davis, 10, 13, 15, 228, 484, 486, 517, 551. Briggs v. Palmer, 352, 486, 651, Brigham v. Jones, 382, xxii TABLE OF OASES. References are to pages. Brigham v, Tillinghast, 137, 172, 175, 252, 258, 256, 264, 239, 382, 427, 441. Brinkerhoff v. Wernple, 503. Brinks v. Heise, 428. Brinley v. Springs, 319. Brittenbender v. Sunbury & Erie Rail- road Co., 111. Brittlestone v. Cook, 31. Britton v. Boyer, 164. Britton v. Hughes, 190. Britton v. Lorenz, 181, 281, 290. Broach v. Powell, 53, Broadbent v. Thornton, 348, 583, Brockley v. Brockley 205. Brock v. Headen, 255, 508. Brodhead, In re, 44, 57. Bromberg v. Heyer, 602. Brooks v. Brooks, 106, 110, 313, 680. Brooks v. Marbury, 126, 172, 297, 311, 826, 3384, 842, 349. Brooks v. Nichols, 98. Brooks v. Peck, 594. Brooks v. Stanton, 5. Brooks v. Sullivan, 81. Brooks v. Wilson, 448. Brooks v. Wimer, 227, 431. Brough’s Estate, 549. Broughton v. Broughton, 511. Brouwer v. Harbeck, 183. Brower v. Goodyer, 114, Brown, Matter of, 120. Brown v. Agnew, 356. Brown v, Bartee, 172, 278, 427. Brown v. Brabb, 478. Brown v. Brittain, 499. Brown v, Cavendish, 128. Brown v. Chamberlain, 127, 181, 460. Brown v. Chambers, 104. Brown v. Foster, 22, 169, 177, 458, 455. Brown v. Guthrie, 124, 268, 275, 450, 480. Brown v. Holcomb, 131, 654, Brown v. Kempton, 32, 164. Brown v. Knox, 148, 154, 208, 377. Brown v. Lee, 179. Brown v. Lyon, 140, 152, 229, 288, 250, 835, 841, 348, 351. Brown v. Maine Bank, 105, 107. Brown v. May, 606. Brown v. Merchants’ Bank, 549, “ Brown v. Minturn, 23, 812, 827, 842. Brown v. Rickets, 511. Brown v. Smart, 380. Brown v. Vanilier, 337, Brown v. Warren, 341, Brown v. Webb, 13, 16. Brown v. Wier, 149. Brownwell v. Curtis, 104, 111, 486. Browning v. Hart, 94, 104, 111, 322, 3538, 441, 472, Bruce’s Adm’rs v. Smith, 166. Bruen v. Gillet, 563, 572. Bruen v. Marquard, 345, 394, Bryan v. Brisbin, 380. Bryant v. Bryant, 603, Bryant v. Kelten, 820. Bryant v. Russell, 550, 594, Bryant v. Young, 284. Bryce, Matter of, 577, Bryce v. Foot, 23. Buck v. Pennybacker, 595, Buck v. Sherman, 415, 427. Buckley v. Dunn, 167. Buckner v. Sayre, 111. Buell v. Buckingham, 65, 66, 179, Buffum v. Green, 165, 172. Bulger v. Roche, 359, Bulger v. Rosa, 89. Bulkley v. Dayton, 345, Bull v. Bray, 400. Bull v. Harris, 85, Bull v. Loveland, 244. Bullis v. Borden, 820. Bullis v. Montgomery, 829, 442, 469, 502. Bullitt v. Methodist Ep. Church, 483. Bump v. Van Orsdale, 3. Bumpas v. Dotson, 95, 118, Burbank, Matter of, 524. Burckmyer v. Beach, 528. Burd v. Fitzsimmons, 204, 205, Burd v. Smith, 98, 152, 170-172, 205,. 210, 217, 280, 282, 250, 277, 282, 301. Burdick, Matter of, 582, Burdick v. Huntting, 259, Burdick v. Post, 180, 256, 258, 259, 260, 508. Burgaman v. Hickman, 268, Burgett v. Paxton, 53, Burghard v. Sondheim, 144, TABLE OF CASES, References are to pages. Burgin v. Burgin, 17, 102, 229, 280, 255, 296, 350, 507. Burke’s Estate, 346. Burke v. Murphy, 443. Burke v. Railroad Co., 518. Burkholder’s Appeal, 509, 522, 525, Burkholder v. Stump, 44, 55, 56, Burley v. Hartson, 186. Burlingame v. Bell, 144. Burlock v. Taylor, 339, 377. Burnell, Ex parte, 512, Burnett, Matter of, 577. Burney v. Spear, 523. Burnham v. Haskins, 636, Burns v. Bangert, 601. Burr’s Ex’r v. McDonald, 65, 275, 296. Burrall v. Leslie, 204. Burrows v. Heter, 536, 602, Burrows v. Keays, 108, 384. Burrows v. Lehndorff, 6, 98, 125, 183, 1235, 452. Burt, In re, 44, Burtnett, Matter of, 557, Busby v. Firm, 120. Bush v. Moore, 178. Bush v. Roberts, 400, Busley v. Finn, 536. Butcher v. Easto, 31, Butler’s Appeal, 512. Butler v. Haskell, 514. Butler v, Jaffray, 208, 212, 568. Butler v. New York & Erie R. R. Co., 107. Butler v. Stoddard, 102, 321, 469, Butler v. Thompson, 353, Butler v. Wendell, 379. Butt v. Peck, 147, 148, 278, Byrd v. Bradley, 218. Byrne v. Becker, 421. % Cabot Bank v. Bodman, 549, Cadagan v. Kennett, 4, 20,326, 400, 401, 404, 413. Cadwell’s Bank v. Crittenden, 15, Cady v. Sanford, 53. Calder v. Moran, 129. Caldwell v. Bruggerman, 126, Caldwell v. Coates, 561. Caldwell v. Rose, 95, 319, 329. Caldwell v, Williams, 95, 284, 319, 329, 847, 448, 470, 484, 502, Calhoun v, Richards, 489, Calkins v. Packer, 8, Callan v. Thompson, 320, Cameron v. Montgomery, 1'72, Cameron v. Scudder, 172, 179. Camp v. Camp, 348, Camp v. Marshall, 151. Camp v. Mayer, 841, Campbell v. Bruen, 557. Campbell v. Colorado-Coal Co., 358, Campbell v. James, 106. Campbell v. Johnson, 513, Campbell v. Pa. Life Ins. Co., 513, Campbell v. Walker, 511, 518, 515, Campbell v. Woodworth, 148, 446, Campfield v. Lang, 186. Canaday v. Paschall, 149. Canal Bank v. Cox, 100, 115, 147, 172, 198, Cannon v. Kelly, 487. Cannon v. Peebles, 195, 254, 274-276, 431, Cannon v. Young, 567. Canton v. Mosely, 148. Carlton v. Baldwin, 26, 208, 212, 260, 268, 270, 412. Carnahan yv. Schwab, 164. Carnegie v. Morrison, 359. Carpenter, Matter of, 112, 494, 563, Carpenter v. Dick, 669. Carpenter v. Mayer, 317, 327. Carpenter v. Underwood, 101, 158, 181, 196, 224, 261, Carr v. Dole, 128. Carr v. Gale, 53, Carr v. Hilton, 37, 62, 53. Carr v. Van Hoesen, 600. Carroll v. Boston Marine Ins..Co., 105. Carroll v. Else, 99. Carson v. Byres, 13. Carson v. Marshall, 515, Carter v. Connell, 591. Carter v. Hammett, .475. Carter v. Rewey, 14, 22, 164. Carter v. Stanfield, 320. Cartwright y. Dickinson, 65, 108. Cary v. Brown, 503. Cary v. Hess, 191. Caryl v. Russell, 181. Case v. Beauregard, 241, Case v. Edney, 517. ie XXxiv. References are to pages. Case v. Gerrish, 191. Case v. Ingersoll, 352, 630. Casey v. Jones, 268, 472. Caskie v. Webster, 108, 358, 368, 374, Cason v. Murray, 166, 169, 172, 419. Cassady v. Wallace, 268. Cassel, Ex parte, 554. Caswell, Ex parte, 519. Caswell v. Caswell, 601, 603. Catlin v. Hoffman, 48, Catlin v. The Eagle Bank of Maryland, 64, Catlin v. Eagle Bank of New Haven, 65. Caton v. Moseley, 281. . Cavanaugh v. Morrow, 583, 602, Cavin v. Gleason, 164, Cawkwell, Ex parte, 33, 51, Cecil v. Sowards, 634, Central Nat. Bank v. Seligman, 134. Central R. Co. v. B. & W. R. RB. Co., 109, . Chace v. Chapin, 483. Chadbourne v. Harding, 235. Chadwick v. Burrows, 80, 85, 204, 417. Chadwick v. Carson, 41. Chafee v. Fourth Nat. Bank, 373, 377, 342, 847, 367. Chaffee v. Risk, 5, 293. Chamberlain v. Bromberg, 66, ‘Chambers v. Meant, 94. ‘Chambers v. Smith, 457, Chambersburg Association’s Appeal, 564, Chandler v. Jenks, 98. Chandler v. Powers, 604, Chapin v. Thompson, 120, 536. Chaplin, Ex parte, 400. Chase v. Tuttle, 66, Chatfield v. Boyle, 607, Chattanooga Stove Co. v, Adams, 567. Cheatham v. Hawkins, 218, 431, Cheever v. Imlay, 205, 394, Cherry, In re, 165, Chesley v. Chesley, 506. Chesterfield v. Janssen, 190, 194, Chertsey Market, In re, 571, Chew v. Ellingwood, 65. Chilcoat’s Appeal, 99, Child’s Estate, 676, aa TABLE OF CASES. whl Childs v. Kendall, 488, Childs v. Mouseley, 93. Chipman v Bank, 500. Chipman v. Montgomery, 557, Chippendale, Ex parte, 518. Chittenden v. Brewster, 565. Chittenden v. Davidson, 488. Christ’s Church in Londonderry, In re, 532. Christian’s Appeal, 121. Christmas v. Mitchell, 516. Christopher v. Covington, 247, 254, 820, 325, 412. Church v. Drummond, 409. Churchill v. Whipple, 688. Citizens’ Bank v. Patterson, 549. City Bank v. Sherlock, 479. City of Richmond v. Davis, 267. Claflin v. Hirsch, 192, 236. Claflin v. Houseman, 54, Claflin v. Iseman, 191, 207, 216, 218, 606, 680. Claflin v. Maglaughlin, 5, 10, 14, Claflin v. Rosenberg, 320. Claflin v. Smith, 606. Claflin v. Sylvester, 168. Clap v. Smith, 139, 305. Clapp v. Ditman, 12, 642. Clapp v. Nordemeyer, 1385, Clapp v. Sherman, 678, Clark v. Bartlett, 114. Clark v, Chambers, 549. Clark v. Craig, 472, 506, 507, 664, 597. Clark v. Few, 188, 144, Clark v. Figgins, 207. Clark v. Flint, 482. Clark v. Fuller, 255, 263, 396, Clark v. Gibboney, 562, 564. Clark v. Hoyt, 525. Clark v. Iselin, 21, Clark v. Lamoreux, 688. Clark v. McClelland’s Assignee, 89. Clark v. McDonald, 416. Clark v. Marx, 56, 140, 145, 151, 285. Clark v. Robbins, 221, 275, Clark v. Sawyer, 526. Clark v. Stanton, 488, 554, Clark v. Taylor, 420. Clark v. Trust Co., 510. Clark v, White, 165, 172, 191. TABLE OF CASES. XXV References are to pages. Clark v. Wilson, 89, 518, 579, 593, Clarke v. Booth, 361. Clarke v. Hume, 475. Clay v. Severance, 57. Clayton v. Brown, 4, ‘Clayton v. Johnson, 198, 210, 215, 351, 612. Cleaver v. Brenzel, 85. ‘Cleveland v, Clap, 105. Close v. Sinclair, 99. Clow v. Woods, 817, 326. Clute v. Barrow, 514, Clute v. Newkirk, 323. Coakley v. Weil, 199, 216. ‘Coate v. Williams, 228, 224, 242, ee ‘Coates’ Estate, 559. ‘Coates’ Ex’r v. Muse’s Adm’rs, 108, Coates v. First Nat. Bank, 47, 53, 111. Coburn v. Pickering, 319. Cochran v. Paris, 104, 246. Cock v. Goodfellow,-164, 171. ‘Cocke v. Chapman, 319. Cockshott v. Bennett, 191. Coddington v. Davis, 398, 457, ‘Codwise v. Gelston, 532. _. Cody v. Quarterman, 104, Coe v. Hutton, 589. Coffee v. Pleasants, 585. Coffin, Matter of, 513, 527. Coffin v. Douglass, 67, 284, 382, 383, Coffin v. McLean, 109, 500. Coflin v. Kelling, 359. Coggill v, Botsford, 234, 295, 383, 617. Cogar v. Stewart, 297, 634, Cohen, In re, 56, 662. Cohen v. Morris, 563, 577, 592, 602. Cohen v. Plousky, 423, Cohen v. State Bank of Florida, 644, Cohen v. Summers, 208, 305, Colburn v. Morton, 513, Colburne v. Shay, 623. Colby v. O’Donnell, 623. Cole v. Albers, 172. Cole v. Dealham, 452, 627. Cole v. Dealman, 179, 180. ‘Coleman v. Darling, 67, 81, 85. Coleman v. Rosenfeld, 85. Coles v. Trecothick, 512. : Colgin v. Redman, 155, 392, 595, 609, Collateral Bank v. Fowler, 54, Collier v. Bickley, 353. Collier v, Davis, 198. Collier v. Munn, 519. Collins, In re, 18, 480. Collins, Matter of, 488. - Collins v. Blantern, 446. Collins v. Brush, 830. Collins v. Cronin, 95, Collins v. Knapp, 3. Collomb v. Read, 239, 607. Collumb v. Bloodgood, 68, Collumb v. Coldwell, 88, 222, 229, 237, 239, 440. Combs v. Watson, 602. Comegys v. Vasse, 105, 106, 109, Comer v. Constantine, 18, Commercial Bank’s Appeal, 617. Commercial Bank v, Brewer, 221, 226, 244, 431, Commercial Bank v. Cunningham, 586, Commercial Nat. Bank of Detroit v. Mosser, 310. Compton v. Bedford, 31, Commissioners v. Bank of Brest, 65, Comstock v, Rayford, 320, 324. Conard v. Atlantic Ins. Co., 161, 328, 824, 827, 328, 540, 541. Cones v, Wilson, 545. Conkling v. Carson, 208, 212, 280, 234, 461. Conkling v. Conrad, 260, 270, 308, 461, 508, Conlee Lumber Co. v. Meyer, 537, Conlee Lumber Co. v. Ripon L. & M. Co., 92, 94, 186, 689. Connah v. Sedgwick, 94, 95, 321, 469, 492, 578. Connaughey v. Chambers, 479, Connell, In re, 664. Connor, Matter of, 557. Conrad v. Burke, 89. Conrad v. Marcotte, 129. Constantine v. Twelves, 223, 320, 470. Converseville Co. v. Chambersburg Wool Co., 663. Conway, Ex parte, 65, 165, 172. | Cook v. Fountain, 281. Cook v. Kelly, 285, 290. Cook v. Moriey, 29. Cook v. Pritchard, 164. xxvi TABLE OF OASES. References are to pages. Cook v. Rogers, 10, 24, 40. Cook y. Smith, 312, 456. Cook v. Van Horn, 859. Cook v. Whipple, 54. Cook County Nat. Bank v. United States, 539. Cooke v. Smith, 442. Cooley’s Appeal, 544. Coope v, Bowles, 79, 85, 601. Cooper v. Davidson, 820, 484. Cooper v. Day, 564. Se ee Cooper v. Douglass, 106, Cooper v. Kramer, 529. Cooper v. McClun, 166, Coots v. Chamberlain, 152, 441, 457, Coots v. McConnell, 354. Coots v. Radford, 477. Coots v. Topping, 111, Copeland v. Mercantile Ins, Co., 518. Copeland v. Stevens, 475. Copeland v. Weld, 115, 341. Copper Mining Co, v. Beach, 516. Corder v. Corder, 282, Corgan v. Frew, 318. Corn v. Saus, 478, 479, Corn Ex. Nat. Bank v. Philadelphia Trust, etc. Co., 5, 181, Cornell, In re, 485, 563. Corning v. White, 479. Cornish v. Dews, 17, 352, 358, 421. Cornwell’s Appeal, 37, 54, Corprew v. Arthur, 414, Corser v. Craig, 105. Coster v. Lorillard, 445. Couch v. Delaplaine, 108, 110, 885. Coursey v. Morton, 817, Covanhovan v. Hart, 166. Coverdale v, Aldrich, 104, 111, Coverdale v. Wilder, 382, 891, Covert v. Rhodes, 111. ‘ Covert v. Rogers, 65, 92, 442, 4 Cowles v. Ricketts, 1, 5. Cowing, Matter of, 557, Cox v. Adams, 367, Cox v. Palmer, 260. Cox v. Platt, 286, 241, 441. Coyne v. Weaver, 270, 428, 442, Craddock v. Orand, 552. Craft v. Bloom, 421, 526, Cragin v. Carmichael, 52, &3, Cragin v, Thompson, 55. Craig’s Appeal, 65, 495. Cram v. Mitchell, 93-95, 175, 322, 476. Crane v. Rosa, 89, 241. Cranston v. Crane, 516. Crapo v. Keliy, 360, 361, 363, Craven, Ex parte, 165. Cravens v. Chambers, 504, 626. Crawford v. Kirksey, 11, 15, 23. Creswell v. Jones, 485, Crevelling v. Fritts, 484, 612. Cribben v. Ellis, 99, 690. Criswell’s Appeal, 586. | Crittenden v. Coleman, 621. | Crocker v. Whitney, 104, 105. | Croft, In re, 47, 57. | Cromie v. Bull, 578, Cromien, Matter of, 558, Crook v. Rindskopf, 240, 882, 481, 444, Cropsey v. McKenney, 601, Crosbie v. Leary, 495. Crosby v. Hillyer, 809, 310, 349, Crosby v. Huston, 17, Cross v. Bryant, 172, Crcssley v. Moore, 191. Croswell v, Allis, 409. Croughwell, In re, 47. Croughwell, Matter of, 660. Crouse v. Frothingham, 110, 496, 677, 594, Crow v. Beardsley, 12, 17, 412, 642, Crow v. Colton, 114. Crow v. Ruby, 138. Crowe v. Ballard, 510, 511. Crowninshield v. Kittredge, 567. Cruger v. Halliday, 576, Crutchfield v. Hudson, 586, 608. Cullum v. Bloodgood, 86, Cullum v. Branch Bank at Mobile, 575 Cumberland Bank v. Hann, 819, Cummings v. McCullough, 227, 453, 469, Cunningham v. Butler, 364. Cunningham v. Freeborn, 6, 115, 128, 128, 150-153, 164, 168, 170, 186, 242, 248, 277, 287, 838, 885, 8389, 842, 381, 415, 422-425, 432, 484, 435, 559, 605, 606. Cunningham v. McGregor, 499, Cunningham v, Neville, 317, 329, TABLE OF CASES. XXvVib References are to pages. Cunningham v. Norton, 63, 188, 382. Curd v. Miller’s Ex’rs, 320, Currie v. Hart, 94, 95,°116, 220, 469. Currier, Matter of, 538, 558, 662, ‘Curtis v. Leavitt, 13, 61, 63, 166, 167, 180, 183, 184, 221-228, 229, 283, 284, 322, 407, 416, 437-440, 446, 520, Cushing v. Gore, 116. Cushman v. Gephart, 624, Cushwa v. Cushwa, 448, Cutler v. Copeland, 319. Cutler v. Reilly, 499. Cuyler v. McCartney, 421, 441, 442, 502, 503. Da Costa v. Guien, 887. Daggett, etc. Co. v. Herman, 616. Daily’s Ex’r v. Warren, 502. Dakin v. Pomeroy, 367. Dale v. Olmstead, 129, Dallam v. Fitler, 317, 477. Dalton v. Currier, 361. Dana v. Bank of the United States, 65, 247, 286, 442, 558. Dana v. Lull, 4, 75, 85-87, 157, 175, 230, 282. Dana v. Stamfords, 8, 12, Dance v. Seaman, 104, 115, 134, 172, 178, 220, 223, 225, 246, 254, 260, 408. Danford v. Denny, 14, 169, 177. Daniel v. Fain, 526. Daniels, Petition of, 85, 86. Daniels v. Willard, 338, 376, Danley v. Rector, 319. Danner v. Brewer, 10, 15, 180, 185, 364, 609. Dansby v. Frieberg, 191. Darbour v. Duncanson, 502. Dargan v. Richardson, 350. Darling v. Rogers, 126, 256, 258, 267, 2838, 381, 282, 444, 446, Darrow, Matter of, 559, Darrow v, Bruff, 90, 91, 286. Darwin v. Hundley, 228, 320. Davenport, In re, 519. Davenport v. Gentry’s Adm’r, 105, Davenport v. McCole, 561. Davenport v. Thornton, 371. Davidson v. Cowan, 296, Davidson v. Robinson, 32, Davis v. Anderson, 167, 179. Davis v. Chicago Dock Co., 478, Davis v. Gibbon, 179, 627, Davis v. Gibson, 160, 169. Davis v. Harman, 563, 564, Davis v. Harrington, 433, Davis v. Howell, 235. Davis v. Newcomb, 484, Davis v. Simpson, 514. Davis v. Turner, 49, 320. Davis & Desauque, Estate of, 508, Davoue v. Fanning, 513, 514. Dawes v. Cope, 816, 326, 327, 4'74, Dawson v. Coffey, 600, 601. Dawson v, Crossen, 152, 298, 476, 673, 674, Dawson v. Dawson, 313, 314. Day v. Bardwell, 39. Dean, Matter of, 491, 524, 554. Dearing v. Watkins, 320. Dearman v, Radcliffe, 448. Deaver v. Savage, 151, 153. Debee v. De Baun, 508, 509. De Brodleben v. Beekman, 818, De Caters v. Le Ray de Chaumont, 348, 346, 582, 583. Deckard v. Case, 78, 74, 79, 85-87, 286, 472. Deckert v. Filbert, 74, 86. Dedham Bank v. Richards, 149, 154, 250, 287, 307, 582. Deering v. Cox, 343. De Forest v. Bacon, 172, 248, 341, De Graw v. King, 291. Dehner v. Helmbacher, 24, 104, 353. Deisbach v. Merritt, 615. | Delaware, etc. Co. v. Scranton, 853, Dell v. King, 35. Demarest v. Willard, 103, Deming v. Colt, 76, 77, 85, Den v. McKnight, 513, 514, Den v, Wright, 518, 514. Dennistown v. Hubbell, 474, Denzer v. Mundy, 299. Depeyster v. Ferrers, 523, Derry Bank v. Davis, 286, 884, De Rouge v. Elliott, 105. De Ruyter v. St. Peter’s Church, ‘11, 64, 95, 355. Dessar v. Field, 166, XXVili TABLE OF CASES. References are to pages. Desch v. Nette, 400. Descombes v. Wood, 66. Demmick v. Register, 9. De Sobry v. De Laistre, 358, 359, 367. Dessar v. Field, 10, 15, 22. De Tastet v. Le Tavernier, 61, Detroit Stove Works v. Osmun, 353, Detwiler’s Appeal, 475, 485, 563. Devey v. Thornton, 519. Dewey v. Adams, 322, 323, 329. . Dewey. v. Littlejohn, 115, 116, 296, 300, 819, 825, 507. De Wolf v. Johnson, 535. De Wolf v. Sprague Mfg. Co., 18, 243, 272, 605. Dews v. Olwill, 334, 345, Dexter v. Parkins, 318. Dey v. Dunham, 23, 277, 480. Dias v. Bouchaud, 8, 15, 123, 161, 540. Dick v. Pitchford, 314, Dickerson v. Benham, 420, Dickinson, Ex parte, 359, 486. Dickinson v. Burrill, 488, Dickinson v. Legare, 69, 72. , Dickinson v. Metacomet Nat. Bank, 389, 394, Dickson v. Chorm, 545, Dickson v. Rawson, 5, 115, 179, 280, 606. Diefendorf v. Spraker, 314, Dieffenderffer v. Winder, 568, Diesbach v. Becker, 14. Dimmock v. Bixby, 582, 566, 597, Dimon v. Delmonico, 117, 121. Dimon v. Hazard, 89, 241. Dinsmore v. Boyd, 108, D'Ivernois v, Leavitt, 221, 248, 366, 454, 455. Dix v. Cobb, 105. Dobbin v. Walton, 65, Dobbs v. Prescott, 298. Dobyns v. Dobyns, 634, Dobyns v. McGovern, 105. Dockray v. Dockray, 172, 206, 212. Dodd v. Hills, 101, 167, 427. Dodd v. Martin, 145, 198, 215, Dodge v. Doub, 548, Dodge v. Sheldon, 54, Doe v. Pitcher, 446, Doe v. Rutledge, 4, Doe v. Scribner, 591, Dohlman v. Jacobs, 601. Dolson v. Kerr, 40, 41, 98, 828, 469, Donaho v. Fish, 67, 682. Donelson’s Adm’rs v. Posey, 520, 526, Donohue v. Ladd, 352, 640. Doolittle v. Cook, 453, Doolittle v. Southworth, 389, Doremus v. Lewis, 231. Doremus v. O’Hara, 179. Dorr v. Gibboney, 562, 564, 594, 598, Dorrance v. Jones, 475. Doub v. Barnes, 602. Dougherty v. Bethune, 309. Dougherty v. Daraach, 294, Douglass v, Cissna, 92, 93, 229, Douglass v. Simpson, 279, 553, Dow v. Platner, 98, 221. Dowdell v. Hamm, 384, 398, Downes v. Grazebrook, 511. Downing v. Kentzing, 184, Downs v. Grazebrook, 506. } Doyle v. Peckham, 486, Doyle v. Smith, 245, 491, Drain v. Mickel, 24, 477. Drake v. Eliman, 633, Drake v. Rogers, 75, 85, 128, 208, 288, Drake v. Rollo, 501. Drakeley v. De Forest, 139, 152. Drane v. Gunter, 576. Drew v. Drum, 478. Drew Glass Co, v. Baldwin, 810, 642, Drewson v. The American Surety Co., 496, Driesach v. Price, 675. Driggs & Co.’s Bank v. Norwood, 59. Driscoll v. Fiske, 1438, Drucker v. Wellhouse, 67. Dryer, Matter of, 557, 579. Dube v. Fire Ins, Co., 105, Dubose v. Dubose, 253, 385, 507. Du Bose v. Carlisle, 102, 124, 160, 609, Dudley v. Danforth, 421. Dudley v. Whiting, 630. Dufford v. Smith, 527. Duffy v. Duncan, 148, 492, 501, 519, 521, 524. | Duggan v. Bliss, 198, 616. Dumahaut, In re, 56, 57. Duncan, Matter of, 240, 558, Duncan v. Miller, 453, TABLE OF CASES, xxix References are to pages. Duncan v. Stanton, 499,’ Duncan v. Taylor,(682, 685. Dundas v. Bowler, 364, 366, 367, 879. Dunham, Ex parte, 507. Dunhat v. Gates, 427, 605. Dunham v. Pettee, 329, Dunham v. Waterman, 159, 175, 196, 204, 242, 425, 455, 492. Dunham v. Whitehead, 12, 15. Dunkee v, Chambers, 442, Dunklin v, Kimball, 85, Dunlap v. Beckes, 514, Dunlap v. Bournonville, 95, 317, 473. Dunn v. Snell, 107. Dunsmore v..Furstenfeldt, 479. =. tes Dupuy v. Ullman, 474, ee Duraut v. Pierson, 90, Durfee, In re, 565. Durham v, Hall, 592, 594, Dutchess Co. v, Van Wagonen, 660, Dutton v. Morrison, 33. Duvall v. Raisin, 115, 128, 151, 186, 332, 643, Dwight v. Lumber Co., 164. Dwight v. Overton, 10, 17, 352, 461, 462. D’Wolf v. Harris, 327, 328. Dwyer v. Garlough, 109, 669. Dye v. Dye, 582, 669. at Dyer v. Burnham, 104, Eagle v. Eichelberger, 327. : Eames, Ex parte, 39. Eames v. Mayo, 479, 546. Earle v. N. Y. Life Ins. Co., 560. Eastman v. McAlpin, 22, 166, 172, 179, Eastman v. Wright, 105. Easton Nat. Bank v. Halshizer, 380. Eaton, Matter of, 660. Ebersole v. Adams, 40, 684, Eckhardt v. Wilson, 32, Eddy v. Winchester, 359. Eden v. Everson, 297, 338, 347, 604, Edgell v. Hart, 321. Edison v. Frazier, 3, 129. Edmonson v, Harris, 575. Edrington v. Rogers, 164-166, 172, 191, 284, Edwards v. Glyn, 32. Seis f Edwards v. Mitchell, 400, aie Edwards v. Peterson, 108. t Egbert v. Baker, 879, Egbert v. Brooks, 518, 522, Egbert v. Wood, 69, 72, 84, 85, 87, 89, 181, 237. Eicks v. Copeland, 248, 260, 380, 485, 441, Einstein v, Chapman, 322, Einstein v. Shouse, 620. Eldridge v. Post, 297. Ellenberger v. Milligan, 625, Elliott v. Carter, 568, Elliott v. Pool, 501. Ellison v. Ellison, 578. Ellison v. Lindsley, 582. Elmes v. Sutherland, 17, 228, 246, 885, 336, 341. Ely v. Cook, 60, 64, 229. Ely v. Hair, 67, 84, 152, 280, 255. Emerick v. Coakley, 105, Emerson v, Knower, 188, 151-158, 845. Emerson v. Senter, 89, 141, 412, 421, 441, Emigrant Industrial Savings Bank v, Roche, 107, 382, 386. Emmons v. Cairns, 103, 106. Empey v. Sherwood, 462, 581, Empire City Bank, Matter of, 183. England v. Reynolds, 148, 260, 337. Englebert v. Blaujot, 292, 486, 676, Ennis v. Leach, 516. Ensign v. Kellogg, 104. Epperson v, Young, 448, Eppright v. Nickerson, 66, 108, 291. Equitable Trust Co. v. Fisher, 506. Eshelman v. Shuman, 109. Estabrook v, Messersmith, 112. Estwick v. Caillaud, 22, 155, 160, 171, 280, 340, 423. Evans v. Chapin, 151. Evans v. Dunkelberger, 295, Evans v. Greenhow, 278, Evans v. Lamar, 253, 255, 260. Everett v. Stone, 37. Everett v. Walcott, 279, 339, 341, 844, Everitt, Matter of, 557. Everitt v. Strong, 68, 286, Everson v. Gehrman, 76, Evertson v. Tappan, 511. Every v. Edgerton, 328, 826, Ewing v. Gargill, 516. Xxx TABLE OF CASES. References are to pages. Exchange Bank v. Knox, 277, 278. Executors of Luce v. Park, 110. Eyre v. Beebe, 148, 287, 240, 241, 268, 278, 524. Ezekiel v, Dixon, 179. Fahey v. Clarke, 192, 522. Fahnestock v. Bailey, 567. Fairbanks v. Haynes, 177, 451. Fairchild v. Gwinne, 151, 290. Falconer v. Hunt, 612. Fall River Iron Works v. Croade, 278, 839, 348, 344, 368. Fallon v. McCunn, 495. Fanshawe v. Lane, 91. Farmers’ Bank v. Douglass, 17, 246, 247, 407, 559. Farmers’ Bank v. Gilpin, 529. Farmers’ Bank v. Willis, 499. Farmers’ Dep. Nat. Bank v. Pennsylva- nia Bank, 500. Farnham, Matter of, 556. Farnsworth v. Shephard, 318. Farquharson v. Hichelberger, 146, 199, 216, 240, 260, 267, 297. Farquharson v. McDonald, 98, 229, 254, 255, 337, Farrall v. Howard, 179. Farrell v. Farnen, 421, 482, Farrin v. Crawford, 26, 438, 53, L Farrington v. Sexton, 98, 433. Farrow v. Hayes, 212, 305, 481. Farwell v. Bohen, 3. Farwell v. Gundry, 140. Farwell v. Howard, 160, 169, 627. Farwell v. Jones, 192, 453. Farwell v. Nilsoon, 164. Farwell v. Webster, 67, 86, 688, Fassett v. Phillips, 206, 224, Fassett v. Traber, 167. Faulkner v. Hyman, 278, 339, 368, 878, Faunce v. Lesley, 219. Faust v. Levy, 527. Faut v. Elsbury, 683. Faxon v. Durant, 331. Fay v. Grant, 101, 218, Fay v. Jenks, 359. Fayette Nat. Bank v. Kenney, 547, Fecheimer v. Robertson, 5. Feimester v. McRorie, 277, Feimster v. Smith, 3.- Felch v. Bugbee, 361. Fellows v. Commercial Bank, 228, 249, Fellows v. Greenleaf, 88, 89, 112, 12%, 334, Fellows v. Vicksburg R. R. & B, Co., 337. Felt v. Dorr, 499. Fera v. Wickham, 499, 500. Ferebee v. Doxey, 107. Ferris v. American Ins, Co., 498, Fermor’s Case, 413. Fiedler v. Day, 119, 448, 447, 456. Field v. Arrowsmith, 813, 887. Field v. Flanders, 281, 484. Field v. Ridgley, 623, Field v. Simco, 319. Fieley v. King, 489, 617. Finlay v. Dickerson, 229, 280, 234, 266, 2738. First Con. Soc. of Raynham v. Trust- ees, etc., 592. First Nat. Bank v. Central Nat. Bank, 462. First Nat. Bank v, Coates, 111. First Nat. Bank v. Hackett, 81, 99, 101. First Nat. Bank v. Hartman Co., 109. First Nat. Bank v. Hughes, 60, 367, 377, 431, 449, 460, 481. First Nat. Bank v. Kennedy, 427. First Nat. Bank v. Kimberlands, 106. First Nat. Bank v. Mastin Bank, 479. First Nat. Bank v. Smith, 339. First Nat. Bank of Bath v. Warner, 483, First Nat. Bank of Dubuque v. Baker, 441, First Nat. Bank of Fargo v. Briggs, 640. Fisher v. Dinwiddie, 160, Fisher v. Johnson, 104. Fisher v. Murray, 77. Fisher v. Shelver, 400. Fiske v. Carr, 114, 350, 586, Fitch v, Workman, 592, 593, 597, Fitler v. Maitland, 317, 472, Fitzgerald v. Vestal, 106, Fitzherbert’s Case, 413, Fitzpatrick v. Flannagan, 241. Flagg v. Mann, 527, Flagler v. Schoeffel, 146, 442, 502. TABLE OF CASES. Xxxi References are to pages. Flagler v. Wheeler, 442, 502. Flanagan v. Wetherill, 293, 307, Flanigan v. Lampman, 442, 470, Flannigan v. Althouse, 453, Flash v, Wilkerson, 681. Fleming v. Townsend, 320, Fletcher v. Piatt, 105, Saas Fletcher v. Willard, 319, ' Flickey v. Looney, 105, Flint v. Bell, 593. ; Flint v. Clinton Co., 64, 126, 287. Flower v. Cornish, 112, 481. Floyd v. Smith, 230. Flynn v. Ledger, 478, Foakes v. Beer, 192. Focke v. Blum, 67. Fogerty v. Phila. Trust, etc. Co., 489. Foley, Matter of, 600. Follweiler v. Lutz, 294. Foot v. Goldman, 58. Foote v. Cobb, 115, 414, Forbes v. Limond, 197, Forbes v. Scannell, 23, 77, 86, 93, 127, 182, 146, 152, 240, 282, 333, 373, 379, 441, 484, Forbes v. Waller, 432, Ford v. Cook, 522. Ford v. Williams, 165, 166. Fordyce v. Pipher, 297. Foreman v. Burnette, 13. Forepaugh v. Appold, 105, 467. Forkner v. Schafer, 297. Forkner v. Stuart, 68. Fort v. Martin Tobacco Co., 621. Fort Stanwix Bank v. Leggett, 603. Fosdyke v. Nixon, 580. Foster v. Beals, 502. Foster v. Brown, 297, 427. . Foster v. Deming, 555. Foster v. Libby, 100, 101. Foster v. Lowell, 129. Foster v. Saco Manufacturing Co., 8, 108, 136, 172, 244, 284, Foster v. Woodfin, 423. Fouche, Assignee, v. Brower, 579. Fouke v. Fleming, 17. Fournier v. Ingraham, 576, 577. Fox v. Adams, 198, 217, 249, 350, 368. "Fox v. Hanbury, 68. Fox v. Heath, 58, 237, 600. Fox v. Mackreth, 510 Fox v. Willis, 601. Foy v. Troy & Boston R. R. Co., 10%. Francis v. Burnett, 109. Francis v. Evans, 595. Francis v. Herz, 208, Francisco v. Aguirre, 479, Francklyn v. Sprague, 482, Franco v. Franco, 571, Franey v. Smith, 477, 661, Frank v. Cruthers, 429. Frank v. Moses; 628. Frankell v. Coats, 442, 502 Franklin v. Menown, 108, Frazer v. Thatcher, 167. Frazer v. Thompson, 31. Frazier v. Fredericks, 359, Frazier v. Truax, 119, 155. Freeman v. Cook, 532, 562, 566, Freeman v. Deming, 21, 36, 54 French v. Lovejoy, 236. French v. Townes, 133, 548. Freund v. Jaegerman, 135, 642, Freydendall v. Baldwin, 623. Friend v. Michaelis, 236, 431, 600. Frierson v. Branch, 342, 645, 581, 684, 586, 602. Frink v. Buss, 92, 100. Frisbee, In re, 47. Fromme v. Jones, 12, 160, 169, 179, 627, Frost v. Citizens’ Nat. Bank, 112, Frost v. Wilson, 479. Frow v. Downman, 482, Fry v. Boyd, 104, 479. Fry v. Soper, 601. Fuhrman v. Jones, 688 Fuller, In re, 484, Fuller v. Davis, 579. Fuller v. Hasbrouck, 477%, Fuller v. Steiglitz, 375, 379, 499, Fulton, Matter of, 524, Furman v. Fisher, 245, 809, 811, 818, 337, 460, 461, 575. Gable v. Williams, 89, Gage v. Chesebro, 15. Gaither v. Mumford, 319, Gale v. Hubbel, 688. Gale v. Mensing, 128, 288, 388, 841. Gallagher, Matter of, 147, 676. XXxii TABLE OF OASES. References are to pages. Galt v. Calland, 89. Galt v. Dibrell, 176, 225, 312, 460, 461. Gamble v. Railroad Co., 109. Gammons v, Coleman, 478. Gammons v. Holman, 114, Gardner v. Adams, 106. Gardner v. Commercial Bank of Amer- ica, 678, Gardner v. Commercial Nat. Bank, 60, 245, 259, 267, 366, 409, 430, 449, 458, 461. Gardner v. Diedrichs, 545. Gardner v. Hoeg, 106. Gardner v. Howland, 327, 328, 474. Gardner v. National City Bank, 478. Gardner v. Pike, 149. Garner v. Frederick, 98, 99. Garr v. Hill, 166, 167, 169, 178. Garrard v. Lauderdale, 127, 840, 341, 583. Garret v. Burlington Plow Co., 1365, Garretson v. Brown, 178, 655, Garwood, Ex parte, 165. Gasherie v, Apple, 420. Gasper v. Bennett, 605, Gassett v. Wilson, 164, 166, Gates v. Andrews, 259, 807. Gates v. Labaume, 9, 234, 260, 271, 278, 421, 441, 481, 496, 529, Gathercole v. Bedel, 342, Gayden v. Tufts, 114. Gayle v. Randall, 54. Gaylord v. City of Lafayette, 461, Gazzam v. Poyntz, 188, 198, 218, 227, 835, 480, 431. Geery’s Appeal, 40, 52. Geilinger v. Philippi, 102. Geisse v. Beal, 346, 400, 448, 484, 505, 514, 524, 536, 537, 580, 581, 594, 595. Geist’s Appeal, 105, 531, 581, George v. Norris, 319. George v. Williamson, 448, Gere v. Murray, 421. German Bank v. Schloth, 106, German Ins. Bank v. Nunes, 412, Germantown Pass. R. Co. v. Fitler, 355, 495. German Sav. Institution v. Adae, 4'78, German Security Bank v. Jefferson, 634, 4 ' i | Gibbs v. Cunningham, 548. Gibbs v. Thompson, 118. Gibson v. Chedic, 460. Gibson v. Cook, 104. Gibson v. Courthope, 475. Gibson v. Jeyes, 511. Gibson v. Love, 416, 426. Gibson v. Muskett, 32, 184. Gibson v. Rees, 127, 304, 383, 340, 346, 460, 461, 559. Giddings v. Eastman, 513, Giddings v. Sears, 167. Gilbert, Matter of, 582, 662. Gilbert v. McCorkel, 453, Gilbert v. Sutliff, 522, 524, 527, 566, Gilchrist v. Gilmer, 388. Gilchrist v. Stevenson, 314, Giles v. Ash, 108. Gilkerson-Sloss Com. Co. v. London, 612. Gill v. Carmine, 566, Gillespie v. Smith, 516. Gilmer v. Earnhardt, 254, Gillet v. Phillips, 67, 183, 184, Gilson v. Boutts, 32, Gimble v. Ferguson, 104. Ginther v. Richmond, 125, 270. Givens v. Taylor, 299. Gitt’s Estate, 186. Gladsden v. Carson, 237, Glen v. Grover, 166, Glenn v. Busey, 364, 579. Glenn v. Howard & Savage, 54, Glenn v. McKim, 569. Glenn v. McNeal, 400, Glenn v. Mickey, 507. Glenn v. Randall, 400. Glenny v. Langdon, 54, 604, Globe Ins. Co. v. Cleveland Ins, Co., 35, 37, 40, 48-45. Gloucester Bank v. Worcester, 200, 394, Goar v. McCanless, 164, Goddard v. Hapgood, 280, Goddard v. Winthrop, 369, Godden, Ex parte, 35. Godfrey v. Poole, 400. Goding, Ex parte, 507. Goepper v. Heckle, 594. Golden’s Appeal, 284, 301, 460, 575, 577. r TABLE OF QASES. XXXHi References are to pages. Golden v. Musgrove, 460. Goldschmidt, In re, 44, 45, 57, 675, Goll v. Hubbell, 99, 101, Goncilier v. Frost, 598. Goodbar v. Mears, 612. Goodman v. Niblack, 108, Goodrich v. Downs 180, 218, 221-223, 229, 230, 257, 288, 425, 430, 432, 437- 440, 448, 444. Goodrich v. Proctor, 281, 505. Goodrich y. Wilson, 54. Googins v. Gilmore, 319. Goodsell v. Benson, 362. Goodwin v. Kerr, 320, 441, 460. Goodwin v. Mix, 478, 563, 568, Goodwin v. Sharkey, 54, 546. Goodwin v, Wertheimer, 479. Gordon, Matter of, 160. Gordon v. Cannon, 85, 92, 152, 159, 172, 207, 212, 217, 241, 272, 472, Gordon v. Coolidge, 310. Gordon v. Freeman, 356, 466. Gordon v. Green, 129, 131. Gordon v. Worthley, 62. Gore v. Clesby, 507. Gorham v. Innis, 164, Gorham v. Reeves, 482, Gorsuch v. Briscoe, 575. Goss v. Neale, 22, 160, Gott v. Hoschina, 489, Gough v. Clift, 268, 485. Gould v. Hayes, 523, 525, Gould v. Keer, 547. Gould v. Lamb, 281, 505. Gouldy v. Metcalf, 58. Gourdon v. Ins. Co. of North America, 105. Governor, use, etc. v. Campbell, 333, 885, 421, 441. Grady v. Bowe, 361. Graeff’s Appeal, 543. Graff’s Estate, 486, Graham v. Candy, 82. Graham v. Davidson, 520. Graham v. Evans, 639, Graham v. Henry, 106. Graham v. Lockhart, 136, 226, 254, 886. Graham v. Newman, 104, Graham v. Railroad Co., 10. Grangers, etc. Co. v. Kampcr, 482, Grant v. Chapman, 117, 188, 196, 261. | Graser v. Stillwagen, 68, 84, Graves v, Alden, 179. Graves v. Blondwell, 220, Graves v. Hull, 78, 85. Graves v. Long, 483, 516. Graves v. McFarlane, 103, Gray, Matter of, 557. Gray v. Bell, 598, 597. Gray v. Hill, 126. Gray v. Lynch, 565. Gray v. McCallister, 179, 180, 627. Gray v. Rollo, 501. Gray v. Thompson, 597. Grayson v. Sandford, 106, Greeley v. Dixon, 208. Green v. Banks, 59, 338, 434, Green v. Bradfield, 164. Green v. Demoss, 337. Green v. Gross, 363, 364, Green v. Morse, 535, 536, 584, 603, Green v. Trieber, 159, 199, 215, 216, 218, 221, 280, 282, 249, 251, 268, 274, 431, 432, Green v. Van Buskirk, 318, 870, 871. Green v. Winter, 511, 519, 554. ‘Greene v. Breck, 90. Greene v. Mowry, 350. Greene v. Sprague Mfg. Co., 347, 365. Greene & Button Co, v. Van Vechten, 457, Greenfield’s Estate, 388. Greenleaf v. Edes, 259. Greenleaf v. Mumford, 602. Greenleaf v. Queen, 508. Greenwood v. Marvin, 356, Gregory v. Gregory, 512. Gresham v. Crossland, 602, Griffin v, Alsop, 474, Griffin v. Doe. 252, Griffin v. Rogers, 5, 178, Griffin v. Wallace, 479. Griffin’s Ex’r v. Macaulay’s Adm’r, 108, 118, 115, 187, 252, 421, 432, 478, 482, 533. 571. Griffith v. Cox, 60, 602, ‘Grimes v. Farrington, 423, Grimshaw v, Walker, 198, 227, 233 j Grimsley v. Hooke, 567, Griswold v. Watkins, 64, XXXIV TABLE OF OASES. References are to pages. Grocers’ Nat, Bank v. Clark, 105. Grocery Co..v. Records, 221. Groencke, Matter of, 582. Gross v. Bunn, 585, 586. Grover v. Grover, 400, 427. Grover v. Wakeman 5, 159, 163, 168, 172, 174-176, 180, 187, 188, 200, 202, 204, 209, 210, 213, 216, 245, 268, 382, 427, 428. 431, 488, 444, Grubbs v. Morris, 160, 170, 181, 624, Gruce v. Sanders, 320. Gryder v. Payne, 514, Guerin v. Hunt, 93, 142, 441. Guggenheimer v. Groeschel, 191. Guilford v. Childs, 296, 299. Guillancder v. Howell, 108, 358, 370, 872- 374, 379. Guittard v. Robinson, 531. Gulick v. Lodor, 367. Gump, Matter of, 505. Gundry v. Vivian, 530. Gunnell v, Adams, 260. Gutman v. MeNulty, 89, 241, 454, Gutzweiler v. Lackman, 536. Guy.v. Mcllree, 167, 169, 294, Guyer, Assignment of, 192. Haas v. O'Brien, 47. Hackers v. Perkins, 390. Hadden v. Knickerbocker, 546, Haenssler v. Teichman, 482, Hafner v. Irwin, 17, 163, 166, 172, 175, 207, 216, 228, 245, 254, 408, 419, 443. Hagen’s Appeal, 190. Haggard v. Lehman, 585, Haggarty v. Pittman, 94, Haggerty v. Granger, 85, 88, Haggerty v. Palmer, 473, 479, 480, 482. Hahn v. Salmon, 454, 478, Haile v. Brewster, 320. Haines v. Campbell, 259, 307. Hairgrove v. Millington, 348, 421, 502.: Halbert v. Deering, 103, 105. Hale v. Allnutt, 164, Hall v. Arnold, 167. Hall v. Crane Co., 11. Hall v. Denison, 23, 127, 128, 166, 172, 180, 207, 229, 277, 352, 353. Hall v. Hallett, 510, 511, Hall v. Harrell, 110, Hall v. Harris, 592. Hall v. Howell, 625. Hall v. Kellogg, 168. Hall v. Marston, 130. Hall v. Mullen, 358. Hall v. Noyes, 511. Hell v. Parsons, 318, 329. Hall v. Robinson, 106. Hall v. Wheeler, 819, 330, 472. Halm v. Salmon, 673. Halsey v. Whitney, 28, 104, 115, 126, 148, 151, 152, 154, 157, 158, 168, 172, 200, 209-218, 217, 229, 233, 249, 250, 270, 282, 807, 384, 841, 3438, 345, 847, 448, 551, 552, 583, Halstead v. Gordon, 254, 273. Halsted v. Halsted, 488. Hastings v. Belknap, 602. Hamilton v. Colt, 678. Hamilton.v. Russell, 20, 828, 824, Hamilton v. Wright, 485, 510. Hammond v, Stanton, 596. Hampton v. Morris, 59. Hanbury v. Kirkland, 569. Hanchett v. Waterbury, 623. Hancock v. Horan, 166, 167, 191. Hancock v. Wooten, 605. Hanes v. Tiffany, 112, 481. Hanford v. Paine, 318, 858, 372, 685. Hanford Oil Co. v. First Nat. Bank of Chicago, 164, 483, Hannah v. Carrington, 17, 228, 574, Hanscom v. Buffum, 163. Hansell v. Lutz, 544, Hauselt v. Vilmar, 23, Hanson v. Dunn, 689. Hanson v. Stephenson, 475. Hard v. Milligan, 488, Hardcastle v. Fisher, 9, 118, 151, 476, 482, 600, 643, Hardin v. Osborne, 208, 250, 252. Harding v. Crosby, 47. Hargdime v. Henderson, 18, 642. Hardy v. Clarke, 48, Hardy v. Simpson, 59. Hardy v. Skinner, 59, 225, 228, 245, 246, 319. Hargrooves v. Chambers, 562, Hargrove v. Millington, 442, Harkins v. Bailey, 5, 166, 169. TABLE OF CASES. References are to pages. Harkist v. Alexander, 511. Harkrader v. Leiby, 13, 16, 179. Harman v. Fisher, 30, 151, 290, 441, Harman v. Hoskins, 431, Harmon v. McRae, 10. Harrington v. Brown, 514, Harris v. Bratton, 281. Harris v. De Graffenreid, 17, 118, 447. Harris v. D’ Wolf, 327. Harris v. Exchange Nat. Bank, 41. Harris v. Rickett, 31. Harris v. Rucker, 813. Harris v. Sumner, 200, 218, 230, 347, 430, 448. Harris v. Thompson, 66. Harris v, Visher, 67. Harrison v. Farmers’ Bank, 108, 352. Harrison v. Mack, 312, 484, 563, 596. Harrison v. Sterry, 68, 71, 72, 86, 87, 361, 367. Harrison v. Winston, 584. Harrison Nat. Bank v. Ellicott, 479. Hart v. Acker, 322. Hart v. Blum, 6. Hart v. Bulkley, 570, 574. Hart v. Crane, 251, 255, 492, 506, 507, 509. Hart v. McFarland, 275, 416. Hart v. Rust, 516. Harvey, Ex parte, 18, Harvey v. Cubbedge, 65, Harvey’s Adm’r v. Steptoe’s Adm’r, 119, 506, 551, 556, Haskell v. Ingalls, 48, Haskins v. Alcott, 118, 342, 582, 586, 669. Hasseld v. Seyforth, 141, 625. Hastings v. Baldwin, 103, 144, 200, 231, 841, 344, Hastings v. Belknap, 204, 601. Hastings Matting Co. v. Heller, 118. Hastings v. Spencer, 527. Haswell v. Simpson, 31. Hatch v. Smith, 188, 165, 172, 200, 345, Hatcher v. Winters, 227, 329, 352, 577, 681, 593, 603, 605. Hatchett v. Blanton, 580, 584. Hathaway v. Fall River Nat. Bank, 479, : 483. ' Hauselt v. Vilmar, 165, 172, 175, 420, 422," Havemeyer v. Loeb, 607. Haven v. Law, 319. Haven v. Richardson, 152, 1'72, 207, 277. Havens v. Hussey, 68, 72, 75, ‘76, 84, 88, 87, 286. Hawkins’ Appeal, 40. Hawkins, In re, 44. Hawkins v. Alston, 507, Hawkins v. Bailey, 10. Hawks v. Pritzlaff, 112, 481, Hawley v. Cramer, 513. Hawley v. James, 445, 515, 519, 567. Hawley v. Muncius, 511. Haxum v. Bishop, 65, 66. Haydock v. Coope, 175, 188, Haydock v. Stanhope, 206. Haydock Carriage Co. v. Pier, 92, 519, 567, Hayes v. Heyer, 75-77, 90. Hayer v. Hellman, 172, Hayner v. Fowler, 604. Haynes’ Assignment, In re, 362, Haynes v. Brooks, 90, 236. Haynes v. Crutchfield, 507, 510. Haynes v. Thompson, 108, Hays v. Doane, 141, 509. Hays v. Drake, 654. Hays v. Hostetter, 229. Haywood v. McNair, 479. Hazel v. Bank, 410. Heacock v. Durand, 278, 526, 601. Head v. Miller, 478. Hecht v. Green, 600, 615. Heckerts’ Appeal, 522, 524, Heckley v. Hendrickson, 427, Heckman v. Messenger, 98, 100, 240, 477, Hedges v. Sealy, 3. Heelan v. Hoagland, 291, 298. Hefner v. Metcalf, 412. Hegeman v. Hyslop, 499. Hegeman v. Hegeman, 106. Heilner v. Imbrie, 186, 389, 390. Heineman v. Hart, 489. Heinrichs v. Woods, 112, 482, Helfrich v. Obermyer, 109, 126. Helm v. Gilroy, 478. Hemphill v. Haas, 99. Hempstead v. Johnson, 118, 172, 228, 246, 815, 819, 824, 888, 421, 427, 441. XXXV1 TABLE OF OASES. References are to pages. Henckley v. Hendrickson, 428. Henderson’s Appeal, 5, 293. Henderson v. Bliss, 159, 208, 212, 214, 215, 217, 251. Henderson v. Dodd, 516. Henderson v. Downing, 218, 220, 246, 800, 350, 430. Henderson v. Hudden, 236, 446, Henderson v. Pierce, 624. Hendricks v. Mount, 163, 319. Hendricks v. Robinson, 17, 115, 116, 172, 186. Hennessy v. The Western Bank, 74, 85, 125, 206, 215, 268, 272, Henriques v. Houe, 601, 606. Henry v. Hughes, 104, 105. Henry v. Murphy, 529. Henry v. Root, 102, 158, 426, 482, Henshaw v. Sumner, 7, 14, 169, 177, 453, Herbert v. Bronson, 108, Herman, Matter of, 57. Herrick v. Borst, 61-63. Hershiser v. Higman, 12. Hertle v. McDonald, 129. Herver v. Rhode I. L. Works, 369, Hess’ Estate, 549, Hess v. Blakeslee, 146. Hessing v. McCloskey, 22. Hewitt v. Hullins, 14, Hext v. Porcher, 562, 564, 565. Hexter v. Loughry, 593. Heydock v. Stanhope, 166, 212, 420. Heye v. Bolles, 89, 236, 241, 602. Heyer v. Alexander, 363. Hibbard v. Lamb, 578. Hickley v. Farmers’ Bank, 166, 172. Hickman v. Cox, 242, Hickman v. Messenger, 224. Hickman’s Ex’r v. Trout, 435. Hicks v. McGrorty, 499, Higginbottom v. Peyton, 129. Higgins v. Whitson, 565. Hildebrand v. Bowman, 100, 101. Hill v. Agnew, 244, 272, 278, 480, Hill v. Alexander, 681, Hill v. Manser, 17. Hill v. Morgan, 518, Hill v. Reed, 65, 185. & Merchants’ Hill v. W. & A. B. RB. Co., 486, 576, Hill’s Estate, 595, Hills v. Elliott, 284. Hindman v. Dill, 172, 227, 229, 247. Hine v. Bowe, 10. Hinson v. Williamson, 569. Hitchcock v. Cadmus, 248, 395, 485, Hitchcock v. St. John, 68, 83, 85-87, 823, 329, 330, 472, 473. Hoagland v. See, 596. Hoagland v. Trask, 503. Hobart v. Andrews, 575. Hobson, In re Assignment of, 531, 545. Hobson v, Markson, 44. Hodge v. Wyatt, 226. Hodges v. Blagrave, 516. Hodges v. Harris, 68, 87, 327, Hodges v. Wyatt, 336, 337, Hodgman v. Western R. R. Co., 107. Hodgson v. Barrett, 478. Hodgson v. Macey, 484. Hoey v. Pierron, 13. Hoff v. Roane, 172. Hoffman v. Mackall, 18, 28, 230, 256, 409, 420. Hoge v. Hollister, 99. Hoge’s Appeal, 388, Holbird v. Anderson, 22, 167, Holbrook, Matter of, 557. Holbrook v. Allen, 172. Holbrook v. Baker, 319. Holcomb’s Ex’rs v. Bridge Co., 185. Holland v. Croft, 608, 607. Holland v. Drake, 80, 85, 86. Hollingsworth v. Napier, 329, Hollins v. Mayer, 199, 212, 354, Hollister v. Loud, 8, 98, 152, 165, 172, 178, 229, 240, 248, 278, 321, 408, 415, 420, 427, 429, 471. Hollister v. Noyes, 252. Holmberg v. Dean, 24, 60, 94. Holmes v. Marshall, 245, 430. Holnies v. Remsen, 108, 361, Holmes v. Winchester, 113, Holridge v. Gillespie, 511. Holt, Matter of, 587. Holt v. Bancroft, 135, 158, 160, 458, 609. Hombeck v. Van Metre, 319. Hon v. Hon, 281. Hone v. Henriquez, 204, 400, 448. TABLE OF CASES. XXXVii References are to pages. Hone v. Woolsey, 459-461. Hook v. Lowry, 527. Hook v. Stone, 75, 85. Hooker v. Baillie, 67. Hooper v. Smith, 30, 31. Hooper v. Tuckerman, 281, 282, 608. Hoopes v, Knell, 129, 221, 277, 297, 446. Hopkins, Ex parte, 67, 99, 101, 284, Hopkins v. Beebe, 165, 178, Hopkins v. Gallatin, 65. Hopkins v. Lacontre, 17. Hopkins v. Ray, 164, 2355, 508, Hopkins v. Scott, 116, 325, Horbach v. Hill, 427. Horsely v. Fawcett, 503, Horsey v. Chew, 602. : Horsfall, Matter of, 556. Horton’s Appeal, 88, 89, 356, Hotop v. Durant, 441. Hotop v. Neidig, 144, 151. Houghton v. Davis, 575, 5¢4. Housatonic Bank v. Martin, 451, Housel v. Cremer, 479. Houston v. Nowland, 297, 333, 365. ' Hovarty v. Davis, 475. Hovey v. Home Ins. Co., 501. How v. Camp, 172. Howard v. Snelling, 442, Howard v. Teel, 235. Howard Nat. Bank v. King, 372, 374, Howe v. Newbegin, 307. Howell v. Bell, 320. Howell v. Edgar, 172, 208, 250, 444, Howell v. Moore, 484, 525, Hower v. Geesaman, 152, 248, 316, 494. Howerton v. Holt, 320. Howitt v. Blodgett, 688, Howland v. Knox, 605. Hoyt v. Sprague, 547. Hoyt v. Thompson, 67, 361, Hubbard v. Fisher, 522. Hubbard v. McNaughton, 209, 342, 416, 431, 483. Hudson v. Maze, 269, 277, 469. Hudson v. Ravett, 148. Huger v. Huger, 507. Huggins v. Perrine, 414, Hughes, Ex parte, 511. Hughes v. Brown, 313. Hughes v. Ellison, 75, 85, 351, Huiscamp v. Albert, 545, Hulan v. Hoagland, 647. Hulbert, Matter of, 524. Hulbert v, Dean, 604, Hull v. Roane, 171. Hull v. Sigsworth, 617, Hulls v. Jeffrey, 169, 179. Hulse v. Marshall, 838, 484, 597. Humphries v. Freeman, 284, Hunker v. Bing, 524. Hunt v. Bass, 506, 514, Hunt v. Weiner, 421, 519, 527, 567, 594, 601, 604, 607. Hunter v, Hubbard, 559, Hunter v. United States, 542, Hurd v. Silsby, 207. Hurlbert v. Dean, 236, 240. Hurlbut v. Carter, 65, 185, 855, 856. Hurley, Ex parte, 507. Hurth v. Bower, 558, 663, Hurtt v. Fisher, 562, Huse v. Ames, 500. Huston v. Worthly, 504, Hutcheson v. Peshine, 361, 363 Hutchings v. Low,- 129, Hutchins v. Hutchins, 565. ‘Hutchins v. Sprague, 567. Hutchins v. Taylor, 37. Hutchinson v. Brown, 688. Hutchinson v. Green, 66, 604, Hutchinson v. Lord, 259, 265, 278, 396, 398, 600. Hutchinson v. McClure, 169, 178, Hutchinson v. Smith, 90, 237, Hutchinson v. Watkins, 627, Hutton v. Crutwell, 30, 31. Hyde v. Olds, 388, 460. | Hyde v. Sontag, 41, 52, | Hyde v. Weitzner, 28, Hyde v. Zacharie, 39, Hyslop v. Clarke, 172, 187, 201, 202, 444, Iddings v. Bruen, 512. Ingersoll v. Kendall, 324. Ingham v. Burnell, 130, 281. Ingham v. Lindeman, 104, 480, 519, 522. Inglehart v. Armiger, 104, Inglis v. Floyd, 485. Ingliss v, Grant, 22, 133, 155, 340. XXXVill TABLE OF CASES. References are to pages. Ingraham v. Geyer, 200, 839, 365, 368, 878, 379. Ingraham v. Grigg, 65, 100, 147, 157, 159, 160, 218, 271, 302, 408, 525, 550. Ingraham v. Wheeler, 172, 208, 306, 327, 457. Ingram v. Kirkputrick, 115, 127, 323, 825, 835, 340, 852, 353, 460, 581. Ingram v. Osborn, 688. Inloes v. American Ex. Bank, 245, 261, 481, 507. Innis v. Lansing, 91, 558.: Insurance Co. v. Jones, 495. Insurance Co. v. Wallace, 216. Insurance Co. v. Wallis, 199, 304. International Trust Co. v. Boardman, 487, Iowa Seed Co. v. Door, 112, 516, Irvine v. Dunham, 575, 578, Irwin v. Keen, 448, 494, 600. Irwin v. Tabb, 536. Iselin v. Dalrymple, 147. Iselin v. Henlein, 434, Isidor, Matter of, 577. Isles v. Martin, 505. Ivison v. Grassiot, 106, 387, Jack v. Wiennett, 545. Jackson v. Cornell, 93, 187, 204, 218, 236, 287, 239, 323, 326, 420, 448, 472. Jackson v. Dean, 820. Jackson v. Harby, 427, 435, 502. Jackson v. Heath, 3. Jackson v. Irvine, 51. Jackson v. Lewis, 417. Jackson v. Lomas, 190, 191, 197. Jackson v. Losee, 106, 109, 398. Jackson v. Mather, 424, Jackson v. McCullough, 41, 48, 53, Jackson v. Mitchell, 190, 191, Jackson v. Parker, 218. Jackson v. Peek, 424. Jackson v. Rounds, 624, 626. Jackson v. Sheldon, 90, 91. Jackson v. Zimmerman, 424, Jacobs v. Allen, 150, 272. Jacobs v. McCally, 673, Jacobs v. Remsen, 118, 119, 172, 175, 229, 322. Jacot v. Corbett, 207, 216, 233, Jacques v. Greenwood, 420. Jaeger v. Kelly, 421. Jaffray v. Greenbaum, 15. Jaffray v. McGahee, 507. Jaffray v. Steedman, 191. Jagoe v. Alleyn, 3. James, Ex parte, 511, 518. James v. Fulcrod, 130. James v. Mechanics’ Nat, Bank, 478, 678. James v. Whitbread, 23, 155, 197, 224, 242, 255, 256, 415, Jamison v. McNally, 606. January v. Powell, 585, Jayne v. Dillon, 320. Jefferie’s Appeal, 581, 593. Jeffries v. Bleckman, 208, 642, Jellenik v. May, 442, Jenkins v. Eldridge, 523, 527. Jenkins v. Pierce, 53. Jenness v. Doe, 432. Jennings v. Prentice, 93, 94, Jermain v. Pattison, 475, 494, Jessup v. Herzfeld, 270. Jessup v. Hulse, 221, 252, 264, 281, 446. Jessup v. Johnson, 426, 432, Jewett v. Tucker, 482. Jewett v. Woodward, 395, 519, 525, 529, 686, 581, 583, 584. John’s Estate, In re, 505. Jobns v. Bolton, 100, 676. Johns v. Erb, 534. Jobn Shilleto Co. v. McConnell, 453, Johns v, James, 45¢, Johnson’s Appeal, 14. Johnson, Matter of, 524, Johnson v. Baker, 302. Johnson v. Bloodgood, 499, Johnson v. Bray, 640. Johnson v. Bush, 183, Johnson v. Candage, 503, 595. Johnson yv. Farnam, 208, 601. Johnson v. Herring, 292, 575. Johnson v. McAllister’s Assignee, 160, 169, 280, 234, 260, 426. Johnson v. McGraw, 5, 179. Johnson v. Merritt, 475. Johnson v. Osenton, 420, Johnson v. Ro,ers, 41, 52, 584. Johnson v. Roberson, 12, 81, 84, 86, TABLE OF CASES, XXXiX References are to pages. Johnson v. Sharp, 802, 850, 869. Johnson v. Whitwell, 130, 188, 158, 165, 167, 168, 296, 400, 458. Johnson v. Thweatt, 103, 125, 220, 246, 432-434, Johnston v. Eason, 506, 509. Johnston v, Zane’s Trustees, 92, 260, 278, 332. Johnston’s Heirs v. Harvey, 215, 219. Joiner v. Van Alstyne. 59, Jones, Matter of, 576. Jones v. Bartlett, 239. Jones v. Beach, 290. Jones v. Dougherty, 127, 278, 888, 337, 422, 460, 462, 592. Jones v. Hamblet, 389, Jones v. Housman, 474. Jones v. Jones, 359, 367. Jones v. Kinney, 56. Jones v. Sleeper, 21, 37. Jones v. Stockett, 314, 566, 576. Jones v. Syer, 244, 431, Jones v. Tilton, 339. Jones v. Whitbread, 270. Jones v. Yates, 112. Jordan’s Appeal, 531, 556. Jordan v. Gellen, 107, 109. Jordan v. Sherlock, 500. Joseph v. Levi, 431. Journeay v. Brackley, 475. Judd v. Langdon, 318, Judson v. Abeel, 259. Juliand v. Rathbone, 151, 307, Julliard v. May, 361. Jung, Matter of, 557. Kaine v. Weigley, 427, 428. Kalkman v. McElderry, 238, 131, 838. Kallman v. Creditors, 166. Kane v. Drake, 319. Kane v. Roberts, 602, Kasson, In re, 47. Kavanagh v. Beckwith, 119, 422, 482, 533. Kayser v. Heavenrich, 118, 221, 421. Keating v. Vaughn, 421, 577, 682, Keeley v. Cassidy, 546, Keen v. Hall, 453. Keen v. Preston, 5, 10. Keep v. Lord, 499. Keep v. Sanderson, 148, 265, 278, 896. Keevil v. Donaldson, 269, 482. Kehoe v. Taylor, 483. Keiley v. Dusenberry, 576, Keim’s Appeal, 548, 556. Keith v. Fink, 236, 241. Keith v. Ham, 89. Keller v. Blanchard, 320. Keller v. Smalley, 481, 482, 682, Kellogg v. Miller, 436, 548. Kellogg v. Root, 185, 450. Kellogg v. Slawson, 60, 64, 186, 140, 145, 151-153, 256, 261, 268, 265, 277, 427. Kelly v. Baker, 79, 84, 85, Kelly v. Crapo, 858, 474, Kelly v. Duffy, 99. Kelstadt v. Reilly, 858, Kemp v. Carnley, 77, 79, 85, 289, 241, Kemp v. Porter, 336. Kendall v. Bishop, 65, 124. Kendall v. Fitts, 319. Kendall B, & S. Co. v. Bain, 163, Kendall v. New England Carpet Co., 248, 522, Kendall v. Rider, 500. Kendrick v. Glover, 105. Kenefick v. Perry, 10. Kennear v. Johnson, 32. Kennedy v. Rose, 318. Kennedy v. Winn, 287, 312. Kennedy v. Wood, 488. Kent’s Appeal, 507. Kepler v. Erie Dime Sav. ete. Co., 478. Kerbs v, Ewing, 12, 642. Kercheis v. Schloss, 151, 152, 155, 188, 190, 268, 281. Kerr v. Blodgett, 588, 558, Kern v. Powell, 295. Ketchum v. Watson, 318. Keteltas v. Wilson, 115, 147, 415, 521, 524. Kettle v. Hammond, 32. Kettlewell v. Stewart, 199. Kevan v. Branch, 140, 207, 225. Keyes v. Brush, 145, 151, 153, 350, 578, 692, 597. Kidder v. Horrowbin, 64. Kilbee v. Sneyd, 511. Kilbourne v. Fay, 481. Killick v. Flexney, 510, xk TABLE OF CASES. References are to pages. Kilpatrick v. Dean, 660. Kimball, In re, 40, 152. Kimball v. Hamilton Fire Ins, Co., 69. Kingston v. Koch, 421. King v. Donnelly, 310, 312, 575. King v. Glass, 24, 358, 363. King v. Gustafson, 164. King v. Kenan, 227, 245. King v. Mitchell, 398. King v. Moore, 289, 312. King v. Trice, 166. King v. Watson, 197, 209, 210. Kingman v. Barton, 477, 639. Kingston v. Koch, 301. Kinnard v. Thompson, 126, 335, 336, 352. Kintner v. Jones, 396. Kintzing, In re, 44. Kirby v. Goodykoontz, 564. Kirby v. Ingersoll, 68, 74, 85-87. Kirby v. Schoonmaker, 88, 235-237, 239, Kircheis v. Schloss, 144, 145. Kirkland v. Brune, 296. Kirtland v, Snow, 319. Kiser v. Dannenbury, 458. Kissam v. Edmonston, 220, 448. Kittell v. Osborne, 283. Kitchen v. Reinsky, 380. Klapp’s Assignees v. Shirk, 227, 317, 825, 838, 349, 352, 441. Klauber v. Charlton, 94, 688, Kleine v. Nie, 434, Kloeckner v. Bergstrom, 112. Klump v. Gardner, 67. Knapp v. McGowan, 60, 229, 660. Knauth v. Bassett, 236, 240, 601. Knefler v. Shreve, 138, 144, 386, Kneeland v. Cowles, 230, Knevals v. Blauvelt, 104. Knight v. Haynie, 569. Knight v. Hunt, 191. Knight v. Packer, 227, 246. Knight v. Waterman, 100, 158, 224, 676. Knighton v. Tufli, 105. Knower v. Central Nat. Bank, 400, 480. Knowles, Petition of, 549. Y Knowles v. Lord, 482. Knowlton v. Mosely, 52, 53. Knox, Matter of, 106. Knoxville Nat. Bank v. Hanirick, 548. Kobbe, Matter of, 583. Kohlsaat v. Hoguet, 21. Kohn v. Clement, 15. Koontz, Matter of, 577. Koster v. Merritt, 372. | Kraft, In re, 47. Kraft v. Dalles, 497. Kreider’s Estate, 443. Krug v. McGilliard, 98, 124, 808. Kruse v, Prindie, 135, 187. Kuhn v. Nieberg, 99. Kuykendall v. McDonald, 164, 166, 820, Kyle v. Harveys, 254, 255. Kyle v. O'Neil, 602. Kynaston v. Crouch, 164, La Belle Wagon Works v. Tidball, 682, Lacey, Ex parte, 511. Lacker v. Rhoads, 114. Lafferty v. Rutherford, 105. Lahm v. Johnson, 553, 573, 595, 669. Lains, In re, 56. Laird v. Campbell, 191. Lake v. De Lambert, 578, Lamar v. Pool, 680. Lamb v. Cecil, 65, 66. Lamb v. Durant, 68, 87, 165. Lamb v. Goodwin, 510, 516. Lamb v. Johnson, 529. Lamb v. Laughlin, 65. Lampson v. Arnold, 169, 179, 421, 452, 453. Lanahan v. Latrobe, 342, 536, 585, 602, 603. Lancaster v. Elce, 583, 585. Lanckton v. Wolcott, 549, Land v. Jeffries, 324, 326. Landaur, Matter of, 557. Lane’s Appeal, 292, 600. Lane v. Bailey, 499. Lane v. Coleman, 522. Lane v. Nickerson, 54, Laner, In re, 51. Laney v. Laney, 448. Lanfear v. Sumner, 361, Lang v. Simmons, 186. Langdon v. Horton, 327, 328. Langdon v. Thompson, 268, 496, 503. Langley, In re, 42, 51. Langley v. Perry, 42, 45, 46. TABLE OF CASES. xli References are to pages. Lanier v. Driver, 17, 226, 335. Lansing v. Woodnorth, 116, 182, 186, 229, 454, Lanson v. De Bolt, 624, 625, Lassell v. Tucker, 85, 241. Latham, Trustee, v. Simmons, 495, Latimer, Estate of, 557. Latrobe v, Tiernan, 569. Lavender v. Blackstone, 274, Lavender v. Thomas, 15, 179. Law v. Mills, 358. Law v. Wyman, 7, 169. Lawrence, In re, 47. Lawrence v. Bayard, 106. Lawrence v. Davis, 166, 172, 178, 277, 809, 334, 341, 342, Lawrence v. Martin, 107, 109, Lawrence v. McVeagh, 624 Lawrence v. Nuff, 12. Lawson v. De Bolt, 508. Lawton v. Levy, 601. ‘Lay v. Seago, 172, 208, Layson v. Rowan, 92, 126, 148, 187, 324. ‘Lazarus v. Bryson, 513. Lazarus v. Commonwealth Ins. Co., 105, 551. Leach v. Kelsey, 111, 353, 457, Leadman v. Harris, 218, Leahy, Matter of, 660. Leavitt v. Yates, 520. Lee’s Appeal, 206, 529. Lee v. Brown, 179. Lee v. Green, 420. Lee v. Huntoon, 330, Lee v. Tabor, 600. Leeds v. Commonwealth, 303, 441. -Leger v. Bonaffe, 478. Legg v. Willard, 329. Leggett v. Hunter, 576. Lehman v. Rosengarten, 489. Lehman v. Tallassee Mfg. Co., 337, 609. Leicester v. Rose, 190. Leitch v. Hollister, 7, 138, 62, 107, 128, 167, 229, 230. 234, 415, 438. Leitensdorfer v. Webb, 160, 338. Lent v. Flint, 482. Lentilhon v. Moffatt, 147, 157, 159, 208, 605. Leon v. Welborne, 62, 682. Leon v. Wittermark, 597. Leonard v. Claflin, 112. Leonard v. Clinton, 488, Le Prince v, Guillemot, 160, 207. Lerry v. Bibeau, 536. Lester v. Abbott, 236, 240, 241. Lester v. Pollock, 241. Letson v. Kenyon, 549. Leverenz v. Haines, 329. Levy’s Accounting, 271, 278, 492, 519, 557. Levy v. Adler, 421. Levy v. James, 347, Lewenthal, Matter of, 557, 579, 582. Lewis, Matter of, 480, 545. Lewis, In re, 488, 484. Lewis v. Bank of Penn. Township, 591. Lewis v. Caperton’s Ex’r, 152, 246. Lewis v. County Clerk, 39. Lewis v. Hake, 554. Lewis v. Miller, 4. Lewis v. Simon, 417%, 601. Lewis v. Whitemore, 319. Lewis v. Ziegler, 281. Lill v. Brant, 14, 115, 130, 185, 230. Lincoln v. Field, 801, 382. Lindemann v. Ingham, 480, 517, Linden v. Sharpe, 80, 33, Linder v. Lewis, 41, 47, 53. Lindsay v. Jackson, 500, Lindsey v. Platner, 597. Lininger v. Raymond, 140, 229, 270, 512. Linn v. Wright, 152. Lintbecum v. Fenley, 634, Lionberger v. Broadway Savings Bank, 65, 108, 482, 495, Lippincott v. Barker, 172, 205, 209, 210, 211. Lister v. Lister, 511. Litchfield v. Cudworth, 513, Litchfield v. White, 150, 196, 272, 397, 464, 485, 563, 583, Little v. Commonwealth, 573. Little v. Eddy, 166. Littlejohn v. Turner, 342, Livermore v. Jenckes, 208, 212, 359. Livermore v, McNair, 167, 319, 455, 654, 655, Livermore v. Northop, 4, 119, 120, 422. Livermore v. Rhodes, 420. Livingston v. Bell, 205, 230, 233. xlii TABLE OF OASES. References are to pages. Lloyd v. Williams, 166. Loan Co. v. Turner, 359. Locke v, Winning, 21. Lockhard v. Brodie, 118, 187, 176, Lockhart v. Stevenson, 7. Lockhart v. Wyatt, 226, 336. Lockwood v. Beckwith, 499. Lockwood v. Canfield, 129. Lockwood v. Nelson, 336. Lockwood v. Slevin, 566, Loeb v. Pierpont, 80, 85. Loeschick v. Baldwin, 456. Loeschigk v. Addison, 90. Loeschigk v. Hatfield, 90. Loeschigk v. Jacobson, 115, 117. Loftin v. Lyon, 129. Loller v. Croft, 523. Lomax v. Buxton, 30, 31, 33, Lomax v. Pendleton, 597. Loney v. Bayly, 181, 199, 216. Long v. Girdwood, 3879, 676. Longmire v. Goode, 4, 102, 609. London v. Parsley, 60. Loomis v. Griffin, 347, 386, Loomis v. Stewart, 627. Loos v. Wilkinson, 421, 443. Lord v. Brig Watchman, 209, 210. Lord v. Devendorf, 236, 259, 296, Lord v. Fisher, 453. Lord v. Meachen, 640. Lorenz v. Orlady, 113. Loring v. Palmer, 133. Lothrop v. Highland Foundry Co., 39, Loveman v. Taylor, 527. Loving v. Pairo, 365, 601. Low v. Graydon, 187, 204. Low v. Welch, 113. Low v. Wyman, 14, 177. Lowe v. Morris, 518, 523. Lowenstein v. Flamand, 84, 286, 290, 660. Lowenstein v. Love, 219, 246. Lowery v. Clinton, 105, 604. Lowry v. Hall, 360. Lucas v. The Sunbury Erie Railroad Co., 5, 132. Luce v. Barnum, 99, Luce’s Ex’rs v. Park, 106. Luckemeyer v. Seltz, 101, 223. Luckenbach v. Brickenstein, 478, Luckes, Ex parte, 34, 85, 49. Ludington’s Petition, 5, 556, 582, Ludwig v. Highley, 118, 216, 591. Ludwig v. Iglehart, 394. Lundecke, Petition of, 640. Lupton v. Cutter, 200. Lycoming Ins. Co. v. Storrs, 478, Lyman v. Bond, #9. Lyon v. McIlvaine, 453, 627. Lyon v. Platner, 262. Lyon v. Receiver of Taxes, 545, Lyons v. Field, 17. Maack v. Maack, 164. Maas v. Goodman, 478, 482. Mabbett v. White, 68, 84. Maberry v. Shisler, 379. Maccubbin v. Cromwell, 568, 572. Macdonald v. First Nat. Bank, 380. Macdonald v. Moore, 41, 47, 56. Mackay v, Bloodgood, 345. Mackie v. Cairns, 163, 166, 172, 217, 218, 221, 480, 488, 448, 448, 454, Mackintosh v. Comer, 118, 277, 317, 348, 447, 468, 536. Macomber v. Parker, 319. Macomber v. Weeks, 455. Maennel v. Murdock, 172, 199, 216, 251. Magee v. Carpenter, 17. Magnus v. Sleeper, 690. Magovern v. Richard, 680. Maguire v. Pingree, 359. Main v. Lynch, 421, 442, 455, Maitland v. Newton, 108. Major v. Hill, 338, 346. Malcolm v. Hall, 23, Malcolm v. Hodges, 157, 199, 200, 212, 282, 244, 281, 282, 388, 431, Maltbie v. Hotchkiss, 39, 40, 52, Malvin v. West, 60, 62, Manahan, In re, 54. Mandel v. Peay, 241, 577, 594, Maney v. Killough, 320. Manhattan Co. v. Greenwich Bank, 397. Mann, In re, 238, 640, Mann v. Flower, 52-54, 481. Mann v. Huston, 329, 474, Mann v. Whitbeck, 264, 268, 271. Manning v. Beck, 660. Manning v. Manning, 520. TABLE OF OASES. xiili References are to pages. Manning v. Stern, 577. Manny v. Logan, 4, 160. Manufacturers’ & Mechanics’ Bank v. Bank of Pennsylvania, 14. Marbury v. Brooks, 8, 172, 192, 812, 421, 467. Marcum v, Hereford, 105. Marden v. Babcock, 14. Marder v. Wright, 587. Marenthal v. Moster, 549. Market Nat. Bank v. Hofheimer, 446, 603. Marklin, Matter of, 491, Marks’ Appeal, 295, 303, 318, 486, 676. Marks v. Bradley, 89, 118, 426. Marks v. Hill, 228, 245, 472. Marquand, Matter of, 485. Marsalis v. Oglesby, 277. Marsh v. Bennett, 89, 90, 188, 209, 211, 420, 431. Marsh v. Vawter, 353, 626, Marshall v. Barkworth, 51. Marshall v. Hutchinson, 172. Marshall v. Livingston Nat. Bank, 16, 92. Marshall v. Means, 107. Marshall v. Shibley, 285, 680. Marston v. Coburn, 155, 287, 301, 339, 371, Marter, In re, 44. Martin v. Hall, 120. Martin v. Hauseman, 12, 14, Martin v. Kennedy, 95. Martin v. Kunzmuller, 499, 500. Martin v. Martin, 359. Martin v. Mathiot, 317. Martin v. Pewtress, 30. Martin v. Pillsbury, 500, Martin v. Potter, 369. Martin v. Price, 593. Martine v. Willis, 499. Mason v. Martin, 514. Mason v. Stricker, 380. Mass v. Goodman, 500. Massey v. Allen, 52, 53, Massey v. Noyes, 600. Masson v. Anderson, 605. Mather v. Nesbit, 361. Mather v. Pratt, 588, 597. Mathew, Ex parte, 165. Mathews v. Dragand, 511. Mathews v. Poultney, 151, 421, 441. Matison v. Demarest, 241. Matlack’s Appeal, 394, 591, Matthews v. Stewart, 41. Matthie v. Edwards, 506. . Mattison v. Judd, 245, 260, 2'78, 882, 526. Maughlin v. Tyler, 85, 181, 199, 216, 261. Maulden v. Armstead, 335, 836, 344, Mawson v. Stock, 190. Maxwell, Matter of, 526. Maxwell v. Evans, 89, Maxwell v. Simonton, 16. May v. First Nat. Bank, 369. May v. Walker, 157, 238, 234, 389, 841, 842, 344, 368, 640. Mayer, Matter of, 577. Mayer v. Bernstein, 68. Mayer v. Galluchat, 526. Mayer v. Hazard, 519. Mayer v. Hellman, 23, 40, 44, 46, 49, 51, 52. Mayer v. Shields, 208. Mayeski v. Creditors, 428, Maynard v. Maynard, 536, Mayo v. Sneed, 382, 384. Mays v. Fritton, 21, 165. McAllister v. Marshall, 22, 215, 284. McAllister v. Richards, 21, 37. McArthur v. Chase, 62, 91. McBlain v. Spelman, 299, 302, 350. McBride v. Bohanan, 208, 337. McBride v. Clelland, 817. McBride v. Dorman, 502, McBride v. Hagan, 345. McBroom v. Turner, 455. McBroom & Wood’s Appeal, 12, 14. McCabe’s Account, 556, McCabe’s Appeal, 113. McCahill v. Hamilton, 559, McCain v. Pickens, 338. McCall v. Hinckley, 172, 199, 210, 282. McCallie v. Walton, 65, 264, 266. McCart v. Maddox, 682. McCartney v. Bostwick, 593. McCartney v. Welch, 121. McCleery v. Allen, 266. McClelland v. Remsen, 12, 15, 68, 181, 223. McClure v. Campbell, 26, 212. xliv TABLE OF CASES, References are to pages. McClure v. Miller, 515. McClurg v. Lecky, 215, 218, 219, 222, 443, 600. McColgan v. Hopkins, 172, 181. McConnaughey v. Chambers, 500. McConnell v. Sherwood, 269, 481. McCormick v. Sullivan, 364. McCracken v. Milhous, 496, 623. McCrea v. Purmont, 592, 597. McCullough v. Hutchinson, 234, 284. McCullough v. Roderick, 361, 365. McCullough v. Somerville, 78, 85, 86, 88, 172, 239, 241, 286, 576. McCullum, Matter of, 530. McDaniel v. Baca, 428, 429. McDonald v. Kelly, 106. McDonald v. McDonald, 106. McDougal v. Dougherty, 594, McDowell v. Caldwell, 519, 554, McElroy v. Seery, 104, McFarland v. Bate, 67. 99. McFarland vy. Birdsall, 208, 280, 232, 234. McFerran v. Davis, 181, 462, 576. McGee v. Carpenter, 325. McGoon v. Scales, 365. McGready v. Harris, 51, McGregor v. Chase, 15. McGregor v. Ellis, 78, 85, 86, McGuire v. Faber, 441. McHose v. Dutton, 11. Mcllhargy v. Chambers, 301, 350, 660. MclIlhenny v. Todd, 549, 578, 683. McIntire v. Benson, 273, 400. McIntyre v. McClenaghan, 587, 554, 581, 680, McKee v. Coffin, 58, McKee v. Judd, 106, 109, McKee v. Scober, 634. McKelvy v. Blair, 356, McKenzie v. Garrison, 182. McKesson’s Estate, 509. McKindley v. Nourse, 627, McKinley v. Combe, 460. McKinley v. Irwin, 514, McKinney v. Rhoads, 301, 802, 850. McKinnon v. Stewart, 12%. McKissick v. McKissick, 367, McLain v. Simington, 519, 522, 554. McLean v. Britton, 440. McLean v. Johnson, 37, 42 McLean v. Meline, 37, 42. McLean v. Prentice, 607. McLellan’s Appeal, 483, 495, 519, 557, McLemore v. Nuckolls, 597. McLeod v. Latimar, 54-. McMahon v. Allen, 112, 488. McMahon v. Morrison, 22. McMenomy v. Ferrers, 172. McMillen v. Scott, 522. McNair v. Rewey, 99, 101. McNeeley v. Hart, 106. McNutt v. Strayhow, 68, 86. McPike v. Atwell, 427. McQueen v. Babcock, 494. McQuinnay v. Hitchcock, 172, 820. Meacham v. Stevens, 148, 257, 258, 261, 268, 396, 492, 520, 528, 524, 534, 562, 567. Mead v. Dayton, 372. Mead v. Phillips, 271, 310, 322, 323, 381, 420, 421. Means v. Dowd, 218. Means v. Hapgood, 358. Means v. Montgomery, 151, 152, 825, 423, 430, Mears v. Commonwealth, 477. Mechanics’ Bank v. Gorman, 205, 230, 283, Mechanics’ & Traders’ Bank v. Dakin, 602, Meeker v. Felts, 110, Meeker v. Saunders, 152, 266, 277, 297, 441. Meeker v. Wilson, 20, 828, 826, 827, 474, Mehaffy v. Share, 114, Meinhard v. Strickland, 680. Melick v. Voorhies, 506, 518, 565. Mellon’s Appeal, 178, 478, 559. Mendelsohn, In re, 44, 46, Menown v. Crawford, 108, Meredith Man. Co. v. Smith, 22, 169, 177, Merrick’s Estate, 551, 597. Merrill v. Englesby, 230, 306, 346, 400, 461, Merrill v. Neill, 239. Merrill v. Wilson, 100, 112, 141. Merrils v. Swift, 350. TABLE OF OASES. xlv References are to pages. Merwin, Matter of, 557, 579. Merwin v. Richardson, 594. Messinger v. Yager, 623. Messonier v. Kauman, 461. Metcalf v. Van Brunt, 278, 807, 808, 460. Metropolitan Nat. Bank v. Morehead, 587, 538, Metzger, In re, 58. Meux v, Anthony, 601. Meux v. Howell, 23, 182, 407, 410, 412. Meyer’s Appeal, 529. Meyer v. Davis, 499. Meyer v. Evans, 453, 481. Meyer v. Pulliam, 250. Meyers v. Briggs, 503. Meyers v. Conway, 99. Mvers, In re, 53, 54. Mezesheimer v. Kennedy, 688, Michelstetter v. Weiner, 16. Michoud v. Girod, 513-515, Middleton v. Onslow, 190, Midgeley v. Slocum, 545, Mifflin v. Rasey, 548. Milburn v. Waugh, 320, Miles v. Bacon, 149, 522, Miles v. Blakeman, 518, Miles v. Parkhurst, 333, Millard v. Hall, 320. Millard v. Webster, 61, 63, Miller’s Appeal, 110, 544, Miller’s Estate, 549, Hiller v. Cherry, 149. Miller v. Conklin, 179, 208, 210, 212, 214. Miller v. Crawford, 186, 536, 548, Miller v. Ewtell, 241. Miller v. Halsey, 112, 469, 488, Miller v. Holcomb’s Ex’r, 190, 564, 568, 672. Miller v. Kernaghan, 361. Miller v. Lockwood, 322, Miller v. Mulford, 490, 538, Miller v. O'Bannon, 298, 353 Miller v. Pancoast, 319. Miller v. Sherry, 501. Miller v. Sligh, 569, Miller v. Stetson, 229, 260, Miller v. Whittier, 554, Milliken v. Dart, 106, 600. Milliken v. Steiner, 66. | Mills v. Argall, 90, 91, 182, 448, 458, 459, 581. Mills v. Barber, 68, 72, 74, 84, 87, 88 Mills v. Goodsell, 518, Mills v. Haines, 387, Mills v. Harris, 460. Mills v. Levy, 208, 204, Mills v. Warner, 818, Mills v. Williams, 18, Milne v. Henry, 817. Mims v. Armstrong, 142, Miners’ Bank Appeal, 178. Miners’ National Bank Appeal, 159, 169, 215, Minor v, Edwards, 105. Minuse v. Cox, 509, 597. Missimer v. Curtis, 353. Mitchell v. Beal, 246, 247, 320. Mitchell v. Gazzam, 179, Mitchell v. Glendell, 454. Mitchell v. Kendall, 561. Mitchell v. Stiles, 183, 276, 414, 416, 432, 434, 485, 600. Mitchell v. Willock, 325. Mitchell v. Winslow, 108, 817. Moale v. Buchanan, 305. Mobile Bank v. McDonnell, 427. Moddewell v. Keever, 112, 486. Moennel v. Murdock, 701. Moffat v. Ingham, 469. Moffat v. McDowall, 172. Mohawk Bank v. Atwater, 601. Moir v. Brown, 92, 148, 145, 151-153, 262, 803, 305, 310. Moise v. Chapman, 579. a ‘Monell v. Monell, 569-571, Monteith v. Hogg, 353. Montgomery v. Commercial Bank of Rodney, 65. Montgomery v. Galbraith, 267, Montgomery v. Goodbar, 220, Montgomery’s Ex’rs v. Kirksey, 95, 104, 227. Moody v. Carroll, 551, 601, Moody v. Litton, 478. | Moody v. Paschal, 133, 189, 268, Moore v. Bonnell, 376. Moore v. Church, 185, 366, 869, Moore v. Collins, 172, 231, 350, Moore v. Hinnant, 835, 408, 430. XIVi TABLE OF CASES. References are to pages. Moore v, Ireland, 108. Moore v. McKinstry, 10%. Moore v. Willett, 358, 360, 474, Moore v. Wyman, 523, Morehead v. Bank, 530. Morey v. Crocker, 466. Morgan’s Appeal, 178. Morgan, Ex parte, 28, 33, 34, 35, 529, 557. Morgan v. Bogue, 230, 320, 412, 601. Morgan v. Brundrett, 82. Morgan v. Kinney, 479. Morgan v. United States, 108. Morgentham v. Harris, 59, 64, Morrill v, Richardson, 573, Morris’ Appeal, 478. Morris v. Mowatt, 587. Morris v. Olwine, 543. Morris v. Parker, 546, 547. Morris v. Rexford, 498. Morris, etc. Co. v. Reeder, 676. Morrison v. Atwell, 240, 241, 601. Morrison v. Brand, 259, 448, 559, Morrison v. Morrison, 518. Morrison v. Shuster, 308, 457, Morrow v. Bright, 500. Morse v. Cohannet Bank, 87. Morse v. Royal, 511. Morse v. Slason, 189, Moses, Matter of, 53. Moses v. Murgatroyd, 311, Moses v. Thomas, 98, 178, 654, Moss v. Humphrey, 101. Motley v. Harris, 529. Mott v. Morris’ Assignees, 540. Mott v. McNeil, 318. Moule v. Buchanan, 342, 536, 586, Mower v. Hanford, 259, 453. Mowry’s Appeal, 552, Mowry v. Crocker, 373. Mowson v. Mendenhall, 68, Muhr v. Pinover, 99. Muir v. Glinsman, 475. Mulford v. Shirk, 98. Maller v. Norton, 396, Murray v. De Rottenham, 545, Murray v. Judson, 119, 535. Murray v. McNealy, 10. Murray v. Riggs, 171, 172, 201. Murray v. Roberts, 262, Murrill v. Neill, 392, Mumford v. Murray, 570. Mumper v. Rushmore, 322, 479. Munsell v. Lewis, 106. Munson v. Ellis, 60, 477. Munson v. Frazer, 358, 627. Munzeheimer v. Mayer, 428. Murphy’s Assignment, 292. Murphy v. Bell, 262, 270. Murphy v. Caldwell, 6, 609. Muscogee Lumber Co. v. Hyer, 522, Mussey v. Noyes, 4, 7, 123-125, 133, 157, 167, 172, 173, 252, 258, 261, 265, 268, 443, 444, 483, 508, 509, 685. Myer’s Appeal, 100, 354. Myer v. Fales’ Sons & Co., 349, Myers v. Kinzie, 412. Nack v. Meisen, 688. Nailer v. Young, 811, 3138, 387. Nash v. Simpson, 53. Nashville Trust Co. v. Bank, 500. National Bank v. Chase, 105. National Bank v. Cohn, 236, National Bank v. Lanahan, 200, 212. National Bank v. Lorenberg, 682, 685. National Bank v. Morris, 163. National Bank v. Printup, 596. National Bank v. Ridenour, 312, National Bank v. Sackett, 79, 85, 285. National Bank v. Scriven, 67. National Mech. & Trad. Bank v. Eagle Sugar Refinery, 339. National Park Bank v. Lanihan, 600. National Park Bank v. Whitmore, 192, National Union Bank v. Copeland, 339, Nave v. Britton, 138, Neal v. Lea, 479, 500. Neally v. Ambrose, 255, 268, 896, 508. Needles v. Needles, 106. Neill v. Jackson, 55, 567. Nelson v. Dunn, 336. Nelson v. Garey, 185, Nelson v. Tenney, 89, Nesbit, Matter of, 640. Nesbitt v. Digby, 95, 284, Neuffer v. Pardue, 116, Neustadt v. Joll, 601. New v. Reissner, 297, 625, 626. New Albany & S. R. R. Co. v. Huff, 230, 284. 248, Newby v. Hill, 129. TABLE OF QOASES. xlvii References are to pages. Newell v. Martin, 286, New England Bank v. Lewis, 311, 341, 581. New England Iron Co. v. Gibert Ele- vated R. Co., 353. Newlin v. Lyon, 502. Newman v. Bagley, 287. Newman v. Mineral Co., 160, 636. Newman v. Vickery, 105. Newton v. Chandler, 30. New York County Bank v. Carter, 22. New York Ins. Co. v. Roulet, 592, 597. Niagara County Nat. Bank v. Lord, 557. Niblack v. Goodman, 354, Nichol v. Spowers, 660. Nichols v. Cass, 652. Nichols v. Ellis, 168, Nichols v. Kribs, 486, Nichols v. McEwen, 171, 221, 263, 446, 526. Nichols v. Wellings, 164, 191. Nicholson v. Leavitt, 158, 178, 175, 238, 289, 253, 255, 260, 273, 407, 410, 419, 424, 426, 432, 472, 508, Nicholson v. Tutin, 348, 346, 583. Nicoll v. Mumford, 238, 125, 811, 312, 338, 835, 342. ‘Nightingale v. Harris, 172, 188, 206, 212, 216. Nimmo v. Davis, 106. Nimmo v. Kuykendall, 423, Niolon v. Douglass, 172, 207. Noble v. Coleman, 315, 320, - Noble v. Smith, 373. Norris v. Douglass, 105. Norris v. Norris’ Adm’r, 448. North v. Turner, 107, 334, 341. North River Bank v. Schumann, 255, Northrup v. Livermore, 60. North Star Boot & Shoe Co. v. Lovejoy, 640, Norton v. Kearney, 133, 265, 442. Norton v. Simmes, 446. Norwich Yarn Co., Ex parte, 518. Nostrand v. Atwood, 165, 168, 172, 200, 215, Noyes, In re, 519. Noyes v, Hickok, 124, 125, 685. Noyes v, Beaupre, 493. Noyes v. Blakeman, 618, 519. Noyes v. Johnson, 678. Noyes v. Wernberg, 811, 558, Nuckolls v. Tomlin, 593, Nueffer v. Pardue, 187, 138, Numbers v. Shelly, 100. Nunn v. Wilsmore, 4, 22, 171, 242. Nutter v. Harris, 277. Nutter v. King, 843, Nye v. Van Husan, 152, 241, 268, 427. Oakley, Matter of, 181. Oatman v. Bank, 500, O’Brien, Matter of, 557. O’Brien v. Greenbaum, 192, Oberholser v. Keefer, 601, Ockerman v. Cross, 367, 372. Ocean Nat. Bank v. Olcott, 593, O'Connell v. Ackerman, 199, O’Fallen v. Tucker, 272, Ogden v. Arnot, 89, Ogden v, Jackson, 21, 165. Ogden v. Peters, 4, 60, 63, 64, 196, 252, 281, 457, 472. Ogden v. Prentice, 448, 494, 495, 500, 503, 601. Ogden v. Saunders, 39, 861. Ogden v. Stone, 164, O’Hara v. Jones, 478, 546. Ohio Life & Trust Co. v. Merchants’ Ins. & Trust Co., 65, 355, 495. Okie v. Kelley, 516, 568. Olcott v. MacLean, 54, Old Nat. Bank v. Joslin, 636. Oliver v. Court, 571. Oliver v. King, 51. Oliver Lee & Co. Bank v. Talcott, 231, 432, Olivier v. Townes, 367, 378, Olmstead v. Herrick, 278, 563, 584, Olney v. Tanner, 52, 54, 427, 441, 4'72, 604, Olson v. Scott, 427. Oneida Bank v. Ontario Bank, 488, O’Neil v. Beck, 99, 625, 626. O’Neill v. Salman, 235, 237, 239, Onslow v. Londesborough, 516. , Ontario Bank v. Root, 603. Oppenheimer v. Holff, 167. Ord v. Noel, 506. xl viii TABLE OF OASES. References are to pages. Ordway v. Montgomery, 681. Oriental Banking Co. v. Coleman, 30. Orser, Matter of, 491, 548. Osborn v. Adams, 361, 363-365. Osborn v. Tuller, 319. Osborne’s Estate, 546. Osborne v. Moss, 448. Oschwend v. Estes, 562. Osgood v. Franklin, 506. O’Shea v. Collier White Lead & Oil Co., | 191. Ostrander v. Meunch, 51, Otis v. Maguire, 10, 15. Outcalt v. Van Winkle, 104, 109. Owen v. Body, 242. Owen v. Foulkes, 511, Owens v. Ramsdell, 537, 582, 669. Owings v. Rhodes, 563, Ownby v. Ely, 514, Paddock, In re, 94, Paddock v. Bates, 544, Page v. Broom, 516. Page v. Olcott, 258, 266, 484, 485, 505, 509, 554, 564, 568, 592, 594, 595, Page v. Smith, 6. Page v. Weymouth, 180, Page-Sexsmith Lumber Co., In re, 638. Paget’s Case, 279. P. & H. Manuf. Co. v. Caldwell, 163. Paige, In re, 359. Paige’s Estate, Matter of, 282. Paige v. Broom, 340. Paige v. Cagwin, 502, Paine v. Lester, 375, 377. Painter v. Henderson, 518, 514, Palmer v. Cross, 298. Palmer v. Giles, 187, 516. Palmer v. Hussey, 39, Palmer v. Mason, 12, 280, 866, 427. Palmer v. Myers, 78, 79, 85. Palmer v. Thayer, 112, 489. Palmer v. Woodward, 480. Palmer v. Yarborough, 458. P. & M. Bank of Mobile v. Clarke, 223, Pancoast v. Spowers, 299, 302. Park v. Glover, 93. Park v. Snyder, 400. Parker, Matter of, 579, Parker v. Grout, 105, Parker v. Jervis, 469, 473. Parker v. Sraat, 563. Parkhurst v. McGraw, 427-429. Parks v. Parks, 445. Parmelee v. Egan, 587. Perrot v. Wells, 345. Parsell v. Patterson, 320, 330, 433, 470, 471. Parsell v. Thayer, 12. Parsons v. Clark, 3538, 854, 549. Parsons v. Gloucester Bank, 288, Parsons v. Powder Works, 355, Passniore v. Eldridge, 140, 215, 284, Passumpsic Bank v. Strong, 685, Paton v. Wright, 85, 241, Patten’s Appeal, 544. Patten’s Estate, 490, 492, Patten v. Wilson, 107, 109. Patterson’s Appeal, 572. Patterson v. Jenks, 446. Patterson v. Johnson, 268, 310. Patton v. Bencini, 594. Patton v. Cone, 523. Patton v. Royal B. P. Co., 500, 564 Patton v. Thompson, 514, Paul v. Baugh, 427, Paul v. Cullum, 67. Paul v. Loganport, 338, Payne v. Matthews, 237, Payne v. Smith, 356. Peabody v. Knapp, 63. Peacock v. Thompkins, 118, 607. Peak v. Ellicott, 479. Pearce v. Beach, 94, Pearce v. Jackson, 157, 160, 188, Pearpoint v. Graham, 70, 72, 84, 87, 151, 158, 172, 205, 207, 209, 211, 212, 217, 588, 589. Pearpoint v. Lord, 70. Pearsall v. Kingsland, 5385. Pearson v. Crosby, 199, 586. Pearson v, Rockhill, 172, 811, 472, 587. Pearson v. Talbot, 107. Pechell v. Fowler, 506, Peck v. Crouse, 421. Peck v. Ingraham, 574. Peck v. Whiting, 473, Peck & Co. v. Merrill, 7, 15, 125, 189, 167, 171, 266. Peckham v. Mattison, 236, TABLE OF. CASES. xlix References are to pages. Peeler v. Peeler, 400. Peet v. Spencer, 478, Peninsular Stove Works v. Sackett, 400. Penn’s Ex’rs v. Penn, 112. Pennebaker v. Tomlinson, 583, Pennell v. Heading, 32. Pennington v. Woodall, 149, 601, 605. Penzel Grocer Co, v. Williams, 330. People v. Chalmers, 573. People v. Hudson R. R. R. Co., 107. People v. Norton, 577. People v. Soper, 582. Peonle v. White, 573. People ex rel. Short v. Bacon, 852. Perit v. Pittfield, 548, Perkes, Ex parte, 515. Perkins v. Zarracher, 476, Perry v. Colby, 12, 642, Perry v. Dixon, 514. Perry v. Holden, 450. Perry v. Murray, 548. Perry v. Stevens, 634. Perry v. Vezina, 101, 1385, Perry Ins, & Trust Co. v. Foster, 4, 15, 117, 118, 221, 242, 246, 247, 253, 320. Person v. Oberteuffer, 482. Petchell, Matter of, 491. Peters v. Bain, 235, 443. Peters ve Cunningham, 199, Peters v. Light, 245, 561. Peters S. & H. Co. v. Schollkoff, 435. Peterson v. Chemical Bank, 362. Petrie v. Lansing, 558. . Petrie v. Petrie, 558. Petrikin v. Davis, 460, 461, 508, Petry v. Randolph, 477. Pettee v. Orser, 78, 85. Pettit v. Johnson, 17, 358. : Pettus v. Wallace, 545, ; Peyser v. Myers, 550. Pfeifer v. Dargan, 207, 537, 552. Phelps v. Curtis, 245, 251, 276. Phelps v. McNeely, 241, 547. Phettiplace v. Sayles, 315, 326, Philips v. Wooster, 41. Phillips v. Bustard, 522. Phillips v. Evarard, 516, Phillips v. Ross, 477. Phillips v. Zerbe Run, etc. Co,, 247. Philson v. Barnes, 295, 373. Phippen v. Durham, 172, 207, 224, 230, 282, 233. 250, 382. Phoenix v. Ingraham’s Assignees, 165. Phoenix Bank vy. Sullivan, 287, 848, 345, 582. Pickersgill v. Riker, 477, 597. Pickett v. King, 549. Pickett v. Leonard, 549. Pickstock v. Lyster, 26, 34, 405, 406, 411, Pickstock v. McNair, 420. Pierce v. Brewster, 255, 259, 804, Pierce v. Crompton, 377, 678. Pierce v. Jackson, 101, 172, 441. Pierce v. O’Brien, 839, 342, 368, 369. Pierce v. Holbrook, In re, 51, 55, 57. Pierpoint v. Graham, 393. Pierpont v. Lord, 209, 210. Pierson v. Hooker, 345. Pierson v. Manning, 171, 280, 251, 276, 309, 416, 426, 432, 433, 443, Piggott v. Schram, 298, 441, 446, Pike v. Bacon, 830, 385, 420, 496. Pillsbury v. Kingon, 24, 60, 487. Pinckney v. Lanahan, 362, 363. Pine v. Rickert, 322, 428, 469, 517. Pingree v. Comstock, 127, 139, 170, 311, 563, 581. Pinkston v. Brewster, 565. Pinneo v. Hart, 118, 536, 577. Piper’s Appeal, 577. Pitkins v. Thompson, 359, 367. Pitt v. Petway, 514, Pitts v. Steubenville R. R. Co., 531, 536. Pitts v. Viley, 273, 460. Place v. Miller, 420. Planck v. Schermerhorn, 60, 96, 271, 275, 282, 314, 420. Planters’ Bank v. Whittle, 65, 686. Planters’ & M. Bank of Mobile v. Clarke, 244. Planters’ & Merchants’ Bank vy. Clark, 227, 252. Platt v. Adams, 444, 581. Platt v. Archer, 607, Platt v. Hodge, 148, 149. Piatt v. Hunter, 89. 236, 481. Platt v. Preston, 47, 144, 151. Platt v. Sheriffs of London, 413, Platt v. Stewart, 480. 1 TABLE OF CASES. References are to pages. Plume & Atwood Mfg. Co. v. Caldwell, 479, Plunkett v. Carew, 478. Poehlmann v. Kennedy, 152. Poland v. Glyn, 32. Polkinghorne v. Martinez, 396. Pollock v. Okolona Sav. Inst., 606. Pomeroy v. Ainsworth, 359, Pomeroy v. Manin, 167, 169. Pond v. Comstock, 567. Pond v. Sweetzer, 382. Pond v. Williams, 589. Pool v. Ellison, 441. Pool v. McDonald, 54, 57. Pope v. Brandon, 66, 92, 140. Porter v. Lazear, 109. Porter v. Walker, 33. Porter v, West, 579. Porter v. Williams, 256, 259, 307, 458, 604. Portland Bank v. Stacy, 327. Posey v. Decatur Bank, 149, 533. Postlewait v. Howes, 62. Potter’s Estate, 677. Potter, In re, 10, 551. Potter v. McDowell, 8, 412. Potter v. Paige, 229. Potter & Paige, Estate of, In re, 559. Potts, Ex parte, 165. Potts v. The Thames Haven & Dock Co., 503. Potts & Garwood, Ex parte, 37. Powell v. Kelly, 9. Power v. Alger, 531. Power v. Kirk, 89. Powers v. Carpenter, 110, 475. Powers v. Graydon, 187, 204, 440, 458. Powers v. Green, 166, 473. Powles v. Dilley, 165, 166. Pratt v. Adams, 119, 390, 566, 584, 603. Pratt v. Curtis, 53. Pratt v. Levan, 111, 474, 485, 547. Prats v. Rathbun, 587. Pratt v. Stevens, 660. Pratt v. Thornton, 513. Presley v. Rogers, 298. Pressley v. Lamb, 624, 625, Preston v. Spaulding, 135, 623. Prevost v. Gratz, 484, 514, 522. Prewett v. Dobbs, 297. Prewit v. Wilson, 400. Price v. De Ford, €9. Price v. Ford, 181, 241, 270. Price v. Haynes, 102, 103, 142, 885. Price v. Mazange, 244, 609. Price v. Moses, 115. Price v. Parker, 310, 333, 334, 476, 477, 627. Price v. Pitzer, 244, 274, 318, 431. Price v. Thompson, 514, Prince v. Shepard, 447. Princeton Mfg. Co. v. White, 181, Prindle v. Carruthers, 105. Probst v. Welden, 434. Produce Bank v. Morton, 606. Prosser v. Hartley, 639. Pulliam v. Newberry, 166, 169, 414, Pulling v. Tucker, 33. Pulver v. Harris, 106. Putnam v. Hubbell, 172, 421. Putnam v. Reynolds, 481. Putney v. Friesleben, 650. Purdy v. Whitney, 281, 505. Pusey v. Clemson, 522. Quackenboss, In re, 57. Quackenbush v, Leonard, 506, Quarles v. Kerr, 254. Quinnebaug Bank v. Brewster, 64 Rabel v. Griffin, 479. Radtke, Matter of, 557. Ragan v. Kennedy, 320. Rahn v. McElrath, 231, 234, Railroad Co. v. Barron, 367. Railroad Co. v. Packet Co., 369. Railroad Co. v. Woodring, 108, Rainwater v. Stevens, 101. Raleigh v. Griffith, 255, 612, 618 Ramsdell v. Edgarton, 288, Ramsdell v. Sigerson, 172, 208, 807, 600. Ramsey v. Hurley, 457. Randall v. Cook, 330. Randal! v. Dusenbury, 290, Randall v. Errington, 511. Randall & Sunderland, In re, 41, 44, 44 53, 62. Randolph v. Quidnick Co., 867. Rankin v. Holloway, 320. TABLE OF CASES. li References are to pages. Rankin v. Loder, 172, 176, 180, 198, 272, 333, 834, 344. Ransom, Matter of, 270, 498, 664. Ransom v. Jones, 104, Rapalee v. Stewart, 259, 263, 265, 602, Rapelye v. Cummins, 344. Rapier v. Gulf City Paper Co., 609. Rasmussen v. State Nat. Bank, 198, Ratcliffe v. Sangston, 575. Rathbun v, Platner, 60, 180, 421. Rauth, Matter of, 491, 524. Ravisies v. Alston, 244, 324, Rawlings, Ex parte, 35. Raworth v. Parker, 343, 845, 583. Ray v. Hiller, 616. Ray v. Raymond, 319. Raymond’s Appeal, 98. Raymond, Matter of, 557, Raynolds v. Ray, 152. Raynor v. Raynor, 189. Read v. Baylis, 241. Read v. Mosby, 106. Read v. Pelletier, 431. Read v. Robinson, 295, 303, 812, 849, 850, 376. Read v. Worthington, 151. Reading Iron Works, 531, Reamer v. Lamberton, 93, Reavis v. Garner, 212. Redmond v. Wemple, 519, 608. Redpath v. Tutewiler, 624, Reed v. Bigelow, 103. Reed v. Emery, 94, 95, 578, Reed v. Jewett, 319. Reed v. McIntyre, 41, 51, 172, 406, 420. Reed v. Newcomb, 686. Reed v. Noxon, 427. Reed v. Pellestier, 227. Reed v. Sands, 478. Reed v. Worthington, 11%. Reehling v. Byers, 167. Regenstein v. Pearlstein, 680, Reichenbach v. Winkhaus, 274, 303, 431. Reid v. Sands, 482, Reiff v. Eshleman, 125, 186, 348, 447, 536, Reiff v. Horst, 186. Reigart’s Appeal, 130. Reinhard v. Bank of Kentucky, 136, 332, 833, 837, 341, 442, Relfe v. Commercial Ins. Co., 67. Renard v. Graydon, 204, 458. Rendleman v, Willard, 291, 297, 809, 477. Renenheim v. Morgan, 605. Rennie v. Bean, 290, 299, 811, 660. Renton v. Kelly, 243, Rettew v. Barnes, 44. Reubens v. Joel, 601. Reves v. Walthal, 414, Reynolds, In re, 39, Reynolds v. Bank of Virginia, 17, 125, 313, Reynolds v. Collins, 108. Reynolds v. Cook, 22. Rhawn v., Pearce, 363, Rhines v. Phelps, 318. Rhoads v. Blatt, 139, 385, 398, Rice, Matter of, 491. Rice v. Courtis, 318, 372. Rice v. Frayser, 509, 612, Richards v. Hazard, 172, 218. Richards v. La Tourotte, 500. Richards v. Levin, 163, 165, 172, 229, 230. Richards v. White, 602. Richardson, Ex parte, 33, Richardson v. Coe, 314. Richardson v. Haney, 282. Richardson v. Herron, 186, 600, Richardson v. Jones, 514. Richardson v. Leavitt, 377, Richardson v. Marqueze, 176, 260, 268, 419, 480. Richardson v. Mead, 496. Richardson v. Rogers, 66, 878, 448, Richardson v. Stapleton, 247. Richardson v. Thurber, 660. Richardville v. Cummins, 108, Riches v. Evans, 420. Richmond v. Mississippi Mills, 6, Riddle v. Norris, 112. Rider, Matter of, 506, Ridgway v. Stewart, 14, 294, Riggs v. Murray, 170, 174, 274, 275, Rindskoff v. Guggenheim, 228, 245, 254, 412, Rindskopf, Matter of, 557. Ring v. Ring, 229. Ringer v. Cann, 110. lii TABLE JF CASES. References are to pages. Ringgold v. Ringgold, 506, 522. Ringo v. Real Estate Bank, 65. Risley, Matter of, 531. Roan v. Winn, 421. Roane v. Bank of Nashville, 120. Robb v. Van Horn, 600, Robbins v Magee, 125, 242, 333, 338, 626 Roberts v. Corbin, 428. Roberts v. Guernsey, 427. Roberts v. Lewald, 533. Roberts v. Phillips, 634. Roberts v. Shepherd, 79, 84. Roberts v. Victor, 416, 661. Robertson, State ex rel., 443. Robertson v. Burnell, 371. Robertson v. Sublett, 127, 311, 460, 581. Robertson v. Todd, 112, 489. Robins v. Embry, 23, 65, 140, 151, 152, 208, 228, 245, 249. Robinson v. Crowder, 69, 71, 72, 82, 85, 86, 286. Rodinson v. Frankell, 435. Robinson v. Gregory, 78, 79, 85. Robinson v. Macdonnell, 106. Robinson v. Mauldin, 104. Robinson v. McIntosh, 77, 90, 91. Robinson v. Nix, 620. Robinson v. Rapelye, 140, 172, 198, 835. Roby v. Meyer, 486. Rochester v. Armour, 168, Rodman v. Nathan, 562. Rogers v. Allen, 361, 365. Rogers v. De Forest, 256-259, 267, 283, 444, 446. Rogers v. Dibrell, 104. Rogers v. Palmer, 48. Rogers v. Rogers, 594 604, Rogers v. Spence, 107, 109. Rogers v. Vail, 318. Rohrbough v. Leopold, 497, Rohrer v. Turrell, 495. Rokenbanugh v. Hubbell, 62. Rollins v. Van Baalen, 135, 636, Roller Wheel Co. v. Fielding, 68, 181. Rome Exch. Bank v. Eames, 440, 446, 681, Roosevelt v. Mark, 549. Root v. Hare, 167, 453, Root v. Potter, 489, Root v. Stuyvesant, 445. Rose v. Meldrum, 422. Rosenbaum v. Moller, 681, Rosenberg v. Moore, 157, 159, 199, 21¢ 282, 481, 597. Rosenburg v. Shaper, 546. Rosenthal v. Frank, 9. Rosenthal v. Scott, 98. Rossett v. Fisher, 146. Rossman v. McFarland, 447. Rothell v. Grimes, 22, Rothschild v. Saloman, 101, 218, Rouse v. Bowers, 112, 400, 519, Rowe v. Page, 39. Rowland v. Coleman, 172. Rowland v. Hewitt, 310. Royal’s Adm’r v. McKenzie, 494, 568 564, 572, Royer Wheel Co. v. Fielding, 125, 23% 809, 481, 660. Rubey v. Watson, 479, 499. Ruble v. McDonald, 421. Ruckman v. Ruckman, 448, Rugeley v. Harrison, 227. Ruhl v. Phillips, 421. Rumery v. McCulloch, 80, 81, 85, 88 308, 448, 449. Rumsey v. Town, 481, 482, 623. Rundlett v. Dole, 148, 151, 245, 451. Rush v. Good, 561, 597. Russell v. Filmore, 105. Russell v. Lasher, 604, 607. Russell v. Rogers, 191. Russell v. Woodward, 103, 172, 225, 279, 284, 339, 341, 344. Rust v. Cooper, 30. Ryerson v. Eldred, 291. Ryhiner v. Ruegger, 304, Sackett, In re, 186, Sackett v. Mansfield, 254, 266, 696. Sadler v. Immel, 89, 40, 141, 344, Sadler & Jackson, Ex parte, 190. Sadlier v. Fallon, 188, 206, 333, 388, Sale v. Dishman’s Ex’rs, 286. Salisbury v. Ellison, 89. Salmon v. Davis, 345. Salmon v. Stuyvesant, 445. Salter v. Salter, 310. Saltmarsh v. Beene, £14, TABLE OF CASES. liit References are to pages. Sampson v. Shaw, 642, Sams v. Binns, 631. Samson v. Arnold, 160, 627. Sanborn v. Norton, 338, 683. Sanders, In re, 51. Sanderson v. Bradford, 377. Sanderson v. Stockdale, 17, 602. Sands v. Church, 535. Sands v. Hildreth, 20, 421. Sandwich Mfg. Co. v. Wright, 482. Sanford v. Conant, 141. Sangston v. Gaither, 159, 172, 180, 199, 212, 215, 216, 232. Sargent v. Webster, 7. Sattler v. Marino, 95. Saunders v. Harris, 337. Saunders v. Lee, 448. Saunders v. Mitchell, 26. Saunders v. Reilly, 237, 602. Saunders v. Waggoner, 503. Saunders v. Williams, 361. Savage v. Knight, 408, 421, 423, 443, Savery v. Spaulding, 63, 441, 442, 472, 502, Savings Bank v. Ela, 154. Sawyer v. Hoag, 501. Sawyer v. McAdie, 342, Scanlan v. Scanlan, 513, 562, Schaller, Matter of, 524, 557, 582. Schaller v. Wright, 486, 497. Scheibler v. Mundinger, 188, 142, 144, 477. Schell, Matter of, 524, Schieffelin v. Stewart, 511. Schiele v. Healy, 89, 235, 236, 431. Schisster v. Rader, 237. Schlang, Matter of, 527. Schleicher v. Walker, 427, Schlenck v. Hart, 448. Schlueter v. Raymond, 352. Schlussel v. Willett, 243, Schneider v. Altman, 557. Schneider v. Bullard, 682. Schnell v. Reiman, 557, Schnitzler v. Andrews, 479, Scholefield v. Hull, 322. Schooher v. Hutchins, 382, 682, Schoolfield v. Johnson, 133, Schuehle v. Reiman, 558, Schufeldt v, Abernethy, 262. Schuler v, Israel, 358. Schultz v. Christman, 107. Schultz v. Hoagland, 661. Schultz v. McNaughton, 433. Schumann v. Peddicord, 58, 125, 416, 431, 438, 448, Schuylkill Bank v. Reigart, 180, 292, 298. Schwab v. Lemon, 624. Schwartz v. Soutter, 311, 660. Schwartz v. Wendell, 522. Scott, Matter of, 519, 524. Scott v. Edes, 342, 536, 586, 602, Scott v. Freeland, 514, Scott v. Guthrie, 237, 239, 299, 440. Scott v. Mills, 660. Scott v. Morris, 549. Scott v. Porter, 39, Scott v. Seaver, 310, 688. Scruggs v. Burruss, 88. Seal v. Duffy, 206, 294, 312, 314, 349, 852, 447, 458, 576, 600. : Seale v. Vaiden, 208, 344. Seals v. Robinson, 435, Seaman v. Stoughton, 54, 595. Seattle Coal Co. v. Thomas, 89, Seaver v. Spink, 52, 53, Seavey v. Maples, 54. Seaving v. Brinkerhoff, 157, 159, 202, 215. Seavis v. Garner, 233, Seay v. Bank of Rome, 65, 545, Second Nat. Bank v. Schranck, 601. Sedgwick v. Place, 43, 45, 46, See v. Zabriskie, 106, 111, 655, Seeley, In re, 47. Seers v. Conover, 105. Seibert v. Milligan, 625. Seibert v. Spooner, 30. Seibert v. Thompson, 60. Seifreid v. People’s Bank, 385, Sciz v. Evans, 230. Selden v. Vermilya, 560. Selleck v. Pollock, 453, 526. Seuter v. Turner, 315. Severson v. Porter, 235, 692. Sevier v. McWhorter, 352, 460. Sewall v. Henry, 118, Sexton v. Wheaton, 19, 407. Seymour v. Wilson, 22, 604. liv TABLE OF CASES. References are to pages. Shaeffer’s Appeal, 100. Shafer v. Alden, 602. Shaffer v. Watkins, 221. Shakelford v. P. & M. Bank of Mobile, 63, 137, 152, 180, 226, 251, 255, 260, 432, 434, Shakeman v. Schleuter, 689. Shanks v. Lancaster, 296. Shapleigh v. Baird, 160. Sharp v. Goodwin, 579. Shattuck v. Chandler, 85. Shattuck v. Freeman, 288, 339, 441, 472. Shattuck v. Knight, 228, 246, 254, 470. Shaw, Matter of, 524. Shaw v. Glen, 479, 482, 487. Shaw v. Lowry, 104, 319. Shaw v. Smith, 489, 617. Shawano County Bank v. Koeppen, 99. Shawhan v. Wherritt, 42. Shearer v. Loftin, 125, 287, 288, 337, 341, 344. Sheepshanks v. Cohen, 205, 395, 589. Sheerer v, Lautzerheizer, 247, 254, 276. Sheffy’s Appeal, 513. Sheldon v. Dodge, 118, 188, 189, 268, 281, 381, 416, 432, Sheldon v. Mann, 16, 163, Sheldon v. Smith, 460, 531. Sheldon v. Stryker, 323, 516. Shelley v. Boothe, 167. Shepherd v. McEvers, 311, 576, 581. Sheppards v. Turpin, 218, 494. Sheridan v. Mayor, 496. Sherman v. Elder, 428, Sherrill v. Hopkins, 359. Sherrill v. Shuford, 148, 523, Sherwood v. His Creditors, 236. Shettle, In re, 35. Shipman’s Petition, 498, Shipman v. Atna Ins. Co., 112, Shipman v. Graves, 113. Shirly v. Teal, 13, 15, 181, 609, Shober v. Hanser, 120, Shockley v. Fisher, 65, 66, 810, 575. Shone v. Lucas, 61, Shook v. Shook, 574. Shotwell, In re, 101, 220, Shotwell v. Webb, 108, Showning v. Cox, 15. Shroeder v. Babbitt, 168, Shropshire v. Behrens, 67. Shryock v. Bashore, 39, 61, 65, 855, 495. Shryock v. Waggoner, 94, Shubar v. Winding, 130, Shufeld v. Jenkins, 420. Shultz v. Christman, 482, Shultz v. Hoagland, 95, 141, 428, 429, 441. Shultz v. Sutter, 65, 108, 642. Shumos v, Caig, 116. Shyer v. Lockard, 310, 314, 592, 594, Sibbald’s Estate, 107, 109, 384, Sibley v. Hood, 165, 172, Sibley v. Killom, 153, Sibley v. Prescott Ins. Co., 477, Sickman v. Abernathy, 347. Siebert v. Spooner, 28. Siggers v. Evans, 128, 309, 340. Silverman, In re, 48, Simmons v. Curtis, 102, Simmons Hdw. Co. v. Kaufman, 683, Simon v. Kaliske, 299, 467, Simon v. Mann, 640. Simon v. Sevier Ass’n, 66, Simonton v. First Nat. Bank, 111, 854. Simpkinson v. McGee, 298. Simpson, Ex parte, 32. Simpson v. Atna Ins. Co., 489, Simpson v. Gowdy, 563, Simpson v. Roberts, 98. Simpson v. Shaw, 642. Simpson v. Warren, 488, Singer v. Armstrong, 310, 311. Singmaster’s Appeal, 504. Sininger v. Herron, 95. Sipe v. Earman, 225, 228, 276, 421, Sirlott v. Tandy, 105. Sisson v. Roath, 112, Sixth Ward Bank v. Wilson, 536, Sixth Ward Building Ass’n v. Wilson, 486. Skinner’s Appeal, 113, Skipwith’s Ex’r v. Cunningham, 159, 172, 207, 212, 215, 228, 224, 230, 282, 2838, 332, 349. Skoll, In re, 47, Slade v. Van Vechten, 480, 483, 513. Slatter v. Carroll, 366, Sleeper v. Iselin, 311, TABLE OF CASES. lv References are to pages. Slicker v. Fisher, 525. Slinkard v. State, 54, Sloan v. Moore, 85. Slocum v. Hooker, 58. Small v. Ludlow, 485. Small v. Marwood, 312, Small v. Oudley, 27,171. Small v. Sproat, 459, 462. Smith’s Appeal, 358, 361, 576, 584. Smith, Ex parte, 33. Smith, In re, 44, 45. Smith v. Atwood, 367. Smith v. Bank of Washington, 676. Smith v. Bowen, 688, 689, Smith v. Bowdre, 96. Smith v. Boyd, 290. Smith v. Brinckerhoff, 499. Smith v. Buchanan, 48. Smith v. Cannan, 33, 172. Smith v. Chicago & N. W. R. R. Co., 373. Smith v. Craft, 192, 268. Smith v. Cunningham, 533. Smith v. Ely, 53. 57. Smith v, Felton, 500. Smith v. Fox, 500. Smith v. Hartwell, 186. Smith v. Henry, 318. Smith v. Howard, 89, 235, 236, 240, 241, 448, 606. Smith v. Hurst, 128. Smith v. Isaac, 514. Smith v. Keating, 279, 339, 340, 495. Smith v. Leavitts, 198, 224, 336, 469. Smith v. Longmire, 600. Smith v. Lowell, 234. Smith v. McCulloch, 688. Smith v. Millett, 207, 338, 845, 352, 553, 561, 596. Smith v. Mitchell, 98, 181, 442, 470. Smith v. Mobile Bank, 429. Smith v. New York Consolidated Stage Co., 65. Smith v. N. Y. & N. H. RB. R. Co., 105. Smith v. Smith, 234. Smith v. Spengler, 479, 500. Smith v. Spinola, 367. Smith v. Stokes, 140, 151, 152. Smith v. Stone, 191. Smith v. Teutonia Ins. Co., 44. Smith v. Timms, 82, 88. Smith v. Tinn, 290. Smith v. Turrentine, 126, 594, Smith v. Welch, 320. Smith v. Wheeler, 312. Smith v. Whitfield, 168 Smith v. Woodruff, 4. Smith & Wolf’s Appeal, 110. Smythe v. Sprague, 113. Snell v. Harrison, 4385. Solinsky v. Lincoln Sav. Bank, 448, 526. Solomon v. Sparks, 8, 15. Soper v. Fry, 58. Southard v. Benner, 112, 488. Southern Bank v. Wood, 360. Southworth v. Casey, 10. Southworth v. Sheldon, 262. Spangler’s Estate, 522. Spaulding v. Strong, 187, 204, 458, Spear v. Wardell, 168, 182, 601. Speed v. May, 108, 367, 373. Spelman v. Freedman, 455, 602, 660. Spence v. Bagwell, 220, 225, 276, 420. Spencer v. Slater, 400. Sperritt v. Willows, 33. Sperry v. Gallagher, 208. Spicer v. Ayres, 593. Spicer & Peckham, In re, 44, Spies v. Boyd, 440. Spies v. Joel, 2381. Spindler v. Atkinson, 514, Spinney v. Portsmouth Co., 341, Sprenkle’s Appeal, 522. Spring v. Short, 488, 602. Spring v. S. Carolina Ins. Co., 104, 105, 172, 212. Springfield Homestead Ass’n v. Rall, 112. Spurrett v. Spiller, 190, 191. Spyer, Ex parte, 35. Stadhman v. Loehr, 80, 85. Stafford v. Merrill, 482. Stamets v. Guinn, 167. Stamford Bank v. Benedict, 529. Stamp v. Case, 145, 152, 302, 310. Standard Wagon Co. v. Nichols, 479. Stanford v. Lockwood, 108, 559. Stanley v. Bunce, 227, 431. Stanley v. Nat. Union Bank, 166. lvi’ TABLE OF CASES. References are to pages. Stanley v. Robbins, 685. Starr v. Dugan, 536. State v. Bank of Maryland, 43, 65, 1772. State v. Benoist, 12, 158, 160, 169, 412, 430. State v. Evans, 320. State v. Grover, 545. State v. Guilford, 589. State v. Hart, 573. State v. Hemingway, 16. State v. Kansas Ins. Co., 537 631. State v. Keeler, 138, 421. State v. Krug, 496. State v. Platt, 522. State v. Real Estate Bank, 356. State v. Rogers, 522. State v. Smith, 320. State v. Tasker, 320. State Bank v. Chapelle, 12. State for Use v. Hunt, 526. State of Ohio v. Guilford, 571. Stedger v. Evans, 508. Stedman v. Davis, 369. Steel v. Brown, 41, 326. Steel v. Tuttle, 590. Steele v. Frierson, 106. Steele v. Goodwin, 358, Stehman’s Appeal. 527. Stein v. La Dow, 79, 85, 86. Stein v. Wilkson, 509. Steinhart v. Fyhrie, 85. Steinlein v. Halstead, 152, 310, 691. Stell’s Appeal, 556, 569. , Stelle, In re, 573. Stephens v. Hotham, 516. Stephens v. Regenstein, 400. Stephenson v. Hayward, 277, ° ‘Sterling v. Van Cleve, 319, Stern v. Fisher, 117, 261. Stetson v. Miller, 102, 160, 609. Stevens v. Bell, 115, 151, 152, 168, 248, 339, 559. Stevenson’s Assignees, 530. % Stevenson, Matter of, 310. Stevenson v. Crapnell, 282, Stewart v. Ackley, 448, Stewart v. English, 420. Stewart v. Hall, 337. Stewart v. Isidor, 54. Stewart v. Jackson, 418, - Stewart v. McMinn, 292, 519, 567. Stewart v. Moody, 33. Stewart v. Pettus, 574. Stewart v. Platt, 49. Stewart v. Railway Co., 109. Stewart v. Spencer, 158, 160, 163,‘ 172," 207, 211, 215, 312, 347, 430, 434. St. Helen’s Mills Co., In re, 52. Stidger v. Evans, 110, 421. Stiffel v. Barton, 635. Stiles v. Hill, 14. Still v. Fock, 67. Stimpson v. Fries, 17, 128, 127, 181, 138, 268, 275, 340. Stine v. Wilson, 17. Stiness v. Pierce, 383. Stites v. Champion, 9. Stix v. Sadler, 167. St. Louis v. Clemens, 105. Stobaugh v. Mills, 41, 56. Stockbridge, Matter of, 557. Stockett v. Goodman, 479, Stoddard v. Doane, 549, Stoddard v. Tomlinson, 115. Stokes v. Jones, 218. Stone v. Frost, 496. Stone v, Miller, 532, Stone v. Waggoner, 319. Storm v. Davenport, 254, 271, 419, 448. Story v. Livingston’s Ex’rs, 503, Story v. Palmer, 92. Stout v. Higbee’s Ex’rs, 605. Stout v. Rapp, 647. Stout v. Watson, 6, 673, Stover v. Harrington, 165, 166, Stow v. Yarwood, 478. Stowell, Matter of, 57. Strachan v. Barton, 32. Strang, Ex parte, 51. Strang v. Spaulding, 204. Stray, Ex parte, 51. Stricker v. Tinkham, 380. Strickler’s Estate, Matter of, 505. Stratton v. Tabb, 236, 547. Straus, Matter of, 57, 577. Straus v. Rose, 427. , Strawn v. Jones, 871. Streatfield v. Streatfield, 536. Strong v. Carrier, 135, 189, 295, 319, 326, 471, TABLE OF CASES. lvii References are to pages. Strong v. Goldbaum, 623, Strong v. Lynn, 151, 639, Strong v. Skinner, 117, 187; 188, 229, 268, 548, 587. Strong v. Willis, 314, 603. Stubbs, In re, 44. Stuchert v. Harvey, 110, 884. Stultz v. Fleming, 522, 621. Sturgis v. Crowninshield, 39. Sturtevant v. Ballard, 482. Suarez v. Pumpelly, 578, Sugg v. Tillman, 98. Sullivan v. Miller, 480. Sullivan v. Smith, 85, 829, 441, 469. Summers v. Rose, 320. Suppiger v. Gruaz, 531, Surget v. Boyd, 164. Sutherland v. Bradner, 229, 307, 458. Sutton v. Dana, 164. Sutton v. Hanford, 259. Suydam v. Dequindre, 337. Swan v. Crafts, 278, 339. Swan v. Dent, 602. Swanson v. Tarkington, 536. Swearingen v. Slicer, 128, 288, 341, 593. Sweeney v. Conley, 10. Sweet v. Tinslar, 448. Sweetser v. Camp, 489, 603. Sweetzer v. Higby, 167, 453, Sweezy, Matter of, 557. Swift v. Hart, 430, 488, 593. Swift v. Stebbins, 503. Switzner v. Miller, 297, 466, 625. Swoyer’s Appeal, 110, 479, 5C9. Talcott v. Harder, 41. Talcott v. Hess, 119, 141, 428. Talcott v. Rosenthal, 441. Tapley v. Butterfield, 68, 88, 286. Tappan v. Whittemore, 53, Tappenden v. Burgess, 32, Tarrin v. Crawford, 41. Tarver v. Roffe, 140, 252. Taylor v. Atwood, 310, 489, 496. Taylor v. Bonham, 569. Taylor v. Columbian Ins, Co., 368, Taylor v. Davis, 11. Taylor v. Palmer, 105, Taylor v. Ruberts, 569. Taylor v. Taylor, 483. Tate v. McCormick, 322. Tatum v. Hunter, 118, 414. Teah v. Roth, 507, 613, Teed v. Johnson, 288. Telford v. Barney, 515, Tempest, Ex parte, 165, Temple, In re, 47, 51, 52, 618, Tennant v. Battey, 601. Tennant v. Stoney, 288. Tenney v. Johnson, 547, Tenney v. Simpson, 133. Tennor’s Case, 444. Terry v. Butler, 118, 151, 153, 822, 414, 533, 606. Thatcher v. Candee, 314, 503, 576. Thatcher v. Franklin, 298, 301, 311, 349, 612. Thatcher v. Rockwell, 54. Thelluson v. Smith, 539. Therasson v. Hickok, 230, 567, 602. Third Nat. Bank v. Guenther, 58, 164 Third Nat. Bank v. Hang, 544, Third Nat. Bank v. Lanahan, 545, Thomas, Matter of, 519. Thomas v. Beales, 510. Thomas v. Beck, 112, 489. Thomas v. Chapman, 338. Thomas v. Clark, 277. Thomas v. Goodwin, 567. Thomas v. Jenks, 24, 158, 159, 176, 187, 206, 214-216, Thomas v. Merry, 281. Thomas v. Penrich, 236, 486, 498, 547. Thomas v. Talmadge, 254, 421, 495, 577, Thomkins v. Wheeler, 302, 472, Thompkins v. Hunter, 191. Thompson, Matter of, 120, 536, 557, 601. Thompson v. Blanchard, 322. Thompson v. Bowman, 88. Thompson v. Childress, 278, 551, 554, 578, 575, 681. Thompson v. Dougherty, 486. Thompson v. Fry, 347. Thompson v. Heffner, 634. Thompson v. Hooker, 499. Thompson v. Ketchum, 359, Thompson v. Parker, 230, 624. Thompson v. Sweet, 54, Thornton v. Davenport, 318. Thornton v, Hook, 427. lili TABLE OF CASES. References are to pages. Thorp v. McCallum, 513. Thorpe v. Dunlap, 478, 479. Thrasher v. Bentley, 40. Thurber v. Blanck, 600, 602. Thurmond v. Andrews, 54. Thurston v. Rosenfield, 377, 380, Thus v. Davidson, 400. Tibbetts v. Weaver, 466, 479. Tichenor v. Coggins, 673. Ticknor v. Wiswall, 443. Tieman v. Molliter, 88, 89, 112. Tiemeyer v. Turnquist, 124. Tiffany v. Lucas, 47. Tillou v. Britton, 22, 163, 165, 168, 169, 172, 178, 654. Titley v. Taylor, 28. Todd v. Buckman, 198, 341. Tomlinson v. Matthews, 22, 121, 172. Tomlinson v. Smallwood, 564. Tompkins v. Adams, 366, Tompkins v. Wheeler, 7, 8, 13, 95, 165, 172, 315, 322, 826, 334. Toof v. Martin, 62. Tootle v. Caldwell, 167, 629. Torrens v. Hammond, 39, 363. Totten v. Brady, 163. Towle v. Ambs, 527. Towle v. Mack, 519. Town v. Bank of River Raisin, 65, 355. Towne v. Rublee, 344. Townsend v. Harwell, 335, 337. Townsend v. Stearns, 248, 252, 265, 428. Towsley v. McDonald, 22. Tracy v. Railroad Co., 523. Tracy v. Talmadge, 488, Tracy v. Tuffy, 91. Train v. Kendall, 379. Trapp v. Moore, 305. Traver v. Rogers, 623. Travis v. Meyers, 558, Treadwell v. Sackett, 290. Trenton Bank v. Woodruff, 511. Trevitt v. Converse, 516. Troth, Matter of, 40. Trott v. Dawson, 518. Trotter v. Blocker, 566. Troustine v. Lask, 447. Truax v. Slater, 502. True v. Congdon, 278, 412, Truitt, Estate of, 426, 564, Truitt v. Caldwell, 6, 131, 230, 259, 261, Truss v. Davidson, 301, 337. Tua v. Carriere, 39. Tucker v. Beacham, 520, 652. Tucker v. Clesby, 113. Tucker v. Parks, 92. Tucker v. Tucker, 557. Tully, In re, 519. Tully v. Nash, 481. Tunner v. Richardson, 475. Turbuck v. Marbury, 274. Turner v. Douglass, 208, Turner v. Hardcastle, 33. Turner v. Jaycox, 144, 151, 240. Turnipseed v. Schaefer, 176, 621. Tuttle v. Gilmore, 397. Twelves v. Williams, 479. | Twyne’s Case, 404, 485. Tyler v. Abergh, 482. Tyler v. Herring, 487. Tyler v. Tyler, 433. Tyler v. Wing, 54. Tyson v. Dorr, 590. Uglow, Matter of, 557. Uhler v. Maulfair, 168, 166, 169, 178. Uhrig Brewing Co., Matter of, 583, Ulmer v. Hills, 319, Union Bank v. Bell, 535. Union Banking Co., Matter of, 66, 576. Union Bank of Chicago v. K. C. Bank, 383. Union Bank of Tennessee v. Ellicott, 64, 65, Union Nat. Bank v. Bank of Commerce, 805, 386. : ‘Union Pacific R. R. Co., In re, 44, 46, 47. Union Trust Co. v. Trumbull, 419. United States v. Bank of the United States, 20, 23, 65, 124, 134, 158, 161, 166, 270, 277, 328, 338, 338, 342, 379, 400, 407, 427, 484, 588, 540, 634. United States v. Clark, 124, 153, 161, 540. United States v. Fisher, 539, 541. United States v. Griswold, 161. United States v. Hooe, 124, 161, 323, 400, 418, 540, 541. United States v. Howe, 116. United States v. Howland, 141, 540, TABLE OF OASES. lix References are to pages. United States v. Hoyt, 116, 281, 340, 842, United States v. Hunter, 108, 540, 542. United States v. King, 166, 172, 178. United States v. Langton, 142, 540. United States v. McLellan, 4, 8, 123, 161, 540. United States v. Mott, 124, 540, 542, United States v. Munroe, 540. United States v. Murphy, 539, 548. United States v. The State Bank of N. C., 539, 540, United States Bank v. Huth, 92, 148, 270, 277. Upson v. Milwaukee Nat. Bank, 546. Vail v. Pecks, 685. Valentine v. Decker, 333, 593, 602. Vallance v. Miners’ Life Ins. Co., 5, 14. Van Alstyne v. Cook, 90. Van Arsdale v. Richards, 593, 597. Van Buskirk v. Warren, 12, 15, 822, 870. Vance v. Phillips, 321, 423. Van Cott v. Prentice, 133. Vandeveer v. Conover, 582, 585, Van Dine v. Willett, 105, 268, 545. Van Dyke v. Christ, 111. Van Hensen v. Radcliffe, 112, 478, 480, 486. Van Hook v. Walton, 148, 229, 299, 301, 820, 472, Van Horn v. Smith, 135. Van Horne v. Fonda, 513. Vanhouten v. Reily, 107. Van Keuren v. McLaughlin, 487, 537, 553. Van Kleeck v. Miller, 41, 53. Van Nest v. Yoe, 44, 60, 136, 152, 188, 240, 267, 269, 271, 272, 322, 419, 469, 603. Van Patten v. Burr, 135, 169, 627. Van Patten v. Thompson, 18. Van Rossum v. Walker, 195, 229, 237, 238, 261. Vansands v. Miller, 275, 617. Van Slyke v. Bush, 529, 662. Vanslyke v. Shryer, 52, Van Valkenberg v. Elmendorf, 503. Van Vieet v. Slauson, 133, 135, 151. Van Waggoner v. Moses, 98, 178, 654, Van Winkle v. McKee, 448. Varnum v. Camp, 359, 654. Varnum v, Evans, 586, Vaughan v. Evans, 115. Vaughan v. West, 212. Vernon v. Morton, 28, 104, 107, 187, 147, 172, 212, 268, 270, 297, 820, 325, 845, 414, 419, 427, 457, 459, 472, 487, 520, 525, 552, 605, 607. Vernon v. Upson, 286, 448, Vidvard v. Powers, 502. Vietor v. Henlien, 430, 431. Von Heim v. Elkus, 47, 578, Von Wettberg v. Carson, 234, 283, 480, 617. Voorhees v. Frisbie, 54, Vose v. Holcombe, 199, 586. Vosper v. Kramer, 89, 241, 603, Vredenburg v. White, 469. Waddingham v. Laker, 427. Wade v. Pettibone, 513. Wadleigh v. Merkle, 301, 310, 688, Wagener v. Boynston, 680, Waggoner v. Smith, 428, Wagner v. Hodge, 299. Wagner v. Jaffray, 368. Waite’s Accounting, Matter of, 362, Wakefield v. Martin, 105. Wakeman v. Barrows, 481. Wakeman v. Dalley, 425, 482. Wakeman v. Grover, 164, 189, 202, 204, 205, 210, 214, 268, 341, 444, 567, 594, 604, 607. Wald v. Wehl, 55, 56. Waldron v. Wilcox, 218, 255, 267. Waldron v. Willard, 488. Wales v. Chase, 475. Walker, In re, 41, 260. Walker v. Crowder, 460. Walker v. Miller, 353, 479, 482, 503. Walker v. Newlin, 140, 141, 349. Walker v. Smyer’s Ex’rs, 578, Walker v. Stone, 578. Walker v. Symonds, 571, Walkins v. Jenks, 103. Wall v. Lakin, 165. Wallace v. Burdell, 301. Wallace v. Cumming, 683, 586, lx TABLE OF OASES._ References are to pages. Wallace v. Wainright, 6, 131, 293. Wallis v. Rhea, 296. Wallon v. Scott, 115. Wallwyn v. Coutts, 340. Walter v. Whitbeck, 105. Walters v. Whitlock, 361, 468. Walworth v. Readsboro, 318, Wandel v. Peay, 421. Ward, Matter of, 484, 488, 530. Ward v. Lamson, 343. Ward v. Lewis, 127, 186, 302, 303, 311, 841, 350, 389, 459, 460, 529, 565, 570, 681, 592, 597. Ward v. Tingley, 149, 188, 190, 270, 441. Ward v. Trotter, 137, 246. Ward v. Webster, 114. Ward v. Wooten, 516. Waring v. Buchanan, 53. Warner v. Jaffray, 299, 802, 350, 361, 871, Warner v. Jameson, 479, 482. Warner v. Littlefield, 12, 16. Warner v. Mower, 64. Warren v. Dwyer, 13, Warren v. Fenn, 478. Warren v. Lee, 17. Warren v. Tenth Nat. Bank, 48. Warren v. Warren Thread Co., 106, Warshing, In re, 519. Washer v. Everhart, 358, Washington v. Ryan, 337, 427. Wasson v. English, 514. Wasson v. Garrett, 566. Waterbury v. Sturtevant, 421, Waterbury v. Westervelt, 448, 495. Waters v. Comly, 167. Watkins v. Jenkins, 102. Watkins v. Wallace, 270, 429. Watson v. Bagaley, 11, 181, 298, Watson v. Bailey, 3. Watson v. Brewster, 359. Watson v. Butcher, 242, 492, Watson v. Hankins, 105. Watson v. Orr, 259. Watts v. Eufaula Nat. Bank, 18, 182, 580, 584, Watts v. Shipman, 111, 113, Waugh v. Wyche, 814. Wear, In re, 556, Weatherly v. Strauss, 427, Weaver v. Leiman, 60, 282. Webb v. Armistead, 244. Webb v. Daggett, 98, 163, 172, 178, 175,. 415, 425. Webb v. Dean, 302, 312, 313, Webb v. Ingham, 435. Weber v. Mick, 3, 12. Weber v. Samuel, 160, 216, 293, 294, 586, 676. Webster v. Harkness, 384. Webster v. Vanderventer, 814, Weeks v. Millardet, 153, Weeks v. Wead, 318. Wehl v. Wald, 52, 54, 55. Weide v. Porter, 352. Weider v. Maddox, 24. Weil v. McDonald, 475. Weinhaus, Matter of, 557. Weir v. Tannehille, 127, 311, 594. Weiskettle’s Appeal, 368. Welch v. Mandeville, 105, Welch v. Myers, 475. Welckler v. Staples, 514. Welles v. March, 67, '78, 79, 85, 420, Wells, In re, 44, 45. Wells v. Lamb, 298, Wells v. Treadwell, 4, Welsh v. Britton, 2386. Wensley, Ex parte, 33. Wente v. Young, 54, West v. Schneider, 507. West v. Snodgrass, 198, 280, 609. West v. Steward, 110, 145, 148, 153,, 155. West v. Tupper, 850. Westbrook v. McDowell, 104. Westcott v. Potter, 105. Weston v. Barker, #12. Weston v. Loyhed, 640. Wetier v. Schlieper, 85. Whallon v. Scott, 116, 195, 276, 492, Wharton v. Fisher, 383, Wharton v. Hopkins, 479. Whatton v. Toone, 510. Whedbee v. Stewart, 159, 200, 212, 282, 415, : Wheeler v, Evans, 199, Wheeler v. Hawkins, 297, Wheeler v. Kerkendall, 15., Wheeler v. Perry, 632, TABLE OF CASES. References are to pages. Wheeler v. Sumner, 212, 827, 841, 848, 474, Wheeler v. Wheeler, 105. Wheelock v. Kost, 62. Whelpdale v. Cookson, 511. Whichcote v. Lawrence, 511, 513, Whipple v. Pope, 278. Whipple v. Stebbin, 164. Whipple v. Thayer, 376. Whitaker v. Gavit, 106, 109, 806. Whitaker v. Lindley, 179, 627. Whitcomb v. Fowle, 182, 460. Whitcomb v. Minchin, 512. White v. Banks, 346, 400. White v. Buck, 105. White v. Cotzhausen, 184, White v. Davis, 428. White v. Fagan, 141. White v. Folgambe, 516, White v. Griffin, 54. White v. Hill, 519. White v. Monsarrat, 269. White v. Thomas, 547. White v. Union Insurance Co., 89. White v. Winn, 210, 213. Whitehead v. Woodruff, 634, Whiteley v. May, 237. Whitewright v. Stimpson, 90, 91. Whitney’s Appeal, 477, 556, 596. Whitney v. Brunnette, 320. Whitney v. Freeland, 448. Whitney v. Hirsch, 236. Whitney v. Kelley, 128, Whitney v. Krows, 195, 258, 262, 264, 268, 435. Whittaker v. Williams, 135, 306. Whittemore v. Gibbs, 104, Whitten v. Fitzwater, 114. Whitton v. Smith, 68. Whitwell v. Thompson, 30, 31. Whitworth v. Benbow, 241. Whitworth v. Patterson, 83. Whorter v. Wright, 179, Wickham v. Green, 140, 247, Wickham v. Martin, 278, 497, Wickliffe v. The City of Lexington, 559. Wicks v. Wescott, 517. Widdall v. Garsed, 326. Widgery v. Haskell, 165, 166, 172, 200, 214, 339, Wieder v. Maddox, 361. Wiener v. Davis, 3, 159. Wiesenfeld v. Stevens, 419, 423, Wilbur v. Fradenburgh, 472, Wilcox v. Bates, 569. Wilcox v. Jackson, 85, Wilcox v. Kellogg, 22, 169, 179, Wilcoxson v. Annesley, 10, 624, Wilde v. Rawlings, 208, 212, 233, Wilder v, Fondey, 407, Wilder v. Keeler, 237. Wilder v. Winne, 167, 407, 410. Wiley’s Appeal, 100. Wiley v. Collins, 342, Wiley v. Knight, 167. Wilhelm v. Byles, 353, 491. Wilkes v. Ferris, 142-144, 172, 229, 281, 282, Wilkins v. Davis, 480. Wilkinson, Matter of, 557. Wilkinson v. Wilkinson, 517 Wilks v. Walker, 680. Willard v. Tillman, 103. Willets v. Waite, 361. Williams’ Appeal, 531, 581, Williams v. Brown, 167. Williams v, Frost, 79, 638, Williams v. Galt, 105. Williams v. Gartrell, 627, Williams v. Hadley, 883, Williams v. Jones, 172, 434, 435, Williams v. Lowdnes, 321. Williams v. Otey, 146, 500, 562, Williams v. Whedon, 90. Williams v. Winsor, 479, Williamson v. Berry, 9. Williamson v. Croft, 523, Williamson v. Nealy, 478. Williamson v. Richardson, 111, Williamson v. Wilkins, 523, Willis v. Bremner, 236, 691. Willis v. Farley, 502. Willis v. Henderson, 478, 482. Willis v. Stewart, 499. Williston v. Camp, 356. Wilmer v. Thomas, 106. Wilson, In re, 88, 154, 159, 205, 206, 210, 215, 285, 807, 519, 556, 567, 600. Wilson v. Berg, 169, 172, 441, 442, Wilson v. Britton, 420. Wilson v. Brown, 566, Lxii ‘TABLE OF CASES. References are to pages. Wilson v. City Bank, 48, 165. Wilson v. Day, 30. Wilson v. Eifler, 421. Wilson v. Esten, 481. Wilson v. Ferguson, 469, Wilson v. Forsyth, 181, 822, 330, 331, 421, 602. Wilson v. Hanson, 387. Wilson v. Hooper, 318. Wilson v. Kneppley, 205, 394. Wilson v. Lott, 427. Wilson v. Pearson, 304, 318, 349. Wilson v. Robertson, 235-237, 240, 241, 258, 264, 283, 431, 440. Wilson v. Russell, 17. Wilson v. Staats, 581. Wilson Bros. Co. v. Daggett, 583, 586, 602. Wilt v. Franklin, 92, 98, 152, 158, 172, 205, 248, 277, 317, 349, 420, 435, Wilt v. Wheeler, 327. Wimbish v. Talbois, 413. Winder v. Diffenderffer, 522, Windham v., Patty, 338, 476, 683. Winebrener’s Appeal, 513. Winn v. Crosby, 494, 520, 526, 562, 563, Winn v. Madden, 151, 297, 477. Winner v. Hoyt, 13, 92, 135. Winslett v. Randle, 682, Winslow v. Assignees of Ancrum, 155. Wintringham v. Lafoy, 172, 229, Wise v. Wimer, 9, 482. Wiswall v. Potts, 115. Wiswall v. Ross, 335, Wiswall v. Ticknor, 198, 227. Witner, Matter of, 558. Wolf’s Appeal, 547. Wolf, Matter of, 524, 527. Wolf v. Gray, 612, Wolf v. O’Conner, 155. Wolverbampton Bank v. Marshton, 420, ‘Wood, In re, 34, 35, 49. Wood v. Augustine, 516. Wood v. Bolard, 168, 182, Wood v. Radcliffe, 142, 143, Wood v. White, 505. Woodbridge v. Perkins, 105. Woodburn v. Mosher, 253, 263, 270. Woodhouse, In re, 28, 33-85. Woodley v. Hassell, 417, Woodruff v. Bowles, 408. Woodruff v. Railroad Co., 526. Woodruff v. Robb, 18. Woods v. Timmerman, 160. Woodward v. Baynard, 115. Woodward v. Brooks, 358, 369. Woodward v. Marshall, 145, 153, 244, 456, 464, 485, 490. Woodworth v. Sweet, 121. Wooldridge v. Irving, 84, 99-101. Woolsey v. Urner, 207. Woolson v. Pipher, 319. Wooster v. Stanfield, 92, 251, 476. Wooten v. Clark, 315. Work v. Ellis, 196, 254, 415, 421, 429, Worley v. Frampton, 516. Worman v. Wolfersberger’s Ex’rs, 132, 169, 178. Worseley v. De Mattos, 30, 81. Worth v. McAden, 569. Worthington v. Greer, 113. Worthley, Matter of, 526. Wright v. Bundy, 484. Wright v. Clapp, 120, 536, Wright v. Gay, 281. Wright v. Gelvin, 109, 624, 625, Wright v. Henderson, 592, 593. Wright v. Linn, 166, 172, 221, 284, 400, 428, 470. Wright v. Mack, 594. Wright v. McCormick, 495, Wright v. Thomas, 260, 275, 626, Wright v. Wigton, 480, 545, Wright v. Williamson, 105. Wright v. Zeigler, 503. Wurtz v. Hart, 117, 545, 549. Wyeth Hdw. Co. v. Standard Imple- ment Co., 453. Wykoff v. Carr, 442, Wyles v. Beals, 101. Wylie’s Appeal, 532, Wynkoop v. Shardlow, 148, 458, 524, ‘Wynne, In re, 52, 53. Wynne v. Glidewell, 502. Wynne v. Simmons Hdw. Co., 397, 480, 485, 491. Yargin v. Shriner, 508. Yates v. Lyon, 58. Yeager, Matter of, 579, TABLE OF OASES. Lxiii References are to pages. Yeager v. Scranton Trust Co., 108. Yelverton v. Sheldon, 387. York County Bank v. Carter, 165, 169, 178. Young v. Booe, 254, Young v. Cardwell, 813. Young v. Dumas, 166, 169. Young v. Gillespie, 152. Young v. Hail, 246, Young v. Harris, 359. Young v. Keighley, 68. Young v. McClure, 317, 329, Youngs, Master of, 270. Youngs v. Hannas, 506. Zacharie v. Kirk, 320. Zaring v. Cox, 297, 342, 529, Zeigler’s Appeals, 121, 529, 581. Zeigler v. Maddox, 430, Zergenfuss, Ex parte, 39. Zimmer v. Miller, 434, Zimmerman v. Harman, 514. Zimmerman v. Willard, 291, 622. Zipcey v. Thompson, 361, 379, 380. Zoebisch v, Von Minden, 192, Zuppann v. Bauer, 375. Zuver v. Clark, 581. Zwang, In re, 18. Zwelchenbart, Ex parte, 33. VOLUNTARY ASSIGNMENTS, CHAPTER I. ASSIGNMENTS IN GENERAL— VOLUNTARY ASSIGNMENTS FOR THE BENEFIT OF CREDITORS DEFINED AND DISTINGUISHED FROM OTHER MODES AND INSTRUMENTS OF TRANSFER. § 1. Assignments in General. 2. Voluntary Assignments for the Benefit of Creditors Defined. 8. Assignments Distinguished — Conveyances Directly to Creditors. 4, Distinguished from Sales. 5. Distinguished from Agencies. 6. Distinguished from Mortgages. %. Distinguished from Mortgages — Illustrations. 8. Distinguished from Deeds of Trust in the Nature of Mortgage. § 1. Assignments in General.— An assignment is a transfer or setting over of property, or of some right or interest therein, from one person to another; the term denoting not only the act of trans- fer, but also the instrument by which it is effected.!. In these senses the word is variously applied in law.? As applied to real estate, an assignment is properly a transfer, or making over to another, of one’s whole interest in Jands or tenemeats, whatever that interest may be;? but in England it is usually applied to express the trans- 1 These appear to be secondary senses of the term, the primary meanings being those of appointment, allotment, specification or designation; all which are still retained, In the Latin of the old books it is termed assignatio, from which the Scotch assignation has been formed; but the word assignment itself is obviously taken from the Law French. Britt., chs. 34, 83, 108. 2 An assignment is properly the transfer of one’s whole interest in any estate; but it is now generally appropriated to the transfer of chattels, either real or per- sonal, or of equitable interests. Watkins on Conv., b. 2, ch. 9, p. 227. The common-law definition of an assigy ment is, ‘the transferring and setting over to another of some right, title or interest in things in which a third party, not a party to the assignment, has a concern and interest.” 1 Bac, Abr. 329. See Mr. Justice Isbell, in Cowles v. Ricketts, 1 Iowa, 582. 2 The introduction of the word assigns into the old instruments of feudal con- veyance had the effect of conferring on the purchaser the power of alienation, Britt., ch. 35; Mirr,, ch. 1, § 8; 2 Bl. Com. 289. Hence the proper sense of assign- 1 2 ASSIGNMENTS IN GENERAL. [ou. I. fer of an estate for life or years.! Considered as an instrument, an assignment at common law is a species of deed, and is classed, by Blackstone and other writers, among common-law conveyances of a secondary or derivative character, which also presupposes a con- veyance precedent2 As applied to personal estate the term as- signment bas the same double sense of the act and instrument of transfer. Where an article of merchandise or personal chattel is the subject of it, the act is more commonly termed a sade, and the instrument used to express and authenticate it, a 710 of sale® But in other cases of transfer the term is usually employed to denote both the act and the instrument; the latter being either separately drawn in the form of a deed, or indorsed upon other instruments (such as bonds, policies, etc.), in shorter form; and in cases of transfer of bills of exchange and promissory notes, the assignment is still more compendiously expressed by the indorsement of the assignor’s name. In many cases, however, no instrument or ment, in ancient conveyancing, seems to have been alienation by virtue of a pre- vious instrument. . This serves to account for the restriction of the term, which has so long prevailed in England, to the sense of the transfer of an interest held under a previous conveyance; the assignor creating no new estate by the assign- ment, but merely passing or setting over an estate already created, to be held as the assignor himself held it; the assignee being put in his place, or (in the ancient sense of the latter word) deputed for that purpose. See the next note. 11 Steph. Com. 485. Sir William Blackstone defines an assignment to be ‘‘ prop- erly a transfer, or making over to another, of the right one has in any estate; but it is usually applied to an estate for life or years.” 2 Bl. Com. 326. Dr. Wood- desson restricts the proper meaning of the term to ‘‘the transfer of the interest which any one has in the unexpired residue of a term or estate for years.” 2 Woodd. Lect. 170, 171. In Cruise’s Digest an assignment is said to be ‘‘ properly a transfer of some particular estate or interest in lands, but it is usually applied to the transfer of aterm for years.” Cruise Dig., tit. xxxii (Deed), ch. vii, sec. 15. The reason of this peculiar restriction of the term to estates for years is to be found in the nature of those estates, which could not be adequately conveyed by a new instrument of the same kind (that is, the lessee or tenant for years could not convey or divest himself of the whole of his estate at once, by a new lease, as a feoffee might by a new feoffment, the idea of a lease implying a reversion of some kind to the lessor on its termination, and of course a continuing interest in the lessor to that extent), but only by setting over the same instrument, and the estate held under it. Hence the distinction, which has become so well es- tablished in modern law, between an assignment and a derivative or under lease. In American law the term assignment, though constantly employed to denote the transfer of a leasehold interest, is not so frequently restricted to that particu- lar sense, 2See 2 Bl. Com. 310, 324, 826, 3 See 2 Steph. Com. 104; 1 Tucker’s Com, (Laws of Virginia), [833] 323, note (a). The resemblances and distinctions between an assignment and a sale will be more fully noticed in § 4. +The term assignment is here used in the larger sense of transfer in general. Chitty on Bills (Perk. ed., 1854), [5, 6] 8, [8] 11, 12, [196] 225; Story on Bills, § 17. In practice, however, the term, as applied to the transfer of bills and notes, is generally restricted to such as are not negotiable, as distinguished from the in- § 2.] VOLUNTARY ASSIGNMENTS DEFINED. 3 writing is used, the title to the property passing by mere delivery.! In mercantile transactions, the term assignment is not used in the sense of sade, but rather in contradistinction from it; being confined in its application either to transfers of a special kind, auxiliary to sales, or in completion of them (such as assignments of bills of lading, of policies of insurance, etc.), or to transfers by way of security for or in payment of debts. Indeed, in most of its applications, the term seems to imply the existence of the relation of debtor and creditor; and it is in this latter sense only that these modes and instruments of conveyance are now proposed to be considered. § 2. Voluntary Assignments for the Benefit of Creditors De- fined.— Voluntary assignments for the benefit of creditors are trans- fers, without compulsion-of law, by debtors, of some or all of their property to an assignee or assignees, in trust to apply the same, or the proceeds thereof, to the payment of some or all of their debts, and to return the surplus, if any, to the debtor. Assignments, in this restricted sense, are distinguished with ref- erence to their subject-matter, as being of all or of part of the debt- dorsement of negotiable paper. Shankland, J., in Bump v. Van Orsdale, 11 Barb. 634, 639; Bank of Marietta v. Pindall, 2 Rand, 465. See, also, on this point, Jagoe v. Alleyn, 16 Barb. 580; Watson v. Bailey, 2 Duer, 509. 1 The term assignment is frequently used ip the books to express the transfer of a promissory note by delivery. Edison v. Frazier, 4 Eng. (Ark.) 219, 220; Jackson v. Heath, 1 Bailey, 355; Chitty on Bills (Perk. ed. 1854), 259, note 3, and cases cited ibid. ; Hedges v. Sealy, 9 Barb. 214; Bump v. Van Orsdale, 11 id. 634: Collins v. Knapp, 18 id. 582. But see Calkins v. Packer, 21 id. 375. And see Andrews v. Carr, 26 Miss. 577. In Feimster v. Smith, 5 Eng. (Ark.) 494, the term, applied to a bond in pleading, was held to import delivery, ex vi termini. In Andrews v. Carr (ub sup.), it was held that the words transfer and assign mean, in legal pro- ceedings, a transfer by writing; and that when a party, in pleading, says that he acquired title to a note by assignment, he is understood to mean written assign- ment, unless he qualifies the meaning of the words. 2 The definition given in the text is approved in Bartlett v. Teah, 1 McCrary, 176, 178. A sale (in cases free from fraud) is, on delivery of the thing sold and receipt of the considera- tion, a complete transaction, passing absolutely and irrevocably all the seller’s interest in the subject of it, without reversion or return under any circumstances. An assignment is likewise an absolute conveyance by which both the legal and equitable estate is divested out of the grantor, but the title vested in the assignee is subject to by the court as a purchaser for a valuable consideration. See, also, Gates v. Le- baume, 19 Mo, 17; Wise v. Winer, 23 id. 237; Hardcastle v. Fisher, 24 id, 70; but see Pierson v. Manning, 2 Mich. 445, 453, contra. 1 Hilliard on Sales, 338, 339, ?Stout v. Watson, 19 Oreg. 251; 24 Pac. Rep. 280. 3 A sale is a transferring of property from one person to another in considera- tion of a sum of money to be paid by the vendee to the vendor. Longon Sales, 1. A sale has been defined to be ‘‘a contract between parties to give and to pass rights of property for money, which the buyer pays, or promises to pay, to the seller for the thing bought and sold.” Wayne, J. in Williamson v. Berry, 8 How. 495, 544. A sale may be defined to be a transfer of the absolute or general property in a thing for a price in money. Benjamin on Sales (1st Am. ed.), p. 1. But the fact that a consideration is paid will not necessarily change the charac- ter of the transaction. Truitt v. Caldwell, 3 Minn. 364. *To constitute a bill of sale there must be either a consideration actually paid or agreed to be paid for the property, or it must appear that the assignment was received at a fixed sum in payment or part payment of a debt and subject to no conditions or trusts. A deed of assignment is an absolute transfer of property to an assignee in trust for the purpose of raising funds by a sale of the property to pay debts, and by which the grantor parted with dominion over the prop- erty. Rosenthal v. Frank, 37 Mo. App. 278. 5 While the form and words of an assignment and bill of sale are generally the same, the element of trust, either express, implied or secret, distinguishes an as- signment froma sale. Powell v. Kelly, 82 Ga.1. A voluntary assignment for the benefit of creditors implies a trust and contemplates the intervention of a trustee. Stout v. Watson, 19 Oreg. 251; 24 Pac. Rep. 230, supra. A bill of sale is distinguished from an assignment for the benefit of creditors in that in the former there is a fixed price and no trust, while in the latter there is a mere trust and no fixed value given to the property. Becker v. Rardin, 107 Mo. 11; 17S. W. Rep. 892. See Demmick v. Register, 92 Ala. 458; 9 So. Rep. 79; Bresson v. Musselman, 86 Mich, 186; 49 N. W. Rep. 39; Stites v. Champion, 49 N. J. Eq. 446. 10 ASSIGNMENTS IN GENERAL. [cH. 2. the uses and trusts in favor of the créditors,' and upon their satis- faction a trust results in favor of the assignor in the residue of the unappropriated property or its proceeds.? A transfer of specific property to a creditor in discharge of a pre-existing debt is in effect a sale. An assignment of itself does not satisfy the claims of the creditors to any extent, but provides a method for raising the means with which to pay them.’ Sales are often subject to cove- nants on the part of buyer and seller, from which assignments are free. An assignee is not liable to the payment of incumbrances to the same extent as a purchaser. The distinction between a sale and an assignment, in this particular, has been judicially declared in Pennsylvania. Thus, a conveyance of property by a debtor to two of his creditors, for the use of them and others, in considera- tion that they would release him, was held to be not a sale, but an ordinary assignment for the benefit of creditors, the debtor having a resulting interest in the surplus; and the creditors were held to be not liable to pay off a subsisting incumbrance beyond the amount realized from the property assigned.® In a case in the court of 1Dwight v. Overton, 35 Tex. 390; Dessar v. Field, 99 Ind. 548; Danner v. Brewer, 69 Ala. 191. An absolute unconditional sale and conveyance of his property by a debtor, free from all reservation, in payment and satisfaction of antecedent debts, cannot be declared a general assignment, although it may em- brace all the debtor’s property and he be insolvent. Otis v. Maguire, 76 Ala. 295, The assignor and those claiming under him have no right, legal or equitable, in the assigned property until the purposes of the trust are satisfied. Briggs v, Da- vis, 21 N. Y. 574; s. c, 20 N. Y. 15. In this application the word has its full original meaning already noticed. See ante, p. 1, note 1. 2In re Potter, 54 Pa. St. 465. 3 Johnson v. McGraw, 11 Iowa, 151; Hawkins v. Bailey, 48 Ala. 377; Claflin v. Maglaughlin, 65 Pa. St. 492; Lockhart v. Stevenson, 61 id. 64; Keen v. Pres- ton, 24 Ind, 395; and see Beach v. Bestor, 47 Ill. 521. The fact that the consid- eration of the sale is to be applied in part to the payment of other debts than those of the vendee does not render the transaction an assignment for the bene- fit of creditors. Johnson v. McGraw, supra; Beach v. Bestor, supra; Beans v. Bullitt, 57 Pa, St. 221; Wilcoxson v. Annesley, 23 Ind, 285. See Murphy v. Cald- well, 50 Ala. 461, Where the partners of an insolvent firm by an instrument under seal assign all the partnership property and assets to a creditor as agent of and in trust for all other creditors whose names are or shall be signed to an agreement thereto annexed, accepting the property in full satisfaction of their respective debts, the conveyance, in the absence of fraud, is to be regarded as alt ordinary sale upon a valuable consideration and not an assignment, Kenefick v. Perry, 61 N. H. 862. See Hine v, Bowe, 46 Hun, 196; Dessar v. Field, 99 Ind.- 548; Sweeney v. Conley, 71 Tex. 543; 9S. W. Rep. 548; Blennerhassett v. Sher- man, 105 U. 8. 100; Murray v. McNealy, 86 Ala, 234; s, c.,5 So, Rep., 565; Gra- ham v. Railroad Co., 102 U. S. 148; Harmon v. McRae, 91 Ala. 401; Southworth v. Casey, 78 Ky. 395. 4 Bebb v. Preston, 8 Clark (Iowa,) 460, 5 Blank v. German, 5 Watts & Serg. 36. The conveyance in this case ‘was in the form of an ordinary deed, but it was executed in pursuance of a prior writ- ten agreement on the part of the debtor to convey the property, subject to a full 8s 5, 6.] DISTINGUISHED FROM AGENCIES — MORTGAGES, 12 appeals of New York,' an assignment of real estate by a religious corporation was construed to signify a sale, within the meaning of the charter, although the court seem to have been willing to con- cede that the assignment was not, strictly speaking, a sale, in con- sequence of the equitable interest which the assignors still retained in the application of the avails of the lands. § 5. Distinguished from Agencies.— It is a general rule of law that an agent represents and acts for his principal, and his contracts bind his principal only; a trustee in general is a person in whom some estate, interest or power in or affecting property is vested for the benefit of another, and his contracts are binding only upon himself? A revocable power of attorney to collect debts and apply the proceeds does not amount to an assignment for the benefit of creditors, for the reason that there is no transfer of the title of the property.? Something more than a mere transmission of the cus- tody and management of the assigned property is essential to con- stitute such an assignment. Thus, where a railroad company, having received certain state aid bonds, transferred them to a trustee to be distributed among such of its creditors as would ac- cept them in payment at ninety-five cents on the dollar, and pro- vided for the return to the company of such of the bonds as should not be disposed of before a specified time, this did not create an assignment for the benefit of creditors, but simply an agency for a particular purpose.* § 6. Distinguished from Mortgages.— The enactment in many of the states of statutes prohibiting preferences in general assign- ments has afforded a ground of attack on partial assignments with release; and on the part of the creditors to release the debtor, provided he could convey for certain uses, Both instruments were taken together as constituting one transaction, and as amounting to a trust for creditors. 1De Ruyter v. St. Peter’s Church, 3 N. Y. 238, 242. See Crawford v. Kirksey, 55 Ala. 282. 2 Taylor v. Davis, 110 U. S. 334; 4S, Ct. Rep. 147, 3 Beans v. Bullitt, 57 Pa. St. 221; Henderson’s Appeal, 31 id. 502; Griffin v. Rogers, 38 id. 382. But see Watson v. Bagaley, 12 id. 164, and Wallace v. Wain- wright, 87 id. 2683; McHose v. Dutton, 55 Iowa, 728; Murphy v. Caldwell, 50 Ala. 461, where, by consent of his creditors, a failing debtor was allowed to con- tinue his business under the supervision of a committee of the creditors for a limited time, and a cashier or clerk was also appointed to receive and pay out. money, the business to be done in the debtor’s name, as before, until the state of affairs could be ascertained, and the property of the debtor never came into the possession of the committee, who merely acted in an advisory manner, and the cushier as a clerk, it was held that the committee and cashier were not trustees as to the property of the debtor for the benefit of creditors, and consequently were not liable to such creditors, Hall v. Crane Co., 87 Ill. 283, 4 Banning v. Sibley, 3 Minn, 389. 12 ASSIGNMENTS IN GENERAL. [cn. 1. preferences sometimes successfully resorted to by non-preferred creditors, where the claims of other creditors are satisfied by the debtor with mortgages or other conveyances. A mortgage re- sembles an assignment more closely in the leading features of being a security or provision for debt and in involving a resulting interest to the grantor on a certain contingency. An assignment is more than a security for the payment of debts; it is an absolute appropriation of property to their payment.! It does not create a lien in favor of creditors upon property which in equity is still. regarded as the assignor’s, but it passes both the legal and the equitable title to the property absolutely beyond the control of the assignor. There remains, therefore, no equity of redemption in the property,? and the trust which results to the assignor in the unemployed balance does not indicate such an equity.’ In the case 1 State v. Benoist, 37 Mo. 500; Fromme v. Jones, 18 Iowa, 480; Vallance v. Miners’ Life Ins. Co., 42 Pa. St. 441; McBroom & Wood’s Appeal, 44 id. 92; Lawrence v. Nuff, 41 Cal. 566; Dana v. Standfords, 10 Cal. 269; Dunham v, Whitehead, 21 N. Y. 181; McClelland v. Remsen, 8 Abb. Dec. (N. Y.) 74; Van Buskirk v. Warren, 4 id. 457. The text is quoted with approval in Crow v. Beardsley, 68 Mo. 435; also in Bartlett v. Teah, 1 McCrary, 176. In State Bank v. Chapelle, 40 Mich. 447, Campbell, C. J., says: ‘‘ We do not think the questions applicable to general assignments have any bearing on a security which is only intended to secure a single debt on specific property.” This is equally true when the security is in favor of several creditors but is on a portion only of the debt- or’s property. Palmer v. Mason, 42 Mich. 146. See Parsell v. Thayer, 39 id. 467; Warner v. Littlefield, 89 Mich. 329; 50 N. W. Rep. 221. 2 The vital dis- tinction between an assignment for the benefit of creditors and a mortgage is clearly pointed out in the case of Briggs v. Davis,‘ in the same court. In Ohio a chattel mortgage executed in contem- plation of insolvency to a particular creditor for the purpose of preferring him was held to be an assignment of property in trust, and the mortgagee was deemed a trustee for all the creditors.’ § 7. Distinguished from Mortgages — [lustrations.— The distinction between voluntary assignments in trust for creditors the mortgagor regards the transaction as a complete disposition of his property. Van Patten v. Thompson, 73 Iowa, 103: s. c., 34. N. W. Rep. 768. See Carson v. Byres, 67 Iowa, 606; s. c., 25 N. W. Rep. 826. It was accordingly held by a majority of the court, Taylor, J., dissenting, in the case of Winner v. Hoyt, 66 Wis, 22; s. c., 28 N. W. Rep. 880; 57 Am. Rep. 257, that where insolvent debtors transferred their entire property by chattel mortgages and made assign- ments to certain of their creditors, with intent that one of such creditors for himself, and as agent of and trustee for the others, should take immediate pos- session and convert such property into money and divide the same pro rata among such favored creditors, such conveyances were in effect a general assign- ment with preferences which is void as to the other creditors. SeeShirly v. Teal, 67 Ala. 449; Box v. Goodbar, 54 Ark. 6; 18S. W. Rep. 925; Watts v. Eufaula Nat. Bank, 76 Ala. 474; Hoey v. Pierron, 67 Wis. 262; s. c., 80 N. W. Rep. 692, See Foreman v. Burnette, 83 Tex. 396; 18S. W. Rep. 756; Bank of Montreal v. Salt & Lumber Co., 90 Mich, 345; 50 N. W. Rep. 512; Warren v. Dwyer, 91 Mich. 414; 51 N. W. Rep, 1062. 116 Pet. 106. 24.N. Y. 211. Gardner, J., speaking of the assignment in this case, observes as follows: ‘‘ The conveyance, whatever may be its form, is in effect a mortgage of the property transferred. A trust as to the surplus results from the nature of the security, and is not the object, or one of the objects, of the assignment. Whether expressed in the instrument or left to implication is immaterial. ‘he assignee does not acquire the legal and equitable interest in the property con- veyed, subject to the trust, but a specific lien upon it.” Id. 216. 315 N. Y. (1 Smith), 9. 4 Brown, J., id. 143. Paige, J., id. 206, 207. Comstock, J., seems to have taken a different view. Id. 126. 521 N. Y. 574; 8.0, 20 N. Y. 15. 6 Bloom v. Noggile, 4 Ohio St. 45; Harkrader v. Leiby, id, 602, 7 Brown v. Webb, 20 Ohio (Lawr.), 389. i4 ASSIGNMENTS IN GENERAL. (cH. 1 and mortgagees has been declared in several adjudged cases. Thus, in Pennsylvania, mortgages to secure debts have been held not to be within the act of March 24, 1818, requiring deeds of as- signment to be recorded within thirty days. In the same state it has been held that a mortgage limited to a trustee, with power to sell for the payment of the debt secured by it, was not a voluntary assignment for the benefit of a creditor or creditors, such as must be recorded within the period prescribed by the statute provided for such a case? In Massachusetts, instruments called bills of sale, but which in reality were mortgages, have been held not to be convey- ances in trust for creditors under the statute of 1836, chapter 238.° In the same state a mortgage, in the form of a deed with a defea- sance, has been held not to be an assignment in trust for cred- itors.! In New Hampshire a mortgage by the debtor of all his property to secure the payment of a part of his debts, leaving others unprovided for, was held to be not an assignment within the meaning of the statute of July 5, 1834, entitled “ An act for the equal distribution of property assigned for the benefit of cred- itors.”> In Connecticut a mortgage, by a debtor, of real estate to 1Ridgway v. Stewart, 4 Watts & Serg. 383, 391. The mortgage in this case contained words expressive of a trust, and was held by the court below to ‘be an assignment for the benefit of creditors. But their judgment was, on appeal, re- versed; the supreme court (Kennedy, J.) holding that the assignments required by the act of 1818 to be recorded weré those absolute transfers made by debtors in embarrassed or insolvent circumstances of their estates to trustees for the benefit of their creditors, that is, for the purpose of being turned into money, and applied by the trustee to the payment of the debts owing by the assignors. See Lill v. Brant, 6 Ill. App. (Bradw.) 366; Stiles v. Hill, 62 Tex. 429; Martin v.. Hauseman, 14 Fed. Rep. 160; Carter v. Rewry, 62 Wis. 552. : 2 Manufacturers’ & Mechanics’ Bank v. Bank of Pennsylvania, 7 Watts & Serg. 835. The conveyance in this case was contended to be not a mortgage, but an assignment in trust to pay a particular creditor. But the court observed: ‘It is clearly a mortgage limited to a trustee in fee with a power to sell, and the statute has regard not to a conditional conveyance which may revest the property in the debtor, but to an absolute assignment to sell and pay at all events.” Gib- son, C. J., id. 843. In Johnson’s Appeal, 103 Pa. St. 378, it was held that no particular form of words is necessary to constitute an assignment under the statute of June 14, 1836, but the transaction must be in substance an abso- lute transfer of property by the assignor in trust for the benefit of creditors. A mortgage executed by the assignor to a trustee for creditors in consideration of an extension of time for the payment of the assignee’s debts, being a mere security, cannot be treated as an assignment for the benefit of creditors under said act. A mortgage was distinguished from a trust deed in the case of Hewitt v. Hullins, 11 Pa. St. 27. See, also, McBroom & Wood’s Appeal, 44 id. 92; Vallance v. Miners’ Life Ins. Co., 42 id. 441; Diesbach v. Becker, 34 id. 152; Claflin v. Maglaughlin, 65 id. 492. 3 Henshaw v. Sumner, 23 Pick. 446, 4 Marden v. Babcock, 2 Mete. 99. ® Barker v. Hall, 18 N. H, 298, And see Low v. Wyman, 8 id. 586; Danford v. Denny, 25 id. 155. § 7] DISTINGUISHED FROM MORTGAGES, 15 certain creditors, to secure them for indorsements, was held to be neither an assignment nor a conveyance, nor in trust for creditors, within the meaning of the statute of 1828.1 In Vermont a transfer by a debtor of all his property directly to certain creditors for their benefit was held to be not a general assignment in trust, under the act of November 1, 1843, but a mortgage or pledge of the property.? In Georgia a mortgage given to secure a just debt was recently held to be not within the statute of 1838 “to prevent assignments,” etc. In Iowa it is held to be a question of the in- tention of the parties whether a conveyance by an insolvent is to be regarded as an assignment or a mortgage. In Virginia, where a, conveyance of real estate was made to a creditor in trust to sat- isfy his own demand, it was held that such a conveyance was not to be considered as a deed of trust, but as a mortgage, to which the right of redemption was incident.’ And in a case in the court of chancery of New York® a voluntary assignment was distin- guished both from a sale to a creditor and a pledge of property in the nature of a mortgage.’ In Ohio a mortgage given to a creditor to secure the debt of any other creditor besides himself has been held to be an assign- ment within the provisions of the act of 1838 relating to assign- ments by insolvent debtors, and the mortgagee to be a trustee for 1 Bates v. Coe, 10 Conn. 280. 2Peck v. Merrill, 26 Vt. 686; McGregor v. Chase, 87 id. 225. See Gage v. Chesebro, 49 Wis. 486, where an instrument is held to be a chattel mortgage rather than an assignment; and Dessar v. Field, 99 Ind. 548; Jaffray v. Greenbaum, 64 Jowa, 492. 3 Lavender v. Thomas, 18 Ga. 668, 675, and cases cited ibid. ; Solomon v. Sparks, 27 Ga. 885, See Code of Ga. (1873), § 1954, 4 Cadwell’s Bank v. Crittenden, 66 Iowa, 237. In this case the defendant had for some time been promised security by the debtor. Just after the burning of the debtor’s store the defendant, for no consideration paid, but only as trustee, took from some of the other creditors an assignment of their claims against the debtor, and then applied to him for security, not only for his own claims but also for the claims which he thus held in trust. Thereupon the debtor executed to the defendant a bill of sale covering all his property. It was at the same time orally agreed that if any proceeds of the property remained after satisfying the claims thus held by the defendant, it should be paid back to the debtor. It was held that the instrument was intended as a mortgage only and should be treated as such, and not as an assignment for the benefit of creditors. See, also, Wheeler v. Kerkendall,; 67 Iowa, 602; Kohn v. Clement, 58 Iowa, 589. 5Showning v. Cox, 1 Rand. 306. 6 Dias v. Bouchaud, 10 Paige, 445, 448, 461. And see Briggs v. Davis, 21 N. Y. 574; S. C., 20 N. Y. 15; Dunham v. Whitehead, 21 N. Y. 181; McClelland v. Remsen, 8 Abb. Dec. (N. Y.) 74; Van Buskirk v. Warren, 4 id. 457. 7In the case of Perry Ins. Co. v. Foster, 58 Ala. 502, a conveyance with result- ing trust to the grantors was held to be technically an assignment and the text cited, And see Crawford v. Kirksey, 55 id, 282; Shirley v. Teale, 67 id. 449; Dan- ner v. Brewer, 69 id. 191; Otis v. Maguire, 76 id. 295. ‘ 16 ASSIGNMENTS IN GENERAL. [cH. 1. all the creditors. In the same state a chattel mortgage executed in contemplation of insolvency to a particular creditor, for the purpose of preferring him, was held to be an assignment of prop- erty in trust, and the mortgagee was deemed a trustee for all the creditors.” In Michigan three consecutive chattel mortgages made to secure existing debts were held to be not an assignment.’ So in Missis- sippi a conveyance by an officer to a trustee to indemnify his sure- ties against any possible loss on an official bond, though embracing all the grantor’s property, was held to be not an assignment but a. mortgage. In Montana it was held that where the effect of an instrument conveying personal preperty was to transfer the debt- or’s property to a creditor, with power to make an immediate sale of the same and render the overplus, after satisfying the debt. therein described, to the debtor, which debt was made due at once, the transaction, though under the form and name of a chattel mortgage, will be regarded as an assignment.’ In Wisconsin three mortgages of debtor’s stock of goods, to secure three several claims, were executed on the same day and delivered to the attor- ney of the mortgagees; and on the next day the goods were turned over to said attorney, either in satisfaction of all the rortgages or in payment of the claim of the third mortgagee with the under- standing that he would pay the two prior mortgages; held that. in either case, as no trustee was appointed or trust created, the transaction did not constitute an assignment for the benefit of creditors within the meaning of section 1694, Revised Statutes.® 7 e “ § 8. Distinguished from Deeds of Trust in the Nature of Mortgage.— Still more similar in form are deeds of trust to secure the payment of particular debts.’ Such instruments are, both in law and equity, substantially the same as mortgages, and the rad- ical distinction between them and assignments for the benefit of 1 Bloom v. Noggle, 4 Ohio St. 45; Hardraker v. Leiby, id. 602, ? Brown v. Webb, 20 Ohio (Lawr.), 389. 3Sheldon v. Mann, 85 Mich. 265; 48 N. W. Rep. 573. See Maxwell v. Simon- ton, 81 Wis. 635; 51 N. W. Rep. 869. 4 State v. Hemingway, 69 Miss. 491, 5 Marshall v. Livingston Nat. Bank, 11 Mont. 851; 28 Pac. Rep, 312, 6 Michelstetter v. Weiner, 82 Wis. 298. In the case of Warner v. Littlefield, 89 Mich. 829; 50 N. W. Rep. 721, it was held that the question whether the instru- ment is a chattel mortgage or an assignment for the benefit of creditors must in all cases be determined as a question of law upon the contents of such instru- ment and not upon any outside testimony; and unless the conveyance upon its face purports to convey all the debtor’s property to secure certain preferred creditors by an absolute title, the court is not at liberty to declare it a common- law assignment, but such outside testimony must be submitted to the jury. Perry on Trusts, 602 e¢ seq, § 8.] DISTINGUISHED FROM DEEDS OF TRUST. 17 creditors consists, as in the case of mortgages, in the equitable in- terest which the grantor still retains in the assigned sranechyu? Frequently, especially in the southern states, assignments for the benefit of creditors are referred to under the designation of deeds: of trust. In most of these states, indeed, assignments in trust are frequently employed for a double purpose — ultimately, as modes of provision for the payment of debts, but intermediately, as in- struments of security against default of payment by the debtor.? Hence they are, in many cases, drawn with a condition that, if the grantor pay the debt provided for within a specified time, the. trustee shall reconvey to him the property,’ or that the deed shall thereupon be void;‘ or ¢ converso, that if the debtor do not pay the debt by a day named (called the “law day ”’),> the trustee shall sell the property and apply the proceeds in payment.’ And spe- cial deeds of trust with such conditions are frequently made di- rectly and exclusively to particular creditors, which gives them still more of the character of a mortgage.’ They are, in fact, mort- gages with the qualities of an assignment in trust superadded, or assignments to take effect at a future day.’ (The chief distinction 1 Wilson v. Russell, 18 Md. 495; Fouke v. Fleming, 13 id. 392; Sanderson v. Stockdale, 11 id. 573; Pettie v. Johnson, 15 Ark. 60. But see Hannah v. Car- rington, 18 Ark. 85; Lyons v. Field, 17 B. Mon. (Ky.) 543. 2 They are called ‘‘deeds to secure the payment of money,” in Stine v. Wilson, 10 Miss. 75. 3 Hafner v. Irwin, 1 Ired. L, 490. 4 Billups v. Sears, 5 Gratt. 31; Reynolds v. The Bank of Virginia, 6 id. 174; Cornish v. Dews, 18 Ark. 172. 5 Lanier v. Driver, 24 Ala. 149. See Bates v. Coe, 10 Conn. 280. 6 Hill v. Manser, 11 Gratt, 522; Farmers’ Bank v. Douglas, 11 Smed. & M. 469; Hopkins v. Lacontre, 4 La. 64; Elmes v. Sutherland, 7 Ala. 262; and see Warren v. Lee, 32 id. 440; Magee v. Carpenter, 4 id. 469; Hemphill, J., in Crosby v. Huston, 1 Tex. 2038, 241, 242; but see Dwight v. Overton, 25 Tex. 39. The text is quoted with approval in Crow v. Beardsley, 68 Mo. 435, 488, where it is said that the distinction is that an assignment is a conveyance toa trustee for the purpose of raising funds to pay a debt, while a deed of trust in the nature of a mortgage is a conveyance in trust for the purpose of securing a debt, subject to a condition of defeasance. 7 Burgin v. Burgin, 1 Ired. L. 453; Harris v. De Graffenreid, 11 id. 89. 8See the observations of Pearson, J., in Stimpson v. Fries, 2 Jones’ Kq. 156. These instruments, however, are not exclusively peculiar to the southern states. In Hendricks v. Robinson, 2 Johns, Ch. 283, the assignments, which were di- rectly to certain creditors, had a proviso that, if the debts and engagements secured by them were paid within a certain time, the assignments should be void; otherwise the assignees were to sell the property and apply the proceeds. And in an English case in the court of bankruptcy, the assignment, which was of all the trader’s property, directly to a creditor, contained a similar proviso, with a further stipulation that, until default in payment, the assignor should re- tain possession of the property assigned. Deeds of this character are spoken of by the court, in this case, as being ‘‘now of very frequent occurrence,” but as seeming to have a tendency “directly opposed to the spirit and policy of the 2 18 ASSIGNMENTS IN GENERAL. [cH. 1. between assignments and trust deeds in the nature of mortgage exists in the equitable interest which the grantor in a trust deed still retains in the assigned property; a defeasible title only passes to the assignee, while a general assignment for the benefit of cred- itors is an absolute conveyance.! . —_—— bankrupt laws.” Ex parte Harvey, In re Collins, 1 Bankr. & Insolv. R. 194, 197, In the Ohio case of Hoffman v. Mackall, 5 Ohio St. 124, an assignment or uncon- ditional deed of trust was distinguished from a deed of trust in the nature of a mortgage in the following terms: ‘‘ There is a manifest and well-settled distinu- tion between an unconditional deed of trust and a mortgage or deed of trust in the nature of a mortgage. The former is an absolute and indefeasible convey- ance of the subject-matter thereof, for the purpose expressed; whereas the lat- ter is conditional and defeasible. A mortgage is the conveyance of an estate, or pledge of property, as security for the payment of money or the performance of some other act, and conditioned to become void upon such payment or perform- ance. A deed of trust in the nature of a mortgage is a conveyance in trust by way of security, subject to a condition of defeasance, or redeemable at any time before the sale of the property. A deed conveying land to a trustee as mere col- lateral security for the payment of a debt, with the condition that it shall be- come void on the payment of the debt when due, and with power to the trustee to sell the land and pay the debt in case of default on the part of the debtor, is a deed of trust in the nature of a mortgage. By an absolute deed of trust the grantor parts absolutely with the title, which vests in the grantee uncondition- ally for the purpose of the trust. The latter is a conveyance to a trustee for the purpose of raising a fund to pay debts, while the former is a conveyance in trust for the purpose of securing a debt subject to a condition of defeasance.” Woodruff v. Robb et al., 19 Ohio St. 216; 1 Hilliard on Mortgages, 359. The court accordingly held (Bartley, J.), in this case, that ‘‘ where the grantor in a deed of trust makes it in contemplation of insolvency, and authorizes the grantee, after paying the expenses of the trust, to make a pro vata distribution of the proceeds of the trust property among the grantor’s creditors, such deed is abso- lute, and the conveyance is to a trustee for the purpose of raising a fund with which to pay debts, as distinguished from a deed of trust in the nature of a mort- gage to secure debts.” In De Wolf v. Sprague Mfg. Co., 49 Conn. 282, the conveyance was to a trustee to secure the payment of certain notes of one of the grantors; it was to be void if the grantors should pay the notes according to their tenor and the expenses of the trust, and it empowered the trustee to sell the property and apply the pro- ceeds to the payment of the notes, paying over the surplus to thegrantors. This was held to be a deed of trust in the nature of a mortgage and not a voluntary assignment. 1 Comer v. Constantine, 86 Ala. 402; 5 So, Rep. 773; Hargdime v. Henderson, 97 Mo. 875; 11 8, W. Rep. 218; In re Assignment of Zwang, 39 Mo. App. 356; Mills v. Williams, 31 id, 447, CHAPTER ILI. THE RIGHT TO ASSIGN—STATUTORY PROVISIONS RESTRICTING THE RIGHT TO ASSIGN AND REGULATING THE OPERATION OF AS- SIGNMENTS. § 9. Debtor’s Right to Assign. 10. Fraudulent Conveyances — Bankrupt Law. 11, Fraudulent Conveyances, 12, Classification of Assignments — Special or Partial Assignments. 13. General Assignments, 14. State Statutes. § 9. Debtor’s Right to Assign.—“It would seem,” observes Mr. Chief Justice Marshall, “to be a consequence of that absolute power which a man possesses over his own property that he may make any disposition of it which does not interfere with the exist- ing rights of others; and such disposition of it, if it be fair and real, will be valid. The limitations on this power are those only which are prescribed by law.” The right to transfer is a necessary incident to the right of property itself, and rests on the same foundation with the absolute rights to acquire and enjoy ;? and its exercise, where the subject of it is free from the claims of others, is placed under no other restriction than such as the general policy of the law has imposed. Where, however, property has become subject to the rights and claims of others, and particularly where the relation of debtor and creditor has been created, it becomes just and reasonable that the general power of disposition should be so far restricted and quali- fied as that conveyances and assignments by the debtor, especially of the whole or greater part of his property, should not be em- yuoyed as a means of preserving it for his own use or benefit, or of unduly protecting it from the remedies of his creditors. 8 10. Fraudulent Conveyances — Bankrupt Law.— In order to effect this object, two systems have been devised in England and have, from that source, been introduced into the jurisprudence of the. United States. The first consists of statutory provisions which simply declare conveyances by debtors in certain cases to be fraud- ulent and void, and subject the property conveyed to the claims 1 Sexton v. Wheaton, 8 Wheat. 229; 242. 29 Kent’s Com, [326], 377; Id. [828], 370; 1 Bl. Com. 138. 20 RIGHT TO ASSIGN. [o. 1. and remedies of creditors, as if no conveyance had been made, but. interfere no further with the debtor’s affairs. The other system is a body of regulations under which the whole of a debtor’s prop- erty is, on the commission of certain defined acts, taken at once out of his hands by the law and disposed of for the general benefit of his creditors. The first of these comprises the provisions of those statutes which are generally known as the statute of fraudu- lent conveyances, and which operate without distinction upon all persons making transfers of property; the second is the system of the bankrupt laws, which is more confined in its operation. The effect of the bankruptcy laws upon the right to assign prop- erty for the benefit of creditors will be considered in a subsequent. chapter. §11. Fraudulent Conveyances.—The statutory provisions against. fraudulent conveyances commenced in England as early as the reign of Edward IIT.,? but were not fully matured until the time of Queen Elizabeth, in whose reign two statutes were passed — the 18 Eliz, ch. 5, and 27 Eliz., ch. 4—the former relating to creditors only, the latter to purchasers. The provisions of the 18 Eliz., ch. 5, to. which we shall confine ourselves, and which is still in force in Eng- land, have been generally adopted throughout the United States.* These provisions have been considered by the highest authority ‘ to be only declaratory of the common law, which, in the opinion of Lord Mansfield,’ was so strong against fraud that it alone would have attained every end proposed by the statutes themselves. More will be said on this subject in another place.® § 12. Classification of Assignments— Special or Partial As- signments.— In tracing the history of the practice of assignments by debtors, we find that they are, for the most part, reducible 1Sometimes, though not with strict accuracy, called statutes of frauds. 2 Stat. 50 Edw. IIL, ch. 6, Crabb's Hist. Eng. Law (Am. ed. 1831), 274; Stat. 3 Hen. VII., ch. 4, Crabb’s Hist. 440; 2 Kent’s Com. [440], 547, And see pnst, ch. XXV. 32 Kent’s Com, [440], 548; 4 id. [463], 510; 1 Story’s Eq. Jur., § 353, See Hamil- ton v. Russell, 1 Cranch, 309, 4Co. Litt. 76a, 290b; Lord Mansfield, in Cadogan v. Kennett, Cowp. 482, 484; Marshall, C. J., in Hamilton v. Russell, 1 Cranch, 309, 316; Story, J., in Meeker v. Wilson, 1 Gall. 419, 428; Spencer, J., in Sands v. Hildreth, 14 Johns, 498, 498: 2 Kent’s Com. [440], 548, note; Garland, J., in The United States v. The Bank of the United States, 8 Rob. (La.) 262, 402. 5 Cadogan v. Kennett, Cowp. 434e. ®¥or the statute in full, and also the statutes of the various states, see Bump: on Fraudulent Conveyances, Appendix, pp. 583 et seg.; Roberts on Fraudulent Conveyances, pp. 2, 8. And see post, ch, XX¥. The recent work of Mr. Wait on Fraudulent Conveyances contains much valuable information on the subject. § 12.] CLASSIFICATION OF ASSIGNMENTS. “21 under three principal divisions: first, transfers of some specific arti- cle, or one or more descriptions of property, directly to some fa- vored creditor, and for his exclusive benefit; secondly, transfers of all or the greater part of the debtor’s property to one or more preferred creditors, either directly or through the medium of a trust; and thirdly, transfers by formal deeds of trust of all the debtor’s property, for the benefit of aid his creditors. All these ‘descriptions of transfers have, at one time or other, been made the subjects of judicial investigation, and have been construed, by the courts in England and the United States, with reference either to the statutes against fraudulent conveyances or to the bankrupt laws, and, in some cases, with reference to both. Assignments of the first description just mentioned, by which a ‘debtor transfers some specific article of property, or some part of his effects, to one or more creditors, by deed or by mere delivery, and in the way of payment or security when made by persons in solvent circumstances, and in a course of trade or dealing, are in the nature of ordinary business transactions and rarely give rise to questions of any kind. Where, however, the obligations of the debtor are large and the portion of his means thus specially ap- propriated is considerable, and the rights of other creditors become thereby affected, and especially where the transaction is inconsist- ent with the prosecution of his business, or is expressly done with reference to or in contemplation of suspension, failure or bank- ruptcy, questions frequently arise as to the validity of these spe- cial or partial assignments. In England they have most commonly -been tested by the bankrupt laws, under which they have in some cases been upheld, but more frequently avoided, as giving undue or fraudulent preferences, contrary to the spirit and policy of that peculiar system. The same rules have, for the most part, been adopted in the United States in cases which have arisen under our bankrupt laws.! In cases not within the bankrupt laws, these special or partial assignments have been construed by the English courts with ref- 1 Under the bankrupt law (section 5128), in order to render a transfer void, it was necessary that certain facts occur. The debtor must be insolvent, the trans- fer must be made with a view to give a preference to the creditor, the creditor must have reasonable cause to believe the person making the transfer to be in- solvent, and that it was in fraud of the bankrupt act, and the transfer must have been made within four (in cases of involuntary or compulsory bankruptcy, two, {section 5131a]) months before the filing of the petition by or against the bankrupt. Bump on Bankruptcy (8th ed.), 792 et seq. and cases cited; Clark v. Iselin, 11 N. B. R. 337; Kohlsaat v. Hoguet, 5 N. B. R. 159. See Mays v. Fritton, 11 N. B. R. 229: s. c, 20 Wall. 414. As to preference under the bankrupt acts of 1800 and 1841, see Ogden v. Jackson, 1 Johns. 370, 373; Locke v. Winning, 3 Mass. $25; Freeman v. Deming, 8 Sandf. Ch. 327; McAllister v. Richards, 6 Barr, 133; £ Kent’s Com. [532], 688; Jones v. Sleeper, 2 N. Y. Leg. Obs, 131. 22 RIGHT TO ASSIGN. [cH. IL erence to the common law, or the statute of fraudulent convey- ances; and under these they have been more frequently sustained." And in the United States, assignments of this class, made directly to particular creditors where no bankrupt law was in force, have been in many instances declared valid;* and even in those states. where preferences in general assignments have been expressly pro- hibited by statute, the prohibition has been held not to extend to transfers of particular portions of a debtor’s property, directly to a creditor in payment of a debt.’ § 13. General Assignments.— Assignments of the second and third descriptions above mentioned (and which may be distin- guished as general assignments),‘ by which all or substantially all the debtor’s property is appropriated for the benefit either of one or more preferred creditors, or of the creditors at large, comprise such as are made by debtors in declining or insolvent circum- stances; and whenever brought within the application of the bank- rupt laws have almost uniformly been condemned by the English courts, on the ground of their inconsistency with the provisions or policy of those laws and their tendency to defeat their leading objects? In cases not within the English bankrupt laws, assignments of all a debtor’s property, whether in favor of particular creditors or of all the creditors, have frequently been held valid.® 1 Holbird v. Anderson, 5 Term R. 2385; Estwick v. Caillaud, id. 420. 2Seymour v. Wilson, 19 N. Y. 417; Towsley v. McDonald, 32 Barb. 604; McMahon v. Morrison, 16 Ind. 172; Hessing v. McCloskey, 387 Ill. 341. In the case of Archer v..O’Brien, 7 Hun, 146, Mr. Justice Brady states the rule as. follows: “The creditor, when he discovers circumstances which would put a prudent man on inquiry, should, in the preservation of his own rights, seek the payment of his debt, the protection of his own property. Such a course is not only con- sistent with honesty, but is a duty which he owes to himseif, the observation of which is sanctioned by the rules of law authorizing the preference which he ob- tains.” “To constitute a valid transfer by a debtor to his creditor, it is only necessary that three things should concur: ‘1. That there was a valid subsisting indebtedness on the part of the vendor or assignor to him. “2, That the property transferred was conveyed to secure the debt. “3. That it was reduced to possession.” 3The New York County Bank v. Carter, 38 Pa. St. 446; Tillou v. Britton, 4 Halst. 120; Meredith Man, Co. v. Smith, 8 N. H. 357; Brown v. Foster, 2 Mete. 152; Eastman v. McAlpin, 1 Kelly, 157; Blakey’s Appeal, 7 Barr, 449; Wilcox v. Kellogg, 11 Ohio, 894. See post, ch. XI. Dessar v. Field, 99 Ind. 548; Boling v. Howell, 93 id. 8329; Tomlinson v. Matthews, 98 Ill. 178; Carter v. Rewey, 62 Wis. 552; 22 N. W. Rep. 129; Rothell v. Grimes, 22 Neb. 526; 35 N. W. Rep. 392. 4 As to what are general assignments, see post, ch. VIII. 5 See post, ch. III. 6 Ingliss v. Grant, 5 Term R. 530; Nunn v. Wilsmore, 3 id. 521; Goss v. Neale, § 13.] GENERAL ASSIGNMENTS. 23 The general power to assign property in trust, in behalf and for the benefit of creditors, has always been recognized and approved in the fullest manner, both by the state and federal courts, as well as by the most eminent American jurists.1 The only checks and restrictions for a long time imposed on the exercise of this power, were the general ones afforded by the provisions of the statutes of fraudulent conveyances, and the exercise of the equity powers of courts in setting aside assignments on the ground of fraud. And even these checks and restrictions were not always rigorously ap- plied in practice. The right to prefer one creditor over another in these conveyances, by priority of payment, which amounted in many cases to the absolute exclusion of a non-preferred creditor, was universally recognized ;? and the debtor was usually allowed a large discretion in prescribing the terms upon which such prefer- 5 J. B. Moore, 19; Meux v. Howell, 4 East, 1; Pickstock v. Lyster, 3 M. & S. 871; approved in James v. Whitbread, 20 L. J. Rep. (N. 8.) C. P. 217. 1*‘Every debtor has a legal right to assign property for the security of the debts due by him, and so far from such an act being reprehended by the law, it is justified and approved.” Story, J., in Brown v. Minturn, 2 Gall. 557, 559. Gen- eral assignments are spoken of by the same judge as ‘‘encouraged by the com- mon law.” Halsey v. Whitney, 4 Mason, 206, 210. See, also, Bascom v. Rain- water, 30 Mo. App. 483; Bryce v. Foot, 25 S. C. 467; Hanselt v. Vilmar, 76 N. Y. 630; Barton v. Brent, 87 Va. 385; 13 S. E. Rep. 29; Hyde v. Weitzner, 45 Minn. 35. ‘‘A conveyance in trust to pay debts is a valid conveyance founded on a good consideration.” Kent, C., in Dey v. Dunham, 2 Johns, Ch. 182, 189. “It is settled that an insolvent debtor may at any time before his property be- comes bound by any lien assign it over to trustees for the benefit of all his cred- itors by an act made bona fide. The assignment is to be referred to an act of duty, attached to his character of debtor, to make the fund available for the whole body of the creditors.” Kent, C., in Nicoll v. Mumford, 4 Johns. Ch. 522, 529. ‘The right of an insolvent debtor to make an assignment for the benefit of his creditors, before the property is bound by any lien, does not admit, of ques- tion, provided it be bona fide.” 2 Tucker’s Com. [443], 482. ‘The right to make a general assignment of all a man’s property results from that absolute owner- ship which every man claims over that which is his own.” Marshall, C. J., in Brashear v. West, 7 Pet. 608, 614. Garland, J.,in The United States v. The Bank of the United States, 8 Rob. (La.) 262, 404: ‘“‘I think that where an assign- ment is for the benefit of all the creditors of the assignor equally and ratably, it must command the sanction of every enlightened tribunal. It is.a practical en- forcement of the maxim that equality is equity.” Buckner, C., in Robins v. Embry, 1 Sm. & Marsh. Ch. 207, 258. See Malcolm v. Hall, 9 Gill, 177. And see the opinion of Bennett, J., in Hall v. Denison, 17 Vt. 310; and Ewing J., in Vernon v. Morton, 8 Dana, 247, 251. Mr. Justice Field, in Mayer v. Hellman, 13 N. B. R. 440: ‘* Whenever such a disposition has been voluntarily made by the debtor, the courts in this country have uniformly expressed their approbation of the proceedings.” Mr, Justice Buchanan, in The State v. The Bank of Maryland, 6 Gill & Johns. 217: ‘‘ Equality is equity, and when a debtor makes a transfer of his property for the fair purpose of equal distribution among his creditors, he does an honest act and discharges a moral duty.” See Kalkman v. McEldeny, 16 Md. 60. Mr. Justice Bailey, in Hoffman v. Mackall, 5 Ohio St. 124; Forbes v. Scannell, 13 Cal. 242. 2 The text is quoted with approval in Crawford v. Kirksey, 55 Ala, 282 24 RIGHT TO ASSIGN. (cH. u. ence, or indeed any benefit of the assignment, should be enjoyed. The same liberality was extended to the execution of the trust, after its creation by the debtor; the powers of assignees not being very rigidly limited, nor their duties very carefully defined. The whole transfer, in short, was in many cases a private transaction between the debtor and the assignee, with little of the notoriety which its avowed object would seem to require; and in its effect has, not inaptly, been characterized as “a bankrupt law made by the debtor for himself.”!_ The evils growing out of this system of assignment were occasionally noticed by the courts, and the in- creasing abuses of the power with which it armed the debtor were at length strongly exposed in some able judicial opinions. § 14. State Statutes.— The attempt to correct these abuses has led in many states to the enactment of statutory regulations limit- ing, on the one hand, the debtor’s power in creating these trusts, and defining, on the other, the duties of assignees in executing them; and at the same time giving to creditors a more effectual power of inspection and control over the acts and proceedings of both. It is obvious, from what has been said, that the power to make such assignments is not dependent upon these statutory pro- visions.’ Assignments for the benefit of creditors are voluntary on the part of the debtor. No authority can exact them; and when made, they partake of the nature of a private contract. The assignee derives his authority entirely from the grantor, and the appointment carries with it an actual and not merely a theoretical trust and confidence. The assignee is the choice of the debtor to ‘whom to intrust his property and his relations with his creditors. Under this view of the relation, we should not expect the legis- lature to go further than to regulate, direct and secure a perform- ance of the trust.? 1Gibson, C. J., in Thomas v. Jenks, 5 Rawle, 221. 2 Mr. Justice Sharswood, in Beck v. Parker, 65 Pa. St. 262; Cook v. Rogers, 13 N. B. R. 97; Bentley v. Thrasher, 59 N. Y. 649; s a, 2 Supm. Ct. (T. & C.) 309; Dehner v. Helmbacher Mills, 7 Ill. App. (Brad.) 47. The right to assign existed at common law, and is not derived from any statute. Weider v. Maddox, 66 Tex. 372; 1S. W. Rep. 168; 59 Am. Rep. 617. See King v. Glass, 73 Iowa, 205; ‘34. N. W. Rep. 820; Barton v. Brent, 87 Pa. 385: 13 S. E. Rep. 29; Pillsbury v. Kingon, 31 N. J. Eq. 624; Holmberg v. Dean, 21 Kan. 74. 3Drain v. Mickel, 8 Iowa, 438. For a digest of the statutes of the several states and territories relative to assignments, see Appendix 1 CHAPTER III. VOLUNTARY ASSIGNMENTS CONSIDERED IN CONNECTION WITH THE BANKRUPT LAW, § 15. The Common Law. 16. English Statutes. 17. English Statutes — Continued. 18. English Statutes — Continued. 19. The English Doctrine. 20. Assignments with Preferences, 21, Assignments for Equal Benefit of Creditors. 22, Assignments for Equal Benefit of Creditors — English Statutes. 23, Exemption of Assignments from Operation of Act. 24, General Grounds of English Rule. 25. United States Bankrupt Acts of 1800 and 1841. 26. Provisions of the Act of 1867 Applicable to General Assignments, 27. The Power to Assign Not Suspended by Bankrupt Laws. 28, Assignments Fraudulent at Common Law, or Under 18 Eliz., or Giving Preferences, 29. Is the Making of a Bona Fide Assignment for Creditors Ratably an Act of Bankruptcy. 30. Cases. 81. Duty of Insolvent, / 32. Insolvency and Assignment Under the Act. 33. Assent of Creditors. 34. Assignments Not Void but Voidable in Bankruptcy. 35. Avoiding Assignment by Assignee, 36. Right of Action in Assignee Exclusive. - 3%. Proceeding Under Voluntary Assignments — When Avoided — Protection of Voluntary Assignee. 38. Allowance of Expenses to Voluntary Assignee. ' 89. Bar to Discharge. 40. Composition in Bankruptcy and General Assignments. ; : § 15. The Common Law.— The bankruptcy system introduced by statute into the jurisprudence of England, and derived from - the civil law,! proceeds upon principles and methods in many re- ‘spects dissimilar to those of the common law. While the common law rewards the diligence of creditors by distributing the estate of an insolvent debtor amongst them according to the priorities they 1 The early law of Rome gave creditors the savage remedy of dividing the body ‘of their debtor or selling him and his family into slavery. The Lex Paetelia (about 826 B. C.) enabled a debtor who could swear to being worth as much as he owed to save his freedom by resigning his property. And many years later the legislation of Julius Ceesar established the cessio bonorum, as an available remedy for all honest insolvents. See Institutes Justinian, 4, 6, 40; Sanders’ Justinian (Hammond), 541. 26 BANKRUPT LAW. [CH. III. obtain in the pursuit of it, the bankruptcy system regards the prop- erty of the debtor as of right belonging to the whole body of his. creditors, to be distributed ratably among them towards the satis- faction of their claims.! . . The common law, in the enforcement of its judgments, seizes only so much of the debtor’s property as is sufficient to pay in full the individual claim of each creditor as it ripens into execution, but the bankruptcy law on the occasion of certain acts, termed acts of bankruptcy, at once sequestrates the entire estate of the debtor, and places it beyond his control and under a course of distribution in the hands of its own officers and under its own direction.? At common law the debtor must satisfy the claims of his creditors to obtain their voluntary releases, if he would be rid of the burden of his liabilities. The humane policy of the bankrupt law discharges the honest debtor from all his obligations, upon compliance with the conditions prescribed by the law for his discharge.* Voluntary assignments for the benefit of creditors manifestly in- terfere with the operation of each of these systems. Apart from statutory regulations they may be said to be the creatures of courts of equity.4 But although they withdrew the property of the debtor from the legal pursuit of creditors, they are not, when honestly made, regarded as in contravention of the common law.® Inasmuch, however, as the method they provide for the pay- ment of the debts of an insolvent is that ordained by the debtor himself, and that method may be at variance with the provisions of the bankruptcy system, they are, whenever brought within the jurisdiction of that system, “subjected to the sharpest scrutiny ;” ® and they have not unfrequently been regarded, even when made for the equal benefit of all creditors, as wholly repugnant to the spirit and provisions of the bankrupt act. A brief review of the bankruptcy legislation as affecting voluntary assignments is essen- tial to a clear apprehension of the questions which have arisen under the administration of the bankrupt law. ‘ § 16. English Statutes.— The first introduction of a bankrupt law in England was by the statutes of 34 and 35 Hen. VIIL., ch.4.7 This statute was very imperfect. It empowered the lord chancel- 1 Robson’s Law of Bankruptcy (2d ed.), p. 1. 2McClure v. Campbell, 71 Wis. 350, 3 After the bankrupt’s debts are paid the original title of the surplus reverts to him by operation of Jaw. Saunders v. Mitchell, 61 Miss. 821. 4Carlton v. Baldwin, 22 Tex. 724, 5 See ante, p. 24. Lord Ellenborough, in Pickstock v. Lyster, 8M. & S, 372. 6 Mr. Justice Swain, in Farren v. Crawford, 2 N. B. R. 602. 72 Bl. Com, 474. § 17.] ENGLISH STATUTES. 27 lor and other high officers, upon petition of a creditor, to seize and distribute the estates of bankrupts ratably among their creditors. But the grounds of the application were confined within no defi- nite limits.!| This statute was enlarged? and almost totally altered by 13 Eliz., ch. 7. By the statute of Elizabeth the law of bank- ruptcy was restricted to traders, and certain acts of bankruptcy were prescribed, upon the commission of which a trader became liable to be adjudged bankrupt. But it does not appear that a voluntary assignment for creditors, or that even fraudulent convey- ances, such as those included within the statute of fraudulent conveyances * enacted in the same year, were regarded as acts of Yankruptcy. The statute of 1 Jac. I, ch. 15, sec. 2, made it an act of bankruptcy for a debtor to “make, or cause to be made, any fraudulent grant or conveyance of his, her or their lands, tenements, goods or chattels, to the intent or whereby his, her or their credit- ors, being subjects born as aforesaid, shall, or may be, defeated or delayed for the recovery of their just and true debts.” * Numerous statutes ° relating to bankruptcy were thereafter from time to time enacted, the most important of which were 21 Jac. L, ch. 19, and 5 Geo. II., ch. 30. By the latter statute the creditors were empowered for the first time to make choice of an assignee. § 17. English Statutes — Continued.— All these statutes were repealed by that of 6 Geo. IV., ch. 16, which consolidated the dif- ferent regulations on this subject into one act. In this act the language in reference to fraudulent conveyances was changed, and it was made an act of bankruptcy for a debtor to make, or cause to be made, any fraudulent gift, delivery or transfer of any of his goods or chattels with intent to defeat or delay his creditors in the recovery of their debts.’ This language remained substantially unaltered in the English bankrupt acts down to 1869, when the words “with the intent to defeat and delay,” etc., were omitted. By the act of Geo. IV. an important exception was made in favor of conveyances of all a debtor’s property to a trustee for the benefit 1This statute was, as we learn from the preamble, directed against debtors “‘who, craftily obtaining into their hands great substance of other men’s goods, do suddenly flee to parts unknown, or keep their houses, not minding to pay, or return to pay, any of their creditors their debts and duties, but at their own will and pleasure consume the substance obtained by credit from other men for their own pleasure and delicate living, against all reason, equity and good conscience.” 2 Sir J. Jekyll, in Small v. Oudley, 3 P. Wms. 427. 318 Eliz., ch. 5. 4Mr, Justice Cadwalader, in Barnes v. Rettew, 8 Phila. 185. 5Bl. Com. 474. No provision was made for the discharge of the bankrupt from his debts until 4 Anne, ch. 17, § 10; Ibid., ch. 15. 6Mr. Justice Cadwalader, in Barnes v. Rettew, 8 Phila. 135. 28 BANKRUPT LAW. fou. 111. of all his creditors. By the fourth section of this act, such a con- veyance executed in the manner prescribed, by the trustee, duly attested and given publicity by published notice, was declared not to be an act of bankruptcy unless a commission issued within six months thereafter.! This act was followed by numerous others,’ to which no particular allusion is here required. In the year 1849 a most important statute, known as “the bank- rupt law consolidation act, 1849,” was passed for the amendment and consolidation of the bankruptcty laws. By the sixty-eighth section of that act it was provided that if any trader amenable to the act should execute any conveyance or assignment by deed of all his estate and effects to a trustee or trustees for the benefit of all his creditors, the execution of such deed should not be deemed an act of bankruptcy, unless a petition for an adjudication of bankruptcy should be filed within three months from the execution thereof, provided the deed were ex- ecuted by the assignee, attested, and notice thereof given as pre- scribed.‘ It was further provided by the twenty-fourth section of the act, and the sections immediately following, that deeds of arrangement entered into between a debtor and his creditors, and executed by six-sevenths in number and value of the creditors whose debts amounted to £10 and upwards, should be binding upon all creditors, and provision was made for completing such arrangements. The construction put upon these provisions by the case of Tetley v. Taylor > defeated to a large extent the benefits which were ex- pected to result from deeds of arrangement, by requiring in every case a complete surrender of the entire estate of the debtor, thus destroying one important element in such arrangements, namely, the continuance of the debtor’s business.® By the bankrupt act of 18617 the bankruptcy system was ex- tended to non-traders as well as traders, and still more liberal pro- ‘vision was made for carrying out amicable arrangements and set- tlements between debtors and their creditors. Under the one hundred and ninety-second section of that act, deeds of trust entered into between a debtor and his creditors, or 1Botcherly v. Lancaster, 3 N. & M. 384; Lord Abinger, in Siebert v. Spooner, 1M. & W. 714, 21 & 2 Wm. IV., ch. 56; 2 & 3 Wm. IV., ch, 114; 5 &6 Wm. IV., ch. 29; 7&8 Vict., ch. 70; 7 & 8 Vict., ch. 96; 10 & 11 Vict., ch. 102, 312 & 18 Vict., ch. 106. . 412 & 18 Vict., ch. 106, § 68; Chitty’s Stat., vol. I, p. 277, 51 El. & Bl. 521; 8. C., 21 L. J. Rep. (N. S.) Q. B. 846, . 6See Lord Chan. Westbury, in Ex parte Morgan, In re Woodhouse, 32 L. J. Rep. Bank, 15. 724 & 25 Vict., ch. 184, &§ 18, 19.] ENGLISH STATUTES. 29 any of them, or a trustee on their behalf, were declared valid, effectual and binding on all the creditors of such debtor, as if they were parties to it, providing a majority in number, representing three-fourths in value of the creditors of such debtors whose debts, respectively, amounted to £10 and upwards, should assent to or approve of such deed, and provided such deed should be accepted by the assignee, be attested, registered, stamped, and notice thereof given in compliance with the requirements of the act. § 18. English Statutes — Continued.— No material changes were thereafter made in the English bankruptcy laws as affecting voluntary assignments for the benefit of creditors previous to the date of the passage by congress of the bankrupt act of March 2, 1867. Very important alterations, however, have been effected in the English system by the bankruptcy act of 1869.1 By the sixth section of that act it is expressly declared to be an act of bank- ruptcy, “that the debtor has, in England or elsewhere, made a con- veyance or assignment of his property to a trustee or trustees for the benefit of his creditors generally ;” and by the ninety-second section preferences fraudulent in bankruptcy may be avoided by the assignee. By the bankruptcy act of 1883, an act passed to amend and con- solidate the law of bankruptcy, 46 & 47 Vict., ch. 52, the English bankruptcy law was materially changed? The provisions of this act are comprehensive and specific and it repeals as to England the bankruptcy act of 1869, 32 & 33 Vict., ch. 71, the absconding debt- ors act of 1870, 33 & 34 Vict., ch. 76, and amends the statutes of Westminster the second, Edw. I., ch. 18, the debtors act of 1869, 32 & 33 Vict., ch. 62, the bankruptcy repeal and insolvent court act of 1869, 32 & 33 Vict., ch. 83, the bankruptcy disqualification act of 1871, 34-& 35 Vict., ch. 50, and the supreme court judicature act of 1875, 38 & 39 Vict., ch. 77. Inasmuch as the existing bankrupt law in this country was modeled largely upon the English statutes of 1849 and 1861, in connection with the insolvent law of Massachusetts,’ an examina- tion of the construction placed upon the English statutes as affect- ing voluntary assignments for creditors will not be out of place. § 19. The English Doctrine.— It should, in the first place, be observed that at no time previous to the act of 1869‘ has any 132 & 88 Vict., ch. 71. This act is said to have been modeled upon the Scotch system as contained in the 19 & 20 Vict., ch. 79. See Robson’s Law Bank, (2d ed.), p. 10, 2 Crook v. Morley, 1 Ap. Ca, 316. 3Mr. Justice Cadwalader, in Barnes v. Rettew, 8 Phila. 135. 432 & 88 Vict. 71, §§ 6, 92. 30 BANKRUPT LAW. [cH. IT. English statute expressly declared the giving of a preference or the assignment of the whole or any part of a debtor’s estate, either directly to creditors or in trust for them, to be an act of bankruptcy or avoidable by an assignee in bankruptcy. The rules of law relating to these subjects have arisen entirely from judicial construction ! of the language of the statute of fraud- ulent conveyances introduced into 1 Jac. L., ch. 15, and retained in a somewhat modified form in 6 Geo. IV., ch. 16,’ interpreted in the light of the policy and object of the bankruptcy system. The words made use of are, in substance, the same as those employed in the statute of fraudulent conveyances, 13 Eliz., ch. 5, and as con- strued in the bankruptcy acts have always been understood as comprehending conveyances void at common law or under the statute of 13 Eliz. ch.5.4 Their interpretation in the bankrupt law has, however, been greatly extended by the courts. § 20. Assignments with Preferences.— As early as the year 1758, Lord Mansfield, in the case of Worseley v. De Mattos,’ very clearly and emphatically announced the doctrine which has ever since been regarded a ssettled law, that a conveyance by an insolv ent debtor of his entire estate to a particular creditor is an act of bankruptcy. He said: “ An equal distribution among creditors who equally give a general personal credit to the bankrupt is anxiously provided for ever since the act of 21 Jac. I., ch. 19.” The same opinion was expressed by him in the cases of Wilson v. Day,’ Compton y. Moore,’ and Hooper v. Smith. Some years later Lord Ellenborough, in the case of Newton v. Chandler,’ said: “ As a general proposition it cannot be disputed that a conveyance by deed by a trader of all his property to a particular creditor in prejudice to the rest is an act of bankruptcy.” 1The doctrine of fraudulent preference described by Lord Ellenborough as an excrescence on the bankrupt act (2 Camp. 168) is entirely of judicial creation and is generally considered to have been introduced by Lord Mansfield. Alder- son v. Temple, 4 Burr, 2235; s. c., 1 W. Bl. 660; Harman v. Fisher, Cowp., 117; Rust v. Cooper, Cowp. 629; Martin v. Pewtress, 4 Burr. 2477; Robson’s Law of Bank. (2d ed.) 125. 2See ante, $16. 3See ante, $17. 4Eden on Bankruptcy, p. 17% 51 Burr. 567. 61 Burr. 827. 71 Ww. BI. 361. 81 Wm. BI. 441. 97 Bast, 148 (1806); and see Lord Abinger, in Siebert v. Spooner, 1M. & W. 714; The Oriental Banking Co. v. Coleman, 8 Gif, 11. 10 See, also, Linden v. Sharpe, 6 M. & G. 875; Siebert v. Spooner, 1M, & W. 714; Whitwell v. Thompson, 1 Esp. 72; Hutton v. Crutwell, 1 El. & Bl. 15; Lomax v. Buxton, L. R. 6 C. P. 107, § 20.] ASSIGNMENTS WITH PREFERENCES. 31 «nd the same conclusion is reached where the conveyance is of all a debtor’s property except some specified.! These decisions ap- pear to have been placed upon two distinct grounds: First, the manifest effect of such conveyances in defeating the great object of the bankrupt law, to wit, an equal distribution of the estate of a : debtor; and second, the fact that such conveyances, by divesting a trader of his entire property, render it impossible for him to carry on his trade. It has sometimes been said that the reason why a conveyance of a debtor’s entire estate is an act of bankruptcy is because it amounts to a declaration of insolvency,” or, as Lord Mansfield is reported to have said, because it is “an assignment of his solv- ency.”*® But, clearly,a man may be insolvent without being a bankrupt, and an act which simply amounts to a declaration of insolvency, or which renders a debtor insolvent, is not necessarily an act of bankruptcy. And Lord: Mansfield, subsequently admit- ting this to be the rule of law, observed that the remark above quoted was incorrectly reported, and “that the reason why a man becomes a bankrupt who conveys away all his property is that he thereby becomes totally incapable of trading.”* We shall have occasion to refer to this topic again. But where there is a substantial exception out of the debtor’s property, such an exception as ought possibly to enable him to carry on his trade with advantage, a conveyance of his property is not necessarily and by force of law, without reference to extrinsic circumstances showing fraud, an act of bankruptcy.’ And where the conveyance is of the whole property, not merely for an ante- cedent debt, but also for a present advance of which the debtor really has advantage, and which he can apply to the purchase of stock or otherwise for his use, it is not necessarily and per se an act of bankruptcy.’ It should be further remarked, under the law as it existed previous to 1869, two things were held necessary to consti- tute a fraudulent preference: first, the transaction was required to be the voluntary and spontaneous act of the debtor from which 1Pulling v. Tucker, 4 B. & A. 382; Gaynor’s Case, cited in Worseley v. De Maitos, 1 Burr. 479; and also in Butcher v. Easto, 1 Doug. 294; and see 2 Cowp. 633, 2 Worseley v. De Mattos, 1 Burr. 827; Haswell v. Simpson, 1 Doug. 91. 3 Hooper v. Smith, 1 W. Bl. 441; Compton v. Bedford, id. 362. 4 See Reporter’s Note to Law v. Skinner, 2 W. BI. 996. 5 Lomax v. Buxton, L. R. 6 C. P. 107. See Robinson’s Law of Bankr, (2d ed.) p. 124, and cases cited. ; 6 Whitwell v. Thompson, 1 Esp. 72; Hutton v. Crutwell, 1 El. & BI. 15; Brittle- stone v. Cook, 6 id. 296; s. c., 2 Jur. (N. S.) 758; Harris v. Rickett, 4H. & W. 1; 8. c., 28 L. J. Exch. 197. See, also, Frazer v. Thompson, 6 Jur. (N. 8.) 669; also, S. C. on appeal, 4 De G. & J. 659. 32 BANKRUPT LAW. {cH. m1. the desire to prefer was inferred ;! and secondly, it was required to be done in contemplation of bankruptcy.’ It is therefore clear that a general voluntary assignment by an insolvent debtor, per- mitting preferences, is, and always has been, regarded as an act of bankruptcy, unless it be assented to by all the creditors. § 21. Assignments for Equal Benefit of Creditors.— Where, however, no preference is given, and the assignment is honestly made for the equal benefit of all the creditors, a more difficult question arises. The English cases have gone to the full extent of declaring such conveyances fraudulent in bankruptcy. “ This doc- trine,” says Lord Henley, “has occasionally met with disapproba- tion, and the reasons upon which it is founded are by no means. satisfactory.” ? The first case in which the point was judicially determined was. Kettle v. Hammond,‘ before Lord Mansfield. at nest prius, which was an assignment by a trader to two of his creditors in trust for all the rest. A few years later, in the case of Eckhardt v. Wilson,® the general doctrine was considered so clear that it was not argued, and in the early case of Tappenden v. Burgess,® Mr. Justice Grose, in delivering the opinion of the court, said: “ Here the bankrupts have done an act to divest them of all their property, which by all the cases is an act of bankruptcy.” And the court relied upon the authority of Bamford v. Baron.’ A little later Lord Eldon, in Ex parte Bourne,’ went somewhat more into the question. He said: “T recollect cases in which it was settled upon a single ground, that an assignment of all the property is an act of bankruptcy, though the direct and immediate object is not to delay but to sat- isfy the creditors; but it was held that a trader had not a right by deed to place his property under a distribution different from that. 1Brown v. Kempton, 19 L. J. C. P. 169; Edwards v. Glyn, 2 El. & BI. 20; sc, 5 Jur. (N. 8.) 1897. See, also, Smith v. Timms, 1 H. & C. 849; s..c., 9 Jur. (N. 8.) 1285 ; 32 L. J. Exch. 215; Morgan v. Brundrett, 5 B. & Ad. 296: Pennell v. Head- ing, 2F. & F. 744; Graham v. Candy, 8 id. 206; Kennear v. Johnson, 2 F. & F. 758; Davidson v. Robinson, 3 Jur. (N. S.) 791; Bills v. Smith, 34 L. J. Q. B. 68; Robson’s Law of Bankr. (2d ed.) p. 127. 2 Morgan v. Brundrett, 5 B. & Ad. 296; Atkinson v. Brindall, 2 Bing. N. C. 225; Abbot v. Burbage, 2 Scott, 656; Strachan v. Barton, 11 Exch. 647; Gilson v. Boutts, 4 M. & G. 169; s. c., 8 Scott, 229; Gibson v. Muskett, 4 M. & G. 160; 8. c., 3 Scott (N. R.), 427; Poland v. Glyn, 4 Bing. 22, n.; Ex parte Simpson, De G. 9; Aldred v. Constable, 4 Q. B. 874; s.c., 7 Jur. 509; Robson’s Law of Bankruptcy (2d ed.), p. 128. 3 Eden on Bankruptcy, p. 28. ‘Cooke Bank. Law, 100; Eden on Bankruptcy, 29. 58 Term R. 140. 64 East, 220 (1808), 72 Term R, 594, 516 Ves, 148 (1809). § 22.) ASSIGNMENT FOR CREDITORS. 33 ordained by the bankrupt law; and it was carried to this extrava- gant length, that though the assignment was intended for the ben- efit of all the creditors, including that one, yet it was an act of bankruptcy.” Ina previous case, Ex parte Richardson, Lord Eldon, without passing upon the question, directly assumed the assign- ment to be an act of bankruptcy, and in later cases? he adhered to the authority by which he had declared himself bound in Ex parte Bourne. The rule thus established has been frequently applied ® by the British courts, and although attempts have been made on the part of the legislature to relax it,t none have fully succeeded,’ and it has now become an integral part of the English bankrupt law.’ The reasons adduced in support of this doctrine are substan- tially as follows: First, that announced by Lord Eldon, that a débtor has no right to place his property under a distribution different from that or- dained by the bankrupt law. This objection lies not against the ultimate distribution effected by the assignment, but against the means employed in effecting it, assuming that the creditors have a, legal right in cases of insolvency to the privileges and methods provided by the bankrupt act and to the assistance and protection of the bankrupt court in the distribution of the insolvent’s estate. The second is that advanced by Lord Mansfield, that by such a disposition‘of his property a trader deprives himself of the power of carrying on his trade. § 22. Assignment for Equal Benefit of Creditors — English Statutes.— This doctrine, as we have seen, arose from judicial construction of the language of the statute 1 Jac. I., ch. 17.7 When the words of that statute were altered by 6 Geo. IV., ch. 16, from these, “with intent, or whereby his creditors may be defeated, etc.,” to these, “with intent to defeat or delay his creditors, etc.,” making the phraseology of the statute conform more nearly to that of 18 Eliz., ch. 5, it was contended, in the case of Stewart v. 114 Ves, 184 (1087). 2 Ex parte Smith, 1 Ves. & B. 518 (1818); Dutton v. Morrison, 17 Ves, 199; Ex parte Cawkwell, 19 Ves. 234, 3 Linden v. Sharpe, 6 M. & G. 895; Stewart v. Moody, 1C., M. & R. 777; Ex parte Wensley, 1 DeG., J. & S, 278; Turner v. Hardcastle, 11 C. B. 704; Botcherly v. Lancaster, 3 N. & M. 388; Smith v. Timms, 7 Jur. (N, S.) 1015; Sperritt v. Willows, 13 W. R. 229; Ex parte Zwelchenbart, 3 M., D, & D. 671; Porter v. Walker, 1 M. & G. 686; Smith v. Cannan, 2 El. & BI. 35. 4See Lord Henley, Eden on Bankruptcy, p. 31. 5 Lord Chan. Westbury, in Ex parte Morgan, In re Woodhouse, 32 L, J. Bank. 15. 6 Bankrupt Act, 1869, 32 and 33 Vict. 71, § 6. 7Mr. Justice Montague Smith, in Lomax v. Buxton, L, R.°6 C. P, 115. 3 34 BANKRUPT LAW. (oH. IIL Moody, that though the former act might warrant the construc- tion put upon it in cases where creditors were in fact delayed, though such was not the intention of the parties, yet in the latter act it was open to contend that the intent to defeat or delay the creditors was requisite and material to constitute an act of bank- ruptcy. To this Baron Parke replied that the latter statute was the same in effect as the former, only more concise, and that the latter act was not intended to alter the former law; and, he adds, “it has been clearly settled that if the necessary consequence of a man’s acts is to delay his creditors, he must be taken to intend it;” but this answer hardly meets the force of the contention. It has been well settled under 12 Eliz., ch. 5, that a general as- signment for the equal benefit of all creditors, honestly made, does not delay or defrdud creditors within the meaning of that statute,? and as a consequence no fraudulent intent on the part of the debtor could be presumed from the execution of such a conveyance. When the language of the bankrupt act, therefore, was made to conform to that of 13 Eliz., ch. 5, why should a fraudulent intent be assumed under the language of the bankrupt act when no such intent could be assumed under similar language in the statute of Elizabeth? No satisfactory answer to this question was then given, nor has any since been suggested.* § 23. Exemption of Assignments from Operation of Act.— The provisions of the acts of 1849 and 1861, protecting general as- signments for the benefit of creditors from the operation of those acts, upon compliance with the statutory regulations, have not been considered as altering the law making such assignments fraud- ulent within the policy of the bankruptcy system, except upon strict compliance with the terms imposed4 110, M. &R. 777. 2 Pickstock v. Lyster, 3M. & 8. 375. And see ante, p. 22. 3Lord Justice Melish, in Ex parte Luckes, In re Wood, 36 L. T. Chan, 117, in commenting upon the express reference to voluntary assignments contained in the sixth section of the act of 1869, observes: ‘“‘ Now I agree that the reason why tbat particular act of bankruptcy has been separated from the act of bankruptcy respecting fraudulent conveyances and transfers, in which it is included in all former acts, is this, that although it was an undoubted rule of law that such a transfer or conveyance was to be deemed to be fraudulent, yet it was really absurd to call it fraudulent. It had no taint of fraud at all about it in the great majority of cases, and therefore it was for the sake of making the language of the act rational, and not for the sake of altering the law — for it left the law ex- actly as it was — that the act of bankruptcy comprised in the first subsection of the sixth section has been separated from the other acts of bankruptcy with which it was formerly joined, namely, from the fraudulent conveyances and transfers, and therefore the words ‘ with intent to defeat or delay his creditors” have been left out.” 4 Ex parte Alsop, In re Rees, 1 De G., J. & J. 289; Ex parte Morgan, In re Wood- § 24.) GROUNDS OF ENGLISH RULE. 35 When the bankruptcy system was extended to non-traders as well as traders, the argument that an assignment by a trader of all his estate was an act of bankruptcy because it prevented him from carrying on his trade was applicable to a part only of those persons amenable to the act, for it might well be that an insolvent non-trader might be able to carry on his avocation, although he had executed such an assignment.! The special provisions of these acts referred to were undoubtedly intended to relax the severity of the rule in reference to the exe- cution of assignments by creditors ratably. Lord Westbury, in commenting upon these provisions, remarked, “it was the object of the legislature in passing the one hundred and ninety-second section of the bankruptcy act of 1861, and the seven or eight subsequent sections, to establish and give security to a private administration of an insolvent estate against process at common law, and also against proceedings in bankruptcy.” ? § 24. General Grounds of English Rule.— At the time of the passage by congress of the bankrupt act of March 2, 1867, the mak- ing of a general assignment, although for the equal benefit of all creditors, was, as we have seen, subject to the restrictions above stated, regarded by the English courts as an act of bankruptcy, and such a conveyance was therefore void in bankruptcy, unless assented to by all the creditors. The grounds of this doctrine, un- certain at first, had not been strengthened by the lapse of time. The rule so established had rested upon an extended construction of the words of the statute 13 Eliz., ch. 5, incorporated into the bankrupt act, and that construction was not in harmony with the interpretation already placed upon these words.’ Lord Eldon’s declaration that a debtor had no right to place his property under a course of distribution different from that ordained by the bankrupt law proceeded upon the theory that creditors had the right to the management of the estate of an insolvent pre- vious to the commission of an act of bankruptcy, and that an in- terference with this right was itself an act of bankruptcy. And this was so held, while it was fully admitted that the mere fact of insolvency conferred no legal rights upon creditors before the debtor had come under the operation of the bankrupt law. The notion that a trader may not terminate his trade by a general as-: signment, rather than to wait for creditors to secure their prefer- house, 32 L. J. Bank. 15: Ex parte Rawlings, id. 27; Ex parte Godden, In re Shettle, id. 87; Ex parte Spyer, id. 68; Dell v. King, 33 L. J. Exch. 47. 1 See Ex parte Luckes, 26 L. T. (N. 8.) 113; In re Wood, 7 L. J. Ch. 802. 2 Ex parte Morgan, In re Woodhouse, supra. 3 See ante, § 19 and note, See Globe Ins, Co. v. Cleveland Ins, Co., 14 N. B. R. 322, 36 BANKRUPT LAW. [cH. 11: ences by law, or to break him up by an adjudication in bankruptcy, is based ultimately upon the same theory that the debtor’s right to manage his property ceases with his solvency. The unsatisfactory grounds upon which the general doctrine rests, together with the alterations effected by the acts of 1849 and 1861, and the intent of those alterations, as defined by Lord Westbury, may well create a. very serious doubt as to whether congress, in enacting the present bankrupt law, intended to adopt the English rule in reference to general assignments for the equal benefit of all creditors, as estab- lished under the general bankruptcy system. § 25. United States Bankrupt Acts of 1800 and 1841.— Under the constitutional power conferred upon congress “to establish uniform laws upon the subject of bankruptcies throughout the United States,” three bankrupt laws have been enacted —one under the act of congress of April 4, 1800,! which was repealed by the act of December 19, 1808; one under the act of August 19, 1841,3 which was repealed by the act of March 3, 1843;* and one under the act of March 2, 1867,’ which was repealed in 1878. The two statutes first referred to were modeled, to a large degree, upon the English statutes existing at the time of their en- actment respectively, but neither of them remained upon the statute book for a sufficient length of time to acquire a settled in- terpretation upon the points here discussed. Under the act of 1800 no cases are reported touching upon the effect of general assignments. The act of 1841 had no provision directed against assignments more specific than the general enact- ment making “any fraudulent conveyance, assignment, sale, gift or other transfer of lands, tenements, goods or chattels, credits or evidences of debt,” an act of bankruptcy.’ Preferential payments and transfers made in contemplation of bankruptcy were, however, declared void and a fraud upon the act, and the assignee was em- powered to claim the property so conveyed.’ In accordance with established principle, a general assignment for the benefit of pre- ferred creditors was under this statute deemed an act of bank- ruptcy, even if made without moral fraud and under the importu- nity of creditors.® 1U. 8. Stat. at Large, vol. IT, ch. 19, p. 19. 2Tbid., p. 248. 3U. 8. Stat. at Large, vol. V, p. 440. 4Tbid., p. 614. 5R.S. U.S., title LXI, p. 969. €U. S. Stat. 1877, 1878, ch. 160. 7U. 8. Stat. at Large, vol. II, ch. 19, p. 19, § 2 8 Ibid, §8Ex parte Brenneman, Crabbe, 456; Freeman v. Deming, 8 Sandf. Ch. 327; § 26.] PROVISIONS OF ACT OF 1867. 37 Where, however, the assignments were free from objectionable preferences, the cases under this statute were not uniform as to their being acts of bankruptcy. Thus, in the case of Ex parte Potts & Garwood,! in the eastern district of Pennsylvania, where 4 petition for an adjudication was based on an alleged act of bank- ruptcy in the making of an assignment of property, and it was shown that the assignment was made on a parol trust for the bene- fit of all the creditors ratably, Mr. Justice Randall, in refusing the adjudication, said: “ An assignment for the benefit of creditors is made on good and sufficient consideration, and is perfectly valid, both at common law and under the statute; while to make it void under the second section of the bankrupt law, it must be made not only in contemplation of bankruptcy, but also for the purpose of giving a creditor, indorser, surety or other person a preference or priority over the general creditors of the bankrupt; but when the object is, as the evidence shows it to have been here, to prevent such a preference or priority, I cannot consider the transfer as a fraud.” But in the cases of McLean v. Johnson? and McLean v. Meline,’ in the district of Ohio, Mr. Justice McLean was of the opinion that such assignments were acts of bankruptcy, as having been made in contemplation of a state of insolvency. The re- ported decisions on this point were few, and remained in conflict at the time of the repeal of the act.‘ § 26. Provisions of the Act of 1867 Applicable to General As- signments.— The provisions of the act of 1867 to which it is nec- essary here to refer relate to what conveyances are regarded as acts of bankruptcy, what bar the bankrupt’s discharge, and what are voidable by the assignee in bankruptcy. Section 5021, Revised Statutes of the United States, recites all the acts which subject a person to involuntary bankruptcy. Among the acts which consti- tute a man a bankrupt are those of giving preference to creditors in contemplation of bankruptcy, or the making of any assignment, McAllister v. Richards, 6 Pa. St. 183; Cornwell’s Appeal, 7 W. & S. 405. For an able note on the bankruptcy acts of 1600 and 1841, and the effect of the latter .on voluntary assignments for benefit of creditors with preferences, see Philips on Evidence (4th ed.), vol. III, p. 628, note 1118. See, also, Hutchins v. Taylor, 5 Law Rep. 289, Story, J.: Jones v. Sleeper, 2 N. Y. Leg. Obs. 181; Arnold v. Maynard, 2 Story, 349; Morse v. Cohanuet Bank, 3 id. 364; Everett v. Stone, id. 446. 1Crabbe, 469. 23 McLean, 202, 33 McLean, 199. And see Carr v. Hilton, 1 Curtis C. C. R. 2380. 4Mr. Justice Emmons, in Globe Ins. Co. v. Cleveland Ins, Co., 14. N. B. R. 316, remarks that, under the act of 1841, ‘‘few doctrines were more generally ac- quiesced in than that general assignments for the benefit of creditors had become unlawful.” He cites, however, only the cases referred to in the text. 38 BANKRUPT LAW. [cH. mt. gift, sale, conveyance or transfer of his estate, property, rights or credits, either within the United States or elsewhere, with intent. to delay, defraud or hinder his creditors, or the making when bank- rupt or insolvent, or in contemplation of bankruptcy or insolvency, of any gift, grant, sale, conveyance or transfer of money or other property, estate, rights or credits with the intent, by such disposi- tion of his property, to defeat or delay the operation of the act. By an amendment to this section! it is provided: ‘That no vol- untary assignment by a debtor or debtors of all his or their prop- erty, heretofore or hereafter made in good faith for the benefit of all his or their creditors, ratably and without creating any prefer- ence, and valid according to the law of the state where made, shall of itself, in the event of his or their being subsequently adjudicated bankrupts in a proceeding of involuntary bankruptcy, be a bar to the discharge of such debtor or debtors.” By section 5110 it is provided that no discharge shall be granted, or, if granted, shall be valid, in the following cases, among others: When the bankrupt has given any fraudulent preference contrary to the provisions of the bankrupt act, or has made any fraudulent payment, gift, transfer, conveyance or assignment of any part of his property; or if, in contemplation of becoming bankrupt, he has made any pledge, payment, transfer, assignment or conveyance of any part of his property, directly or indirectly, absolutely or con- ditionally, for the purpose of preferring any creditor or person. having a claim against him, or who is or may be under liability for him, or for the purpose of preventing the property from coming into the hands of the assignee or of being distributed in satisfac- tion of his debts. By sections 5128 and 5129 certain transfers are prohibited and. declared void, and the assignee is empowered to recover the prop- erty so transferred. By the former section all dispositions of property made by one who is insolvent or in contemplation of insolvency within four months? before the filing of the petition by or against him to any creditor or person having a claim against the bankrupt, or who is under any liability for him, and who has reasonable cause to be- lieve that such disposition of property is made by an insolvent and in fraud of the provisions of the bankrupt act, is declared void. By the latter section it is provided that if any person, being insolv- 1 Approved July 26, 1876 (19 Stat. at L. 102; Supp. to R. S., vol. I, 282). This: is an amendment to section 12 (corresponding to section 5021, R. S. U. 8.) of the amendatory act of June 22, 1874. The words quoted in the text are inserted after the word ‘‘ committed,” in line forty-four. i '#R. 8S. U.S., § 5180a, In cases of voluntary bankruptcy the time is limited to two months. ) § 27.] POWER TO ASSIGN NOT SUSPENDED. 39 ent, or in contemplation of insolvency or bankruptcy, within six months! before the filing of the petition by or against him, makes any payment, sale, assignment, transfer, conveyance or other dis- position of any part of his property to any person who then has reasonable cause to believe him to be insolvent, or to be acting in contemplation of insolvency, and knowing that such payment, sale, assignment, transfer or other conveyance is made with a view to prevent his property from coming to his assignee in bankruptcy, or to prevent the same from being distributed under this title, or to defeat the object of, or in any way impair, hinder, impede or delay the operation and effect of, or to evade any of the provisions of this title, the sale, assignment, transfer or conveyance shall be void, and the assignee may recover the property, or the value thereof, as assets of the bankrupt. The phrase “fiduciary character” in section 5117 applies only to technical trusts. By section 5128 it is provided that the fact that. such a payment, pledge, sale, assignment, conveyance, or other disposition of a debt- or’s property as is described in the two preceding sections, is not made in the usual and ordinary course of business of the debtor, shall be prima facie evidence of fraud. § 27. The Power to Assign Not Suspended by Bankrupt Laws. Before discussing these provisions more in detail, it is important to observe that, while the existence of a bankrupt law established by congress under its constitutional powers ipso facto suspends and supersedes the operation of state insolvent laws,’ in so far at least as they are in conflict with such laws,’ yet this principle has no 1In cases of involuntary bankruptcy four months, Ibid.; Maxwell v. Evans, 90 Ind. 596; 46 Am. Rep. 284; citing Palmer v. Hussey, 87 N. Y. 308; Scott v. Porter, 98 Pa. St. 88; 39:-Am. Rep. 719, and other cases. 2 Sturgis v. Crowninshield, 4 Wheat. 122; Ogden v. Saunders, 12 Wheat. 213; Hyde v. Zacharie, 6 Pet. 688; Ex parte Eames, 2 Story, 322; In re Reynolds, 9 N. B. R. 50; Torrens v. Hammond, 4 Hughes, 596; Day v. Bardwell, 97 Mass. 246. See Boedefeld v. Reed, 55 Cal. 299; Lewis v. County Clerk, id. 604; Seattle Coal Co. v. Thomas, 57 id. 197; Rowe v. Page, 54 N. H. 190; Sadler v. Immel, 15 Nev. 265. In Lyman v, Bond, 130 Mass. 291, it is held that if the effect of the New Hampshire statute of 1867, chapter 126, was a bar in an action upon a cred- itor’s claim, it was an insolvent law, the operation of which was suspended by the bankrupt act; and in Lothrop v. Highland Foundry Co., 128 Mass, 120, it was held that a conveyance by way of preference, made contrary to the insolvent law, while the bankrupt act was in force, is sufficient cause for instituting pro- ceedings in insolvency after the repeal of the bankrupt act. In Tua v. Carriere, 117 U. 8. 201. It was held that the insolvent laws of Louisiana revived on the repeal of the bankruptcy act of 1867. ; ' 8Ex parte John Zergenfuss, 24 N. C. 463; Shryock y. Bashore, 13 N. B. R. 481; reversed on error, 15 id. 288; s. c., 82 Pa. St. 159; Maltbie v. Hotchkiss, 38 Conn. 80; Geery’s Appeal, 43 id, 289: s. c., 17 N. B. R. 196; Beck v. Barker, 65 Pa. St. 262; Barber v. Rogers, 71 id. 362, 40 BANKRUPT LAW. [cH. I. application to general voluntary assignments for the benefit of creditors! The right to make such assignments exists independ- ent of any statute,? and the various state statutes regulating the execution of such assignments and the procedure under them are in no sense insolvent laws. There is no proper analogy between insolvent law, correctly so called, and those principles of the com- mon law which allow and sanction the conveyance of his property by a debtor for the equal benefit of all his creditors, and no re- semblance or relation as to warrant the conclusion that, if the ex- istence of a bankrupt law suspends the first, it must also suspend the last.® 1 Cook v. Rogers, 81 Mich. 391; 18 N. B, R. 97; Thrasher v. Bentley, 59 N. Y. 649; s. c. below, 2 Sup. Ct. R. 399; Ebersole v. Adams, 13 N. B. R. 141; Haw- kins’ Appeal, 34 Conn. 548; s. c., 2.N. B. R. 378; Maltbie v. Hotchkiss, 38 Conn. 80; Barnes v. Rettew, 8 Phila. 183; Mayer v. Hellman, 13 N. B. R. 440. See Re Kimball, 16 N. B. R. 188; Dolson v. Kerr, id. 405. Voluntary assignments un- der the state laws are valid, unless proceedings in bankruptcy are instituted within six months thereafter. Geery’s Appeal, 43 Conn. 289; s. c., 17 N. B. R. 196, Butan assignment, under a law of New Jersey, which ‘‘ imposes restraint upon the rights to partivipate in the distribution of an assigned estate,” incon- sistent with the bankrupt act, and changing the course of administration under the act, is a conveyance in violation thereof, within the scope of section 5129. Matter of Troth, 1 Fed. Rep. 405. Where all the creditors of a bankrupt are secured to the same extent and in the same manner, so that no one has a pref- erence over the others — as by an assignment — the provisions of the bankrupt act, discriminating between secured and unsecured creditors, have no applica- tion. Matter of Backer, 2 Abb. N. C. 879. The mere existence of the bankrupt law does not ipso facto render a common-law assignment void. Sadler v. Im- mel, 15 Nev. 265, Same ruling, provided no proceedings in bankruptcy have been instituted, Bostwick v. Burnett, 74 N. Y. 317. Nor are the rights of the as- signee affected by the subsequent bankruptcy of the debtor. Bigler v. Nat. Bank of Newburgh, 26 Hun, 520. 2 Cook v. Rogers, supra; Thrasher v. Bentley, supra. See Sadler v. Immel, 15 Nev. 265; Boese v. King, 78 N. Y. 471; affirmed, 108 U. S. 379. 3 Mr. Chief Justice Graves, in Cook v. Rogers, 31 Mich. 396. In the case of Globe Ins. Co. v. Cleveland Ins. Co., 14 N. B. R. 316, 320, Mr. Justice Emmons has expressed a contrary view of the law. This point was, however, necessarily before the supreme court of the United States in the case of Mayer v. Hellman, supra, and was there distinctly ruled upon. Mr. Justice Field, after considering the Ohio statute regulating voluntary assignments, which does not vary in its character materially from the statutes of other states on the same subject, re- marked: ‘“ There is nothing in the act resembling an insolvent law,” and it was held that the assignment, irrespective of the statute, was valid and binding at common law, although the bankrupt act was in force. In Boese v. King, 78 N. Y. 471, it was held that although part of a state statute (New Jersey) is in the nat- ure of a bankrupt law, and consequently suspended by the United States bank- rupt act, yet that fact does not affect the validity of the remainder of the law, or its effect upon the assignment; and it was further held that even if the whole of the state statute was suspended by the bankrupt act, the right of a debtor to make an equal distribution of his property among his creditors by means of a voluntary assignment still existed. This case was affirmed on writ of error by the United States supreme court in 108 U.S. 379. § 28.] ASSIGNMENTS FRAUDULENT. 41 § 28. Assignments Fraudulent at Common Law, or Under 13 Eliz., or Giving Preferences.— Where the assignment is fraudu- lent at common law,! or under the statutes of the state where it is made,’ or where it attempts to create a preference * among cred- 1 Farrin v. Crawford, 2 N. B. RB. 602. 2 Hyde v. Sontag, 8 N. B, R. 225; Bean v. Amsink, Blatchford, J., id. 235; In re Randall & Sunderland, 3 N. B. R. 26. 3 Jackson v. McCullough, 18 N. B. R. 283; Stobaugh v. Mills, 8 N. B. R. 361. See Harris v. Exchange Nat. Bank, 4 Dillon, 188. An assignment being valid until proceedings in bankruptcy are instituted, it is not void as against a sub- Sequent execution creditor, although it gives preferences. Bostwick v. Bur- nett, 74 N. Y. 317. More than two months before the filing of a creditors’ pe- tition, the bankrupt transferred parts of his property to several creditors in satisfaction of their claims, he being then insolvent to the knowledge of said creditors, and he and they knowing that the transfers were intended for the purpose of preferring them over other creditors to whom he was indebted, as in- dorser for his son, who was also insolvent. Held, that the transfers could not be impeached as preferences under section 5128. Van Kleeck v. Miller, 19 N. B. ‘R. 484. See Matthews v. Stewart, 44 Mich. 209. See, also, Talcott v. Harder, 119 N. Y. 536; 23 N. E. Rep. 1056. U.S. Rev. Stats., § 5128, construed, Chadwick v. Carson, 78 Ala. 116. The assignee in bankruptcy, though he represents all the creditors of the bankrupts, acquires only the title of the bankrupts, except as he is also invested with the right of creditors to assail fraudulent transfers, and with title to property conveyed to the bankrupts contrary to the provisions of the bankrupt act. With these exceptions, his title is subject to all liens existing upon the property, legal or equitable, at the time of the commencement of the pro- ceedings in equity. Where an assignment, fraudulent at common law, because made with the intent to hinder and delay creditors, was set aside at the suit of the assignee in bankruptcy, it was held that the latter took the assigned prop- erty subject to the liens of judgment creditors which had attached subsequent to the assignment. Johnson v. Rogers, 15 N. B. R. 1. If, however, a creditor, by reason of exceptional circumstances, is precluded from assailing the assign- ment, as to him it is as valid as it is to the assignors and to the assignees who have accepted it. Thus when creditors have concurred in the execution of the assignment, they cannot be heard to allege that it was fraudulent because of facts of which they were fully informed when they gave assent; they cannot impeach a transaction for fraud in which they participated as parties. Steel v. Brown, 1 Taunt. 381; Philips v. Wooster, 86 N. Y. 412; Johnson v. Rogers, supra. Where the assignment was held void as against an assignee in bankruptcy because regarded as repugnant to the bankrupt law, although otherwise valid, held, that an execution creditor, under a judgment obtained after the assign- ment took effect and before the filing of the petition in bankruptcy, secured a - preference over the title of the assignee in bankruptcy. Macdonald v. Moore, 1 Abb. N. Cas. 58; s. c., 15 N. B. R. 26. See Dolson v. Kerr, 16 id. 405; Re Beadle, 5 Sawyer, 351. It is said, however, that Johnson v. Rogers, and Macdonald v. Moore, are in conflict (Re Beisenthal, 14 Blatch. 146; s. 0,15 N. B, R. 228), where the former of the two cases followed. A voluntary assignment was made, and the assignee accepted and qualified. Afterward a creditor recovered judg- ment, and the sheriff seized the property. After that an assignee in bankruptcy was appointed. Held, that the judgment creditors had no lien upon or right in the assigned property, so as to be let in to intercept, and take precedence of, the right of the assignee in bankruptcy to the property when he exercised his right to avoid the assignment and to recover the property. Re Beisenthai, supra; Linder v. Lewis, 19 N. B. R. 455; s. c., 10 Ben. 49; Re Walker, 18 id. 56; Belden v. Smith, 16 N. B. R. 802, Reed v. McIntyre, 98 U. 8. 570. 42 BANKRUPL LAW. [oH. mm. itors, it is clearly repugnant to the bankrupt act. The exccution of such an assignment is unquestionably an act of bankruptcy, and it may be avoided by the assignee in bankruptcy. § 29, Is the Making of a Bona Fide Assignment for Creditors Ratably an Act of Bankruptecy?— Among the earliest cases in which the question whether the execution of an assignment hon- estly made for the equal benefit of all creditors is an act of bank- ruptcy was that of In re Wm. H. Langley,! in the southern district of Ohio. The facts were that Langley, being in failing circum- stances, and judgments being about to be recovered against him, executed an assignment of all his estate for the equal benefit of his creditors, in compliance with the various statutory requirements. of the Ohio statute in reference to such assignments. Within a. month thereafter Perry filed a petition against him in the district. court, setting forth the assignment, and claiming that it was made with the intent to hinder and delay him in the collection of his. debt, and also with intent, by such disposition, to defeat and delay the operation of the bankrupt law, and that it was therefore an act of bankruptcy. The district court (Mr. Justice Leavitt) regarded the assignment. as in contravention of the spirit and policy of the bankrupt law, although admitted t- be made in good faith, and rested its decis- ions on the English cases and upon the decisions in McLean v. Meline,? McLean v. Johnson,’ and Shawhan v. Wherritt,* and upon the further ground that the particular creditor was hindered and delayed in the collection of his debt. The case was taken to the cir- cuit court, where Mr. Justice Swayne delivered an opinion which unfortunately is not reported in full. From the abstract given he appears to have decided: “That where a creditor is about to recover a judgment against. his debtor in Ohio, and the debtor makes a general assignment of all his property for the benefit of all his creditors before the judg- ment is rendered, such conveyance is not necessarily a conveyance with the intent tq hinder, defraud or delay creditors. And where such assignment is made under like circumstances, with intent to secure an equal distribution of all the debtor’s property among all his creditors, it is not necessarily a conveyance of property with intent to defeat or delay the operation of the bankrupt act. To make such an assignment an act of bankruptcy it must be made 11N. B. R. 559; s. ©. on appeal, 2 N. B. R. 596, 23 McLean, 190. 33 McLean, 202, 47 How. 627. 5 Reported sub nom. Langley v. Perry, 2 N. B. R. 596. § 29.] BONA FIDE ASSIGNMENT FOR CREDITORS. 43 with intent to delay, defraud or hinder creditors within the mean- ing of 13 Elizabeth, or with intent to defeat or delay the operation of the bankrupt act. It becomes a question of fact. The innocence or guilt of the act depends upon the mind of him who diu it, and it is not a fraud within the meaning of the bankrupt law unless it was meant to be so.”! The opinion thus expressed was subsequently reviewed and ap- proved by the same learned judge, in the case of Farrin v. Craw- ford,? where he said: “Now while I have held, and still emphat- ically hold, that an assignment such as this purports to be (made for the equal benefit of all creditors) is valid and proper when made in good faith, it is yet to be subjected to the sharpest scru- tiny, and any badge of fraud that attaches itself in the light of extraneous circumstances will, unless fully and satisfactorily ex- plained, be fatal to its validity, and the arm of the bankrupt law will sweep it away and subject the person and estate to its own provisions.” It was consequently held in that case that where the assignor had reserved to himself a sum of money largely in excess of the amount exempt, this fact, taken in connection with other suspicious circumstances, was such a badge of fraud as to render the assignment fraudulent and create an act of bankruptcy. In harmony with these opinions is that expressed by Mr. Justice Nel- son, in the case of Sedgwick v. Place,’ in the circuit court for the southern district of New York. In that case, where an assign- ment untainted with fraud had been duly executed, and the re- quirements of the statute of the state of New York regulating such assignments had been complied with, and the assignees in bankruptcy, under a subsequent voluntary assignment, filed their bill in equity seeking to have such assignment set aside, and in the meantime applied for an injunction restraining the voluntary assignees from proceeding with the administration of the trust, the circuit judge, in denying the application for an injunction, said: “ Assuming the assignment in question to be untainted with fraud, either against creditors or against the bankrupt act, which is the present position of the case, we find nothing in the provisions of the law which would authorize us to take this property out of the 1 This opinion has been criticised as not having been necessary to the determi- nation of the case (see Emmons, J., in Globe Ins, Co. v. Cleveland Ins. Co., 14 N. B. RB. 314; Cadwalader, J., in Barnes v. Rettew, 8 Phila. 141). The assign- ment under which the question arose appears to have been recorded under the laws of Ohio five days before the bankrupt act took effect, and the opinion of the court below, that the statute was retroactive, might have been a sufficient ground of reversal. 22.N. B. R. 602, 31 N. B. R. 673. 44 BANKRUPT LAW. [oH. 11. hands of the assignee under the state law, and turn it over to the assignee in bankruptcy.” § 30. Cases.— While these cases have in some instances been fol- lowed and approved,! yet their authority has been frequently ques- tioned and in the majority of instances entirely dissented from.’ The question, however, may still be regarded as open and unde- termined. The leading cases which uphold the doctrine that such assign- ments are acts of bankruptcy are Barnes v. Rettew* and the late case of Globe Ins. Co. v. Cleveland Ins. Co.* In the former of these cases, decided in the circuit court for the eastern district of Pennsylvania, Mr. Justice Cadwalader delivered an able and careful opinion, in which he looked into the English cases and reviewed the subject on principle and on authority. Ad- vancing upon the theory that the judicial interpretation of an act forms a part of it, and that congress in enacting the law of March 2, 1867, modeling it to a large degree upon the English bankruptcy law, adopted the approved construction of that law in its relation to general assignments,® he proceeds to show that under the Eng- lish system general assignments, though made for the equal ben- efit of all creditors, were regarded as acts of bankruptcy, and that the reason for that rule was that by such an act the debtor at- tempted to put his estate into a course of distribution different from that prescribed by the bankrupt act, which had been the sub- stance of the language of Lords Mansfield, Eldon and Wensleydale, and which are words of like import of those employed in the stat- ute, to wit: “with intent to delay or defeat the operation of this act.” In addition he emphasizes the inconvenience which would arise from permitting general assignments under the various state acts 1In re Kintzing, 3 N. B. R. 217; In re Charles J. Marter, 12 N. B. R. 185; Smith v. Teutonia Ins. Co., 4 C. L. N. 180. And see In re George H. Arledge, 1 N. B. R. 648; In re George A. Hawkins, 2 N. B, R. 878; In re Alfred L, Wells, Jr, 1N.B. R. 171. See, also, Mayer v. Hellman, 13 N. B. R. 440. \ 2In re Randall & Sunderland, 3 N. B. R. 18; s. c., Deady, 527; In re Smith, 3.N. B. R. 877; 5.0, 4 Ben. 1; 5.6, 1 L. T. R. 147; In re Spicer & Peckham, 3N. B. R. 512; Rettew v. Barnes, 8 Phila. 133; In re Burt, 1 Dillon, 489; Hob- son v. Markson, id. 421. And see In re Goldschmidt, 3 N. B. R. 164; Burk- holder v. Stump, 8 Phil. 172; In re The Union Pacific R, R. Co., 10 N. B. R. 178; In re Brodhead, 2 N. B. R. 278; In re Stubbs, 4 N. B. R. 376; In re Mendelsohn, 12 N. B. R. 533; Globe Ins. Co. v. Cleveland Ins, Co., 14 N. B. R. 811. 3 Supra. 4 Supra. 5 Concurred in by Mr. Joseph McKennan. 6 See Globe Ins. Co. v. Cleveland Ins, Co., 14 N. B. R. 824, § 30.] OASES. 45 to be made part passu with the bankrupt act, and attempts to dis- tinguish the cases of Langley v. Perry! and Sedgwick v. Place.? In the case of Globe Ins. Co. v. Cleveland Ins. Co. in the circuit court for the northern district of Ohio, Mr. Justice Emmons con- sidered the question very fully. In addition to the grounds of decision adopted by Mr. Justice Cadwalader, he argues at length to show that the principle which underlies the doctrine that state ~ insolvent laws are suspended by the operation of the bankrupt act, necessarily involves the determination that general assignments are in conflict with that act and are prohibited by it.4 The opin- ion reviews the English and American cases, and is an important and instructive discussion of the question, reversing the rule for- merly prevailing in that circuit. In the case of Randall and Sunderland,' in the district of Oregon, Mr. Justice Deady placed his decision upon the ground that the necessary consequence of the assignment would be to prevent the assignor’s property from coming to the assignee in bankruptcy, and from being distributed among his creditors under the bankrupt act, and thus the operation of the act would be defeated; and since every person is presumed to intend the natural and probable con- sequences of his own act, the intent of the assignor must have been to defeat the operation of the bankrupt act. The assignment in that case was a clear act of bankruptcy, inasmuch as it appears to have been invalid and fraudulent upon its face. In the northern district of New York the question was presented in the case of In re Wells, Jr.,5 but was not deemed essential to a determination of the case. In the later case, in the same district, of In re Smith,’ an assignment was declared an act of bankruptcy because it defeats the operation of the bankrupt act in depriving the creditors of the right to select an assignee, and in taking from the bankrupt court the supervision of the assignee and the administration of the estate. In Goldschmidt’s* case, in the southern district of New York, where a debtor who was insolvent, and while actions were pend- ing against him, and more than six months before the commence- ment of proceedings in bankruptcy, made a general assignment, it was held that the inference from these facts was that the assign- ment was made with the intent to hinder and delay creditors, and was therefore a bar to the bankrupt’s discharge. The question 12 N. B. R. 596. 22 N.B. R. 28. 314 N. B. R, 311. 4See ante, § 27 and notes. 53N. B. R. 18. 61N. B. R. 171, 73 id, 877. 83 id. 164, 46 BANKRUPT LAW. fos. m1. was raised in the case of the Union Pacific Railroad Company,' in the district of Massachusetts, and although the decision turned upon another point, yet Mr. Justice Lowell made these observa- tions: “I consider the better opinion under our bankrupt law to be the same (as the English doctrine), that it forbids such a distri- bution by means of a private trust created by the debtor, unless all his creditors consent. Various reasons are given, the substance of which is that if an estate is to be wound up by trustees, they should be appointed by and be subject to the order of the courts having jurisdiction of the subject-matter, and that the creditors should have a voice in their appointment. Putting a person into bankruptcy who has undertaken to have his affairs wound up in this way is scarcely more than a specific performance of the trusts he has himself created. The only general proposition that can safely be laid down is one which I mentioned before, that one who is not only insolvent, but who undertakes to make a final distribu- tion of his assets, must do it through the bankrupt court.” And in alate case? in the district of California, it was remarked that the weight of authority is decided that even a fair general assignment for the benefit of creditors is an act of bankruptcy, because it necessarily defeats the operation of the act, and hinders and delays creditors. Quite recently the question was discussed before the supreme court of the United States,’ and Mr. Justice Field, in delivering the opinion of the court, made these observations: “The counsel for the defendants have filed an elaborate argument to show that as- signments for the benefit of creditors generally are not opposed to the bankrupt act, though made within six months previous to the filing of the petition. Their argument is that such an assignment is only a voluntary execution of what the bankrupt court would compel; and as it is not a proceeding in itself fraudulent as against creditors, and does not give a preference to one creditor over an- other, it conflicts with no positive inhibition of the statute. There is much force in the position of counsel, and it has the support of a decision of the late Mr. Justice Nelson, in the circuit court of New York, in Sedgwick v. Place, 1 N. B. R. 673, and of Mr. Justice Swayne, in the circuit court of Ohio, in Langley v. Perry, 2 N. B. R. 596. Certain it is that such an assignment is not absolutely void; and if avoidable it must be because it may be deemed perhaps necessary, for the efficiency of the bankrupt act, that the adminis- tration of an insolvent’s estate shall be intrusted to the direction of the district court, and not left under the control of the appointee 110 N.B. R. 178, 2In re Mendelsohn, 12 N. B. R. 583. 3 Mayer v. Hellman, 13 N, B. R. 440, § 31.] DUTY OF INSOLVENT. 47 of the insolvent. It is unnecessary to express any decided opinion upon this head, for the decision of the question is not required for the disposition of the case.” The ultimate rule to be deduced from the cases which hold that such assignments are acts of bankruptcy is well expressed in the language of Mr. Justice Lowell, “‘that one who is insolvent, and who undertakes to make a final distribution of his assets, must do it through the bankrupt courts,” ! a rule which is adduced from no aflirmative mandate of the statute, but which arises, if at all, by implication from judicial determination, that every other method of distribution must necessarily either delay and defraud creditors or hinder and defeat the operation of the bankrupt act. § 31. Duty of Insolvent.— It is proper here to refer to a propo- sition which has been frequently maintained and applied, to wit, that there is a legal duty imposed upon an insolvent by the exist- 1Mr. Justice Lowell, In re The Unicon Pacific R. R. Co., 10 N. B. R. 178. In Platt v. Preston, 10 N. B. R. 241, Choate, J., says: ‘‘ The great weight of author- ity at present is, that a general assignment for the benefit of creditors without preferences is necessarily a fraud under the bankrupt law, defeating the operation of the law, because it provides for the administration of the estate in a different way from that provided by the bankrupt law, and by an assignee selected by the bankrupt himself.” Re Beisenthal, 14 Blatch. 146; s. c., 15 N. B. R. 228; Hard- ing v. Crosby, 17 Blatch. 348; Re Croughwell, 17 N. B. R. 337; Linder v. Lewis, 19 N. B. R. 445; s. oc, Ben. 49; Re Temple, 17 id. 345: Re Skoll, 16 id. 175; Re Croft, 17 id, 824; Re Frisbee, 14 Blatch, 185. The intent to have the debtor’s estate wound up and distributed under a general assignment constitutes an in- tent to prevent the property from coming to the assignee in bankruptcy and of being distributed under the bankrupt law. Re Kraft, 4 Fed. Rep. 523. See Re Seeley, 19 N. B. R. i; Re Kasson, 18 id. 379. The defective execution of a volun- tary assignment does not prevent it being an act of bankruptcy. Re Lawrence, 18 N. B. R, 516. A general assignment, though under a state law without pref- erences, is void as against an assignee in bankruptcy if the petition in bankruptcy is filed in season. Macdonald v. Moore (U. S. Dist. Ct. S. Dist. of N. Y.), 1 Abb. N. Cas. 53; s. c., 15 N. B. R. 56. Where a debtor executed an assignment, valid under the laws of the state of New York, and without preferences, on the 9th day of January, 1872, and on the 18th day of May, 1872, was adjudged bankrupt, in an action brought by the assignee in bankruptcy to obtain possession of the assigned property, held, that the assignment did not contravene any of the pro- visions of the bankruptact. Miller, J.; ‘‘In Tiffany v. Lucas, 15 Wall. (U. S.) 410, 412, it was held that two things must concur to bring an assignment within the jurisdiction of the bankrupt act, viz., the fraudulent design of the bankrupt and the knowledge of it on the part of the assignee. Neither of these features char- acterizes the case at bar. The admission and proof established that there was no such design or knowledge; in fact, that all the parties acted in entire good faith and with no intent to violate the provisions of the act. The principle is settled in this court (New York court of appeals), that where the debtor has not been proceeded against, or taken any proceedings in the bankrupt court, an assignment for the benefit of the creditors is not an instrument void per se in hostility to the bank- rupt act.” Haas v. O’Brien, 1 Abb. N. Cas, 173; 8, c., 66 N. Y. 507; 16 N. B. R. 508; Von Hein v. Elkus, 15 N. B, R. 194; Coates v. First Nat. Bank, 47 N. Y. Super. Ct. 322. 48 BANKRUPT LAW. (cH. mr. ence of the bankrupt act to avail himself of its provisions for the benefit of his creditors. This doctrine has found expression in the dicta of many able judges and was made the foundation of a course of decision in a very important class of cases. Thus, it has been said, “strictly and truthfully speaking an in- solvent has no property, and therefore he has no natural right to dispose of his property in his possession otherwise than with the consent of the real owners — his creditors.” ! Again, “at the date of the assignment Holloman was insolvent and he knew it. It was his duty to go into bankruptcy;”* and in the case of Wilson v. The City Bank,’ and other analogous cases,‘ it was for the time maintained that the silent acquiescence of the debtor without in- voking the protecting shield of the bankrupt act in permitting a creditor to obtain judgment and secure a lien when the debtor was. insolvent and known so to be by the creditor was a fraud upon the bankrupt act. This doctrine, however, failed to meet the approval of the supreme court of the United States.® Mr. Justice Miller, in delivering the opinion of that court in the case of Wilson v. City Bank, on appeal said:® “It is said, however, that the grand feature of that law (the bankrupt law) is to secure equality of distribution among creditors in all cases of insolvency, and to secure this it is the legal duty of the insolvent, when sued by one creditor in an ordinary proceeding likely to end in judg- meut and seizure of property, to file himself a voluntary bankrupt, and that this duty is one to be inferred from the spirit of the law and is essential to its successful operation. The argument is not. without force and has received the assent of a large number of the district judges to whom the administration of the bankrupt law is. more immediately confided. We are, nevertheless, not satisfied of its soundness. “We have already said there is no moral obligation on the part. of the insolvent to do this unless the statute requires it, and then only because it is a duty imposed by the law. It is equally clear that there is no such duty imposed by that act in express terms. It is therefore an argument solely of implication. This implica- tion is said to arise from the supposed purpose of the statute to secure equality of distribution in ald cases of insolvency, and, to 1Mr. Justice Deady, In re Silverman, 1 Saw. 416. 2Mr. Justice Woods, in Jackson v. McCulloch, 13 N. B. R. 285. And see re- marks of Mr. Justice Blatchford, in Hardy v. Clarke, 3 N. B. R. 392. 35.N. B. RB. 270. 4 Warren v. Tenth Nat. Bank, 7 N. B. R. 481; Smith v. Buchanan, 8 Blatch. 153; Haskell v. Ingalls, 5 N. B. R. 205; Catlin v. Hoffman, 2 Sawyer, 486. See Rogers v. Palmer, 102 U. 8S, 263, 5 Wilson v. City Bank, 17 Wall. 478, 6 Thid. 484, 485, § 32.) INSOLVENCY AND ASSIGNMENT. 49 make the argument complete, it is further necessary to hold that this can only be done in bankruptcy proceedings under that stat- ute. Does the statute justify so broad a proposition? Does it, in effect, forbid all proceedings to collect debts in cases of insolvency in other courts and in all other modes than by bankruptcy? We do not think that its purpose of securing equality of distribution is to be carried so far.” § 32. Insolvency and Assignment Under the Act.— Inasmuch, then, as there is no legal duty imposed upon an insolvent by the mere fact of insolvency to resort to bankruptcy, and since no legal rights are acquired by creditors to their debtor’s property solely by his insolvency, it would appear that an insolvent debtor may make any disposition of his property not prohibited by law,! but a general assignment for the benefit of all his creditors equally is not prohibited by law; on the contrary, “ whenever such a disposi- tion has been voluntarily made by a debtor, the courts in this country have uniformly expressed their approbation of the pro- ceeding.” ? : The only provisions of the bankrupt act under which it has been or can be claimed that an assignment honestly made for the equal benefit of all creditors is an act of bankruptcy are the clauses of section 5021 respecting fraudulent conveyaces, to wit, assignments, etc., made by a debtor, with the intent to delay, defraud or hinder his creditors, and the subsequent clause of the same section in ref- erence to conveyances by an insolvent made with the intent to de- feat or delay the operation of the act.’ For the bankruptcy courts to declare such an assignment as has been described a fraudulent conveyance, under the former of these clauses, would be to disre- gard the authority of courts of law and equity in this country upon the construction of the words employed from the earliest time, and no decision of the bankruptcy courts in this country has ever gone fully to this length.‘ The opinions adverse to such assignments have, for the most part, been rested upon the latter clause of the section. The words “ with intent to defeat or delay the operation of the act ” appear for the first time in the bankrupt act of 1867, and they have not acquired a distinct and definite interpretation. It is difficult to perceive how any act of a debtor can be said to de- feat or delay the operation of a law in the abstract. The words 1Mr. Justice Baldwin, in Davis v. Turner, 4 Gratt, 426. See, also, Stewart v. Platt, 101 U. S. 781. 2 Mr. Justice Field, in Mayer v. Hellman, 13 N. B. R. 442. 3See ante, § 26. 4See remarks of Mellish, L. J., in Ex parte Luckes, In re Wood, 36 L, T. Chan, 117, quoted ante, § 22, note; Field, J., in Mayer v. Hellman, 138 N, B. R, 442, 4 7 50 BANKRUPT LAW. [oH. m1. have ordinarily been regarded as referring to the rights of credit- ors secured under or by the operation of the act. But to say that an assignment honestly made for the equal benefit of all creditors is an act of bankruptcy because it defeats or delays the operation of the act by depriving creditors of the right to administer the es- tate of an insolvent is to say that it is an act of bankruptcy because it deprives them of a right which they have not yet acquired, and which they cannot acquire except by an appeal to the court in certain numbers and under peculiar circumstances, and the mere in- solvency of their debtor is not one of those circumstances. But if it be said that the rights of creditors protected by this clause are prospective rights which will spring into existence when the insolvent shall be brought under the operation of the act, then every interference by a debtor with his property after his insolv- ency is equally anact of bankruptcy, since every such interference, to the extent to which it goes, as effectually prevents the property of the insolvent from coming into the hands of the assignee in bankruptcy and from distribution under the act as does a general conveyance of his entire estate. Such a proposition is tantamount to affirming that insolvency itself is an act of bankruptcy. When it is asserted that the clause under consideration was in- serted into the act from the English decisions, and is equivalent to the language of Lord Eldon, “ puts his property under a course of distribution different from that ordained by the bankrupt law,” ! it may well enough be replied, that, admitting the analogy between the phrases (although not entirely apparent), still no intent on the part of the legislature to adopt the English rule on this subject can be gathered from the discussion of the act during its progress through congress; and it is not to be presumed that a rule of law which was declared by the eminent chancellor who first formulated it, to have been placed on a “singular ground,” and to have been “carried to an extravagant length,”? and the force of which has been materially affected by the amendments to the bankrupt acts in existence at the time of the passage of the act of 1867, was in- corporated into that law without more pointed reference to it either in the act itself or in the extended discussion which the passage of the act evoked. If assignments honestly made for the equal benefit of all credit- ors and carrying out the beneficial design of the bankrupt law were regarded by congress as antagonistic to that law, it is some- what surprising that conveyances so familiar to the law of this country should have been referred to only under the indirect phraseology employed. 1See ante, § 22. 2 Lord Eldon, in Ex parte Bourne, 16 Ves, 148, §§ 83, 34.] assenr or CREDITORS — ASSIGNMENT NOT VOID. 51 § 33. Assent of Creditors.— Under the English decisions it has been uniformly held that a creditor who has either executed, or been privy to, or acted under, a deed of assignment, cannot after- wards set it up as an act of bankruptcy.!. And so a creditor who, by standing by and not objecting, assents to the execution by the debtor of the assignment, cannot afterwards rely on its execution as an act of bankruptcy.? And this rule is believed to prevail in this country, though perhaps not to the same extent. Thus where a debtor caused his property to be transferred to trustees for the payment of certain specified debts, and was subsequently adjudged bankrupt, it was held that the creditors secured by the assignment might dissent therefrom and prove their debts; but in the absence of an actual dissent, creditors preferred under an assignment will ‘be deemed to assent to its provisions and cannot prove their claims without surrendering their preference’ —_ But where an application for an adjudication of bankruptcy was made against the debtor, and the acts of bankruptcy alleged were that the debtor, being a merchant, had suspended payment otf his commercial paper, and had not resumed within a period of four- teen days, and it appeared that, before the expiration of the four- teen days, the debtor had made an assignment for the benefit of creditors under the Ohio statute, it was held that the assignment did not prevent the running of the fourteen days; held, also, that the fact that the state court had acquired jurisdiction of the debt- or’s estate did not prevent the bankrupt court from proceeding under the bankrupt law, no fraud having been shown in the assign- ment.‘ § 34. Assignment Not Void but Avoidable in Bankruptcy.— In the absence of actual fraud, the assignment, even though con- structively fraudulent, is not void, but voidable, in bankruptcy, and is voidable only at the suit of the assignee;* but transfers void 1 Bamford v. Baron, 2 Term R. 594, note; Ex parte Cawkwell, 1 Rose, 313. 2 Ex parte Stray, L. R. 2 Ch. 374; Marshall v. Barkworth, 4 B. & Adol. 508; Jackson v. Irvine, 2 Camp. 49; Oliver v. King, 25 L. J. Ch. 427; Ex parte Strang, L. R. 2 Ch. App. 874. See Bradley, J., Barings v. Dabney, 19 Wall. 9, 3In re W. A. Sanders, 18 N. B. R. 164. And where the petitioning creditor applied to the state court to have the security of the voluntary assignee in- creased, this was not such an assent to the proceedings as to estop him from claiming that the assignment was an act of bankruptcy, In re William H. Lang- ley, 1 N. B. R. 559. 4In re Laner, 9 N. B. R, 494. 5In re George H. Arledge, 1 N. B. R. 644; McGready v. Harris, 9 N. B, R. 185; Mayer v. Hellman, 13 N. B. R. 440; Cadwalader, J., In re Pierce & Holbrook, 3. B. R. 258. And see Barnes v. Rettew, 8 Phila. 188; Ostrander v. Meunch, 2 McCrary, 267; Belden v. ‘Smith, 16 N. B. R. 302; Reed v. McIntyre, 98 U. S. 507; Re Temple, 17 N, B. R. 845. In Shryock v. Bashore, 82 Pa, St. 159; s. ©, 52 BANKRUPT LAW. [cH. mn. ‘under the law of the state where the transfer is made, or fraudu- lent at common law, may be avoided by the assignee in bank- ruptcy, though made more than six months prior to proceedings in bankruptey.! Conveyances and transfers, however, which are fraudulent by virtue of sections 5128 and 5129, can be impeache¢ only when proceedings in bankruptcy are commenced within the time limited by section 5130a.? The pleadings may be so framed as to assail the instrument, both ‘because fraudulent under the bankrupt act and under the common law or under the statute of the state.’ § 35. Avoiding Assignment by Assignee.— The bankrupt law (sec. 5046, R. S. U.S.) declares that all the property conveyed by a. bankrupt in fraud of his creditors shall, by virtue of adjudication of bankruptcy, and the appointment of his assignee, but subject to. the exceptions stated in the previous section, be at once vested in such assignee.‘ The assignee, therefore, not only succeeds to the rights and lia- bilities of the bankrupt, but he also represents the rights of the creditors,> and, as such representative, may maintain and defend proceedings which, on the ground of public policy or otherwise, the latter would not be allowed to.’ He has the rights which an 15 N. B. R. 283, the assignees of an insolvent bank brought an action against the maker of a note to the bank, Held, that he could not be permitted to set up as a defense that the assignment was void as being contrary to the bankrupt act. Where the voluntary assignee sues to recover money due the assignor, and the assignee in bankruptcy is brought in by interpleader, the latter, in order to re- cover, must establish that the voluntary assignment was not merely void at his election, but so absolutely void that the plaintiff’s title under it can be assailed and defeated collaterally; this position is not tenable. The voluntary assign- ment is not void ab initio even as against the assignee in bankruptcy, but void- able at his election, and he must elect to treat the assignment as void in toto or not at all. Wehl v. Wald, 18 Blatch. 163. 1 Massey v. Allen, 17 Wall. 851: s.c., 7 N. B. R. 401; Bean v. Amsinck, 8 N. B. R. 235; Hyde v. Sontag, 8 N. B. R. 225; Bean v. Brookmire, 1 Dillon, 151; s.c., 4.N. B. R. 57; Knowlton v. Mosely, 105 Mass. 186; Bradshaw v. Klein, 1 N. B. R. 542;5.¢6,1L.T. R. 72; 5.0, 7 A. L. Reg. 505; Cragin v. Carmichael, 11 N. B. R. 511. See Olney v. Tanner, 19 N. B. R. 178; Mann v. Flower, 25 Minn. 500. ? Mayer v. Hellman, 13 N. B. R. 440; In re George H. Arledge, 1 N. B. R. 644; Seaver v. Spink, 8 N. B. R. 218; Geery’s Appeal, 48 Conn. 289; s. c., 17 N.B.R. 196; Maltbie v. Hotchkiss, 88 Conn, 80; Re Temple, 19 N. B. R. 845; Barnewell v. Dunn, 14.N. B. R. 278, 3 Cragin v. Carmichael, 11 N. B. R. 511. 4Vanslyke v. Shryer, 98 Ind. 126; Johnson v. Rogers, 15 N. B. R, 1, 5 Bolling v. Munchus, 59 Ala. 482, 6In re The St. Helen’s Mills Co., 10 N. B, R. 418; In re Wynne, 4 N. B, R, 23; Allen v. Massey, 8 N. B. R. 401; s. c. on appeal, 17 Wall. 351; Carr v. Hilton. 2 Story, 231; Black v. Terrin, 2 N. B. R. 643. An action may be maintained by the assignee in bankruptcy against a voluntary assignee and intervening cred- § 35.] AVOIDING ASSIGNMENT BY. ASSIGNEE, 53 attaching creditor would have.! He may attack an assignment on the same grounds on which a creditor, having obtained judgment, might attack it.? “He may,” says Mr. Justice Woodruff, “ impeach any conveyance and recover any property which, were there no bankrupt law, the creditors (having first obtained judgment) might impeach and recover on the ground that it was conveyed, or trans- ferred, to defraud them.” ® But he may also attack an assignment upon grounds upon which a judgment creditor could not, as giving a preference or being fraudulent under the provisions of the bankrupt act.t But in that event he is restricted in his right of maintaining his action by the time in which the proceedings in bankruptcy were com- menced after the fraudulent act complained of, and if the proceed- ings were not instituted within the time limited his right of action‘ is lost.6 And when the action is brought to avoid a transaction as fraudulent under the provisions of the bankrupt act, it may be brought in a state court.’ itors to avoid the assignment and recover of such creditors the avails of the, property levied upon and sold by them. Linder v. Lewis, 19 N. B. R. 455; 8. ©., 10 Ben. 49. See Adams v. Hyams, 19 Blatch. 487. The bankrupt cannot set up in’ defense to the claim of the assignee the title of a prior assignee under a voluntary assignment, merely for the purpose of retaining property in his own possession. ' Matter of Moses, 1 Fed. Rep. 845. An assignee stands upon the right of the bankrupt and may be opposed by the same defenses as if the suit were in his. name. Cady v. Sanford, 53 Vt. 632, See Burgett v. Paxton, 99 Ill. 288; also: Jenkins v. Pierce, 98 Ill. 646. But i seems that the assignee is not bound to take possession of all property conveyed by the bankrupt in fraud of the bank-’ rupt law. Nash v. Simpson, 78 Me. 142; 3 Am. Rep. 53. Specific liens existing at the time of adjudication are preserved. Broach v. Powell, 79 Ga. 86; 3S, E.' Rep. 763. : 1Cragin v. Carmichael, 11 N. B. R. 511. 2Farrin v. Crawford, 2 .N. B. R. 602; In re Randall & Sunderland, 3 N. B. R. 18; Massey v. Allen, 17 Wall. 851; Bean v. Amsinck, 8 N. B, R. 235; Knowlton v. Moseley, 105 Mass, 186; In re Wynne, 4 N. B. R. 23; 8.0, 9 A. L. Reg. 627; Bradshaw v. Kline, 1 N. B. R. 542; 8. ¢., 2 Biss. 20; In re Metzger, 2N. B. R. 353; In re Meyers, 1 N. B. R. 581; 8. c., 2 Ben. 424; Boone v. Hall, 7 Bush, 66; Pratt v. Curtiss, 6 N. B. R. 189; Carr v. Gale, 3 W. & M. 38; 8. ©, 2 Ware, 380; Carr v. Hilton, 1 Curt. 230; Ashley v. Robinson, 29 Ala, 112. 3 Smith v. Ely, 10 N. B. R. 554. Where a general assignment was held void as against the assignee in bankruptcy, it was also held that his title related back to the date of the general assignment, and cut off the lien of a creditor whose exe- cution was levied on goods subsequently thereto, and before the filing of the crediters’ petition. Waring v. Buchanan, 19 N. B, R. 502, See cases cited with Re Beisenthal, in note 3 of § 28. 4 Jackson v. McCulloch, 3 N. B. R. 288. See ante, § 28, All the persons uniting in a common design to effect a fraudulent disposition of the bankrupt’s property may be joined as defendants in one suit brought by the assignee, although the relief sought against them respectively relates to different parts of the estate. Van Kleeck v. Miller, 19 N. B. R. 484. 5Seaver v. Spink, 8 N. B. R. 218; Mann v. Flower, 25 Minn. 500; Tappan v. Whittemore, 15 Blatch. 440; Coates v. First Nat. Bank, 47 N. Y. Super. Ct. 822, 6 A state court has jurisdiction of an action by an assignee in bankruptcy to 54 BANKIUPT LAW. [cH. rr. § 36. Right of Action in Assignee Exclusive.— After the com- mencement of proceedings in bankruptcy, no one but the assignee can bring or maintain an action to set aside a fraudulent convey- ance made by the bankrupt.!. The right of action to set aside such a conveyance is, after an adjudication in bankruptcy, exclusively in the assignee,’ and the judgment creditor cannot maintain an ac- tion thereon; and this is true even when the creditor had no notice of the proceedings in bankruptcy, and when his debt was not in- cluded in the schedules. And when a trustee, claiming under an assignment, filed a bill to recover assets belonging to the estate, the assignee in bankruptcy was permitted to intervene by supple- mentary bill. And a creditor cannot disregard the assignment and levy upon the property transferred by it, although it is void under the bank- rupt law, for it is void only as to persons claiming in virtue of proceedings under the statute.° Nor can the voluntary assignee claim that the.assignment is void under the bankrupt law, without showing that the property has. been recovered from him by the assignee in bankruptcy.° recover a debt due the bankrupt (Kidder v. Horrobin, 72 N, Y. 159; Mann v. Fowler, 25 Minn. 500), or to avoid transactions which constitute a fraud on the bankrupt act (Ansley v. Patterson, 77 N. Y. 156; Olcott v. MacLean, 73 id. 223; Thompson v. Sweet, id. 622; Goodrich v. Wilson, 119 Mass. 429; Tyler v. Wing, 19 Hun, 622; Wente v. Young, 12 id. 220. See Claflin v. Houseman, 93 U. S. 130; Cook v. Whipple, 55 N. Y. 150. But see Bingham v. Claflin, 7 N. B. R. 412; Voor- hees v. Frisbie, 8 id. 152; Cornwell’s Appeal, 7 W. & S. 305; Seavey v. Maples, 94 Ind. 205), and on the refusal of. the assignee, creditors may bring such an ac- tion in a state court (Bates v. Bradley, 24 Hun, 84, distinguishing Glenny v. Langdon, 98 U. S. 20); but state courts have no jurisdiction of an action against. the assignee to reach the bankrupt’s assets in his hands. Griswold v. Watkins, 20 Hun, 114. The jurisdiction of the bankrupt court is not affected by the fact that an assignment for the benefit of creditors under the state law has been made prior to the adjudication. Pool v. McDonald, 15 N. B. R. 560. Nor is the juris- diction of the court defeated by the fact that the complainant or cross-complain- ant is declared a bankrupt while proceedings are pending on his complaint or cross-complaint. Anderson v. Wilson, 100 Ind. 402. 1In re Meyers, 1 N. B. R. 581; s. c., 2 Ben. 424; Stewart v. Isidor, 1 N. B. R. 485; s.c.,5 Abb. Pr. (N. 8.) 68; Goodwin v. Sharkey, 3 N. B. R, 485; 5. c, 5 Abb. Pr. (N. 8.) 64; Allen v. Montgomery, 10 N. B. R. 5038. 2Gayle v. Randall, 71 Ala. 469; Lane v. Nickerson, 99 Ill. 284; Thatcher v Rockwell, 4 Colo, 375. 3 Thurmond v. Andrews, 13 N, B. R. 157. A receiver in supplementary pro- ceedings cannot bring such an action, Olney v. Tanner, 21 Blatch. 540. The law will not compel an assignee in bankruptcy to accept property of the bank- rupt, which is onerous and will yield nothing towards payment of his debts, Glenn v. Howard & Savage, 65 Md. 4. Nor when the property is incumbered for its full value. Slinkard v. State ex rel., 87 Ind. 188. Leasehold estates, see White v. Griffin, 44 Conn. 487. ‘Collateral Bank v. Fowler, 12 N. B. R. 289, See Freeman v. Deering, 3 Sandf. Ch. 827; Wehl v. Wald, 18 Blatch. 163. 5 Dodge v. Sheldon, 6 Hill, 9. ®Seaman v. Stoughton, 3 Barb. Ch. 344. See Re Manahan, 19 N. B. R. 65. 8§ 37, 38.] VOLUNTARY ASSIGNMENTS — EXPENSES. 55 § 37. Proceedings Under Voluntary Assignments, When Avoided — Protection of Voluntary Assignee.— Where the: as- signment is set aside the bankrupt court will sometimes, to facili- tate the administration of the estate, recognize the voluntary assignee, and refuse .o interfere with him pending certain trans- actions which are deemed to be of advantage to the estate! In the case of In re Pierce & Holbrook,? Mr. Justice Cadwalader, refer- ring to this subject, remarked: “Even when the assignment has been the sole foundation of the proceedings in bankruptcy, I have considered it not a void act, but an act voidable by the assignee in bankruptcy under a bill in equity filed for the purpose of avoiding it, and have sustained acts done under it previously in good faith. In one case I refused an injunction under such a bill because the injunction would have prevented the working out of an. equity beneficial to the creditors. In another case I suspended granting an injunction and appointing a receiver until the completion of a beneficial sale by the assignee under a previous deed. In the third case, of a very suspicious. kind, where a sale had apparently been forced by the assignee under the previous deed, at. a sacrifice, and: the bill was at the suit of the petitioning creditor before the-ap- pointment of an assignee in bankruptcy, as the previous assignee was of questionable solvency, and might be liable for the full value of what had been sacrificed, I made a qualified and guarded order for a receiver.” And where, previous to the commencement of an action on the part of the assignee in bankruptcy to obtain posses- sion of the assigned property, the voluntary assignee sold'the prop- erty assigned to him, and distributed the proceeds under the orders of the state court, acting in good faith and deriving no interest or benefit therefrom himself, the United States circuit court for Iowa. held the voluntary assignee free from liability in an action subse- quently brought by the assignee in bankruptcy to recover the value of the assigned property.’ § 38. Allowance of Expenses to Voluntary Assignee.— The as- signee claiming under a voluntary assignment is not chargeable with the value of property in good faith turned over to creditors, or payments made to creditors in accordance with the terms of the assignment before proceedings in bankruptcy were instituted ; but he is liable for the balance which shall appear to be in his hands 1 Burkholder v. Stump, 8 Phila. 172; s. 0, 4.N. B. R, 597. 23. B. R. 258. 5 3Cragin v. Thompson, 12 N. B. R. 81. But in this case Mr. Justice Dillon said: ‘If the present.action were against the creditors who received dividends under the assignment, there could, as it now seems to me, be little or no doubt: as to their liability.” See Neill v. Jackson, 8 Fed. Rep. 144; Wehl v. Wald, 18 Blatch. 168; Wald v. Wehl, id. 495, 56 BANKRUPT LAW. [cH. Ir. upon a proper accounting with the assignee in bankruptcy, after deducting such payments." The expenses of converting the property into money may be allowed to a trustee under an assignment,’ and in the case of Burkholder v. Stump? the court directed an allowance to be made to vhe voluntary assignee for his necessary and reasonable charges and expenses; but it was said that no allowance could be made of a future settlement of the trustee’s account in the court of a state under its laws relating to assignments. But where the debtors had made an assignment under the laws of the state of Maine, and were within a month thereafter adjudged bankrupt, and the voluntary assignee surrendered to the assignee in bankruptcy all the property of the debtors which had come into his hands, reserving only enough to cover the expenses and com- missions to which he was entitled under the state law, it was held,. in a proceeding to compel him to pay over the balance, that he was not entitled to.the deductions claimed, for the reason that the pro-: ceedings under the state law were in fraud of the bankrupt act, and that.the bankrupt court would not allow the expenses incurred. in an attempt to defeat the operation of the act.* It is usual and: proper, when the assignment is set aside, for the decree to contain a direction for a reconveyance by the trustee to the assignee in bankruptcy.? § 39. Bar to Discharge.— Previous to the recent amendment * to the bankrupt act, the authorities were in conflict as to whether ‘1Jones v. Kinney, 4 N. B. R. 649. 2In red. S. Cohen, 6 N. B. R. 379; Stobaugh v. Mills, 8 N. B. R. 861; 5. 0, 5 Cc. L. N. 526. 34.N, B. R. 597; s. c., 8 Phila. 172. Upon setting aside the assignment under the state law in bankruptcy, the assignee will be allowed his disbursements, and for his own services and those of his counsel. Macdonald v. Moore, 1 Abb. N. Cas. 53; Wald v. Wehl, 18 Blatch. 495. But the assignee will be allowed no ‘compensation for his own services unless the court can see clearly that the estate will not be subjected to a duplication of charges. Re Kurth, 17 N. B. R. 573. As to compensation and attorney’s fees, the voluntary assignee is not entitled to priority of payment, but as to such items stands in the same position as other creditors, and must prove his claim. Re Lains, 16 N. B. R. 168. As to the al- lowance of expenses to a creditor who brings suit, see Re Dumahaut, 17 N. B. R. 517; affirmed by Waite, C. J., 15 Blatch. 20. See, also, Re Dumahaut, 19 N. B. R. 3893. : ; '4In re Stubbs, 4 N. B. R. 376, See Clark v. Marx, 6 Ben. 275. 5 Burkholder v. Stump, supra. 6 Act of July 26, 1876, ch. 234; 19 Stat. L. 102; Supp. to R. S., vol. I, 232 (see ante, p. 88). ‘* This amendment alters the law only in involuntary cases, and in them only in the single particular that such an assignment (i. e., one in good faith, without preferences, and valid by state law), of itself, is no longer a bar to a discharge. In voluntary cases it is a bar, and in all cases it is an act of bank- ruptey, and is void as against the assignee.” Re Beisenthal, 15 N. B. R., 228,. per Johnson, J. ; ee § 40.] COMPOSITIONS IN BANKRUPTCY. 57 the execution of an assignment for the equal benefit of all creditors was a bar to the debtor’s discharge in case of a subsequent adjudi- cation of bankruptcy.!| And the question may be still regarded as being open in a case where voluntary proceedings in bankruptcy are instituted. Where, however, the debtors are adjudicated bank- rupt in a proceeding of involuntary bankruptcy, no voluntary as- signment for the benefit of all creditors ratably and without prefer- ence, and valid according to the laws of the state where made, will be a bar to a discharge, and this applies to assignments heretofore or hereafter made. § 40. Compositions in Bankruptcy and General Assignments.— Under the provisions for composition? in the bankrupt act, credit- ors may resolve that a composition proposed by the debtor shall be accepted-in satisfaction of their claims. It has been decided that the making of an assignment prior to the commencement of proceedings in bankruptcy does not preclude the confirmation of the com position ; * nor where a debtor has made a general assign- ment in good faith are the rights of the assignee to the property affected by the subsequent bankruptey of she. debtor and his dis- charge under a composition in bankruptcy. The creditors’ right to an accounting. by the assignee under a general assignment is not divested by the mere fact of a composition in bankruptcy, unless this right is relinquished by the creditors; nor will an order of the bankruptcy court, made in composition proceedings to which the assignee is not a party, directing him to hand over the assigned property to the assignor, protect the assignee from. the necessity of an accounting on the petition of a creditor who did not person-_ ally assent to the composition, although his name was duly entered on the list of creditors.® 1 An assignment was regarded as a bar to a discharge in the cases of In re Gold- schmidt, 3N. B. R. 165; s. c., 3 Ben. 879; In re Brodhead, 2 N. B. R. 278; s. c., 3 Ben. 106; but the contrary decerine. was sustained in In re Pierce & Holbrook, 3N. B. R. 258: 5. ¢c., ‘16 Pitts. L. J. 204; In re Jobn M. Quackenboss, 1 N. Y. Leg. Obs. 146; Smith v. Ely, 1 id. 343. Where an assignment was made for the purpose of preventing some portion of the firm assets from being distributed to satisfy the firm debts, it was held that the court would not grant a discharge. Re Croft, 8 Bissell, 188. 2 Act of June 22, 1874, ch. 890, sec. 17; 18 Stat. L. 178; adding to R. S., § 5103. A composition with creditors is authorized to be made only in cases pending i in court, and has no validity until confirmed by the court, and then it is binding on - creditors who were named and made parties. Bidwell v. Bidwell, 92 Pa, St. ; Clay v. Severance, 55 Vt. 300. serra McDonald, 15 N. B. R. 560. 4Bigler v. National Bank, 26 Hun, 520; Matter of Stowell, id. 258, See Matter of Backer, 2 Abb. N. C. 879. 5 Matter of Allen, 24 Hun, 408; Matter of Herman, 53 How. Pr. 877. See Re Dumahaut, 15 Blatch. 20; affirming 17 N. B. R. 517; 19 id, 393; Matter of Straus. 9 Abb. N. C, 131; Matter of Stowell, 46 Hun, 342. i : 6 Matter of Stowell, 26 Hun, 258, See Matter of Stowell, 16 Abb. N. C. 90. CHAPTER IV. WHO MAY MAKE AN ASSIGNMENT. § 41. Who May Assign. 42. Insolvency, When Important. 48. Insolvency, What. 44, Insolvency, What — Continued. 45. Corporation — Right to Assign. 46. Restrictions on the Right. 47. Power of Partners to Assign. 48. Power of Partners to Assign — Review of Cases, 49. Review of Cases — Continued. 50. Review of Cases — Preferences. 51. Review of Cases — Preferences— Continued, 52. Power of Partners to Assign — Summary. 58. Power of Partner to Assign — Summary of Authorities. 54, Power of Each Partner to Assign His Interest. 55. Surviving Partners. 56. Limited Partnership. § 41. Who May Assign.— Assignments for the benefit of credit- ors are most commonly made by persons engaged in business as merchants, traders, manufacturers, mechanics, and the like, either individually or as copartners. Any person, however, of sound mind, and not laboring under legal disability,| may make such a disposition of his or her property. A general assignment may be made by an agent or attorney in fact, properly authorized thereto.” 11¢ was held in the case of Fox v. Heath, 21 How. Pr. 384, that an assignment. executed by partners, one of whom was an infant, was void for the reason that. the instrument being voidable by the infant the conveyance was not absolute and irrevocable, and was consequently fraudulent as to creditors. In the late case of Yates v. Lyon, 61 N. Y. 344, this doctrine was disapproved, and it was there held that the defense of infancy must be made, if at all, by the infant himself; and it seems that the most he could claim would be that he should not be held per- sonally for debts beyond what the assets of the firm are able to. pay. In Soper v. Fry, 37 Mich. 237, it is held that an infant’s assignment is not void, but only voidable, and that only by the infant or some one in his right. In an assign- ment by a partnership to pay a firm debt the fact that one of the partners was an infant cannot be set up by a third person, for the reason that infancy is a per- sonal privilege, and no one but the infant can take advantage thereof. Avery v. Fisher, 28 Hun, 508; citing Slocum v. Hooker, 138 Barb. 537. And see Foot v. Goldman, 68 Miss. 529; 10S. Rep. 62. A married woman having a separate es- tate and engaged in a separate business may make an assignment for the benefit of creditors, Third Nat. Bank v. Guenther, 123 N. Y. 568; 25 N, E. Rep. 986. In Maryland a married woman may make an assignment of her property, the same as any other person. Schumann v. Peddicord, 50 Md. 560. 2Gouldy v. Metcalf, 75 Tex. 455; 12 S. W. Rep. 880; citing McKee v. Coffin. 66 Tex. 307; 1 S. W. Rep. 276. § 42.] INSOLVENCY, WHEN IMPORTANT. 59 The power of corporations to assign their property for the benefit, of creditors has frequently been discussed, and important restric- tions have in some instances been imposed upon the exercise of this right by corporate bodies. The authority of partners to make such disposition of the partnership effects has likewise given rise to judicial discussion and legislative enactment. The questions thus presented will be considered in the course of the present chap- ter. But, before entering upon this division of the subject, it will be proper to devote some attention to the meaning of a term which is constantly used, not only as descriptive of that condition of af- fairs in which assignments usually originate, but as a test of the validity of the instruments themselves, namely, insolvency. § 42. Insolvency, When Important.— As we have already seen, many of the state statutes, which have been enacted for the pur- pose of restraining the right of making assignments and regulating their operation, are confined by their terms to assignments made by debtors who are insolvent or acting in contemplation of insolv- ency.! When, therefore, the attempt is made to bring an assign- ment within the operation of these acts, either for the purpose of © having it declared fraudulent and void or for the purpose of com- pelling an administration of the assigned property in accordance with its provisions,’ it becomes essential to establish primarily the fact that the instrument was made by a debtor in insolvency or in view of insolvency ;* and when the deed purports on its face to be made by a solvent debtor, proof may be given of his insolvency, and if that is established it will then be governed by the same principles as if the insolvency appeared on its face.‘ The question of insolvency also frequently becomes of importance in considering the validity of assignments executed by corporations, the restrictions upon their right to make such conveyances de- pending in some instances upon their financial condition and out- look at the time of the execution of the instrument.’ Independent of statutory regulations, it has been thought that the right to make an assignment for the benefit of creditors be- longed exclusively to debtors who were insolvent or who honestly believed themselves to be so, and that the execution of such an in- strument by a solvent debtor was conclusive evidence of an intent 1 See ante, ch. II. 2 Hampton v. Morris, 2 Met. (Ky.) 336. 3 Morgentham v. Harris, 12 Cal. 245. 4 Hardy v. Skinner, 9 Ind. 191; Hardy v. Simpson, i8 Ind. 132; Green v. Banks, 24 Tex. 508; Pearson v. Maxfield, 51 Iowa, 76; Joiner v. Van Alstyne, 22 Neb. 172; 84 N. W. Rep. 366; Driggs & Co.’s Bank v. Norwood, 50 Ark. 42; 6S. W. Rep. 323. 5 See post, § 46. 60 WHO MAY MAKE AN ASSIGNMENT. (cH. Iv. to hinder, delay and defraud creditors.! This doctrine no longer prevails to the same extent.2 “The solvency of the debtor,” says. Mr. Justice Comstock, in the case of Ogden v. Peters,’ “in his own estimation or in fact, does not invalidate his assignment of all or any portion of his property for the payment of his debts.” The solvency of the debtor, taken in connection with other suspicious circumstances, may be evidence of a fraudulent intent of the debtor to delay and defraud creditors which will invalidate the assignment.* 1‘ Where a man,” it was said in the case of Planck v. Schermerhorn, 3 Barb. ‘Ch, 844, ‘‘has ample means to pay all his debts in cash as they become due, there seems to be no reason for making a general assignment and giving preferences, except for the purpose of delaying the creditors in the assertion of their legal rights.” See Van Nest v. Yoe, 1 Sandf. Ch. 4, 9; Kellogg v. Slawson, 15 Barb. 56; Mason, J., in Rathbun v. Platner, 17 id. 272, 275. ‘tSome of the cases have decided that where a debtor was perfectly solvent, having funds immediately available for the satisfaction of his debts, and knew that he was so, an assignment of all his property to pay his debts must necessarily be to delay his creditors in the collection of their debts, and must be designed for his own advantage, and was therefore void under the statute.” Strong, J., in Ogden v. Peters, 15 Barb. 560, 563; disapproved ins. c., 21 N. Y. 23. And see the observations of Roose- velt, J., in Ely v. Cook, 18 id. 612, 614. See London v, Parsley, 7 Jones’ L, (N. C.). 313; Malvin v. West, 19 Fed. Rep. 721. In Munson v. Ellis, 88 Mich. 331, it was held that an assignment by a solvent person is'valid unless creditors .can show that-it was made with the fraudulent intent of hindering them. 2Ogden v. Peters, 21 N. Y. 23; Angell v. Rosenbury, 12 Mich. 241, But see Bates v. Ableman, 138 Wis. 644. 321 N.Y. 23. 4 Baldwin v. Buckland, 11 Mich. 389. And see Northrup v. Livermore, 44 N. Y. 109, where Mr. Justice Leonard said: ‘‘ Where the assets are clearly in excess of the liabilities of the debtor to a large extent, it may raise a presumption of an intent to hinder and delay creditors in the collection of their just demands and amount to a prima facie case of fraud.” In Knapp v. McGowan, 96 N. Y. 75, it was held that a conveyance by a solvent debtor to trustees of a part of his prop- erty for the benefit of part of his creditors, with a provision for a return of the surplus to the debtor, was not, as matter of law, fraudulent and void as to cred- itors not provided for, nor did the statutes relating to voluntary assignmeuts apply, they having reference only to general assignments by insolvent debtors for the benefit of all their creditors. And in the case of Pillsbury v. Kingon, 31 N, J. Eq. 624; 36 Am. Rep. 556, it was held that a solvent debtor may make an assignment. See Munson v. Ellis, 58 Mich. 332. So long as a debtor remains solvent, no sale, mortgage or assignment by him can be held to have been made in contemplation of insolvency unless actual fraud be alleged and proved. Grif- fith v. Cox, 79 Ky, 562. In Maryland the fact that a petitioner under the insolv- ent laws of the state is not actually insolvent does not preclude him from his. discharge nor his right to the surplus in hands of the trustee. Weaver v. Leiman, 52 Md. 708. In Holmberg v. Dean, 21 Kan. 73, it is said: ‘‘The law does not permit a debtor who, believing himself fully solvent and actually having re- sources sufficient, either of cash or of property, to satisfy all his creditors in full, to assign his property and thereby withdraw it from attachments and execution of creditors, with the motive to obtain a compromise or to procure an extension of time, so as to save a larger surplus to himself.” Seibert v. Thompson, 8 Kan. 65; Gardner v. Commercial Nat. Bank, 95 Ill, 298; First Nat. Bank v. Hughes, 10 Mo. App. 7%. ‘ § 43.] INSOLVENOY, WHAT. 61 § 43. Insolvency, What.— Insolvency literally imports énabdt- ity to pay; but the term cannot be adequately defined without reference to the two important circumstances of manner and time. Absolute insolvency may be described as that condition of a debtor’s affairs in which the whole mass of his means, including property of every description, falls short of satisfying his existing engagements, and cannot, by any possibility, or in any event, be made adequate to their entire liquidation. There can be no ques- tion as to the competency of a debtor so circumstanced to make a general assignment of his property, or as to the validity of the transfer itself, in this particular. On the other hand, where a debtor is able to meet all his engage- ments as they become due, in the ordinary way, that is, to satisfy them in money or its equivalent, without resorting to the general mass of his property or disturbing the course of his business, he is . clearly solvent. But between these two conditions of absolute and irreparable insolvency at one extreme, and perfect ability to pay at the other, there is an extensive middle ground, representing that condition of a debtor’s affairs which — in itself of various shades and degrees of difficulty — is described by a corresponding variety of expressions in daily use; such as “ involved,” and “embarrassed circumstances,” “declining” and “failing circumstances.” How far the conditions thus described amount to insolvency now remains to be considered. Insolvency has been defined, “ inability to pay one’s debts out of one’s own means,” ! and “inadequacy of a man’s funds to the pay- soent of his debts,”? and “inability to pay debts as they become que in the ordinary course of business.”* Other definitions are given in the books,’ but these describe insolvency in the primary and ordinary sense of the term,’ and are the only definitions which are important to be considered under the present head. Insolvency, then, is the inadequacy of a debtor’s means, that is, of his whole means or resources (including not only money or its equivalent, but property in its most extensive sense), for the pay- 1Cowen, J., in Herrick v. Borst, 4 Hill (N. Y.), 650, 652; Paige, J., in Curtis v. Leavitt, 15 N. Y. 200. 2 Bell’s Com. 162, cited by Brown, J., in Curtis v. Leavitt, 15 N. Y. 141. 3 Anderson’s Dic. of Law, p. 552. See Millard v. Webster, 54 Conn, 415; 8 Atl. Rep. 470. ‘Bayly v. Schofield, 1M. & S. 888; Shone v. Lucas, 3 D, & R. 218, cited by Cowen, J., in Herrick v. Borst, 4 Hill, 653; De Tastet v. Le Tavernier, 1 Keen, 161, 171; Ingraham on Insolvency (ed. 1827), 9; Brown, J., in Curtis v. Leavitt, 18 N. Y. 141; Paige, J., id. 201. §’ Cowen, J., in Herrick v. Borst, 4 Hill, 652. 62 WHO MAY MAKE AN ASSIGNMENT. [oH. Iv. ment of all his debts.! Debts are paid with property ;? and so long asa debtor is in possession of means of any kind with which, or _out of which, he can himself at once discharge all his liabilities in full, or out of which his creditors can collect all their debts by legal process, it is hardly necessary to say-he cannot be considered in- solvent in the sense now under consideration.? However deficient in cash resources, if he can without any doubt satisfy all his cred- itors in full, either by directly distributing his property among them, or by converting it into money for the purpose of payment, though (it may be) for less than its real value, and even with the result of absorbing all his means, he is not insolvent to that degree which would justify the making of an assignment.* 1Gardner, J., in Leitch v. Hollister, 4 N. Y. 215. ‘‘The term insolvency,” said Mr. Justice Field, in Toof v. Martin, 13 Wall. 40, “is not always used in the same sense. It is sometimes used to denote the insufficiency of the entire prop- erty and assets of an individual to pay his debts. Thisis its general and popular meaning. But it is also used in a more restricted sense to express the inability of a party to pay his debts as they become due in the ordinary course of business. It is in this latter sense that the term is used when traders and merchants are said to be insolvent; and as applied to them, it is the sense intended by the act of congress.” The latter is the sense in which the term is used in the bankrupt act. See In re Randall & Sunderland, 3 N. B. R. 18; Bump’s Bankruptcy (8th ed.), 897, 798 ef seg., and cases cited. See, also, Leon v. Welborne, 58 Tex. 157; Mal- vin v. West, 19 Fed. Rep. 721. The term has been construed variously in its ap- plication to debtors making assignments. Thus, in the case of McArthur v. Chase, 18 Gratt. 683, Mr. Justice Daniel, in discussing the construction of the term in- solvency, as employed in the statutes prohibiting preferences by limited partner- ships when insolvent, remarks: ‘‘ To declare that open and notorious bankruptcy is the true and only test of insolvency would defeat in most cases the design of the law, inasmuch as the desire of the firm in failing circumstances to sustain itself, as also to prefer its special friends, would generally result in sales and assign- ments of most of its property, made to insure those ends, before such bankruptcy would occur. To say, on the other hand, that the firm should be held to be in- solvent whenever from any cause it may fail to meet its engagements in the usual course of business, would seem to be harsh, and might tend greatly to dis- courage the formation of such partnerships.” And he applied as a test the ques- tion whether the partnership property at the time of the assignment was sufficient to pay its debts. But in the case of Blow v. Gage, 44 III. 208, where the solvency of the debtors was relied upon as a badge of fraud, the fact that the debtor firm. if wound up, would be unable to pay all its liabilities, was not regarded as evi- dence of insolvency. In Wheelock v. Kost, 77 id. 296, it is held that to prove the insolvency of a banking corporation no better evidence need be produced than a return of nulla bona to executions. So, also, when the debtor’s property is in- sufficient to satisfy his debts under process of law. Ackers v. Rowan, 38 S. C. 451; 12 8. HE. Rep. 165. Yet insolvency may be proved in other ways. Postle- wait v. Howes. 3 Iowa, 365; Gordon v. Worthley, 48 id. 429, 2 Cowen, J., in Herrick v. Borst, 4 Hill, 652. 3Ibid. Under the provisions of the civil code of California relating to volun- tary assignments, a debtor is insolvent when he is unable to pay his debts from his own means as they become due. Title 8, part II, p. 54, § 3450. 4McArthur v, Chase, 18 Gratt. 688. See Rokenbanugh v. Hubbell, 5 Law Reps § 44,1 INSOLVENCY, WHAT. 63 It often happens that parties owning large property, much more than sufficient to pay all demands against them in the ordinary course of business, have not property enough for the purpose if all their creditors should at once press for payment. They are clearly not insolvent.! § 44. Insolvency, What — cumstance of the mode of payment (including the character of the means employed by the debtor), that of the time of payment con- stitutes an important element in the idea and definition of insolv- ency. In strictness the term imports present? inability to pay ; it is descriptive of a present, not a future, condition of affairs. It is true that present inability to pay, though aclear matter of fact, may be consistent with ability to pay at a future day. Owing to peculiar circumstances the debtor’s assets, though in ordinary times ample, may prove unavailable, because inconvertible into money. Indulgence in point of time on the part of creditors may enable the debtor to satisfy all his engagements in full; and the prospect of such a result in such a case may be morally certain. But ac- cording to a writer of high authority,’ whose definition of insolv- ency has been adopted by the courts,‘ “‘a person in this state is truly insolvent; and it does not follow that he is not insolvent be- cause in the end his affairs may come round, and he may ulti- mately have a surplus on winding them up.” ® In what has just been said the present inadequacy of the debt- or’s means to satisfy his engagements has been assumed as a known fact, even in connection with the probable fact of ultimate . solvency. But it may happen that this fundamental fact, instead of being apparent, is itself a matter of uncertainty, being depend- ent upon contingencies of various kinds which cannot be foreseen or estimated. This state of things frequently occurs in the «ffairs of embarrassed debtors; and it is a condition which justifies, equally with the one last mentioned, the course of making a genera) ussign- ment. “ Where the property of a debtor,” it has been said, “s of ‘ (N. 8.) 95, 96; cited by Strong, J., in Ogden v. Peters, 15 Barb. 568, 564, And see Shakelford v. P. & M. Bank of Mobile, 22 Ala. 288, 242, arg. 1 Millard v. Webster, 54 Conn. 417; 8 Atl. Rep. 470. 2 The statement in the assignment that the debtor ‘‘is indebted to divers per- sons in considerable sums of money which he is at present unable to pay in full” is a declaration of his insolvency. Cunningham v. Norton, 125 U. S. 80; 8S. Ct. Rep. 804. See Peabody v. Knapp, 153 Mass. 242; s. 0, 26 N. E. Rep. 696; Bridges v. Miles, 152 Mass. 249; 25 N. E. Rep. 461. 32 Bell’s Com. 162. 4Cowen, J., in Herrick v. Borst, 4 Hill, 652; Brown, J., in Curtis v. Leavitt, 15 N. Y. (1 Smith), 141; Paige, J., id. 201. 5 Blow v. Gage, 44 Ill. 208; Savery v. Spaulding, 8 Iowa, 239; Baldwin v. Buckland, 11 Mich. 389. 6a WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. a doubtiul character, and may or not, according to circumstances, be sufficient to discharge his debts in full, and his primary object and influencing motive is to distribute it equitably and fairly, an assignment in such case, instead of violating the policy of the law or the rights of creditors, would be in harmony with both.” * The possibility even of a surplus resulting in such a case to the debtor himself would form no objection to such an arrangement. It seems, reasonable, therefore, to distinguish between mere sup- position or even belief, on the part of a debtor, at the time of mak- ing an assignment, that he is solvent, and actual knowledge of that. fact.? A mere supposition on the part of a debtor at the time of mak- ing an assignment to secure preferred creditors that he is solvent is not necessarily a badge of fraud; and an assignment will not be rendered invalid by proof of the mere supposition or belief of the debtor at the time of making it that he was solvent, when in fact he had not sufficient property to pay his debts. § 45. Corporation — Right to Assign.—“ A corporate body as well as a private individual,” observes Chancellor Kent in his Commentaries, “ when in failing circumstances and unable to re- . deem its paper, may without any statute provision, and upon general principles of equity, assign its property to a trustee in trust to collect its debts and pay debts and distribute as directed. It has unlimited power over its property to pay its debts.” 4 “ It ap- pears to be settled,” remarked Chancellor Walworth in a case be- fore him,’ “ by a weight of authority which is irresistible, that a corporation has the right to make an assignment in trust for its creditors; and may exercise that right to the same extent and in the same manner as a natural person unless restricted by its char- ter or some statutory provision.”® A corporation may conse- 1 Roosevelt, J., in Ely v. Cook, 18 Barb. 612, 614. See, also, the observations. of Strong, J., in Ogden v. Peters, 15 Barb. 564, 565. ? Kellogg v. Slawson, 15 Barb. 56 (Onondaga General Term, October 4, 1852), This was decided on the authority of Van Nest v. Yoe, 1 Sandf. Ch. 4, in which it was further said that if the assignor was in truth insolvent at the time it. would make no difference as to the conclusion. 8 Morganthem v. Harris, 12 Cal. 245; Quinnebaug Bank v. Brewster, 30 Conn. 539, But see Bates v. Ableman, 18 Wis. 644. A corporation may be insolvent under the law and yet its stock be worth par or more, Alden v. Wright, 47 Minn, 225; 49 N. W. Rep. 767. 42 Kent’s Com. (10th ed.), p. 898 and note, 5 De Ruyter v. The Trustees of St. Peter’s Church, 3 Barb. Ch. 119, 124; af- firmed on appeal, 3 N. Y. 288. 6 See Catlin v. The Eagle Bank of New Haven, 6 Conn. 233; Pope v. Brandon, 2 Stew. (Ala.) 401; State v. Bank of Maryland, 6 Gill & J. 205; Union Bank of Tennessee v. Ellicott, id. 863; Warner v, Mower, 11 Vt. 385; Flint v. The § 45.] CORPORATION — RIGHT TO ASSIGN. 65 quently make an assignment with preferences to particular cred- itors where such transfers are permitted.!_ It has been objected to the power of a corporation to make such an assignment, that, on the happening of its insolvency, the corporation and its agents became trustees for the creditors, who were entitled to a ratable payment out of the trust fund in proportion to the amount of their debts.’ This position, however, has not been sustained, and apart from statutory provisions no distinction exists between an indi- vidual and a corporation in regard to the exercise of the power of conferring preferences.’ _ It has also been contended, and in some instances successfully, that a general assignment of corporate property, since it practi- cally works a dissolution of the corporation, is an act outside of the corporate powers of the officers of the company.‘ The better opinion, and the one sustained by authority, however, is that an assignment of all the corporate property does not affect the cor- porate franchises and does not dissolve the corporation.’ Clinton Co., 12 N. H. 431; Buell v. Buckingham, 16 Iowa, 285; McCallie v. Wal- ton, 37 Ga. 611; Dobbin v, Walton, id, 614; Rengo v. Real Estate Bank, 13 Ark. 563; Dana v. The Bank of United States, 5 Watts & Serg. 223; United States v. Bank of United States, 8 Rob. (La.) 262; Ex parte Conway, 4 Ark. 804; Hopkins v. Gallatin Co., 4 Humph. (Tenn.) 403; Bank of United States v. Huth, 4 B. Mon. 423, 429; Robins v. Embry, 1 8. & M. Ch. 207; Montgomery v. Commercial Bank of Rodney, id. 632, 644; Arthur v. Commercial Bank of Vicksburg, 9 id. 394; Ingraham v. Grig, 13 id. 22; Town v. Bank of River Raisin, 2 Doug. (Mich.) 520. But see Coners v. Bank of Brest, Harr. (Mich.) 106; Haxum v, Bishop, 3 Wend. 13; Hill v. Reed, 16 Barb. 280; Ang. & A. on Corp. (10th ed.), § 191; Bun’s Ex’r v. MacDonald, 3 Gratt. 215; Hurlbut v. Carter, 21 Barb. 221; Shultz v. Sutter, 3 Mo. App. 137; Lionberger v. Broadway Savings Bank, 10 id. 499; Covert v. Rog- ers, 38 Mich. 363; Seav v. Bank of Rome, 66 Ga. 609; Shockley v. Fisher, 75 Mo. 498; Chew v. Ellingwood, 86 id. 260; Lamb v. Cecil, 25 W. Va. 288; Harvey v. Cubbedge, 75 Ga. 792; Bankmay-Fouche v. Brower, 74 id. 251; Cartwright v. Dickinson, 88 Tenn. 478; 12 S. W. Rep. 1030; 17 Am. St. Rep. 910. 1 Ringo v. Real Estate Bank, 18 Ark. 563; Dana v. Bank of United States, 5 Watts & Serg. 223; State v. Bank of Maryland, 6 Gill & J. 205; Union Bank of Tennessee v. Ellicott, 6 id. 363. 2Catlin v. Eagle Bank of New Haven, 6 Conn, 2383. 31d. 242. See review of cases in Lamb v. Laughlin, 25 W. Va. 300; Bissell v. Besson, 47 N. J. Eq. 580; 22 Atl. Rep. 1077. Directors of an insolvent bank in making an assignment may in good faith prefer themselves if they be creditors. Planters’ Bank v. Whittle, 78 Va. 737; Kendall v. Bishop, 76 Mich. 634; 43 N. W. Rep. 643. 4 Smith v. New York Consolidated Stage Co., 18 Abb. Pr. 419. See Abbot v. Am. Hard Rubber Co., 33 Barb. 578; Com’rs v, Bank of Brest, Har. Ch. (Mich.) 106. See argument in Buell v. Buckingham, 16 Iowa, 284. Mr. Justice Story dissenting in Beaston v. Farmers’ Bank of Delaware, 12 Pet. 138. 5 State v. Bank of Maryland, 6 Gill & J, 205; Union Bank of Tennessee v. Elli- cott, id. 363; Hurlbut v. Carter, 21 Barb, 221, 224; Ringo v. Real Hstate Bank, 18 Ark, 568; Ohio Life & Trust Co. v. Merchants’ Ins. & Trust Co., 11 Humph. 1; Craig’s Appeal, 92 Pa, St. 396; Ahl v. Rhoads, 84 id. 319; Shryock v. Bashore, 5 2 4 66 WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. ’ The right of assignment is not affected by a provision in the charter that the stockholders shall be individually liable for the corporate debts.! The power may be exercised by a quorum of a board of directors of a corporation at a meeting at which a bare quorum is present.’ The president of a corporation has not the power on his own authority to execute a general assignment,’ but the power may be exercised by a quorum of the board of directors at a meeting at which a bare quorum is present, provided the absent members had legal notice of the meeting. And this authority may be conferred by the directors upon one or more of the officers. § 46. Restrictions on the Right.—In some cases the general power of alienation is restrained, either by the particular act cre- ating the corporation or by general statute. in New York conveyances by an insolvent corporation, its officers or directors, to any of the officers, directors or stockholders, in pay- ment of existing debts, are void. Preferences by such corporations, and assignments of stock in contemplation of insolvency, are pro- hibited. Every director or officer who violates this statute thereby becomes personally liable for the resulting loss.? 82 id. 159; Ang. & A. on Corp., § 191; Southern L, Rev., vol. III (N. 8.), 553. See post, ch, XXII. 1 Pope v. Brandon, 2 Stew. 401. The assignee may be authorized by the assign- ment to collect unpaid subscriptions of stock. Chamberlain v. Bromberg, 83 Ala. 576; 3S. Rep. 484; Eppright v. Nickerson, 78 Mo. 482; Shockley v. Fisher, 73 id. 498. 2 Buell v. Buckingham, 16 Iowa, 284. In Milliken v. Steiner, 56 Ga. 251, it was held that the president and cashier of a bank were the proper officers to exe- cute an assignment. And in Assignment of the Union Banking Co., 12 Phila. 214, 469, that the stockholders of a bank have the right to select an assignee sub- ject to the approval of the court, and having done so, a receiver appointed by the court pending litigation will be ordered to pay over to the assignee when duly qualified. In Lamb v. Cecil, 25 W. Va. 288, it was held that the common seal of the corporation, and due proof of the signature of the proper officer, is prima facie evidence of due execution, the presumption being that the officer did not exceed his authority. In Eppright v. Nickerson, 78 Mo. 482, it was held that the assignment, if made by the board of directors without the consent of the stockholders, is ultra vires and void, but only as against the stockholders. A creditor of the corporation cannot make the objection. But in the later case of Descombes v. Wood, 91 Mo, 196, the same ccurt held that the board of direct- ors of an insolvent banking corporation, acting in good faith, have the authority to make an assignment of all its property for the benefit of its creditors without first obtaining the consent of the stockholders to the assignment. See Hutchin- son v. Green, 91 Mo. 367; 18. W. Rep. 853; Chew v. Ellingwood, 86 id. 260; 56 Am. Rep. 429. 3 Richardson v. Rogers, 45 Mich, 591; 8 N. W. Rep. 526, 4 Chase v. Tuttle, 55 Conn, 455; 12 Atl. Rep. 874; 2 Bl. Com. 480; 3 Pars. Contr. 465, 489; Simon v. Sevier Ass’n, 54 Ark. 58. 5R.8., part I, ch. 18, title 4, § 4 (8th ed.), p. 1729; Birdseye’s ed., p. 679; L. 1890, ch. 564, § 48; also L. 1892, ch. 688, § 48. See Throop v. Hatch Lithographic Co., 125 § 47.] POWER OF PARTNERS TO ASSIGN. 67 In Missouri it is held that an insurance company cannot, ever with the consent of stockholders, make a valid voluntary assign- ment, and thus withdraw itself and its property from the control of the insurance department of the state, after it has violated the laws made for the regulation of insurance companies. Such an as- signment would be in fraud of those laws.} Another special restriction imposed by statute on the right of moneyed corporations to make assignments in the state of New York is to the effect that the assignment must be authorized by the board of directors by a previous resolution when the property assigned exceeds $1,000.? § 47. Power of Partners to Assign.— The power of partnership firms to make general assignments for the benefit.of creditors has been repeatedly recognized by the courts under unsettled restric- tions regarding preferences and other special provisions. And this nawar mav ha avaraicad_in tha nama nf tha fium her o nina. AppeEnpDa To $46. In New Jersey, since the repeal of the “Act to prevent frauds by incorporated companies,” and the failure to re-enact the provisions of its Second Section in the present “Revision” of New Jersey (1878), there exists no statutory prohibition against the making of assignments by New Jersey Corporations.” *Wilkinson vs. Bauerle, 41 N. J. Eq., page 635; Vanderpoel vs. Gorman, 140 N. Y. 563. NN. Y. 530; 58 Hun, 149; Braem v. Merchants’ Nat. Bank, 127 N. Y. 508; National B’way Bank v. Wessell Metal Co., 59 Hun, 470; Keiley v. Mechanics’ & Traders’ Bank, 39 St. Rep. 488; Paulding v. Chrome Steel Co., 94 N. Y. 384. 1Relfe v. Commercial Ins. Co., 5 Mo, App. 128. 2R. S., part I, ch. 18, title 4, § 4 (8th ed.), p. 1729; Birdseye’s ed., p. 679; L.. 1890, ch. 564, § 48; L. 1892, ch. 688, § 48. 3 Baldwin v. Tynes, 19 Abb. Pr. 82; Welles v. March, 30 N. Y. 244; Ely v. Hair, 16 B. Mon. 280; Paul v. Cullum, 132 U. 8. 539. Oral assent is sufficient. Flooker v. Baillie, 118 N. Y. 413. : 4 Still v. Focke, 66 Tex. 715; 2S. W. Rep. 59; Donaho v. Fish, 58 Tex. 164; following Coffin v. Douglass, 61 id. 406; Shropshire v. Behrens, 77 id. 275; 13S. W. Rep. 1043; Focke v. Blum, 82 Tex. 436; 17 8. W. Rep. 770; National Bank v. Scriven, 63 Hun, 375; Blank, etc. Co. v. Walker, 46 Mo. App, 484. 5 Bradley v. Bischel, 81 Iowa, 80; 46 N. W. Rep. 755; McFarland v. Bate, 45 Kan. 1; 25 Pac. Rep. 238; Ex parte Hopkins, 104 Ind. 157; 2 N. HE. Rep. 587; Auley v. Osterman, 65 Wis. 118; 25 N. W. Rep. 657; 26 N. W. Rep. 568; Drucker v. Wellhouse, 82 Ga. 129; 8S, E. Rep. 40, citing Harris v. Visher, 57 Ga. 229. 6 Coleman v. Darling, 66 Wis. 155; 28 N. W. Rep. 367; 57 Am. Rep. 253; Klump v. Gardner, 114. N. Y. 158; 21 N. E. Rep. 99: Adee v. Cornell, 93 N. Y. 572. Not invalidated by being ratified on Sunday. Farwell v. Webster, 71 Wis, 485; 37 N. W. Rep. 481. 68 WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. the partners, which is inoperative for the reason that the other partners did.not join in or consent to its execution, it may become valid by their subsequently ratifying it; but not against liens ac- quired in the meantime by assailing creditors.’ It is clear that one partner may so assign portions of the partnership effects, in pay- ment of partnership debts, or by way of security for antecedent debts, or debts thereafter to be contracted on account of the firm. And in this way he may give a preference to one creditor or to several? Assignments of this description are frequently made in the course of trade, for the purpose of sustaining the credit of a. firm, or with a view to the continuance of the partnership.t So a. single partner may sell* or mortgage ® all the partnership effects — his power to bind the firm to this extent being an implied power, arising out of the nature of the partnership relation.’ But whether one partner or any number less than all the partners may, without. the knowledge or consent of his copartners, make a general assign- ment of all the funds and effects of the partnership, especially in trust for the benefit of creditors, has been doubted;® and the question, as a general one in American law, is not yet conclusively settled. 1 Mayer v. Bernstein, 69 Miss. 17. 2 Harrison v. Sterry, 5 Cranch, 589; Anderson v. Tompkins, 1 Brock. 456; Parker, C. J., in Hodges v. Harris, 6 Pick, 360, 861, 362; Tapley v. Butterfield, 1 Mete. 515, 518: Walworth, C., in Havens v. Hussey, 5 Paige, 30, 31; Farns- worth, C., in Kirby v. Ingersoll, 1 Harr. (Mich.) 172. 187, 191; Hoffman, A. V.C., in Hitchcock v, St. John, Hoff. Ch, 511; Story on Partn., § 101; Collyer on Partn., § 395 (Perkins’ ed. 1848). In Fox v. Hanbury, Cowp. 445, Lord Mans- field decided that, even after an act of bankruptcy committed by one partner; an assignment bona fide of partnership effects, by the solvent partner, to a cred- itor of the firm, in payment of his debt, was binding on the firm. In Hodges v. Harris, 6 Pick. 360, it was held that one partner may assign goods at sea to pay a partnership debt. In Mills v. Barber, 4 Day, 428, the assignment of a debt. due the firm, made by a single partner without the knowledge of his copartner, was held valid. In Everit v. Strong, 7 Hill (N. Y.), 485, it was held to be no objection to an assignment of an account due to several partners that it was made by only one ot them. See 5 Hill, 163; Roger Wheel Co. v. Fielding, 101, N. ¥. 564. The power of one partner to sell the partnership effects, without the knowledge or consent of his copartners, in payment of debts, is well settled. Lamb v. Durant, 12 Mass. 54; Anderson v. Tompkins, 1 Brock. 456; Forkner v. Stuart, 6 Gratt. 197; McClelland v. Remsen, 8 Abb. Dec. (N. Y.) 74; Mowson v. Mendenhall, 18 Minn. 232; Young v. Keighley, 15 Ves. 557. 3 Story on Partn., § 101. 4 Harrison v. Sterry, 5 Cranch, 289. 5 Anderson v. Tompkins, 1 Brock. 456; Arnold v. Brown, 24 Pick. 89; Whit- ton v. Smith, 1 Freeman (Miss.), 231; Mahbett v. White, 12 N. Y. 442; Graser v. Stellwagon, 25 N. Y. 815; Collumb v. Bloodgood, 15 Ala. 34; Boswell v. Green, 1 Dutch. (N. J.) 390. See McNutt v. Strayhow, 39 Pa. 269. 6 Tapley v. Butterfield, 1 Metc. 518. 7Story on Partn., § 101; 8 Kent’s Com, [44, 46], 47, 49; Parsons on Partuer- ship, 167. 8 Story on Partn., ubi sup.; 3 Kent’s Com., ubi sup. &§ 48, 49.] POWER TO ASSIGN— REVIEW OF CASES. €9 § 48. Power of Partners to Assign — Review of Cases.— The earliest reported American case in which the question appears to have arisen is that of Dickinson v. Legare,! in the court of chan- cery of South Carolina. In that case an assignment of all the partnership effects had been made by an absent partner, without the knowledge or consent of his copartner, to pay the debt of a particular creditor. The court decided the assignment to be in- valid, on the general ground of the want of power in one partner to assign the partnership property in this manner, without the con- sent of his copartner. The assignment appears to have been made directly to the creditor; but it was executed under very peculiar circumstances, which are supposed to have materially influenced the decision. The company, during the revolutionary war, were ‘doing business in this country; and while one of the partners was on a voyage to France, he was taken by a British ship of war and carried as a prisoner to England, where he was prevailed upon by a creditor residing there to give him a general assignment of all the partnership funds, which funds were then in this country, to secure the payment of his particular debt against the firm. It is remarked by Chancellor Walworth, in reviewing this case in Eg- berts v. Wood,’ that “although the decision was put upon the gen- eral ground that one partner had not the right to assign the part- nership funds in this manner without the consent of his copartner, there is no doubt that the particular circumstances under which that assignment took place had a very considerable influence in- bringing the mind of the chancellor to that result. The assign- ment in that case being made by a citizen of one of the United States during the existence of the war to an alien enemy and in an enemy’s country was probably void by the laws of war, so far at least as to prevent its being carried into effect by any of the courts of this country. And certainly it could not be considered as made according to any mercantile usage.” The decision itself ‘was considered to have been overruled by the court of appeals of South Carolina in the case of Robinson v. Crowder,’ which will be mentioned on a succeeding page. § 49. Review of Cases — Continued.— In the case of Harrison v. Sterry ‘ the question as to a partner’s power of assignment first came before the supreme court of the United States. In that case an assignment of a large amount of partnership property ® had 11 Dessaus. 537. 23 Paige, 517. 34 McCord’s Law, 519. See Parsons on Partnership, p. 167, 0.; Kimball v. Hamilton Fire Ins. Co., 8 Bosw. (N. Y.) 495. 45 Cranch, 289. 5It does not appear to have been of all. 70 WHO MAY MAKE AN ASSIGNMENT, [cH. Iv. been made by a partner of a London house residing in New York to a trustee for the benefit of certain creditors, but without the knowledge or consent of the other partners. The assignment it- self, which was under seal, professed to be made for the purpose of raising funds in aid and support of the credit of the firm, and with reference to a continuation of the business; and the partner mak- ing it had a power of attorney from the others, which, however, did not authorize him to execute deeds in their names generally. It was objected to the assignment that one partner was not author- ized to make it, because it was not a transaction within the usual course of trade. But the court (Marshall, C. J.) were of opinion that it was such a transaction, and laid stress on the circumstances under which it was executed. “The whole commercial business of the company in the United States,” it was said, “was necessarily committed to Robert Bird (the partner by whom the assignment was executed), the only partner residing in this country. He had the command of their funds in America, and could collect or trans- fer the debts due to them. The assignment under consideration is an act of this character, and is within the power usually exer- cised by a managing partner. In such a transaction he had the power to sign the names of both firms, and his act is the act of all the partners.” The assignment, however, was adjudged to be void on another ground, namely, that of being a fraud on the bankrupt. laws. § 49a. Review of Cases — Continued.— In the case of Mills v.. Barber,! in the supreme court of Connecticut, the assignment was. not a general one, the subject of it being a debt due the company, which was assigned directly to a particular creditor (with a power to collect and apply the avails) by one of the partners without the knowledge of his copartner. The court in sustaining the assign- ment recognized the general principle that one partner has the ab- solute power of disposing of all the partnership property where the act done has relation to the joint trade or business; and that, with regard to all personal property, both in possession and in action, each partner necessarily has the same power and control over it that any individual has over his own? In the case of Pearpoint v. Graham,? which came before Mr. Justice Washington, in the circuit court of the United States fer the district of Pennsylvania, the assignment was a general one of all the partnership estate, and was executed by one of two partners 14 Day, 428, 21d. 430, Brainard, J. 34 Wash. C. C. 282; sometimes inaccurately cited as ‘‘Pearpoint vy. Lord.” Usually cited as ‘‘ Pierpont v. Graham.” § 490.) REVIEW OF CASES, 71 to a trustee for the benefit of such of the creditors as should, within a specified time, execute in favor of the partners a full re- lease of all demands. The executing partner resided in Philadel- phia, the others in Charleston, the business being conducted in both places, under different firms. The assignment was contended to have been made without the assent of the copartner; and was objected to as invalid, on the ground that one partner could not dispose of the whole of the partnership effects, and thus by his own act dissolve the partnership, contrary to the terms of the associa- tion, without the assent of his copartners. The principle of the objection seems to have been acknowledged by the learned judge, who, in the course of delivering his opinion, remarked as follows: “Tt may admit of serious doubt whether one partner can, without the consent of his associates, assign the whole of the partnership effects (otherwise than in the course of the trade in which the firm. * is engaged) in such manner as to terminate the partnership. An assignment of all the effects to trustees for the benefit of the cred- itors of the concern would seem emphatically to be of this char- acter. Such is its obvious design, and such must be its necessary consequence.”! The learned judge, however, thought that in the case before him the assignment had been ratified by the other partner, and so became the act of the firm; and on that ground it was sustained. § 49b. Review of Cases — Continued.—In the case of Robinson v. Crowder,’ in the court of appeals of South Carolina, the assign- ment was of all the partnership property to a trustee for the bene- fit of all the creditors ratably, and was executed by two of three partners, who resided in Liverpool, the remaining partner residing in Charleston, South Carolina, and having the partnership effects conveyed in his possession. The court considered it to be no ob- jection to the assignment that it was not executed by the partner in this country; and Mr. Justice Johnson, who delivered the opin- ion, after referring to the case of Harrison v. Sterry as having de- : elded “on very sound principles” that an assignment of funds for the payment of debts was in the course of trade, went on to re- mark as follows: “Indeed, every partial application of funds to the payment of debts, whether it consists of cash or goods, or anything else, is in effect an assignment for that purpose, and binds the firm. And if, in the course of things, a general assignment be- comes necessary, there can be no reason why it should not be equally binding. The principle is the same whether it be partial 14 Wash, C. C, 2384. 24 McCord’s Law, 519. 72 WHO MAY MAKE AN ASSIGNMENT. [oH. 1v. or total, and it follows that, in either case, one may bind the whole.”! The decision, however, was against the assignment on other grounds. In the case of Egberts v. Wood,? in the court of chancery of New York, an assignment of all the partnership effects had been made by one of two surviving copartners, to trustees, to pay cer- tainp referred creditors, without the assent of the other or of the representative of the deceased partner (though this was denied). The non-executing partner does not appear to have been absent; but it is said he was a dormant partner, and the execution of the assignment by him was for that reason not considered necessary to its validity. It was held by the chancellor to be “the better opinion that one of the partners, at any time during the existence of the partnership; may assign the partnership effects, in the name of the firm, for the payment of the debts of the company, although by such assignment a preference is given to one set of creditors over another.” The cases of Dickinson v. Legare, Robinson v. Crowder, Pearpoint v. Graham, Mills v. Barber and Harrison v. Sterry ‘ were reviewed, and considered as authorizing this conclu- sion. The chancellor declined, however, expressing any opinion “in favor of the validity of such an assignment of the partnership effects to a trustee by one partner against the known wishes of his eopartner, and in fraud of his right to participate in the distribu- tion of the partnership funds among the creditors; or in the decis- ion of the question which of the creditors should have a preference in payment out of the effects of an insolvent concern.” 5 § 49c. Review of Cases — Continued.— In the case of Havens v. Hussey,’ in the same court, an assignment of all the partnership property and effects had been made by one of two copartners — without the consent of the other, and against the known wishes of her attorney, who was present and attending to her interests — to. trustees, to pay certain preferred creditors. The point mentioned and passed over in Egberts v. Wood, without an opinion, was here’ distinctly presented; and it was decided that such an assignment: was illegal and inequitable and could not be sustained. The chan- cellor explained his conclusion in Egberts v. Wood to have been, “that from the nature of the contract of copartnership one of the partners, during the continuance of the partnership, might make 14 McCord’s Law, 537. 23 Paige, 517. 33 Paige, 523. 4The case of Anderson v. Tompkins was not noticed, 53 Paige, 525. 65 Paige, 30. § 49d.] REVIEW OF CASES. 73 a valid assignment of the partnership effects, or so much thereof as was necessary for that purpose, in the name of the firm, directly to one or more of the creditors, in payment of his or their debts, although the effect of such an assignment was to give a preference to one set of creditors over another.” ! In the case of McCullough v. Somerville,’ in the court of appeals of Virginia, the assignment was executed by one of two partners to trustees for the payment of creditors in a certain order, and in- cluded all the private property of the assignor and all the property of the firm. It appeared that the partner executing the assign- ment had the whole management of the concern, the other partner residing in another state (Pennsylvania). The court (Carr, J.) thought the deed effectual to convey the absent copartner’s interest, on the grounds that the whole of the partnership property was personal, that the assignor was the sole managing partner, and that the purpose for which the effects were conveyed was the pay- ment of bona fide creditors. The case of Anderson v. Tompkins was considered as fully in point and as decisive of the case. “ Fol- lowing this high authority,” observed Carr, J., “I conclude that a partner has a right to convey the social effects (save real estate) to trustees to pay specified creditors of the firm, and this without the consent of his copartner, where (as here) that copartner resides out of the state, and the grantor is sole manager of the concern.”* And Cabell, J., observed: “That one partner living in this state, and having the management of all the business of the company (the other partner residing out of the state), has the power to deliver over and assign the goods and choses in action of the company to the creditors of the company in discharge of the partnership debts, is a position too clear, in my opinion, to require either argument or authority. If he can do this directly, I think it equally clear that he may indirectly, by delivering or assigning them to an agent or trustee to be applied in payment of the partnership debts. And if he may do this as to all the creditors he may do it as to any one or more of them; and hence he may give a preference to a particu- lar creditor or to a class of creditors, although the consequence of such preference may, in case of a deficiency of funds, defeat the claims of the postponed creditors.” * § 49d. Review of Cases —Continued.— In the case of Deckard v. Case,> in the supreme court of Pennsylvania, the assignment 15 Paige, 31. 28 Leigh, 415. 38 Leigh, 415, 433. 41d. 436. 55 Watts, 22. Sometimes inaccurately cited as “Deckard’s Case.” 14 WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. was of the whole stock in trade of the firm directly to certain cred- itors in payment of debts. It was made by one of two partners, without the assent of the other; but it appeared that the non- assenting partner had left the country. The court sustained the assignment on the general ground of the implied power of a part- ner to dispose of the whole partnership interest, as held in Mills v. Barber and other cases; though the peculiar facts of the case were also urged as strengthening such a conclusion. In the case of Hennessy v. The Western Bank,! in the same court, the principle maintained in Deckard v. Case was applied to the case of a general assignment of partnership effects to trustees exe- cuted by two of three copartners, the assignment being held to be binding on the third. The case of Deckert v. Filbert,? in the same court, involved the same general question, though under some new circumstances. In this case two assignments had been made of all the partnership effects in trust for creditors: one by one of the partners with pref- erences, and the other shortly after by the other partner without preferences. The court below was of opinion that the facts in evi- dence proved the express dissent of each partner to the assignment made by the other, and that therefore neither assignment had validity. On appeal to the supreme court the judgment was affirmed. § 49e. Review of Cases — Continued.— In the case of Kirby v. Ingersoll,’ in the court of chancery of Michigan, an assignment of all the partnership effects had been made by one partner to a trustee, who was also a creditor, with preferences to particular creditors, without the knowledge or consent of the other, who was present, and without any previous consultation with him. The court not only held the assignment to be void, but went the fur- ther length of declaring that one partner could not make a general assignment of the partnership effects to a trustee, for the benefit of the creditors of the firm (even without preferences), without the knowledge or consent of his copartner, where the latter is on the spot, and might be consulted. The chancellor, in the course of de- livering his opinion, observed that “a partner may transfer a por tion of the assets or obligations for the purpose of paying or secur- ing debts, or to raise money to carry on the concern; but that the power of divesting entirely one partner of his interest, appointing a trustee for both and breaking up the concern, is not one of the powers either contemplated or implied by the contract of copart- 16 Watts & Serg. 300; Rogers, J., id. 310. 23 Watts & Serg. 454. 31 Harr. (Mich.) 172; s. c. on appeal, 1 Doug. 477. §§ 497, 499.] REVIEW OF CASES. 75 nership.”! The New York case of Havens v. Hussey was cited and relied on; and the principle upon which assignments of this kind have been declared void was stated to be that one partner has no authority to make a general assignment of the partnership effects in fraud of the rights of his copartner to participate in the distribu- tion of them among the creditors.? In the Missouri cases of Hughes v. Ellison,? Drake v. Rogers,* and Hook v. Stone,’ it has also been decided that one partner has no authority to make a general assignment to a trustee for cred- itors. § 49f. Review of Cases — Continued.— In the case of Dana v. Lull,’ in the supreme court of Vermont, the assignment was of all the partnership effects to a trustee for the benefit of preferred creditors, and was made by one of two partners without the au- thority or assent of the other. It appeared that the partners re- sided in different parts of the state, and that the partner who made the assignment had the superintendence and care of the business. The court held the assignment to be void as not being within the implied power of the partner, as agent of the firm; and that such power extended only to such acts as are incidental to the carrying on of the business of the firm, and not to the appointment of a trustee to close up the business and distribute the proceeds of the partnership effects in unequal proportions among the creditors, and thereby exclude the other partners from participating in the dis- tribution, or in the decision of the question in regard to what creditors should have a preference, if any.’ The cases principally relied on by the court were those of Hitchcock v. St. John, and Havens v. Hussey. § 49g. Review of Cases — Continued.— In the case of Hayes v. Heyer,? in the court of chancery of New York for the first circuit, the question whether one partner conld make a general assignment of the partnership effects, even without preferences, where his co- partner was present attending to business as usual, came up inci- dentally and was noticed by the court as being one of importance and difficulty, but was not further considered, the point not being 11 Harr. 187. 27d. 191, 35 Mo. 463, 46 id. 317. 534 id. 329. 617 Vt. 890. 717 Vt. 394, 84 Sandf. Ch, 485. 76 WHO MAY MAKE AN ASSIGNMENT. [ca. Iv. before the court for decision. The case was subsequently trans- ferred to the superior court of the city of New York, where it was decided against the validity of the assignment, as will be seen below. § 49h. Review of Cases — Continued.— In the case of Deming v. Colt,! in the superior court of the city of New York, a general assignment had been made of all the partnership property by one of two partners to a trustee in trust for the benefit of the creditors of the firm without any preferences; and it was made without the consent or assent of the other partner and without consulting him, although he was at the time actively engaged in the business. The court held the assignment to be void on the principle that one partner cannot of his own exclusive authority appoint a trustee to dispose of the partnersbip effects in behalf of all the copartners; and that it is not incident to the right of one partner thus to se- lect an agent and clothe him with all the authority of the firm for the disposal and application of its property. The rule in this case was laid down by the court without hesitation, “that a partner can in no case make a general assignment to a trustee for the bene- fit of creditors against the consent or without the acquiescence of his copartner; the latter being present or capable of acting in the matter.” ? In the case of Hayes v. Heyer,’ in the same court, and reported with the last case, the same question arose under somewhat differ- ent circumstances. This was a case of an assignment made by one of the general partners in a limited partnership, with the consent of the special partner, but without the knowledge or assent of the other general partner, who was present and might have been con- sulted. The assignment was a general one of all the partnership effects to a trustee for the benefit of all the creditors ratably. The court adopted the views and conclusion of the court in Deming v. Colt, and declared the assignment void, holding that the power to appoint a trustee, and transfer to him the entire partnership effects, was not an implied power which one partner might exercise with- out the knowledge or consent of the others. 13 Sandf. 8. C. 284, 21d. 392. 3 Td. 284, 293. 4In the case of Everson v. Gehrman, decided at the New York general term of the supreme court, February, 1855, it was held that the confession of a judgment to a particular creditor, by one of two partners, against the known wishes of his copartner, was void; the court holding it to be more objectionable than even an assignment to a trustee. The cases of Havens v. Hussey, Deming v. Colt, and Hayes v. Heyer, were cited and approved. §§ 491-494. ] REVIEW OF CASES. 17 § 49i. Review of Cases — Continued.— In the case of Kemp v. Carnley,' in the same court, an assignment had been made by one of two partners of all the partnership property to a trustee, giv- ing a preference to a mortgage creditor of the firm. It appeared that the non-executing partner had absconded. The court held the assignment valid. The doctrine of Deming v. Colt and Hayes v. Heyer was recognized as the established rule of the court. In the case of Fisher v. Murray,? in the New York court of com- mon pleas, it was held that to support an assignment of the whole of the partnership property to a trustee for the payment of debts, by one partner, or any number short of the whole, even without preferences, it must be shown that it was made under circumstances that rendered it impossible to consult the other partners; or from their acts or declarations, either before or subsequent thereto, it must appear that it was executed with their assent or by their au- ‘hority. § 49j. Scannell,’ in the district court of California for the fourth judicial district, an assignment had been made by one of three partners doing business in Canton, China, in the absence of the others, of all the partnership property to trustees for the equal benefit of all the creditors. One of the absent partners was residing and doing business at Shanghai, about nine hundred miles from Canton; but it appeared that after the assignment he had denied that he was a partner at the time of the failure, asserting that he had pre- viously withdrawn from the firm. The other partner was a sal- aried partner, not sharing in the profits and losses, and at the time of the assignment was absent from China on a trip to Calcutta. The court held the assignment valid. § 49k. Review of Cases— Continued.— In the case of Robinson v. McIntosh,! in the New York common pleas, a copartnership as- signment to trustees for the benefit of creditors, in all respects equitable and just to all parties, made in a condition of insolvency by the general and managing partners of a limited copartnership, was sustained. Mr. Justice Woodruff observed: “ Whatever doubts there may be in ordinary cases of the power of some of the mem- bers of a firm to make such a disposition of the property, while other members are present and equally entitled to a voice in the disposition, I do not doubt that we ought to sustain an assignment 13 Duer, 1. 21E. D. Smith (N. Y.), 341, 313 Cal. 242. 44E, D, Smith, 221. “Ws WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. in all respects equitable and just to all parties, made in a condition of hopeless insolvency by all of those who, by the terms of the actual arrangement between the members, are the active managing partners in the business.” § 491. Review of Cases — Continued.— In the case of McGregor v. Ellis,'in the superior court of Cincinnati, where the non-assign- ing partner was present and dissented, the court (Storer, J.), in an opinion reviewing the cases, expressed itself very strongly in favor of the doctrine that a transfer of the partnership property in trust for creditors by one partner was obligatory upon the others. And the same doctrine was applied in the case of Graves v. Hull,? in the supreme court of Texas.’ § 49m. Review of Cases — Continued.— Robinson v. Gregory,® in the supreme court of New York, and affirmed at the court of appeals, is an important case. The firm consisted of three partners, one of whom was residing in Paris. The partnership affairs having become embarrassed, the two resident partners executed a general assignment of individual and partnership property, with preferences. The assignment was adjudged invalid in the court of last resort, but the opinion of the court is not reported. The court below placed its decision upon the ground that a partner who went abroad immediately granted a power, in cases of emergency, to the re- maining partners to act for him. This view of the law was re- garded as incorrect by the appellate court. In Pettee v. Orser,! in the superior court of New York, where an assignment was executed by two of four partners, the others of whom were absent temporarily on business, the conveyance was adjudged void. § 49n. Review of Cases — Continued.— In the case of Wells v. March® one of the partners had absconded, leaving a letter ad- dressed to his copartner, saying, among other things, “Take charge of everything in our business —close it up speedily,” etc. The re- maining partner thereupon executed a general assignment of the 12 Disn. (Ohio), 386. 233 Tex. 665. 329 Barb. 560, referred to in Welles v. March, 30 N. Y. 344. Wright, J., ob- served: ‘Our judgment proceeded upon the ground that it was not competent for the two partners, without the consent or authority of the third, to make a general assignment of the partnership property of a trustee. Our opinion was that no such power could be implied from the partnership relation.” 46 Bosw. (N. Y.) 123; affirmed in court of appeals. See Ingraham, J., in Pal- mer v. Myers, 43 Barb. 509 (1860). 530 N. Y, 344. § 49n.] REVIEW OF CASES. 79 partnership property, which was assailed by judgment creditors as being fraudulent in fact, and not the act of the partners. The court were of opinion that the conduct and declaration of the ab- sconding partner were such as to empower his copartner to execute the assignment. Mr. Justice Wright, who delivered the opinion of the court, said: “ A general assignment to a trustee of all the funds and effects of the partnership for the benefit of creditors is the exer- cise of a power without the scope of the partnership enterprise, and amounts of itself to a suspension or dissolution of the partner- ship itself. It is no part of the ordinary business of the copartner- ship, but outside and subversive of it. No such authority as that can be implied from the partnership relation.! The assignment in the present case was without preference, but the principle of law to be applied to it is not affected by that circumstance.” The case of Kelly v. Bader, where the facts were very similar, was rested on substantially the principle adopted in this case. In the case of Palmer v. Myers,? where it appeared that one of the partners had absconded, and ineffectual efforts had been made to consult with him and obtain his consent to the execution of an assignment, it was held that evidence of these facts was admissible to sustain an assignment executed by the remaining partners. The court relied upon Kemp v. Carnley,’ Deckard v. Case,‘ and Kelly v. Baker, and with this agrees the case of National Bank v. Sackett.® The case of Coope v. Bowles’ was substantially the same in its facts as Robinson v. Gregory,’ and a similar conclusion was reached. Where it was provided in the copartnership agreement that either partner might dissolve or close up the copartnership upon the fail- ure of the other partuer to contribute his proportion of the capital, this was deemed a sufficient authority to enable one partner to ex- ecute a general assignment without the consent of his copartner.® In the case of Stein v. La Dow,” in the supreme court of Minne- sota, the rule was stated to be that under ordinary circumstances one partner may not, without the assent of the other, assign the firm property to a trustee for the benefit of the creditors, yet, if an extraordinary emergency occurs in the affairs of the partner. ship, and the non-assigning partner cannot be consulted on account 1 Johnson, J., concurred upon the ground of an express authority. See p. 353. 243 Barb. 509. 33 Duer, 1, 45 Watts, 22, 52 Hilt. 536. 62 Daly, 395. 742 Barb. 87; 8. C., 18 Abb. Pr. 442; 28 How. Pr. 10, 829 Barb. 560; reversed in court of appeals. See Welles v. March, 30N. Y. 344. 9 Roberts v. Shepherd, 2 Daly, 110. 1013 Minn, 412; Williams v. Frost, 27 Minn, 255, 80 WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. of his absence under circumstances which furnish reasonable ground for inferring that he intended to confer upon the assigning part- ner authority to do any act for the firm which could be done with his concurrence if he were present, such an assignment, if fairly made, will be presumed, prima facie, to be valid. The temporary absence of one partner from the state was not regarded as suffi- cient to empower the remaining partner to execute an assignment. of firm property. § 490. Review of Cases — Continued.— In Ohio’ it was held that. one of the members of an insolvent firm cannot, either before or after dissolution of the partnership, make a valid assignment of all its effects for the benefit of creditors, against the will of a copart- ner, or without his assent, when he is present or accessible. The same point and like conclusions were had in Adams v. Thornton.” In the case of Loeb v. Pierpont’ the court, after reviewing the authorities, said: “We think the American cases are almost unani- mous in holding that one partner has not the authority to execute an assignment of the property of the firm unless his copartner be absent, so that he cannot be consulted, or is incapable, from some cause, of expressing either assent or dissent.” Temporary insanity of one partner does not authorize the other to make a general as- signment.* In the case of Rumery v. McCulloch ® the assignment was made without preferences, and in every respect regular, except that it was made by one partner only. The facts were that the other partner had abandoned the business and permanently located in Canada. The assignment was held to be valid. In the case of Chadwick v. Burrows,’ a firm being insolvent and one of the partners having absconded, the remaining partner made an assignment upon the recommendation of all the creditors except one who attacked the assignment. Held, that the assignment was a valid conveyance. § 49p. Review of Cases — Continued.— A partner who has in fact withdrawn from the firm, so that as between himself and the other partners he has no authority or control over the property or business of the firm (although as between himself and creditors he 1 Holland v. Drake, 29 Ohio St. 441. 282 Ala. 261; 56 Am. Rep. 49; 3S. Rep. 20. 358 Iowa, 469; 48 Am. Rep. 122, citing the text. Anderson v. Thompson, 1 Brock. 456, distinguished. 4Stadhman v. Loehr, 47 Hun, 327, 554 Wis. 565; 12 N. W. Rep. 65. 642 Hun, 39. § 499.] REVIEW OF CASES. 81 may still be liable for its debts), need not join in an assignment by such firm for the benefit of its creditors. In the case of Johnson v. Robinson? the court held: “It is gen- erally held that one partner cannot, without the authority or con- sent of his copartner, make a general assignment. An exception is recognized when one partner has the entire management of the business or the other is absent, so as to be beyond the reach of prompt communication.” In this case the partner who did not sign the assignment was absent from the state at the time, and the assignment was made to secure a firm debt. The court decided that under these circumstances the assignment was a valid convey- ance. In the case of Coleman v. Darling,’ R., N. and H. were partners doing business under a firm name at Unity in the state of Wisconsin The assignment was made by R. alone, at Wausau, in the same state, on the 22d of June, 1885. The other partners were at that time at their place of business, and knew nothing of the assignment until the 23d of June, at which time N. assented to it. H. did not then assent, but after a garnishee process had been served in this case he did consent to the assignment and ratify the same. Held, the assignment was void when made. § 49q. Review of Cases — Continued.—In the case of Anderson v. Tompkins,‘ before Chief Justice Marshall, in the circuit court for the district of Virginia, the question of a partner’s power of assignment was distinctly presented, and very fully considered by the court. In this case an assignment had been made by one of two partners of an American firm during the absence of the other on a voyage to England, and (as was alleged) without his knowl- edge or consent. It was an assignment of all the effects, personal and real, of the company (the house having stopped payment) to trustees, for the payment, first, of certain creditors named in the deed, and then of those who should exhibit their claims within certain specified periods. The general doctrine as to the power of each partner of a firm to dispose of the whole of the partnership ef- fects was not controverted on the argument; but it was contended that it did not authorize the deed in that case because, first, it was not an act in the course of trade, but was a disposition of the whole subject, and a dissolution of the partnership; and secondly, because it was a preference to particular creditors, in making which the 1First Nat. Bank v. Hackett, 61 Wis. 335; 21 N. W. Rep. 280. 268 Tex. 400; 48. W. Rep. 625. 366 Wis. 155; 57 Am. Rep. 253; 28 N. W. Rep. 867; citing Brooks v. Sullivan, 32 Wis, 444; Rumery v. McCulloch, 54 id. 565; 12 N. W. Rep. 65, supra, and the text. 41 Brock. 456. 6 82 WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. other partner ought to be consulted. The court, however (after con- sidering these objections at length), was of opinion that the assign- ment, so far as it embraced the partnership effects for sale, was valid ; and on this point Chief Justice Marshall expressed himself with peculiar confidence, as having “ never, from the first opening of the cause, entertained a moment’s doubt.” He could perceive no dis- tinction between an assignment of all the partnership effects to pay debts, and a sale of all for money or on credit, which was clearly within the power of a single partner.! Both were regarded as acts fairly within the course of trade,? and the circumstance that the goods were conveyed to trustees to be sold was considered not to affect the power.’ The assignment was regarded as not necessarily dissolving the contract of partnership, though it might suspend the operations of the company.* It is evident, from a perusal of this important case, that the de- cision of the court was placed partly on the ground of a partner’s general power, and partly on that of the necessity of the case, arising from the absence of the non-executing partner; but it is difficult to ascertain which of these considerations exercise a con- trolling influence upon the mind of the court. Throughout his opinion the chief justice seems to place the power to assign on the same footing with the power to sell; the latter being conceded to belong absolutely to each partner, to the extent of the whole ef- fects, “though the others be w7thin reach.”*® The situation of the partners in the case before the court is referred to as giving “in- creased force” to the reasoning by which the assignment was sus- tained as an act within the course of trade, but not as constituting the main ground of the opinion.$ § 50. Review of Cases — Continued — Preferences.— And in this last cited case it is only on the point of giving a preference to creditors that the court expressly say that had the non-executing partner been present “he ought to have been consulted,” and that “the act ought to have been a joint act.”' Preference of creditors, indeed, is evidently regarded as the most important feature of the power; conveyance to trustees being held to be an immaterial con- sideration. From these expressions it might be inferred to have been the opinion of the court (though not expressed in terms) that 11 Brock. 460, 461, 2 Thid. 3Tbid. 461, 4Tbid. 5 Tbid. 459, 461, 61 Brock. 460, TId, 462. § 51.] REVIEW OF OASES. 83 an assignment by one partner to trustees for the benefit of credit- ors, without preferences, would be valid, though the non-assenting partner was present or within reach. On the other hand, there are expressions in the opinion which seem to limit even the power of sale by one partner to cases where the other is absent, and make the consultation of a partner who is present a necessary prelim- inary to its exercise. Thus, it is said of the power of sale, that “ it would certainly not be exercised in the presence of a partner with- out consulting him; and if it were so exercised, slight circum- stances would be sufficient to render the transaction suspicious, and perhaps to fix on it the imputation of fraud.”! And again, “Tn the absence of one of the partners, in a case of admitted and urgent necessity, the power to sell may be exercised by the part- ner who is present, and who must act alone, in such manner as the case requires, provided it is exercised fairly.” ? § 51. Review of Cases — Continued — Preferences.—In the ease of Hitchcock v. St. John,’ in the court of chancery of New York for the first circuit, the facts were these: One of two part- ners resided in the city of New York, carrying on the business there; and the other in Augusta, Georgia, conducting the business there, under the same firm. The partner residing in New York made an assignment to trustees of all the partnership property of that firm, with preferences to certain creditors, without the assent of the partner in Augusta. The assignment was declared void, the court holding that one partner, on the eve of insolvency, cannot assign all the partnership property to a trustee for the purpose of paying debts of the firm with any preferences. The case was held to be different where the assignment was without preferences, the vice-chancellor observing that “the rule seems well established that. this court will sustain an assignment of the whole of the partner- ship funds by one partner where all the creditors are admitted to equal participation.” It was further held that although partner- ship funds might be exhausted by an immediate payment to a cred- itor by one partner, yet there was no implied authority, arising from the partnership relation, in one partner to appoint a trustee of all the funds, to collect and distribute them as that partner shall determine. The appointment of a trustee was regarded as an ex- traordinary act, in which all the members of the firm were entitled to a voice and share.° 11d, 460. 21d, 468, 8 Hoff. Ch, 511. 4 Hoff. Ch, 514, 515, 5 Hoffy Ch, 518, 84 WHO MAY MAKE aN ASSIGNMENT. [cH. Iv. The facts of this case resemble, to a considerable extent, those in Pearpoint v. Graham, already noticed,’ which, however, was not. cited. The effect of the absence of a non-assenting partner, as qual- ifying the rale applicable to the case, was not adverted to; the principal test adopted by the court for determining the question being the fact whether the assignment was with or without prefer- ences. § 52. Power of Partners to Assign —Summary.— It will be seen, on an examination of the cases just reviewed, that those of them which deny the partner’s power to assign in trust, place such denial on different grounds, which may be reduced to the follow- ing: that such an assignment works a dissolution of the copartner- ship;? that it is an act out of the course of trade, not contemplated by the contract of partnership, and not within the implied powers incident to the partnership relation; and that it is an act in fraud of the rights of other partners to participate in the distribution of the partnership funds among the creditors, and in the decision of the question which of the creditors, if any, should have a prefer- ence in payment out of the property assigned. The cases which affirm the power place it, to some extent, on the general ground of being an implied power incident to the partnership relation, but more frequently on the ground of the relative situation of the partners, and the necessity of the case; as where it is impossible to consult the copartners, owing to their absence or other cause. The following propositions appear to be deducible from the ad- judged cases on the question now under consideration, and to be sustained by the weight of authority: I. One partner may, without the assent of his copartner, assign a portion or the whole of the partnership effects directly to cred- itors in payment of partnership debts. II. One partner cannot make a general assignment of the part- nership effects to a trustee for the benefit of creditors, even ratably, without the consent‘ or against the known wishes of the other 1 Ante, p. 72. ? On this point, the opinions of Mr. Justice Washington, in Pearpoint v. Gra- ham, and of Chief Justice Marshall, in Anderson v. Tompkins, are in conflict. See ante, pp. 72, 74. 3 Mills v. Barber, 4 Day, 428; Egberts v. Wood, 3 Paige, 517; Havens v. Hus- sey, 5 id. 30; Deckard v, Case, 5 Watts, 22; Mabbett v. White, 12 N. Y. 442; Graser v. Stillwagen, 25 N. Y. 315; Johnson v. Robinson, 68 Tex. 400; 4S. W. Rep. 625. 4But he may, with the express consent of the other partners, Ely v. Hair, 16 B. Mon, 230; Baldwin v. Tynes, 19 Abb. Pr. (N. Y.) 32; Lowenstein v. Flauraud, 82 N. Y. 494; affirming 11 Hun, 399; Kelly v. Baker, 2 Hilt, 531; Roberts v. Shepherd, 2 Daly, 110. See Wooldridge v. Irving, 23 Fed. Rep. 676, and note. § 52.] POWER OF PARTNERS TO ASSIGN. 85 partners, for the reason that no such authority can be implied from the partnership relation.! II. Where a partner has relinquished all control of the partner- ship affairs by absconding, this will be regarded as evidence of an authority to the remaining partners to make an assignment either with or without preferences.? IV. But the mere absence of a partner from the country will not be regarded as conferring such a power upon the remaining partners. V. But where the absence or non-residence of the partner is coupled with other circumstances tending to show such an author- ity, especially where the assignment is made without preferences,‘ . But the rule requiring all the partners to unite in the assignment does not apply to those who are liable as partners to third persons, but only to those who are partners as between each other. Adee v. Cornel], 25 Hun, 78; affirmed, 93 N. Y. 572; Whitworth v. Patterson, 6 Lea (Tenn.), 119; Loeb v. Pierpont, 58 Iowa, 469; 43 Am. Rep. 123; 12 N. W. Rep. 544, supra, p. 80. 1 Robinson v. Gregory, cited in Welles v. March, 30 N. Y. 344; reversing S. C., 29 Barb. 560; Palmer v. Myers, 43 Barb. 509; Pettiev. Orser, 6 Bosw. 128; affirmed in Court of Appeals; Wilcox v. Jackson, 7 Col. 521; Loeb v. Pierpont, 58 Iowa, 469; Steinhart v. Fyhrie, 5 Mont. 463. See Palmer v. Myers, 43 Barb. 509; Welles v. March, 30 N. Y. 344; Coope v. Bowles, 42 Barb. 87; Haggerty v. Granger, 15 How. 243; Paton v. Wright, id. 481; National Bank v. Sackett, 2 Abb. Pr. (N. 8.) #80; Stein v. La Dow, 13 Minn. 412; Bull v. Harris, 18 B. Mon. (Ky.) 195; Dunk- jin v. Kimball, 50 Ala. 251; Maughlin v. Tyler, 47 Md. 545; Wetter v. Schlieper, 4 E. D. Smith (N. Y.), 917; Sloan v. Moore, 87 Pa. St. 217; Dana v. Lull, 17 Vt. 390; Hook v. Stone, 34 Mo. 329; Hughes v. Ellison, 5 id. 463; Drake v. Rogers, 6 id, 317; Kirby v. Ingersoll, Harr. Ch. (Mich.) 172; 1 Doug. 477; Bowen v. Clark, 1 Biss. 128; Cleaver v. Brenzel, 1 Luz. Leg. Reg. 228. Contra, Ch. J. Marshall, in Anderson v. Tompkins, 1 Brock. 456; Hitchcock v. St. John, Hoff. Ch. 511; Robinson v. Crowder, 4 McCord, 519; McGregor v. Ellis, 2 Disn. (Ohio), 286; McCullough v. Sommerville, 8 Leigh, 415; Graves v. Hall, 32 Tex. 665; Gordon v. Cannon, 18 Gratt. 387. And see Deckard v. Case, 5 Watts, 22; Hen- nessy v. Western Bank, 6 Watts & Serg. 300; Egberts v. Wood, 3 Paige, 517; Lassell v. Tucker, 5 Sneed (Tenn.), 1. But see Barcroft v. Snodgrass, 1 Cold. (Tenn.) 480; Hollum v. Drake, 29 Ohio St. 441; Adams v. Thornton, 82 Ala. 261, 38. Rep. 20; 56 Am. Rep. 49; Stadhman v. Loehr, 47 Hun, 327; Shattuck v.. ‘Chandler, 40 Kan. 516; 20 Pac. Rep. 225. 2 Welles v. March, 30 N. Y. 344; Kemp v. Carnley, 3 Duer, 1; Palmer v. Myers, 43 Barb. 509; S. C., 29 How. Pr. 8; Deckard v. Case, 5 Watts, 22; Kelly v. Baker, 2 Hilt. 531; National Bank v. Sackett, 2 Daly, 895; Rumery v. McCulloch, 54 Wis. 565; First Nat. Bank v. Hackett, 61 id. 385; Coleman v. Rosenfeld, 28 N. W. Rep. 367; Aubrey v. Osterman, 25 id. 657, and note; S. C., 65 Wis. 118; Petition of Daniels, 14 R. I. 500; Sullivan v. Smith, 15 Neb. 476; S. C., 18 Neb. 450; 19 N. W. Rep. 620; Chadwick v.’ Burrows, 42 Hun, 39. 3 Robinson v. Gregory, cited in Welles v. March, 80 N, Y. 344; reversing S. C., 29 Barb. 560; Coope v. Bowles, 42 Barb. 87; 8. C., 18 Abb. Pr. 442; Pettee v. Orser, 6 Bosw. 123; Stein v. La Dow, 138 Minn. 412; Coleman v. Darling, 66 Wis. 155; 57 Am. Rep. 253; 28 N. W. Rep. 367, supra, p. 81. 4Pearpoint v. Graham, 4 Wash, C. C. 232; Hitchcock v. St. John, Hoff. Ch. 511; Dana v. Lull, 17 Vt. 390, 86 WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. and in an extraordinary emergency, or where a subsequent ratifi- cation can be inferred,! the assignment will be sustained. The mere fact of the absence or residence of a partner out of the state does not seem to furnish the test for determining the validity of assignments by a copartner. Taken in connection with the fact that the latter is sole manager of the company’s business, and the other a merely dormant or inactive partner, it would indeed be allowed its full weight, as in the case of McCullough v. Sommer- ville, where both facts appeared. But where the partners are equally active in the business, and especially where the business is. transacted in different states, under the same firm or different. firms, by partners resident at each place, the right of one to as- sign on the mere ground of the absence of the other would be much less readily conceded. § 53. Power of Partner to Assign — Summary of Authorities. It remains to notice the opinions of several eminent American ju- rists on this question of a partner’s power of assignment; and these seem to have left it in much of its original uncertainty. The inclination of Mr. Justice Story’s mind seems to have been against the power to assign ald the property of the partnership under any circumstances. In his Treatise on Partnership he observes: “It may well admit of some doubt whether this power extends to a general assignment of all the funds and effects of the partnership by one partner for the benefit of creditors; for such an assignment would seem to amount of itself to a suspension or dissolution of the partnership itself” Ina note to this passage he cites Pear- point v. Graham, Dana v. Lull, Cullum v. Bloodgood,’ Deming v. Colt, Kirby v. Ingersoll, and Deckert v. Filbert.6 He then extracts 1Forbes v. Scannell, 18 Cal. 242; Stein v. La Dow, 18 Minn. 412; McGregor v.. Ellis, 2 Disn. (Ohio), 286; Pearpoint v. Graham, 4 Wash. C. C. 282; McNutt v. Strayhorn, 39 Pa. St. 269; Holland v. Drake, 29 Ohio St, 441; Adee v. Cornell,. 93 N. Y. 572; Petition of Daniels. 14 R. I. 500. 2 Forbes v. Scannell, 13 Cal. 242; Stein v. La Dow, 13 Minn. 412; McCullough v. Sommerville, 8 Leigh, 415; McGregor v. Ellis, 2 Disn, (Ohio), 286; Pearpoint. v. Graham, 4 Wash. C. OC, 232; Harrison v. Sterry, 5 Cranch, 289; Johnson v. Robinson, 68 Tex. 400; 4 8, W. Rep. 625; Farwell v. Webster, 71 Wis. 485; 37 N. W. Rep. 487. 3See Pearpoint v. Graham, 4 Wash. C. C. 232; and Hitchcock v. St. John, Hoff. Ch. 511, in which the facts were as above stated. 4Story on Partn., § 101. The same view of the effect of such an assignment. was taken by Mr. Justice Washington in Pearpoint v. Graham, and by Chancellor Walworth in Havens v. Hussey. But in Anderson v. Tompkins Chief Justice Marshall held that such an assignment did not necessarily dissolve the contract of partnership; and the same was held by the supreme court of Pennsylvania in Deckard v. Case, 5 Watts, 22. 515 Ala. 42. 63 Watts & Serg. 454, § 53.] POWER OF PARTNER TO ASSIGN. 87 largely from the opinions of the court in the cases of Anderson v. Tompkins, Egberts v. Wood, Havens v. Hussey, and Hitchcock v. St. John, and sums up by observing: “There is no small difficulty in supporting the doctrine, even with qualifications, that one part- ner may make a general assignment of all the partnership prop- erty.”! Chancellor Kent, in his Commentaries,? remarks: “It is a point not quite settled whether one partner, without the knowl- edge or assent of his copartner, though under circumstances, may not assign over all the partnership effects and credits, in the name of the firm, to pay the debts of the firm; and where all the cred- itors are admitted to an equal participation, the conclusion is that he may.’ He may give a preference to one creditor over another; though whether it might be made to a trustee for that purpose, against the known wishes of the copartner, so as to terminate the partnership, was left an unsettled point in Egberts v. Wood.”* He then cites the case of Havens v. Hussey as settling this point, and refers to some of the other cases on the subject.’ The passage con- cludes as follows: “There is no small difficulty,” says Mr. Justice Story, “in supporting the doctrine, even under qualifications, that one partner may make a general assignment of all the partnership property, so as to break up its operations.® This I consider to be the soundest conclusion to be drawn from the conflicting authori- ties.” 7 Mr. Parsons, in his work on Partnership,’ refers to the subject in the following language: “Whether one partner may assign all the property in trust to pay creditors, the firm being solvent, has 1Story on Partn., § 101, n. 4. 23 Kent’s Com. [44], 47, n. 3 Harrison v. Sterry, 5 Cranch, 289; Mills v. Barber, 4 Day, 428; Lamb v. Du- rant, 12 Mass, 54; Pothier, Traité du Con. de Soc., Nos. 67, 69, 72, 90; Robinson v. Crowder, 4 McCord (S. C.), 519; Hodges v. Harris, 6 Pick. 360; Deckard v. Case, 5 Watts, 22; Hitchcock v. St. John, Hoff. Ch. 511; Anderson v. Tompkins, 1 Brock. 456, 43 Paige, 517. Some doubt expressed in Pearpoint v. Graham, 4 Wash. C. C. 232, 5 Hitchcock v. St. John, Hoff. Ch. 516; Kirby v, Ingersoll, Harr. Ch. (Mich.) 174; Dana v. Lull, 17 Vt. 890; Gibson, C. J., 8 Watts & Serg. 63, S. P. 6Story on Partn., pp. 145-150, ; 7Mr. Troubat, in his Treatise on the Law of Limited Partnership, states the rule in regard to general partners to be, that one partner may separately, at any time during the existence of the partnership, assign the effects and property of the firm, and prefer one of its creditors to another, ‘‘ It is true,” he adds, “that it was not without great doubt and difficulty that the courts could arrive at this conclusion, but it became and is now the rule, as far as such a rule can be established by the authority of the highest judicial tribunals in South Caro- lina, Connecticut, Massachusetts and the United States as a federal body.” Law of Commandatory and Limited Partnership in the United States, p. 390, § 393 (Phila. ed., 1853), 8 Parsons on Partnership, p. 166. 88 WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. been much doubted. That he may, in good faith, assign a part of the property to pay or secure an existing debt, or a debt to be con- tracted, is not doubted; and we think the weight of authority sanctions his assigning the whole property in trust for all the cred- itors, especially if this be done without preferences of any kind; although this has been questioned on the ground that such a trans- fer of itself operates a dissolution; but so, in fact, would the pre- vious and actual insolvency, in effect, though not technically.” On the whole — while the law remains thus unsettled on this point — it may be laid down as the only safe practical rule, that in making assignments of partnership property, particularly to trust- ees, all the partners, special as well as general, dormant as well as active, should be consulted; and the assignment should either be the joint act of all, or should be made by the express authority or with the consent or concurrence of those who do not actually exe- cute it, or subject to ratification on their part. It is clear, however, that the right of one partner to dispose of partnership property is confined strictly to personal effects, and does not extend to veal estate owned by the partnership.’ One partner cannot convey away the real estate of the firm without special authority.’ § 54. Power of Each Partner to Assign His Interest.— The power of each partner over his own share or interest of the part- nership property stands upon an entirely different footing from his power over the partnership property generally. No partner owns absolutely any part of the property. His interest is an in- terest subject to the interest of his copartners.? While, therefore, he cannot transfer his share of any specific partnership property, he may transfer the interest which he has in the firm property, subject to the rights of his copartners; and he may make a valid assignment of this interest to trustees for the benefit of his cred- itors.t But such an assignment will pass only so much as may re- 1 Anderson v. Tompkins, 1 Brock. 456; Brainerd, J., in Mills v. Barber, 4 Day, 428, 480; Shaw, C. J., in Tapley v. Butterfield, 1 Metc, 518; Carr, J., in McCul- lough v. Sommerville, 8 Leigh, 415, 433; Collyer on Partn., § 394; Story on Partn., § 101; Thompson v. Bowman, 6 Wall. 316. See Collumb v. Coldwell, 16 N. Y. 484; S. C., 24. N. Y. 505; Tieman v. Molliter, 71 Mo. 512. 2 Collyer on Partn., § 394; Story on Partn., § 101. The separate property of a partner can in no case be conveyed, unless by an instrument executed. by him. In re Wilson, 4 Barr, 430. But with such authority he can convey away the real estate of the firm by an assignment under seal in the name of the firm. Rumery v. McCulloch, 34 Wis. 565; Scruggs v. Burruss, 25 W. Va, 670. 3 Parsons on Part., p. 168. 4 Fellows v. Greenleaf 43 N. H. 421; Horton’s Appeal, 18 Pa, St. 617; Kirby v.: Schoonmaker, 3 Barb. Ch. 46. But see Hagerty v. Granger, 15 How. Pr. 243. And separate assignments by each of the partners of all his property to the same § 55.) SURVIVING PAKINERS. 89 main after the payment of the firm debts and a settlement with his copartners.! An assignment by one partner of all his interest in the joint property to the other partner or partners works a dissolution of the firm,? and the remaining partner may thereupon execute an assignment of all his property, whether belonging to the pre- vious firm or not, in trust for the payment of his individual cred- itors.3 § 65. Surviving Partners.— As to the power of surviving part- ners it has been held in South Carolina that a surviving partner, especially in case of insolvency, may assign the firm’s effects to a trustee for the payment of debts. The supreme court of the United States has recently held that a sole surviving partner of an insolvent firm who is himself insolvent may make a general as- signment of all the firm’s assets for the benefit of all joint creditors with preferences to some of them.° In New York it is held that the surviving partner has no power without the consent of the representatives of the deceased partner to make an assignment to a trustee creating preferences,’ but such an assignment cannot be attacked by creditors, although liable to assignee convey the firm property. Boughton v. Crosby, 47 Conn. 577; Bulger v. Rosa, 119 N. Y. 459; 24 N. E. Rep. 853; Keith v. Ham, 89 Ga. 590. 1See Platt v. Hunter, 11 N. Y. Weekly Dig. 300; Schiele v. Healy, 61 How. Pr. 73; Fellows v. Greenleaf, 43 N. H. 421. An assignment by one partner of his property for the benefit of his creditors which does not purport to convey the partnership property gives the assignee no title to said property or right to its possession. Wan Kleeck v. McCabe, 87 Mich. 599, 49 N. W. Rep. 872.. A volun; tary assignment by an insolvent partnership which devotes partnership assets to the payment of individual debts of a partner is fraudulent and void as to firm creditors. Marks v. Bradley, 69 Miss. 1. 2 Horton’s Appeal, 13 Pa. St. 617; Armstrong v. Febnstock, 19 Md. 59; Power vy. Kirk, 1 Pitts. R. 510; Clark v. Wilson, 19 Pa. 414; Parsons on Part., p. 400; Conrad v. Burke, 21 W. Va. 396; Ogden v. Arnot, 29 Bun, 146, 3 Clark v. McClelland’s Assignee, 2 Grant (Pa.), 831; Clark v. Wilson, 19 Pa. St. 414; Power v. Kirk, 1 Pitts. R. 510; Marsh v. Bennett, 5 McLean, 117; Price v. De Ford, 18 Md. 489; Dimon v. Hazard, 32 N. Y. 35; Smith v. Howard, 20 How. Pr. 266; Crane v. Rosa, 23 N. Y. Weekly Dig. 440; Gutman v. McNulty, 22 id. 241, Contra, Heye v. Bolles, 33 How. Pr. 266; 8. C., 2 Daly, 231. . 4 White v. Union Insurance Co., 1 Nott & McCord, 556, And see in Virginia, Galt v. Callaud, 7 Leigh, 594. In Colorado he may make an assignment for the equal benefit of all the firm’s creditors. . Salisbury v. Ellison, 7 Col. 167, See 8 id. 157. But the rule is otherwise in Tennessee. See Bancroft v. Snodgrass, 1 Cold. (Tenn.) 430; Tiernan v. Molliter, 71 Mo, 512; Vosper v. Kramer, 31 N. J. Eq. 420. The surviving partner cannot apply the partnership assets to the satisfaction of his individual debts before fully.discharging those due from the firm. Gable v. Williams, 59 Md. 46, 5 Emerson v. Senter, 118 U. 8. 3. 6 Nelson v, Tenney, 86 Hun, 827; Egberts v. Wood, 3 Paige, 517. 90 WHO MAY MAKE AN ASSIGNMENT. [cH. Iv. be set aside at the instance of the representatives of the deceased partner,! § 56. Limited Partnership.—In almost if not quite all the states, restrictions have been placed by statute? upon the powers of limited partnerships and their members, when insolvent or in contemplation of insolvency, to make assignments. These restric- tions in general prevent such partnerships and their members, under such circumstances, from giving any preferences to creditors.* But although a limited partnership cannot make an assignment giving preferences, when insolvent or in contemplation of insolv- ency, nor can any member of such partnership make such assign- ment under like circumstances, yet an assignment for the benefit. of creditors in all respects equitable and just to all parties, made in a condition of hopeless insolvency by all those who, by the terms of the actual arrangement between the members, are the active man- aging partners in the business, will be sustained.* 1 Williams v. Whedon, 39 Hun, 98; Beste v. Burger, 17 Abb. N. C. 162, and note. See Haynes v. Breoks, id. 152. In Loeschigk v. Hatfield, 5 Robt. 26 (S. C., as. Loeschigk v. Addison, 4 Abb. Pr. (N. §.) 210; affirmed, 51 N. Y. 660), the power ofa surviving partner to make an assignment with preferences was sustained, but it is. to be observed that the conveyances in this case were not technically a general assignment but rather a mortgage to a creditor. It would seem from Hutchin- son v. Smith, 7 Paige, 26 (Walworth, Ch. id. 35, 36), that since the adoption of the Revised Statutes, the surviving member of an insolvent firm is not authorized to give a preference in payment to some creditors of the firm over others; and that a general assignment made by him of the partnership effects to a trustee for the purpose of securing a preference to some of the creditors, even with the assent of the legal representatives of the deceased partner, is invalid; but this. case is of doubtful authority on this point, in view of the above decisions and the remarks of Allen, J., in Beste v. Burger, 17 Abb. N. C. 162, 169. In a case in the circuit court of the United States for the district of Michigan, it was held that by the dissolution of a partnership, provision being made in the articles of dissolution for the payment equally of all the creditors of the firm by the part- ner who purchases the interest of the retiring partner and continues the business, such partner is a trustee for the creditors of the firm; and a subsequent assign- ment by such a partner of the partnership effects, preferring certain creditors to others, and contrary to the stipulation in the articles of dissolution, is fraudulent and void. Marsh v. Bennett, 5 McLean, 117; Williams v. Whedon, 39 Hun, 98; Beste v. Burger, 17 Abb. N. C. 162; 18 Daly’s Rep. 317; 110 N. Y. 644. See Haynes v. Brooks, 17 Abb. N. C. 152; 116 N, Y. 487; 42 Hun, 528, A surviving: member of a firm may in making an assignment prefer a bank from which he borrowed money to pay his firm debts. Durant v. Pierson, 124 N, Y. 444; 21 Am. St. Rep. 684, 2 See post, ch. X, 3 See, on this subject, Troubat on Limited Partnership, ch. 13, ‘Robinson v. McIntosh, 3 E. D. Smith, 221; Jackson v, Sheldon, 9 Abb. 133; Hayes v. Heyer, 3 Sandf. 298; 4 Sandf. Ch. 485; Whitewright v. Stimpson, 2 Barb. 379; Greene v. Breck, 10 Abb, 483; Darrow v. Bruff, 86 How. 479; Mills v. Argall, 6 Paige, 582; S. C., 7 Paige, 586; Van Alstyne v. Cook, 25 N. Y. 489. § 56.] LIMITED PARTNERSHIP. 91 And such assignment is valid when made by the general partner only.! But this has been doubted, unless the express consent of the special partner is contained in the partnership agreement or can be inferred from the circumstances of the case.? 1 Robinson v. McIntosh, supra. Under the laws of Texas an assignment by a limited partnership consisting of one general and one special partner, for the benefit of creditors, may be executed by the general partner, and such assignment. need not embrace the individual property of the special partner. Tracy v. Tuffly, 134 U.S. 206; 10S. Ct. Rep. 527. 2Mills v. Argall, 6 Paige, 582. See Crary’s Specl. Proceedings, vol. I, p. 714. On the insolvency of a limited partnership, the partnership property becomes a trust for the benefit of creditors; and if the partners neglect to place it in the hands of a trustee for immediate distribution among all the creditors ratably, any creditor may file a bill on behalf of himself and all other creditors for distri- bution of the partnership funds without first obtaining a judgment atlaw. Innes v. Lansing, 7 Paige, 583. See Jackson v. Sheldon, 9 Abb. Pr. 127; Whitewright v. Stimpson, 2 Barb. 379; Darrow v. Bruff, 36 How. 479; McArthur v. Chase, 18 Gratt. 688. An assignment by a general partnership in which a member of a limited partnership may be also a member is not to be treated, in view of these prohibitions, as an assignment by the individual member of the limited partner- ship of his individual property. Fanshawe v. Lane, 16 Abb. 71. CHAPTER V. TO WHOM AN ASSIGNMENT MAY BE MADE— QUALIFICATIONS OF ASSIGNEES, § 57, Who May be Assignee. 58. Qualifications of Assignee. 59. Relative as Assignee. § 57. Who May be Assignee.— A voluntary assignment for the benefit of creditors may be made either to a person who is a cred- itor of the assignor or to one who isnot a creditor, and it may be made to a single individual or to several.2 The persons to whom it is made are, from the usual form of the transfer, called trustees as well as assignees; the latter being. the more general term by which they will be designated in the present work. When the assignment is made to partners, it is not material whether they are designated by the firm name or their individual names, if the language used is such to indicate with certainty the 1 Yates, J.,in Wilt v. Franklin, 1 Binn. 502, 520; Lee, J., in Johnston v. Zane’s Trustees, 11 Gratt. 552, 564; United States Bank v. Huth, 4 B. Mon. (Ky.) 4238; Wooster v. Stanfield, 11 Iowa, 128; Frink v. Buss, 45 N. H. 325. See Layson v. Rowan, 7 Rob. (La.) 1. Creditor may be assignee. Marshall v. Livingston Nat. Bank, 11 Mont. 351; 28 Pac. Rep. 312. In Virginia, in the case of Gordon v. Can- non, 18 Gratt. 888, where the trustee was a creditor, and the trust was to secure his own demand amongst others, it was contended that the trust deed was a mortgage, and the trustee could not sell by the mere authority of the deed, and without resorting to a court of equity; the objection was not regarded as valid. 2 Where made to several, only those who accept are required to act (Moir v. Brown, 14 Barb. 39; Douglass v. Cissna, 17 Mo. App. 44), but those who accept niust all act. Brennan v. Wilson, 4 Abb. N. C, 297; 71 N. Y. 502. It may be made to a non-resident (see Backrack v. Norton, 182 U.S, 837; 10 8. Ct. Rep. 106) or to an attorney (Tucker v, Parks, 7 Colo. 62), but not to a married woman (Haydock Carriage Co. v. Pier, 74 Wis. 582), or by a corporation to an officer or stockholder, Conlee Lumber Co, v. Ripon L. & M. Co., 66 Wis. 481; 29 N. W. Rep. 285; Pope v. Brandon, 2 Stew. 401. In Covert v. Rogers, 88 Mich, 363, it was held that the fact that the assignee is or has been a stockholder of the in- solvent corporation, or is insolvent himself, does not disqualify him; but the jury may consider its bearing upon the good faith of the transaction. But an officer: of the court before whom the trustee is required to qualify cannot himself be as-' signee and qualify before his deputy. Bancroft v. Snodgrass, 1 Cold. (Tenn.) 430. In Brahmstadt v. McWhirter, 9 Neb, 6, it was held that a clerk of court might act as assignee, and his approval of his own bond did not render his acts void. Trustees are not disqualified by the fact that they are also cestuis que trustent. Story v. Palmer, 46 N. J. Eq. 1; 18 Am. Rep, 363; Winner v. Hoyt, 66 Wis. 227; 28 N. W. Rep. 880; 57 Am. Rep. 257, § 58.] QUALIFICATIONS OF ASSIGNEE. 93 persons who are nominated as assignees.!_ Where it is intended to make the transfer to an assignee, he must be named in the instru- ment.? But where the conveyance is declared by the court to be an assignment for creditors, and no trustee is named, the court will either regard the transferee as trustee* or will name a trustee. The power to select and appoint his own assignee is one which the common law of voluntary assignments allows to every debtor contemplating such a disposition of his property;‘ and he is not bound to consult his creditors, or any of them, and obtain their previous consent to the appointment,’ but may make his selection even against their will.6 But this power is not to be exercised arbitrarily and without proper reference to the interests of the creditors.’ a § 58. Qualifications of Assignee.— It is an essential qualification of an assignee, not only that he should be capable from age, health and education of performing the duties of the office, but also that he should be of sufficient character and pecuniary ability to afford assurance to creditors that the fund will be safe in his hands, and that the trust will be properly administered ;* and the selection of incompetent assignees, in order to retain control of the property or otherwise intentionally defraud creditors, will have the effect of rendering the assignment void.? Thus, where the debtor selected 1 Forbes v. Scannell, 13 Cal. 242; Douglass v. Cissna, 17 Mo. App. 44. 2In the case of Reamer v. Lamberton, 59 Pa. St. 462, where an assignment for the benefit of creditors, leaving a blank for the assignee’s name, was executed and acknowledged, and an execution was afterwards issued against the assignor’ and put into the sheriff's hands, and subsequently the assignee’s name was in- serted and the assignment recorded, it was held that the title to the property remained in the assignor till the assignee’s name had been inserted and the as- signment delivered to him, and the assignor’s goods were not protected from the execution. See Park v. Glover, 23 Tex. 469. 3 See Burrows v. Lehndorff, 8 Iowa, 96. 4 Tilghman, C. J., in Wilt v. Franklin, 1 Binn. 502, 516; Sandford, A. V. C., in Cram v. Mitchell, 1 Sandf. Ch, 251, 253; and Jackson v. Cornell, id. 354, In Burd v. Smith, 4 Dall. 76, this right was denied. But in all the subsequent Pennsyl- vania cases it has been conceded. 5 Harris, J., in Webb v. Daggett, 2 Barb. 9, 11. 6 Id. 7Sandford, A. V. C., in Cram v. Mitchell, 1 Sandf. Ch. 254; Roosevelt, J., in Childs v. Mouseley, N. Y. Supreme Ct., Sp. Term, Nov. 1854, 3See observations of Tilghman, C. J., in Wilt v. Franklin, 1 Binn. 502, 516; ‘Christiancy, J., in Angell v. Rusenbury, 12 Mich, 241; Flandrau, J., in Guerin v. Hunt, 6 Minn, 375; Jennings v. Prentice, 39 Mich. 421, 9 This will depend upon the question whether the selection was made with a fraudulent intent. In the case of Guerin v. Hunt, Mr. Justice Flandrau laid down the rule as follows: ‘‘If it appears that the selection of an incompetent as- 94 TO WHOM AN ASSIGNMENT MAY BE MADE. [cH. v. for assignees three relatives, one of whom was incapacitated by his residence, one by blindness, and the third by his want of edu- cation, from executing the trust, it was held to be evidence of an intent on the part of the assignor to keep the control of the prop- erty in his own hands, or to appropriate it for his own use and benefit; and the assignment was therefore declared void.! So, where the debtor selected as his assignee his brother, who at the time was unfit to attend to business by reason of a lingering dis- ease which the assignor himself believed was incurable, and of which he died, the assignment was held for that cause to be fraud- ulent and void as against creditors; and it was considered by the court that the selection of such an assignee furnished strong pre- sumption of an intent on the part of the assignor to keep the con- trol and disposal of the property.’ The selection of a person as assignee who is known to the as- signor to be insolvent has been repeatedly pronounced by the courts to be a fraud upon the rights of creditors, as evincing an in- tention on the part of the assignor to place his property beyond their reach, or, in the language of the statute of fraudulent con- veyances, “to delay or hinder them” in the collection of their debts. But the better doctrine is that based upon the presence or absence of fraudulent intent in the assignor. The mere fact that the assignee is a poor man and destitute of means is not a badge of fraud, but in a suit attacking an assignment for fraud it is com- petent to show the insolvency of the assignee.‘ But where the creditors are consulted, and consent to the assignment to a particu- lar individual, such consent will rebut the presumption that there was any intention to commit a fraud, although the assignee was signee was made in order to allow the assignor to control the administration of the estate, then the assignment will be declared void, because such an intent on the part of the assignor would be a fraud upon his creditors. If it should appear that the assignee was incompetent in fact from any cause, but that his selection was not made from any improper motive on the part of the assignor, then the assignee would be subject to removal at the instance of a creditor of the state and a proper person would be substituted by the court to carry out the trust.” A want of capacity on the part of the assignee to act as such does not show fraudu- lent intent in the assignment. Conlee Lumber Co. v. Ripon L. & M. Co., 66 Wis. 481; 29 N. W. Rep. 285. 1Cram v. Mitchell, 1 Sandf. Ch. 251. 2Currie v. Hart, 2 Sandf. Ch. 353, 3 Reed v. Emery, 8 Paige, 417; Walworth, C., id. 418; Haggarty v. Pittman, 1 id. 298; Connah v. Sedgwick, 1 Barb. 210; Browning v. Hart, 6id. 91. But see Shryock v, Waggoner, 28 Pa. St. 480; Angell v. Rosenbury, 12 Mich. 241; Jen- nings v. Prentice, 39 id. 421. 4Chambers v. Meant, 66 Wis. 625; Pearce v. Beach, 12 How. Pr. 404; In re Paddock, 6 id. 215; Holmberg v. Dean, 21 Kan, 78; Klauber v. Charlton, 47 Wis. 564; 3N. W. Rep. 443, § 59.] RELATIVE AS ASSIGNEE. 95 known to be destitute of property, as the creditors would have the right to repose themselves upon his honesty only. § 59. Relative as Assignee.— The selection of members of the assignor’s family, and of doubtful competency (such as a clerk and ; @ journeyman boarding in his family, and both young men), as as- signees, conduces, it has been held, to raise a presumption that there was a secret trust in the assignment for the benefit of the assignor.’ And the selection of near relatives as assignees, espe- cially where they are placed before all other creditors in the sched- ule of preferred debts, is a circumstance against the assignment.’ But the relationship of the parties, though calculated to awaken suspicion, is of itself no evidence of fraud in a conveyance of prop- erty. And in a case where all the parties to a deed of trust made by an insolvent debtor (viz., the debtor, the trustee, and most of the secured creditors) were related, it was held that such relation- ship furnished no predicate for a legal presumption or conclusion of fraud, although it was a circumstance which might go to a jury, to be considered by them in connection with the other facts of the case in determining the question of fraud in fact.® In some of the states the appointment of a competent and re- sponsible assignee is provided for by statutory enactments, and in most of them he is required to execute bonds with sureties for the faithful performance of the trust.é An assignment by a religious corporation, in trust to pay debts, may be made to persons ineligible, under its charter, as general trustees of the society.’ It is an important preliminary to the making of an assignment that the person selected as assignee be one who will accept the ap- 1 Walworth, C., in Reed v. Emery, 8 Paige, 417, 418. The creditors, indeed, may agree that the assignor himself shall act as trustee or agent in certain cases. ‘Tompkins v. Wheeler, 16 Pet, 106, 120. 2 Perkins, J., in Caldwell v. Rose, Smith (Ind.), 190; Caldwell v. Williams, 1 Ind. 405; Perkins, J., id. 408; Martin v. Kennedy, 83 Ky. 336; Sattler v. Marino, 30 La. Ann, 335, 3Sandford, A. V. C., in Cram v. Mitchell, 1 Sandf, Ch. 251, 255. In this case as well as in Currie v. Hart and in Conneh v. Sedgwick the assignees were rel- atives of the assignors. 4Bumpas v. Dotson, 7 Humph, 310; Nesbitt v. Digby, 13 Ill. 33; Baldwin v. Buckland, 11 Mich. 389; Shultz v. Hoagland, 85 N. Y. 464; Sininger v. Herron, 18 Neb. 450; 25 N. W. Rep. 578; Collins v. Cronin, 117 Pa. St. 35; 11 Atl. Rep. 869; Archer v. Long, 32S. C. 171; 11S. E, Rep. 86. 5 Montgomery’s Ex’rs v. Kirksey, 26 Ala. 172. And see, on this point, Dunlap v. Bournonville, 26 Pa. St. 72; Adams v. Ryan, 61 Iowa, 733; 17 N. W. Rep. 159. 6 This branch of the subject will be particularly considered hereafter, under a distinct head. See ch. XXXI. 7De Ruyter v. St. Peter’s Church, 3 N. Y. 288, 96 TO WHOM AN ASSIGNMENT MAY BE MADE. [cH. v. pointment and undertake the trust; as his refusal to act, after the execution and delivery of the instrument, might impair its effect or interfere with its operation.! A debtor, having once appointed his assignee, cannot, by the as- signment, reserve the right to name another person as successor of the assignee, in case the latter wishes to resign the trust.’ 1See post, ch. XVIII. 2 Planck v, Schermerhorn, 3 Barb. Ch. 644; Smith v. Bowdre, 69 Miss, 692. CHAPTER VI. THE ASSIGNED PROPERTY—THE AMOUNT ASSIGNED— WHAT MAY BE ASSIGNED — WHAT PASSES BY THE ASSIGNMENT, § 60. The Amount of Property Assigned, 61, Exemptions. 62. Exception of Property Not Exempt. 63, When the Assignment Must Embrace All. 64. Proportion of Amount Assigned to Debts, 65. What May be Assigned, 66. What Passes Under General Terms, 67. Foreign Property. ; 68. Claims for Damages for Torts, 69. Wife’s Property. 70. Leasehold Interests. 71. Interests of Devisees, 72, Interests of Heirs, 73. Rents. 74, Money in Bank. “5. Property Fraudulently Transferred by Assignor. 6. What Does Not Pass. 7%. After-acquired Property. § 60. The Amount of Property Assigned.— The amount of property embraced in, or intended to be conveyed by, an assign- ment determines its character as being general or partial. A gen- eral assignment is understoodto import, in its nature, a transfer of all the debtor’s property for the benefit of his creditors. The nature of the relation created by insolvency usually requires that the transfer should be of this comprehensive character. ‘‘Cred- itors,” observes Chief Justice Marshall,! “have an equitable claim on ali the property of their debtor, and it is his duty, as well as his right, to devote the whole of it to the satisfaction of their claims.” Partial assignments, however, when not within the pro- hibition of any statute, and where they leave the unassigned residue open to creditors, are, as we shall see, valid conveyances.” In some of the states an assignment of ai/ the debtor’s property is expressly required by statute, and in others assignments are construed to pass all the debtor’s property, real and personal, whether specified in the assignment or not. The intentional with- holding from a general assignment of property included in it is 1JIn Brashear v. West, 7 Pet. 608, 2See post, ch, IX, % 98 THE ASSIGNED PROPERTY. (oH. vr. fraudulent and makes it void; but the unintentional omission of property of small value does not render it void.' Apart from all statutory provisions it may be said that if there be nothing in the instrument or schedules annexed to it to limit or qualify its operation, a general assignment by a debtor of all his estate and effects will pass to the assignee everything which is in its nature assignable, except such property as may be specially exempted by law, or excepted by the terms of the deed itself, where such exception is allowed. It is, however a leading rule in the construction of assignments by debtors, that no more property will pass to the assignee than is embraced in the terms of the instrument; and even where ail the debtor’s property is assigned in terms, if there be subsequent words of description or a reference to a schedule, as setting it forth particularly, the contents of such clause or schedule will operate to limit the general clause of transfer, and nothing will pass that is not so set forth or specified? § 61. Exemptions.— There are, however, portions of a debtor’s property which the law expressly exempts from the process of creditors; and these of course he is allowed to except and retain out of the general conveyance.’ Provision is frequently made by 1 Farrington v. Sexton, 48 Mich. 454; 5 N. W. Rep. 654, post, p. 543; Krug v. McGilliard, 76 Ind. 28, 2See post, ch. VIII. 3 Heckman v. Messenger, 49 Pa. St. 465; Mulford v. Shirk, 26 Pa. St. 473: Dow v. Platner, 16 N. Y. 562; Baldwin v. Peet, 22 Tex. 708; Garner v. Frederick, 18 Ind. 507; Smith v. Mitchell, 12 Mich. 180; Brooks v. Nichols, 17 Mich. 38; Farqu- harson v. McDonald, 2 Heisk. (Tenn.) 404; Sugg v. Tillman, 2 Swan, 208. See Simpson v. Roberts, 35 Ga. 180; Dolson v. Kerr, 5 Hun, 648; Barber v Buffalo, 111 N. C. 206. In Michigan an assignment is not void on its face for excepting property exempt from execution without specifying it, and the assignor may se- lect property exempt from execution after the execution of the instrument, and the assignee takes the property subject to this right of selection. Smith v. Mitchell, 12 Mich. 180; Hollister v. Loud, 2 Mich, 309, 310, 322. So in Missouri. Hartzler v. Tootle, 85 Mo. 23, But in New Jersey an assignment of all his prop- erty by a debtor divests him of the personal right to claim what is by statute exempt from execution, and does not vest it in the assignee. Moses v. Thomas, 26 N, J. L. 124; Van Waggoner v. Moses, id. 570. So where the debtor made no reservation in the instrument of the one hundred dollars exempt, he was held to have waived his right to reserve the money. Raymond’s Appeal, 28 Conn. 47; Brooks v. Nichols, 17 Mich. 88. The exemption is not lost by offering the ex- empted property for sale, or changing the place or conditions of occupation. Ro- senthal v. Scott, 41 Mich. 682, When an assignment limits the transfer to prop- erty ‘‘which might be reached or recovered by any of the creditors of the assignor,” it sufficiently excludes such property as would be exempt by law. Chandler v. Jenks, 50 Mich. 151. But where a debtor executes a deed of trust of all his property for the benefit of his creditors, without reservation of his right to exemption, he is entitled to no allowance on that account out of the proceeds § 62.] EXCEPTION OF PROPERTY NOT EXEMPT. 99 statute for these exemptions. Under a general reservation of ex- empt property in an assignment for the benefit of creditors the debtor will be allowed such exempt articles as he may select within a reasonable time after the execution of the assignment. But his right to claim such property may be lost by undue laches.! A part- ner is not entitled to any exemption from firm property until all the firm debts are paid, and a provision in an assignment convey- ing partnership property excepting such articles as may be exempt by law is nugatory and inoperative.? In Wisconsin a reservation of the homesteads of partners in the assignment by the firm does not render such an assignment void.2 In the Kentucky case of Hemphill v. Haas,‘ it was held that a deed of assignment for the benefit of creditors executed by the debtor alone does not divest either him or his wife of the homestead exemption. And in Ohio the court went so far as to hold that the assignor’s wife was entitled to an allowance in lieu of the homestead, against the assignee, though the family dwelling-house had been burned previ- ous to the sale by the assignee.® § 62. Exception of Property Not Exempt.—It has sometimes ‘been the practice to except, in addition to such articles as were ex- empted by law, other portions of property for the debtor’s use; and it has been held that the insertion of such a clause of exception would not vitiate the assignment. Thus, in Maine, previous to the statute of April 1, 1836, concerning assignments, where the as- signor excepted from the general conveyance of his property “necessary and proper household furniture and means of paying his small debts under fifty dollars, and ordinary family expenses,” it was held that as the excepted property did not pass to the as- of the property. Carroll v. Else, 75 Md. 801; Chilcoat’s Appeal, 101 Pa. St. 22. See Bank of Commerce v. Payne, 86 Ky. 446; 8 8. W. Rep. 856. 1 Meyers v. Conway, 90 Ala. 109; 7S. Rep. 639; Cribben v. Ellis, 69 Wis, 337; 34N. W. Rep. 154; Bradley v. Bischel, 81 Iowa, 80; 46 N. W. Rep. 755; Bobbitt v. Rodwell, 105 N. C. 236; 11S. E. Rep. 245; Muhr v. Pinover, 67 Md. 480; 10 Atl. Rep. 289; O’Neil v. Beck, 69 Ind. 239; Garner v. Frederick, 18 Ind. 407. 2McFarland v. Bate, 45 Kan. 1; 25 Pac. Rep. 238; Ex parte Hopkins, 104 Ind. 157. See, also, McNair v. Rewey, 62 Wis, 167; First Nat. Bank v. Hackett, 61 id. 335; Goll v. Hubbell, id. 298. The presumption is that the exemption was intended to be from individual property and not from firm property, so as to sustain the assignment. Wooldridge v. Irving, 23 Fed. Rep. 676, An assign- ment by an individual of the assets of a partnership for the purpose of holding them as his own under the exemption law is fraudulent as to firm creditors. Luce v. Barnum, 19 Mo. App. 359. 3 Shawano County Bank v. Koeppen, 78 Wis. 583; 47 N. W. Rep. 723. 488 Ky. 492; 118. W. Rep. 510. 5 Kelly v. Duffy, 31 Ohio St. 487. See, also, Hoge v. Hollister, 8 Baxter (Tenn.), 538, As to the Ohio exemption act see Close v. Sinclair, 388 Ohio St. 580; Kuhn v. Nieberg, 40 id. 631. : 100 THE ASSIGNED PROPERTY. [cH. VI. signee, but was left open to attachment as it was before, the ex- ception did not vitiate the assignment.' But it was afterwards. held in that state that an exception of property not exempted by law rendered an assignment void.? It is now declared by statute that assignments shall be construed to pass all the debtor’s prop- erty, real and personal, whether specified in the assignment or not, which is not by law exempt from attachment.’ In Mississippi a. deed of assignment by a bank for the benefit of its creditors, which conveys all its assets and property, except certain specified por- tions, to trustees, has been held not void because of the reserva- tion. In Pennsylvania an assignment (stipulating for a release), excepting the household furniture of the assignors and property exempt from execution, is voidable; but until an election by cred- itors to avoid it, conveyances by the assignees for value received by them are valid.’ But in other cases in that state it has beem held that the reservation from a general assignment for the benefit of creditors of certain specified property, without any stipula- tion, reservation or condition, in favor of the assignor, does not render it void as to creditors.’ And even where all the debtor’s property passes under the assignment by reason of statutory en- actment, the fact that a foreign tribunal will not give efficacy to. the assignment, and that certain real property of the debtor sit- uated elsewhere may not pass owing to such construction, will not invalidate the assignment.’ And an express exception from the: 1 Canal Bank v. Cox, 6 Greenl. 395, 2 Foster v. Libby, 24 Me. 448, 3 See Act of March 21, 1844; Merrill v. Wilson, 29 Me. 58. 4Ingraham v. Grigg, 13 Sm. & M. 22. See Wooldridge v. Irving, 23 Fed. Rep. 676. 5 Johns v. Bolton, 12 Pa. St. 889; Boker v. Crookshank, 1 Phila, 193. 6 Knight v. Waterman, 36 Pa. 258; Heckman v. Mersenger, 49 Pa. St. 465. In Bousman’s Appeal, 90 Pa. St. 178, the court say: ‘‘The general right of the as- signor to except and reserve from the assignment property to the value of $300 is undoubted. He may not do so out of land to the injury of one holding a lien for the purchase-money, or a judgment lien in which the exemption from exe- cution is waived. His claim, however, must be restricted to some property which he owned, or in which he had an interest at the time of the assignment, or, at the farthest, to the proceeds for which that property was sold. It cannot extend: to money made by the assignee’s care, management and use of the assigned prop- erty. Hildebrand v. Bowman, 100 Pa. St. 580; Wiley’s Appeal, 90 id. 178. The proper time to claim the exemption is when the appraisers act, The assignor cannot claim the exemption when at the time of making the assignment there are judgments against him in which he has waived the benefit of the exemption laws. Shaeffer’s Appeal, id. 45. Where the debtor assigned, reserving property exempt by law, and afterward a creditor recovered judgment against him on a note containing a waiver of exemption, it was held that the creditor must assert. the waiver by execution or attachment against the reservation, and had no stand- ing to claim in the distribution of the fund assigned, Myers’ Appeal, 78 Pa, St. 452. See Numbers v. Shelly, id. 426. 7Frink v. Buss, 45 N, H. 825, § 63.] WHEN ASSIGNMENT MUST EMBRACE ALL, grant of a portion of the property, as, for instance, a claim against certain persons then in suit, there being no reservation of any benefit from or interest in the property actually assigned, does not invalidate an assignment;! nor does the insertion of the clause, “except what is by law exempt,” when in fact none is exempt.? ‘Considering the present general inclination of the courts against all reservations in assignments for the debtor’s own benefit, the safest rule is to avoid these clauses altogether. § 63. When the Assignment Must Embrace All.— Assignments containing a stipulation for the release of the debtor (even where such stipulations are allowed) are in most of the states invalid unless they contain a transfer of aii the debtor’s property; but assignments with preferences not conveying all the property are not necessarily void for that reason.* In Rhode Island it has been held that an assignment which on its face purports to convey all the assignor’s property, when in fact he has other property not disclosed in the assignment, is void as against treditors; but if it does not so purport, it is valid, not- withstanding property may remain in the hands of the assignor unassigned.’ And in Massachusetts an assignment by partners, not purporting to transfer their whole property, but only their part- nership property, and not purporting to transfer their separate prop- erty, nor alleging that they had no separate property (and it not appearing elsewhere that they had no separate property), and pro- viding for a discharge from their entire partnership debts, was held to be repugnant to the insolvent laws of the state.® But in Maine the provision of the act of 1844, that an assign- ment shall be construed to pass all property not exempt from at- tachment, whether specified in such assignment or not, will not bring the private property of partners within an assignment of 1Carpenter v, Underwood, 19 N. Y. 520. See Bates v. Ableman, 13 Wis. 644; Baldwin v. Peet, 22 Tex. 702; Foster v. Libby, 24 Me. 448; Moss v. Humphrey, 3 ‘Greene (Iowa), 443. 2Dodd v. Hills, 21 Kan. 707; Hildebrand v. Bowman, 100 Pa. St. 580; Rain- ‘water v. Stevens, 15 Mo. App. 544; Perry v. Vezina, 68 Iowa, 25; McNair v. Rewey, 62 Wis. 167; First Nat. Bank v. Hackett, 61 id. 835; Goll v. Hubbell, id. 293; Wooldridge v. Irving, 28 Fed. Rep. 676; Luckmeyer v, Seltz, 61 Md. 313; Fay v. Grant, 58 Hun, 44; N. Y. S. Rep. 910; Rothschild v. Saloman, 52 id. 486; 5.N, Y. S. Rep. 865; In re Shotwell, 48 Minn. 389; 45 N, W. Rep. 842, 3See post, ch. XI. 4See post, ch. XI. 5 Pierce v. Jackson, 2 R. I. 35. 6 Shaw, ©. J., in Wyles v. Beals, 1 Gray, 238, 236, It has been held in Indiana that an assignment by a firm of firm property for the payment of firm debts is valid though it does not embrace individual property. Ex parte Hopkins, 104 Gnd. 157. 102 THE ASSIGNED PROPERTY. [cH. vI- property beionging to the copartnership.! In Michigan an assign- ment has been held void for not including? the assignor’s real es- tate; but an express omission of property subject to specific claims. did not necessarily invalidate an assignment.’ § 64. Proportion of Amount Assigned to Debts.— Where an assignment is made for the benefit of particular creditors, the pro- portion which the amount-of property assigned bears to the amount of debts provided for is frequently an important consideration. If a debtor in failing circumstances makes an assignment of this char- acter, and the value of the property assigned is more than the par- ties could have reasonably supposed necessary to satisfy the claims of the creditor provided for, fraud may be inferred from that circum- stance alone, unless a satisfactory excuse is shown for the transfer of the excess. Such a transaction affords ground for the conclusion that the assignment was upon some secret or implied understanding between the parties to keep the surplus from other creditors, and for the benefit of the debtor himself.’ But where, at the time of making the assignment, it is doubtful whether the property as- signed will be sufficient to satisfy the claims of the creditors for whose benefit it was made, a mere nominal excess in the amount. of the property over that of the debts will not justify a conclusion of fraud. Thus, where the debts provided for were upwards of $26,000, and the whole nominal amount of property and demands. assigned, including $21,000-of outstanding claims, was short of $34,000, the court refused to pronounce the transaction fraudulent,. considering it probable that there would not be any excess after making due allowance for bad debts and deducting the expenses of collection and of executing the trust.6 The same principle has been applied to deeds of trust for the security of particular creditors, which are so common in the southern states.’ 1 Simmons v. Curtis, 41 Me. 373. 2 Price v. Haynes, 37 Mich. 487, 3 Henry v. Root, 38 Mich. 371. 4 Beck v. Burdett, 1 Paige, 8305; Stetson v. Miller, 36 Ala. 642, See Longmire v. Goode, 88 Ala, 577; Watkins v. Jenkins, 24 Ga. 431: Du Bose v. Carlisle, 51 Ala. 590; Geilinger v. Philippi, 183 U. S. 246; 10S. Ct. Rep. 266, 5 Butler v. Stoddard, 7 Paige, 163; Walworth, C., id. 165. 6 Beck v. Burdett, 1 Paige, 305; Walworth, C., id. 309. 7 Burgin v. Burgin, 1 Ired. L. 458. In this case it was remarked by the court. as follows: ‘‘ With respect to the amount of property it must be remembered that, as it cannot be ascertained what accidents may occur to diminish the per- ishable part of it, or lessen its value, or how old accounts will turn out upon col- lection, it is usual to convey more in mortgage or trust, by way of security, than it may be supposed will precisely meet the demand. It is indeed fair that the creditor should have ample security; and therefore it furnishes no conclusive ar- gument of a dishonest purpose if the deed conveys property of value fully to § 65.] WHAT MAY BE ASSIGNED. 105 The proportion between the amount assigned and the debts pro- vided for was also a material consideration in Massachusetts, in cases under the system of assignment which prevailed in that state prior to the regulation of assignments by statute. In those cases the proportion to be observed was between the amount of property assigned and the debts of the creditors who became parties to the assignment. If more was assigned than such debts amounted to, the surplus was open to attachment by other creditors of the as- signor; but if such debts equaled or exceeded the amount of the assigned property, they had the prior and better title, and nothing remained to be reached by an attachment.! § 65. What May be Assigned.— An assignment for the benefit of creditors may embrace every description of property which is in its nature assignable; and, when purporting or intended to be a general disposition of the assignor’s property, shouid be in good faith a transfer of the whole, including real? and personal estate, debts and choses in action. Among these* may be more particu- larly mentioned lands; interests in lands or real estate, such as the interests of a purchaser,‘ mortgagor,’ lessor,’ mortgagee, lessee and cover the debts, under any and all contingencies that may be expected or reason- ably apprehended. But it is equally true that, under the pretense of securing a debt, the debtor may convey much more than is necessary for that purpose, and really for securing the use to himself and baffling his other creditors. Hence the question is one of intention,” etc. Id. 459. In Johnson v. Thweatt, 18 Ala. 141, where the property conveyed was of much greater value than the aggregate of the debts intended to be secured, the deed was held to be fraudulent and void on its face as against creditors. It contained, however, other objectionable pro- visions, In Georgia, an assignment by an insolvent debtor to his creditor of effects to an amount greater than the debt, in which it is stipulated that any surplus remaining in the hands of the assignee, after satisfying his debt and pay- ing the expenses of reducing the effects to cash, shall be subject to the order of the assignor, is not, upon its face, void under the statute of 1818; though the ex- cess is a badge of fraud to be considered by a jury. Banks v. Clapp, 12 Ga. 514; Walkins v. Jenks, 24 Ga. 431. 1Shaw, C. J., in Foster v. Saco Manufacturing Co., 12 Pick. 451, 454. See Russell v. Woodward, 10 id. 408; Hastings v. Baldwin, 17 Mass, 552; Adams v. Blodgett, 2 Woodb, & Min. 233. 2In Price v. Haynes, 37 Mich. 487, an assignment was held void because it did not include the assignor’s real estate, 3 Some of the rules given under this head have been established with particu- lar reference to that class of assignments called special assignments, which do not always contemplate provision for creditors. But most of them appear to have an equal application to general assignments by debtors. 4 A purchaser’s right to a deed of land agreed to be conveyed is assignable. Thus, a bond for the conveyance of land is assignable. Halbert v. Deering, 4 5A statutory right to redeem a mortgage after the sale of an equity is assign- able. Bigelow v. Wilson, 1 Pick. 458. See Reed v. Bigelow, 5 id. 281; Graves v. McFarlane, 2 Cold. (Tenn.) 167; Birdwell v. Cain, 1 Cold. (Tenn.) 801. 6See Demarest v. Willard, 8 Cow. 206; Willard v. Tillman, 2 Hill (N. Y.), 274, 104 THE ASSIGNED PROPERTY. [cH. VI. tenants for life;! profits of lands;* goods,’ merchandise, stock and other descriptions of personal property; debts* and choses in ac- tion generally,’ including promissory notes, bills of exchange,’ Littell, 9; Brown v. Chambers, 12 Ala. 697; Ensign v. Kellogg, 4 Pick. 1; Rogers v. Dibrell, 6 Lea (74 Tenn.), 69. A right to call on a trustee to convey an estate in fee is an equitable interest or chose in action which may be assigned. Cover- dale v. Aldrich, 19 Pick. 391, 395. The assignment of a contract to convey an interest in real estate upon the performance of certain conditions vests an equi- table interest therein in the assignee, which will be protected and made available by courts of law. Dyer v. Burnham, 25 Me. 9. And in the same state, where a person holding land in trust for another, who paid the purchase-money, conveyed the legal title to the latter, but, before the deed was re- corded, made an assignment of all his property for the benefit of his creditors who should agree to release their debts on receiving their share of the estate, and a release was executed accordingly, it was held that the assignment passed no interest in such trust land, although the assignor was in possession, and the creditors had no notice of the trust until after the execution of the release.® § 7%. After-acquired Property.— Where purchases are made by a firm some time before an assignment, but arrive subsequently, the title thereto vests in the assignee, the seller having failed to exercise the right of stoppage im transitu; but property, the title to which is acquired subsequent to the assignment, does not pass,’ nor a cause of action accruing to the assignor after the date of the 1Sheldon v. Dodge, 4 Den. 417. 2 Worthington v. Greer, 17 B. Mon. (Ky.) 741. 3 Griffin’s Ex’r v. Macaulay’s Adnv’r, 7 Gratt. 476. 4Tucker v. Clesby, 12 Pick. 22. 5 Skinner’s Appeal, 6 Barr, 262. As to dower and choses in action of the wife, see ante, p. 109, 6 Ludwig v. Highley, 5 Barr, 132. Property held in trust for others by a debtor tloes not pass to the assignee. Holmes v. Winchester, 133 Mass, 140; Low v. Welch, 189 id. 83; Watts v. Shipman, 21 Hun, 598. Nor does land conveyed by the debtor to a purchaser who has not had the deed recorded until after the debtor’s assignment in insolvency. Smythe v. Sprague, 149 Mass. 310; 21 N. E, Rep. 383. 7™McCabe’s Appeal, 22 Pa. St. 427; Haskins v. Alcott, 13 Ohio St. 210; Ship- man v, Graves, 41 Mich. 675; Lorenz v. Orlady, 27 Pa, St. 228. The assignee 8 114 THE ASSIGNED PROPERTY. [cH. vr. assignment but before its delivery.'. The title to bank stock does not pass to the assignee until the statutory requirement has been complied with, when it is necessary that the transfer should be entered on the corporate records? But an assignment of a par- ticular claim passes all the remedies and securities which the as- signor possesses, although not named or set forth in the assign- ment. A parol transfer of goods to arrive, as security for a pre-exist- ing indebtedness and for advances subsequently made, is valid as against the assignee for the benefit of the creditors of the trans- ferrer, although actual possession of such goods is not obtained by the pledgee until after the assignment for the benefit of creditors.‘ ‘‘under chapter 80, Revised Statutes, gets no title to property in transit at the time of making the assignment, and which is not mentioned or referred to in the as- signment or the required inventory, and where neither the vendor.nor vendee ever intended that the title should vest in such vendee making the assignment, not- withstanding he may get the property into his actual possession.” Clark v. Bart- lett, 50 Wis. 548. See Lacker v. Rhoads, 51 N. Y. 641; reversing 45 Barb. 499. Where property was forfeited to the government, and the forfeiture was after- ward remitted, it was held that the avails of the property would not inure to the benefit of the assignee under a general assignment made after the forfeiture and ~ before its remission. Ward v. Webster, 9 Daly, 182. a aa 1 Crow v. Colton, 7 Daly, 52. 2 Fiske v. Carr, 20 Me. 301. 3 Mehaffy v. Share, 2 Penn. (Penr. & W.) 361; Gayden v. Tufts, 68 Miss. 69; Whitten v. Fitzwater, 129 N. Y. 626; Brower v. Goodyer, 88 Ind. 572. 4Gammons v. Holman, 11 Ore, 284; 3 Pac. Rep. 676. : CHAPTER VII. FOR WHOSE BENEFIT AN ASSIGNMENT MAY BE MADE. § 78. Who May be Secured. 79. Sureties, Future Responsibilities, etc. 80. Future and Contingent Liabilities. 81. Secured Debts. 82. Fictitious and Fraudulent Debts, 83. Usurioys Debts, 84, Other Cases. § 78. Who May be Secured.— Assignments may be made not only for the benefit of creditors, strictly so called, that is, persons to whom the assignor is actually indebted,! but also for the benefit of persons who have incurred reeponeiBiléties on his behalf, such as sureties,’ indorsers,’ and bail;‘ actual liabilities being as proper subjects of security by assignment as debts due This is called, by Mr. Justice Story,’ “a clear principle.” Nothing, in fact, is 1Qne to whom another is liable on a contract, express or implied, though con- tingently, is a creditor from the time the liability is entered into, within the meaning of the statute of 13 Elizabeth. Foote v. Cobb, 18 Ala. 585, Nor is a mortgage given to secure a just debt within such statute. But in Louisiana, if a debtor shall, within three months next preceding his failure, have sold, engaged or mortgaged any of his goods and effects, or shall have otherwise disposed of the same in order to give an unjust preference to one or more of his creditors over the others, such deed or act is required to be declared null and void.’ So in Jowa it has been repeatedly held that the statute prohib- iting preferences does not limit or affect the right of an insolvent debtor to sell or mortgage bona fide a part or all of his property to one or more of his creditors in payment or security of a par- ticular debt.® § 133. Preferences in Partial Assignments.— It has been thought that an assignment giving preferences to'certain creditors or classes of creditors is not valid unless it contains a transfer of ali the debtor’s property; and expressions may be found in the opinions of the court in several important cases which go the 1See ante, p. 169, note 4. 2 Wilcox v. Kellogg, 11 Ohio, 394; Wood, J., id. 399, 3 Hulls v. Jeffrey, 8 Ohio, 390; Lane, J., id. 391. See Doremus v. O’Hara, 1 Ohio St. 45. 4Bloom v. Nagle. 4 Ohio St. 45; Harkrader v. Leiby, id. 602; Atkinson v. Tomlinson, 1 id. 237; Justice v. Uhl, 10 id. 170; Dickson v. Rawson, 5 id, 218. See Mitchell v. Gazzam, 12 Ohio, 315; overruled in Atkinson v. Tomlinson, supra. 5 Eastman v. McAlpin, 1 Kelly (Ga.), 157; Cameron v. Scudder, id. 204; Mc- Whorter v. Wright, 5 Ga. 555; Starnes, J., in Miller v. Conklin, 17 Ga. 480, 433; Brown v. Lee, 7 Ga. 267; Ezekiel v. Dixon, 3 Kelly (Ga.), 146. See Code of Ga. (ed. 1873), § 1953; and see the proviso in the statute. 6 Davis v. Anderson, 1 Kelly, 176; Lee v. Brown, 7 Ga. 276; Lavender v. Thomas, 18 Ga. 668, 675. 7Rev, St. of La. (ed. 1870), p. 359, $$ 28, 1801. 8Lambson v. Arnold, 19 Iowa, 479; Cole v. Dealman, 18 id, 551; Gray v. McCallister, 50 id. 497; Johnson v. McGrew, 11 id. 151; Fromme v. Jones, 13 id. 457; Whitaker v. Lindley, 14 id. 598; Buell v. Buckingham, 16 id. 284; Davis v. Gibbon, 24 id. 257; Farrall v. Howard, 26 id. 881; Graves v. Alden, 13 id. 673, 180 ASSIGNMENTS WITH PREFERENCES. [cH. x. length of establishing such a doctrine. Thus, in Goodrich vy. Downs,! in the supreme court of this state, Bronson, J., in deliver- ing the opinion of the court, observes: “Such transfers have only been allowed to stand where the debtor makes an unconditional surrender of uis effects for the benefit of those to whom they right- fully belong.”? “They can only be supported,” says the same learned judge, in Barney v. Griffin, in the court of appeals,’ “ when they make a full and unconditional surrender of the property to the payment of debts.” In Burdick v. Pest,‘ Barculo, J., more explicitly says: “ As we understand the settled law in this state, derived from an examination of all the decisions, assignments pre- ferring certain creditors are only tolerated when they are absolute and unconditional; when they devote the whole of the assignors property to the immediate and unqualified payment of his debts,” etc.5 In Rathbun v. Platner,* Mason, J., observes: “The law only tolerates them when honestly made for the purpose of giving the preference, and devoting the whole property of the debtor to the pay- ment of the debts.” Similar expressions may be found in decisions made in the courts of other states.’ But in the leading case of Grover v. Wakeman,’ upon which the New York decisions above referred to either professedly or actually, for the most part, rest, the opinion of the court, instead of declaring partial assignments with preferences void, expressly admits their validity. “It is now too late,” observes Mr. Justice Sutherland in this case, “to agitate the question whether these assignments, edther partial or general, are sustained by considerations of true wisdom and policy. . . . They have become thoroughly incorporated into our system; and all that it is now competent for our courts to do is to see that they fairly appropriate all the insolvent’s property, or such portion of tt as he undertakes to assign, to the payment of his just debts.”*® The: true doctrine is here stated with great clearness and discriminar tion. It has been further laid down, in a work of authority," as 16 Hill, 488, 2Tbid. 439, 32.N. Y. 365, 371, 412 Barb. 168. 5 Ibid. 175 618 Barb. 272, 275. See, also, the observations of Comstock, J., in Curtis v. Leavitt, 15 N. Y. 182, 7Sangston v. Gaither, 3 Md. 40; Phelan, J., in Rankin v. Lodor, 21 Ala. 380, 889; Goldthwaite, J., in Shackelford v. P. & M. Bank of Mobile, 22 id. 238, 245. 811 Wend. 187. 911 Wend. 195. 10 American Leading Cases (Hare & Wall. notes), 65 (ed. 1857), In Vermont, prior to the statute prohibiting preferences, partial assignments with preferences were held to be valid. Hall v. Dennison, 17 Vt. 810. And see Cle v. Dealman, 18 Iowa, 551, and cases cited ante, p. 171. In Gray v. McCallister, 50 Iowa, 497, § 134.] RESTRICTIONS ON THE RIGHT TO PREVER. 181 the general American rule on this point, that in the absence of statutory prohibitions and of a bankrupt law, partial as well as general assignments may be made with preferences to creditors. In the case of Wilson v. Forsyth,! in the supreme court of this state, the question as to the validity of a partial assignment with preferences was distinctly raised and argued; and the court (Gould, J.), after reviewing the cases, came to the conclusion that an assignment giving preferences among creditors, and not em- bracing add the debtor’s property, is not void for those reasons. In Maryland? it is held that an assignment creating preferences and exacting releases is void, unless it appears on its face to convey all the property of the debtor, and where it is executed by partners it must so appear to convey both their partnership effects and their individual estate. § 134. Restrictions on the Right to Prefer.— The right to prefer one or more creditors to others in assignments by debtors is sometimes either restrained or entirely taken away by statute. Where a bankrupt law exists the right is also considered as taken away, its exercise having always been regarded as inconsistent with the policy and objects of such a system.’ And the insolvent laws of a state sometimes create a restriction in this respect by depriv- ing an insolvent debtor who attempts to exercise the right of the benefit of a discharge under them.‘ But such provisions do not avoid bona jide assignments by debtors merely because of prefer- ences given to some creditors over others.» So in South Carolina, assignments by debtors giving undue preferences to creditors have a transaction was held ‘‘to be nothing more than a partial assignment of the debtor’s property in good faith, preferring certain of his creditors, Such an as- signment is not invalid.” Partial assignments with preferences which do not exact releases are valid in Maryland. Price v. Ford, 18 Md. 489. In Indiana, where the statute prevents preferences in general assignments, the debtor may prefer by a partial assignment. Grubbs v. Morris, 103 Ind. 166. But in the Michigan case of Smith v. Mitchell, 12 Mich. 180, it was said that the assignment was void if it did not fairly, bona fide, assign all of the assignor’s property liable for the payment of his debts. See Carpenter v. Underwood, 9 N. Y. 520; Mc- Clelland v. Remsen, 36 Barb. 622; affirmed, 83 How. 618; Roller Wheel Co. v. Fielding, 101 N. Y. 504. The right to prefer is unqualified except that the debtor must not reserve the surplus for his own benefit or that of any favored creditor, to the exclusion of other creditors. McFerran v. Davis, 70 Ga. 661; The Prince- ton Mfg. Co. v. White, 68 id. 96, 122 Barb, 105, 122-127. 2Maughlin v. Tyler, 47 Md. 545; Loney v. Bayly, 45 id. 447. 32 Kent’s Com. [532], 688. See Ex parte Breneman, Crabbe, 456; Caryl v. Rus- sell, 13 N. Y. 194. 4 Eeberts v. Wood, 3 Paige, 517, 521. 5McColgan v. Hopkins, 17 Md. 395, 182 ASSIGNMENTS WITH PREFERENCES. [ou. x. the effect of debarring such debtors from the benefit of the insolv- ent or “prison bounds” act.! But in North Carolina a deed of trust to satisfy certain creditors, conveying an amount of property greater in value than the amount of debts secured by the deed, is no bar to the debtor’s taking the ingolvent act, if he sets forth the deed in his schedule and surrenders all his resulting interest. In New York the power to make an assignment, with or with- out preferences, is entirely denied to a debtor against whom pro- ceedings have been instituted by a creditor under the “act to abolish imprisonment for debt and to punish fraudulent debtors.” * § 135. Restrictions on the Right of Limited Partnerships to Prefer.— The right of giving preferences to creditors is also, in many of the states, denied to limited partnerships, even where preferences by other partnerships are allowed. Thus, in New York, every sale, assignment or transfer of any of the property or effects of a limited partnership, made by such partnership when insolvent or in conteraplation of insolvency, or after or in contem- plation of the insolvency of any partner, with the intent of giving a preference to any creditor of such partnership or insolvent part- ner over other creditors of such partnership, and every judgment confessed, lien created or security given by such partnership, under the like circumstances and with the like intent, are by statute de- clared void as against the creditors of such partnership.4 Similar preferences given by any general or special partner are also de- clared void? Similar provisions have been enacted in Arkansas, Delaware,’ Idaho,’ Iowa,? Kentucky, Maryland," Minnesota,” Ne- braska, Nevada," New Jersey,” New Mexico, North Dakota,” 1McKenzie v. Garrison, 10 Rich. L. 284. And see Brandon v. Rogers, id. 9. 2 Adams v. Alexander, 1 Ired. L. 501. 3 Spear v. Wardell, 1 N. Y. 144; Wood v. Bolard, 8 Paige, 556, 557. 4R. S. (8th ed.), p. 2495. 5TIbid. See Mills v. Argall, 6 Paige, 5%6; Whitcomb v. Fowle, 7 Abb. N. C. 275. See ante, p. 90. 6 Mansf. Dig. (1884), §$ 4848, 4844, TRev. Code (1874), p. 858. 8R. S. (1887), § 8281. §McClain’s Am. Code (1888), § 3851. 10Gen. Stats. (1887), ch. 82, § 10, p. 97% 1 Pub. Gen. Stats. (1883), p. 1076, § 15, 12R, S. (1881), p. 827. § 17. 13G. S. (1891), ch. 653, § 20, 4G, S. (1885), §§ 9, 10. 15 R, S. (1877), p. 808. 16 Act 89, ch. 36, § 15. 17Comp. Laws (1887), § 4089, §§ 186, 137.] ResTRICrIONS ON RIGHT OF CORPORATIONS. 183 Rhode Island,! Pennsylvania,’ South Carolina,’ South Dakota,! Ten- nessee,’? Texas,’ Virginia,’ West Virginia,® Wisconsin,? Wyoming.” § 136. Restrictions on the Right of Corporations to Prefer.— A corporation, like an individual, may prefer its creditors in or by an assignment of its property; but in some of the states this right has been subjected to material restrictions by statute.’ Thus in New York, where an individual debtor’s right to give preference is unquestioned, it has been provided by statute on the subject of moneyed corporations, after declaring that no conveyance, as- signment or transfer, not authorized by a previous resolution of its board of directors, shall be made by any such corporation of any of its real estate, or of any of its effects exceeding the value of one thousand dollars," “that no such conveyance, assignment or transfer, nor any payment made, judgment suffered, lien created or security given by any such corporation when insolvent or in contemplation of insolvency, with the intent of giving a preference to any par- ticviar creditor over other creditors of the company, shall be valid in law; and every person receiving by means of any such convey- ance, assignment, transfer, lien, security or payment any of the effects of the corporation shall be bound to account therefor to its creditors or stockholders or their trustees, as the case shall re- quire.” 4 § 137. Restrictions on the Right of Corporations to Prefer — «‘ Insolvency .’’— The language of the ninth section of the statute, just cited, has been made the subject of much discussion in several cases in the courts of this state.’ In the case of Gillet v. Phillips,* in the court of appeals, it was said that “when a moneyed corpo- IP, S, (1882), ch. 136, § 10. 2 Purd. Dig. (1883), p. 1072, §§ 22, 28. 3G. S. (1881), § 1306. 4Comp. Laws, § 4084. 5M. & V. Code (1884), 8§ 2418, 2419, 6 Sayles’ S. C. (1888), art. 3461, 7Code (1887), § 2874. 8 Code (1891), pp. 720, 721. 99, & B., C. &S. (1889), S$ 1719, 1720. WR, S. (1837), § 4085. 11 Blalock v. Kernersville Mfg. Co., 110 N. C. 99; 14 8. E. Rep. 501. And may prefer its officers. Id. 12See Appendix, I. 132 Rev. Stat. (7th ed.), p. 1366, § 8 142 Rev. Stat. (7th ed.), p. 1366, § 9. 18 See Bowery Bank Case, 5 Abb. 415; s. c., 16 How. Pr. 56; Matter of Empire City Bank, 10 How. Pr. 498; Brouwer v, Harbeck, 9 N. Y. 589; Curtis v. Leavitt, 15 N. Y. 9; Gillet v. Phillips, 18 N. Y. 114; Johnson v. Bush, 3 Barb, Ch. 207, 1613 N.Y. 114. 134 ASSIGNMENTS WITH PREFERENCES. [ou. x. ration was insolvent, in such a sense that all its debts cannot prob- ably be discharged from its assets, the payment of any one creditor in full is a preference within the meaning of the statute.” Bat it was in the later case of Curtis v. Leavitt,? in the same court, that the language of the same section received the fullest consideration, and the meaning of the terms “ insolvency,” “contemplation of in- solvency ” and “intent of giving a preference” was considered at much length in the course of the opinions delivered. “The term insolvency,” it was said, “can mean nothing less than the inability of the company and the inadequacy of its property to pay its debts, and not a present inability to pay in cash or its equivalent.’”? “The insolvency intended by the statute was an actual or absolute insolvency, by which is meant an inability of the company to pay all its debts from its own property.”* ‘A contemplation of in- solvency is where the debtor, having full knowledge of his em- barrassed circumstances, has no hope or expectation of relief, and anticipates an entire failure in business and absolute insolvency; or when his circumstances are such that any prudent man, taking a reasonable view of his situation and of the surrounding circum- stances, might at the time fairly expect insolvency to follow.”® The result arrived at by the court was that “ notwithstanding the fact of insolvency, according to any definition of the term, a con- veyance by a moneyed corporation is not within the said ninth sec- tion unless made with dntent to prefer a particular creditor over others. The intent to prefer is a fundamental fact which must be alleged and proved.”® “From this it mast follow,” said Comstock, J., “that so long as the debtor corporation, notwithstanding the pressure of great embarrassments, entertains an honest expectation, in the exercise of a reasonable inteliigence, of going on with its business and paying all its debts, its acts cannot be brought within the operation of this statute. While this expectation is entertained in sincerity and good faith it may lawfully secure a particular creditor or sell or pledge a portion of its assets to raise money to meet its necessities.”’ “The intent to give a preference,” said Paige, J., “and either an actual insolvency or a contemplation of insolvency, must be proved as facts. The intent and the contem- plation of insolvency may be proved either by direct evidence or 1Gardiner, C. J., id. 119, cited by Brown and Paige, JJ., in the case, infra. 215 N. Y. 9 3 Brown, J., id. 150. The learned judge cites 2 Bell’s Com. 162, and Gillet v. Phillips, cited supra. 4 Paige, J., id. 200. The learned judge goes into a critical examination of the meaning of the term, and gives various definitions, 5 Paige, J., id. 208, citing Gibson v. Muskett, 3 M. & G. 158, 168. 615 N. Y. 10. 715 N. Y. 109. See the observations, Brown, J., id. 139. §§ 138, 139.] REsreictions—suBJECTS OF PREFERENOES. 185 inferred as the necessary consequence of other facts clearly proved. If insolvency is relied upon to defeat the securities, knowledge of the insolvency by directors of the company, or a belief by them that it existed at the time the securities were made, must be proved; for an intent to give a preference to particular creditors in fraud of all other creditors of the company cannot be conceived except as connected with a knowledge or belief that the company is in- solvent or with a contemplation of its insolvency.” ! It has been decided by the supreme court of this state that in- surance companies are within the provision of the statute prohibit- ing preferences.’ § 188. Restrictions on the Right of Corporations to Prefer — In New Jersey.—“ Since the repeal of the ‘Act to Prevent Frauds by Incorporated Companies,’ and the failure to re-enact the provis- ion of its second section in the present ‘ Revision’ (of 1878), there exists no statutory prohibition against the preference of creditors by an insolvent corporation, except a preference by way of con- fessed judgment under the provision of section 80 of the act con- cerning corporations.” In the case of Wilkinson v. Bauerle,’ the New Jersey court of error and appeals uses the identical language above set forth, adding, however, that corporations and their offi- cers may not divert the corporate property from the payment of debts, and that when such diversion charged is by a sale of corpo- rate property to one of the directors taking part in the transaction as buyer and seller, it devolves on the directors to establish the good faith of the transaction, and that the sale produced the full value of the property. If not made in good faith, or if it did not produce the full value of the property, the directors taking part in the sales will be answerable to greditors for what was thus lost. This case is cited in Vanderpoel v. Gorman,' where such an assign- ment by a New Jersey corporation made in the state of New York was upheld, the learned judge stating that “under the law of New Jersey, in which state the corporation was created, its right to make an assignment of this nature seems to be established.” § 139. Subjects of Preferences in Assiguments.— In those states where preferences are not prohibited by statute it is well 115 N. Y. 198. 2 Hill v. Reed, 16 Barb. 280; Hurlbut v. Carter, 21 id. 221. 3 Wilkinson v. Bauerle, 14 Stewart, 635. 4Vanderpoel v. Gorman, Sheriff, New York Court of Appeals, January 7, 1894, Peckham, J. 186 ASSIGNMENTS WITH PREFERENCES. Len. x. settled that not only actual creditors, but sureties and indorsers, may be preferred by debtors in making assignments of their property.? Drawers and indorsers of what is termed “(accommodation paper,” being considered entitled to peculiar favor, are frequently provided for in this way. A debtor is also allowed to secure a creditor for future advances and responsibilities, as well as for existing claims and engagements, by an assignment to him in preference to other creditors.? Sureties liable on existing or even future responsibili- ties are as much entitled to indemnity and preference as creditors in the more strict sense of that term.’ And a deed of assignment for the security of indorsers is valid, though no payments have been made by them at the time of its execution.* It seems that a wife’s claim for dower may be preferred.’ In some of the states claims of various classes of employees for wages or salary are preferred by force of special statute.® § 140. Personal Preferences.— A preference also may not only be personal, but may be extended so as to cover particular de- mands, whoever may be the holder. Thus, where, among the pre- ferred demands contained in a schedule annexed to an indenture of assignment, was “S. & T.’s draft (accepted by the debtors), for which they hold a mortgage of B. W.,” etc., it was held that the trust was not personal to 8. & T., but that the holders of the draft, to whom it had been indorsed before the making of the indenture, were entitled to the benefit of the trust.’ A debtor making an assignment may also include among pre- ferred debts such as have been previously secured by either judg- 1 Hendricks v. Robinson, 2 Johns. Ch. 283; affirmed on error, 17 Johns. 438; Cunningham v. Freeborn, 11 Wend. 240; Lansing v. Woodworth, 1 Sandf. Ch. 43; Duval v. Raisin, 7 Mo. 449. i; 2 Hendricks v. Robinson, 2 Johns, Ch. 285. See Barnum v. Hempstead, 7 Paige, 568: ante, pp, 115, 116. 3 Cunningham v. Freeborn, 11 Wend. 240. 4 Duval v. Raisin, 7 Mo. 449. 5 Miller v. Crawford, 32 Gratt. 277; Reiff v. Horst, 55 Ind. 42. See Reiff v. Eshleman, 52 id. 582. ’ 6 In New York, for instance, by Laws of 1884, ch. 828; Laws of 1886, ch. 283. See on the construction of these statutes, Richardson v. Herron, 39 Hun, 587; Burley v. Hartson, 40 id. 181; Blackington v. Goldsmith, 83 How. Pr. (N. 8.) 773 Smith v. Hartwell, 1 N. Y. State Rep. 241. Such a statute exists in Pennsyl- vania. Act of April 22, 1854; Assigned Estate of Gitt, 13 Phil. 494; Re Sackett, 1 Luz Leg. Rep. 243. And in Wisconsin. Laws of 1883. ch. 849; Laws of 1885, ch, 48; Lang v. Simmons, 64 Wis. 525; Campfield v. Lang, 25 Fed. Rep. 128; Conlee Lumber Co, v. Ripon Lumber Co., 29 N. W. Rep. 285. As to other states, see Appendix, post. * Ward v. Lewis, 4 Pick. 518. The court in this case say: ‘(The parties were designating the demands which were to be paid in full and not the persons to whom payment was to be made,” and cite Heilner v. Imbrie, 6 Serg. & R. 401. §§ 141, 142.] Mopzs oF GIVING PREFERENCES — ABSOLUTE, ETL. 187 ment. or mortgage; and a provision for their payment will not render the assignment fraudulent and void.! But the creditors thus doubly secured are held bound in equity to resort to their previous security first, so as to give the other creditors provided for the benefit of the assigned fund.? § 141, Modes of Giving Preferences in Assignments.— Prefer- ences may be given to creditors in a variety of forms; as by simply directing certain named creditors or designated debts to be first paid in full out of the proceeds of the assigned property, and the balance to be applied for the benefit of all the other creditors with- out distinction; or by formally dividing the creditors into numbered or designated classes, arranged ina certain order, and directing each class to be paid to the extent of the proceeds applicable for that purpose before the one immediately following. § 142. Preferences, Absolute or Conditional.— Again prefer- ences may be given either absolutely, as by directing certain named creditors to be first paid, at all events; or wpon condition, as by preferring such creditors as shall comply with certain requisitions named in the assignment. In regard to the latter species of pref- erences it has been said that a debtor having an unquestionable power of preference, of which he is the absolute master, may set his price upon it, provided it be not a reservation of part of the effects for himself or anything that would carry his power beyond mere preference ;* and that a debtor may deprive the creditor who refuses to accede to the terms of his preference and postpone him to all other creditors.‘ A condition of preference frequently in- 1$trong v. Skinner, 4 Barb. 546; Kruse v. Prindle, 8 Oregon, 158, 2 Besley v. Lawrence, 11 Paige, 581. 3Gibson, C. J., in Thomas v. Jenks, 5 Rawle, 221. And see Layson v. Rowan, 7 Rob. (La.) 1. But see Jackson v. Cornell, 1 Sandf. Ch. 348, 354. 42 Kent’s Com. [534], 694. See Bellows v. Patridge, 19 Barb. 176. In this case the assignment preferred, in the third class of creditors, two notes made to one H. upon condition that H. accounted for certain collaterals. If he did not ac- count for them, however, no portion of the assigned property was to be applied on those notes until all the residuary creditors were paid except B. The notes were then to be paid, and B.’s claim was to follow. In any event B. was to be . paid last. It was held by the court that these provisions were nothing more than the exercise of the assignor’s undoubted right to direct preferences, and to prescribe the order in which his debts should be paid, and did not render the as- signment void. In the case of Spaulding v. Strong, 37 N. Y. 185; s. ., 38 N. Y. 9, preferences were given to such of ‘the creditors as had already executed a conditional release on receiving fifty per cent. of their claims. If the prefer- ence had been conditioned on the release, the assignment would have been in- valid under the decisions in Grover v. Wakeman, 11 Wend. 201; Hyslop v. Clarke, 14 Johns, 458. See also, to the came effect, Low v. Graydon, 50 Barb, 414; Pow- ers v. Graydon, 10 Bosw. (N. Y.) 630. See Palmer v. Giles, 5 Jones’ Hq. (N. C.) 188 ASSIGNMENTS WITH PREFERENOES. [oH. x. serted in assignments is that which requires the creditors to exhibit their demands to the assignee within a specified period; and a con- dition of this kind has been sustained in New York.' Another condition of constant occurrence has been that which requires the creditors to release or agree to release their claims against the debtor, by becoming parties to the assignment itself where it con- tains a release, or by the execution of a separate instrument to that effect. Assignments containing both these species of condition have been adjudged to be valid in Rhode Island.? But the coercive power which such a condition obviously gives to the debtor has subjected it to much question, and where it is not regarded as ille- gal it is now usually viewed with disfavor.2 A provision in an as- signment postponing the payment of those creditors who should have made any cost or expense upon their claims until all the other creditors should be paid in full kas been held to be fraudulent and void. And as to conditions of preference generally, the inclination of the courts in most of the states is against them, as has already been shown in this chapter. § 148. Future Preferences.— It is a further rule on the subject of preferences that the debtor must declare such preferences in the assignment at the time of executing it, and he cannot reserve to him- self or transfer to his assignee the right to declare future prefer- ences, or to change the order of the preferences already given, or to give preferences at the assignee’s discretion.? Assignments con- taining provisions to this effect have been repeatedly held fraudu- lent and void.’ Thus, where an assignment contained a provision 15, In the case of Grant v. Chapman, 38 N. Y. 293, a provision preferring the amount found due in certain attachment proceedings, provided they were sus- tained and were a lien, was not regarded as rendering the assignment invalid, as being conditional or giving an illegal preference. See Haydock v. Coope, 63 N. Y. 68, 74. 1 Ward v. Tingley, 4 Sandf. Ch. 476. 2 Pearce v. Jackson, 2 R. I. 35. See Nightingale v. Harris, 6 R. I. 321; Sadlier v. Fallon, 4 id. 490; Allen v. Gardner, 7 id. 22. 3In Pennsylvania, by the act of April 16, 1849, a condition in an assignment for the payment of those creditors only who shall execute a release is declared to be a preference in favor of creditors and to be void. Laws of 1849, p. 664; Purdon’s Dig., p. 22, pl. 3. The subject of stipulations for a lease, as a general - condition in assignments, will be more fully considered in chapter XI. 4Marsh v. Bennett, 5 McLean, 117, 123. ‘Sutherland, J., in Grover v, Wakeman, 11 Wend. 187; Boardman v. Halli- day, 10 Paige, 228, 228; Sandford, A. V. C., in Van Nest v. Roe, 1 Sandf. Ch. . 2 Kent’s Com. [532], 691, note; Van Vorst, J., in Kercheis v. Schloss, 49 How. 88. . 6 Barnum v. Hempstead, 7 Paige, 568; Boardman v. Halliday, 10 id. 228; Shel- don v. Dodge, 4 Denio, 217; Strong v. Skinner, 4 Barb. S. C. 546; Averill v. Loucks, 6 id. 470; Mitchell v. Stiles, 18 Pa. St. 306; Gazzam v. Poyntz, 4 Ala, § 143.] FUTURE PREFERENCES. 189 giving to the assignee a discretionary power to pay off or discharge a certain class of claims against the assignor, or certain small debts due from the latter, in preference to other debts provided for in the assignment, it was held void as against the creditors of the as- signor, as being calculated to injure, delay and hinder creditors in the collection of tacir just debts! So, where a debtor in failing circumstances made an assignment of all his property to trustees in trust, to apply the proceeds to the payment of certain preferred creditors, so far as should be necessary, and to apply the residue of the proceeds to the payment of his other creditors in such order of priority as the trustees should think proper, and if the fund was insufficient to pay all such debts, then to apply the same in pay- ment of such part of such debts as the trustees should judge most just and equitable, it was held that the assignor could not legally delegate to the trustees the power to give preferences at their dis- cretion, and that the assignment was fraudulent and void as to creditors who did not assent to the same.2_ So where an assign- ment providing for the payment of the debts of the assignor, ac- cording to several classes of preference, contained a provision that if any of the debts in the sixth class should become pressing, and ' the trustees should thereupon assume them, the debts so assumed should be preferred over similar debts in the prior classes, the assignment was held void as to non-assenting creditors.’ And it is. immaterial whether the right thus to declare or alter preferences is reserved by the express terms of the assignment, or only in effect and in substance; as through the medium of a power to the assignees to compound with certain creditors,‘ or a right to annex schedules at a future period. Accordingly, where an assignment. directed the assignees to pay the debts specified in the schedules annexed thereto, according to the priority of the several schedules, and provided that such schedules should be made within sixty days and be annexed to and form part of the assignment, but did not prescribe what debts should be inserted in the respective schedules, or in what order they should be arranged therein, the preparation of such schedules being left entirely to the discretion of the assignors; and it appeared that such schedules had not been made out and annexed to the assignment previous to its execution, but that they were prepared by the assignors and annexed at some 874, An assignment which attempts to confer on the assignee power to declare future preferences, as to non-preferred creditors, in his discretion, is void. Moody v. Paschal, 60 Tex. 483. 1 Barnum v. Hempstead, 7 Paige, 568, 571, See Morse v. Slason, 13 Vt. 296, 2 Boardman v. Halliday, 10 Paige, 223. 38Sheldon v. Dodge, 4 Denio, 217. 4 Wakeman v. Grover, 4 Paige, 23, 41, 190 ASSIGNMENTS WITH PREFERENCES. [cH. x. subsequent time, it was held that the assignment was fraudulent and void.!- But where an assignment. providing for the payment of creditors in certain classes directed the assignee to pay as a third class such creditors as should present their claims within a certain time after notice to be given by him, it was held that this was not giving to the assignee a discretion as to performances, within the meaning of the rule established by the preceding cases.’ § 144. Preferences by Implication.— A deed of trust for the benefit of creditors may have the effect of preferring certain debts by implication without any express words. Thus, where such a deed was made to secure certain creditors, for some of whose debts sureties were bound, and the deed directed the trustee so to dis- pose of the trust property that no suretv in the said debts should suffer or be injured on account thereof, it was held that the debts for which sureties were bound were preferred debts, and to be first satisfied. § 145. legal and Fraudulent Preferences.— Where a pref- erence is privately given to one or more creditors over others, con- trary to the principle and professed object of the deed of assign- ment itself, it is clearly fraudulent and void. This happens more frequently in cases of deeds of composition between a debtor and his creditors, in which the parties always profess to deal upon equal terms and are supposed to stand in the same situation! In regard to these instruments, the rule has been established in Eng- land by numerous cases, that the secret or separate agreement be- tween the debtor and one or more of the creditors, by which a greater advantage is secured to them than the others would have under the deed, whether in the form of payment or security of the balance of their debts,’ or of a greater sum than the deed pur- ports to secure to all,’ or of additional security, though for no great sum,’ is a fraud upon the other creditors, and is void not only in 1 Averill v. Loucks, 6 Barb. S. C. 470; Kercheis v. Schloss, 49 How. Pr. 284. 2 Ward v. Tingley, 4 Sandf. Ch. 476, 479. 3 Miller v. Holcombe’s Ex’, 9 Gratt. 665. ‘Best, C. J., in Britton v. Hughes, 5 Bing. 465. 5 Mawson v. Stock, 6 Ves. Jr. 300. ®Spurrett v. Spiller, 1 Atk. 105; Middleton v. Lord Onslow, 1 P. Wms. 68; Jackson v. Mitchell, 13 Ves. Jr. 561; Jackson v. Lomas, 4 Term R. 166. 7Chesterfield v. Janssen, 2 Ves, 125: Lord Hardwicke, id. 156. 8 Ex parte Sadler & Jackson, 15 Ves. Jr. 52; Leicester v. Rose, 3 East, 371. 9It is said to be a fraud both upon the debtor and the other creditors, Ex parte Sadler & Jackson, ubi supra. And see Jackson v. Mitchell, 13 Ves. Jr. 581. In Hagen’s Appeal, 11 Weekly Notes of Cas. 86, it is held that where a creditor who has become a party to a composition deed. whereby he agrees in common with the other creditors to take the notes of the common debtor, payable at a future § 145.] ILLEGAL AND FRAUDULENT PREFERENCES. 191 equity but at law.’ And the rule is the same whether tne agree- ment be voluntary on the part of the debtor, with the object of inducing the creditor preferred ? or other creditors to agree to the composition ;* or whether the preference be extorted by the cred- itor by holding out a threat of refusal to sign. And ina case where a creditor refused to accede to the proposed composition until the debtor’s brother agreed to supply him with coal equal in value to the residue of the debt, which agreement was unknown to the other creditors and was fully performed by the brother, it was held that the creditor could not recover upon the note given him for the amount of the composition.’ The doctrine established by the preceding cases has also received the sanction of the courts in this country.$ The same rule against secret preferences has been applied in England‘ and the United States* to cases of deeds of trust for the benefit of creditors ratably where the creditors become parties or agree to release the debtor on receiving their proportion of the trust fund.? day, for the amount of his claim, subsequently gives up said notes to the debtor and receives from him other and better security in lieu thereof, such action will not be deemed fraudulent as against the other creditors unless in pursuance of an agreement entered into with the debtor prior to or contemporaneous with the execution of the composition deed, Where creditors have entered into a composition with their debtor after a gen- eral assignment for their benefit the assignment is thereby vacated and the prop- erty restored to the debtor. The assignee cannot thereafter seize such property. Where such creditors receive from the debtor an amount in excess of their share under the composition deed, it is no fraud upon subsequent creditors, and under a subsequent assignment they are entitled to their dividend on a new debt with- out accounting to subsequent creditors for the excess so received on their first debt. Guggenheimer v. Groeschel, 238. C. 274. 1 Jackson v. Mitchell, wbi supra; Cockshott v. Bennett, 2 aera R. 763. 2 Chesterfield v. Janssen, 2 Ves. 125. 3 Buller, J., in Jackson v. Lomas, 4 Term R. 166; Bennett v. Ellison, 23 Minn. 242, 4Spurrett v. Spiller, 1 Atk. 105; Cockshott v. Bennett, 2 Term R. 763; O’Shea v. The Collier White Lead & Oil Co., 42 Mo. 897. 5 Knight v. Hunt, 5 Bing. 432, 6 Russell v. Rogers, 10 Wend. 478, 499; Breck v. Cole, 4 Sandf. 8. C. 79. The latter case contains a good summary of the doctrines on this point. See Jaffray v. Steedman, 358. C. 33; 148. E. Rep. 6832; Thompkins v. Hunter, 65 Hun, 441. 7 Cockshott v. Bennett, 2 Term R, 763; Jackson v, Lomas, 4 id. 166. §8Smith v. Stone, 4 Gill & J. 310; Case v. Gerrish, 15 Pick. 49; Clark v. White, 12 Pet. 178; O’Shea v. The Collier White Lead & Oil Co., 42 Mo. 397. See Claflin v. Iseman, 23 8. C. 416, a; Dansby v. Frieberg, 76 Tex. 463; 13S. W. Rep. 331; Carey v. Hess, 112 Ind. 398; 14 N. E. Rep. 235; Crossley v. Moore, 40 N. J. Law, 27; Laird v. Campbell, 92 Pa. St. 470; Nichols v. Wellings, 61 Hun, 601. "The rule against secret preferences has been applied to cases of the direct transfer of property to the creditor preferred. Edrington v. Rogers, 15 Tex. 188; Hancock v. Horan, id. 507. s 192 ASSIGNMENTS WITH PREFERENCES. [CH. xX. A secret agreement to prefer the creditor in case of insolvency of the debtor is fraudulent,’ as is also a preference to a dormant partner.2 An agreement to prefer one creditor, made after the signing of the composition, violates the spirit of the composition deed, and is a fraud upon the other signers thereof as much as if made before the signing. Any unlawful consideration moving from the preferred creditor to induce the performance, or a con- sideration founded upon a nudum pactum,' may avoid the deed which gives it. 1 Smith v. Craft, 11 Biss. 840. See Assignment of Guyer, 69 Iowa, 585; 29 N. W. Rep. 876; Farwell v. Jones, 63 id. 316; Nat. Park Bank v. Whitmore, 104 N. Y. 297; 10 N. E, Rep. 524; 40 Hun, 499; O’Brien v. Greenbaum, 92 Cal, 104; 28 Pac. Rep. 214. 2Claflin v. Hirsch, 19 N. Y. Weekly Dig. 248. 3 Zoebisch v. Von Minden, 47 Hun, 213; Foakes v. Beer, 9 App. Cas. 605. 4Marshall, C. J., in Marbury v. Brook, 7 Wheat. 856. 5 Where under a composition agreement with the debtor all the creditors signed to the amount of about $4,000, except one whose claim was only $250, tho court held that ‘‘ The agreement was substantially and legally complied with, and the deed made in pursuance of it must be upheld.” Fahey v. Clarke, 80 Ky. 613. § 146, 147, CHAPTER XI. ASSIGNMENTS WITH SPECIAL PROVISIONS, Special Provisions — Use and Effect of. Special Provisions Should be Avoided. I. STIPULATIONS FOR THE RELEASE OF THE DEBTOR AS A CONDITION OF THE 148, 149, 150. 151. 182. 153, 154. 155. 156. 157. 158, 159. 160. 161, 162, 163. 164, 165, 166. 167, 168. 169, 170, 171, 172, 173, 174, 175, 176. 177, 178, ASSIGNMENT. Assignments with Releases, how Drawn, Rule in England. Rule in the United States, Releases in Several of the States, Releases — Alabama, Releases — Arkansas, Releases — Colorado, Releases — Maine. Releases — Maryland. Releases — Massachusetts, Releases — New York. Releases — Pennsylvania, Releases — Rhode Island. Releases — Virginia — West Virginia — South Carolina — Vermont — New Hampshire. Releases in Other States. Stipulations for Release — Summary. Stipulations for Release, Excluding Non-releasing Creditors, Obligations to Stipulations for Releases, Stipulations for Releases in Partial Assignments. IL RESERVATIONS OF BENEFIT TO THE DEBTOR Reservations — General Rule as to, Reservations of Property. Trusts for the Assignor. What Reservations Are Allowed. Reservations or Exceptions of Property. Stipulations for the Use of Property. Stipulations for the Use of Property — Continued. Reservations in Mortgages and Deeds of Trust. Reservations of Surplus Moneys or Property. Reservations of Surplus Moneys or Property in Preferential Assignments. Resulting Trusts for Assignor. Reservation with Stipulations for Releases, and Other Conditions. III. APPROPRIATION OF ASSETS IN ASSIGNMENTS BY FIRMS AND THEIR 179. 180, MEMBERS, Preference of Individual Creditors, Preference of Firm Creditors. 18 194 ASSIGNMENTS WITH SPECIAL PROVISIONS. [oH. XI. IV. STIPULATIONS FOR THE CONTINUANCE OF ASSIGNOR’S BUSINESS. § 181. Assignor’s Business May be Continued, When. : 182. Assignor’s Business May be Continued, When — Illustrations. V. Provisions RESPECTING THE TIME FOR EXECUTING THE TRUST. 183. Reasonable Time Allowed for Executing the Trust. 184, Reasonable Time, What. 185. Indefinite Postponement. VI. Lamration oF TIME FOR CREDITORS TO BECOME PaRTIES OR ASSENT. 186. Limitation Must be Reasonable — Illustrations. VII. Provisions RESPECTING THE SALE OF THE PROPERTY ASSIGNED, 187. Time of Sale. 188. Time of Sale — Discretion of Assignee. 189. Mode of Sale. 190. Terms of Sale — Power to Sell on Credit. 191. Prohibiting Sale on Credit. 192, Sale at Retail. 193, Implied Power to Sell on Credit. 194. Implied Power to Sell on Credit — Cases, VIII. SpecIAL POWERS AND DIRECTIONS TO ASSIGNEES. “195. Power to Mortgage and Lease. 196. Power to Pay Insurance, Interest and Incumbrances, 197. Power to Employ Agents. i 198. Power to Compound and Compromise Debts. 199. Notice to Creditors by Assignee. 200. Power to Defend Suits. IX. STIPULATIONS FOR THE BENEFIT OF ASSIGNEES. 201. Assignee Liable for Misconduct of Others, When. 202. Provisions for Expenses and Services of Assignees, X. RESERVATIONS OF POWERS TO ASSIGNORS. 2083. Reservation of Power to Assignor Invalidates the Assignment, 204. Reservation of Power to Assignor Over Preferences, 205. Reservation of Power to Assignor Over Sales. § 146. Special Provisions — Use and Effect of.— Allusion has already been made to the simplest form of a deed of assignment for the benefit of creditors as being that where the debtor’s prop- erty is unconditionally and unreservedly transferred to the as- signee, with a general authority to the latter to receive, hold and dispose of it for the equal benefit of all the creditors. It has been acommon practice, however, to introduce into these instruments special clauses of various kinds, tending to limit or modify their usual operation, such as conditions on which creditors are to have the benefit of them; reservations for the benefit of the assignor; provisions as to the time and mode of disposing of the property; § 147.] SPECIAL PROVISIONS SHOULD BE AVOIDED 195 and special directions to the assignee as to the manner of execut- ing the trust. , Some of these clauses are entirely within the admitted scope of the power which the law allows an assignor of directing the dispo- sition of the property assigned; and are useful in practice as more clearly expressing the objects of the trust, and as defining for the greater convenience of the assignee the course of his proceedings, and the nature and extent of his duties and powers. Others are either of doubtful utility, or decidedly objectionable, as tending to give rise to questions affecting the validity or operation of the in- strument; and, if not to be avoided, are at least to be inserted with care and caution. Others, again, have almost uniformly the effect of invalidating the assignment and defeating its object. § 147. Special Provisions Should be Avoided.— As a general rule it is not advisable to multiply special clauses of any description. If unusual, they always excite suspicion.! And even those of an ordinary character are to be inserted with great care, particularly in assignments which give preferences. “Every provision in a voluntary assignment,” observed Sergeant, J., in Whallon v. Scott,? in allusion to this class of conveyances, “ought to be narrowly scanned and closely watched;” and the courts now almost uni- formly act upon this principle. Even clauses directing an assignee to do what is prima facie his duty to do without them, sometimes give rise to suspicions.? And so many instances have occurred of 1Clauses which are unusual ought on that account alone to excite suspicion. Gaston, J., in Cannon v. Peebles, 2 Ired. L. 449, 455, 210 Watts, 237, 244. 3 This was strongly illustrated in a New York case. It had been decided in this state that an authority expressly given to an assignee to sell the assigned property on credit avoided the assignment which contained it, Barney v. Griffin, 2 N. Y. 365; Whitney v. Krows, 11 Barb. 198. In Van Rossum v. Walker, 11 Barb. 237, the assignment contained aclause (framed, perhaps, with reference to the previous decision) expressly prohibiting the assignee from selling on credit, The assignment was assailed on this very ground as furnishing evidence of fraud, and the court so far regarded the objection as to hold that such a pro- vision was not per se evidence of fraud. The following remarks of Edwards, J., explain the ground of the decision: ‘‘It is well settled that, as a general rule, it is the duty of the assignee to dispose of the assigned property at once; and that when it can be done consistently with the interests of the parties it should be sold for cash. The question then arises whether a specific direction to the as- signee to do what is prima facie his duty is per se evidence of fraud. It may be that such a provision is an unwise one and one that ought not to be counte- nanced, and where there are any circumstances which go to show that a forced sale was intended, to the injury of the creditors, it ought to be taken into con- sideration as an important item-of evidence, which, in connection with the other circumstances, would justify this court in setting aside the assignment. But it seems to me that this is all the effect which should be given to such a provision.” And see Whitney v. Krows, ubi supra. It has since been determined that such 196 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. XI. assignments being declared fraudulent and void on account of a single provision, supposed by the draughtsman to be, at most, of a harmless character, that the drawing of a valid assignment has come to be regarded by some as a matter of no small difficulty and hazard. This difficulty was dwelt upon by counsel in the argu- ment of the case of Litchfield v. White, in the superior court of the city of New York, and the remarks of Mr. Justice Sandford in reply so well explained the grounds of it and how it may be avoided, that they are inserted here as an apt conclusion to the prefatory observations which have just been made. “The whole difficulty consists in the insertion of clauses beyond or varying the necessary provisions for transferring the debtor’s property and appropriating it to the payment of his debts. We have never heard of a case, nor do we believe there has ever been one decided in this state, in which an assignment has been held fraudulent which simply vested the debtor’s estate in trustees, and directed them to convert it into money and apply it absolutely and without reserve to the payment of his debts, whether equally among all the creditors or with preferences. But so long as failing debtors will make assignments containing provisions directly or indirectiy for their own benefit, to the detriment of their creditors, or vest- ing in assignees the power of giving preferences, or excluding creditors who will not release the debtor, or exempting the as- signee from his proper legal responsibility to those for whom he is to act, or otherwise deviating from the direct appropriation of the assets to the payment of debts, so far as they can be reasonably secured and applied —so long it will be the duty of the courts to pronounce such assignments fraudulent whenever they are pre sented for adjudication.” ? The most important of these special provisions, together with their effect, as exemplified by cases decided in the courts, will now be considered. a clause does not invalidate the assignment. Grant v. Chapman, 38 N. Y. 293; Carpenter v. Underwood, 9 N. Y. 520. See Work v. Ellis, 50 Barb. 512. 13 Sandf. S, C. 545. 23 Sandf.S. C, 554, 555. In the case of Ogden v. Peters, 21 N. Y. 28, Mr. Justice Comstock made the following observations: ‘‘ An assignment drawn precisely as it ought to be will not undertake to speak to the assignee in regard to his duties under the trust. Those duties, unless the creditors themselves direct otherwise, are simply to convert the estate and pay the debts in the order and with the preferences indicated in the instrument. A trustee is always bound by any restrictions contained in the writing which creates the trust, and if these are in- consistent with the rights of creditors the trust itself must fall to the ground.” And see remarks of Mr. Justice Selden to the same effect in Dunham v. Water- man, 17N. Y. 9 §§ 148-151.] MISCELLANEOUS. 197 I. Srreunations ror tHe Retease or tur Desror as a ConpiTIon oF THE ASSIGNMENT. § 148. Assignments with Releases, how Drawn.— Assignments are sometimes drawn with a stipulation for a release of the debtor as the condition of receiving the benefit of the deed; or, in other words, making it a condition that the creditors shall accept the provision made for them in full satisfaction and discharge of their demands. Such a stipulation is in some cases introduced as a con- dition of receiving any benefit under the assignment, non-releasing creditors being wholly excluded; in others, as a condition of pref. erence over other creditors provided for; and in others as a condi- tion of sharing in the surplus remaining after payment of credit- ors who are preferred absolutely; and it is sometimes united with a provision expressly reserving the shares of non-releasing credit- ors to the assignor himself.! ment for the release of the debtor, as a condition of receiving the benefit of the deed, has been held valid even against a claim of the crown,? and such stipulations continue to be inserted in the forms now in use? In the case of Jackson v. Lomas‘ there was a pro- viso to the assignment that in case any creditor should not execute the trust deed, which contained among other things a release of the debts by a given day, he should not be entitled to the benefit of it, and his share was to be paid back to the debtor. “It seems to have been assumed throughout that case,” observes Chancellor Kent, “that such a provision would not affect the validity of the assignment.” * It was, in fact, held void on another ground. § 150. Rule in the United States.— In the United States there is no uniform rule on the subject. In some of the states assign- ments with stipulations for a release have been sustained to the full length of wholly excluding non-releasing creditors; in others they have been adjudged valid only so far as they operate to post- pone non-releasing creditors to others. In other states they have been pronounced void under all circumstances. § 151. Releases in Several of the States.— The rulings in the different states upon the law of releases in assignments have been 'On the question discussed under this subdivision, see Bump on Fraudulent Conveyances, ch. XV. 2King v. Watson, 3 Price (Exch.), 6. 3See the case of Janes v. Whitebread, 20 L. J. C. P. (N. 8.) 217; 8, o., 5 Eng. L, & Eq. 481; Forbes v. Limond, 4 De G., M. & G, 298. 44 Term R, 166. 52 Kent’s Com. [534], 693, 198 ASSIGNMENTS WITH SPECIAL PROVISIONS. (cH. x1. so frequently conflicting that for the use of the sation a summary of most of the leading cases is given in the following sections. § 152. Releases— Alabama.—In Alabama they were at one time eld valid to the extent of excluding non-releasing creditors,! but in later cases this principle has been strongly condemned ;? and more recently a stipulation for a release, coupled with an express reservation of the residue to the grantor in case of non-release, has been held to render the assignment fraudulent and void. But if the debtor assigns all his property and retains no control over it, and stipulates for no share of the proceeds to result to himself, such a stipulation will be sustained.‘ § 153. Releases — Arkansas.— In Arkansas, in the case of Clay- ton v. Johnson,’ it was held that a stipulation for a full release from the accepting creditors was not fraudulent, the assignment being of all the property, and no statute interfering. But in the late case of Collier v. Davis a contrary doctrine was established and Clayton v. Johnson expressly overruled. § 154. Releases — Colorado.— In Colorado? a condition in the assignment requiring creditors to release the assignor from all claims before receiving any benefits under the assignment, and the surplus returning to the debtor and not to the non-releasing cred- itors, renders the deed fraudulent and void. § 155. Releases — Maine.— In Maine before the act of April'1, 1836, stipulations for a release in assignments were judged valid.* 1 Robinson v. Rapelye, 2 Stew. 85. 2 Ashurst v. Martin, 9 Port. 566; Gazzam v. Poyntz, 4 Ala. 374; Wiswall v. Ticknor, 6 id. 179; Smith v. Leavitts, 10 id. 92. 3 Grimshaw v. Walker, 12 Ala, 101. See West v. Snodgrass, 17 id. 549. In this case the assignment provided that the preferred creditors were not to enjoy its benefit unless they accepted of its provisions in full satisfaction of their debts; and if any of them should refuse to accept they should be excluded, and the pro rata share to which they would have been entitled, had they accepted, should be paid to another specified creditor. It made no provision as to the disposition of any surplus that might remain, in the event that all the preferred creditors should refuse to accept, after paying the debt of the residuary creditor. It was held by the court to be fraudulent and void upon its face. 4 Rankin v. Lodor. 21 Ala. 880. This is laid down by Phelan, J., as a “settled legal proposition in this state.” Id. 289, 5 36 Ark, 406, citing numerous cases; Dodd v. Martin, 15 Fed. Rep. 388. 647 Ark, 397; 58 Am. Rep. 758; 1S, W. Rep, 684, TDuggan v. Bliss, 4 Colo, 228. See Rasmussen v. State Nat. Bank, 11 Colo. 801; 18 Pac. Rep. 28. 8 Fox v. Adams, 6 Greenl. 245; Canal Bank v. Cox, 6 id. 395; Todd v. Buck- man, 2 Fairf. 41. § 156.] RELEASES. 199 But under that act it was decided that assignments containing such stipulations were illegal.! And it was further held that a clause of release embodied in an assignment was inoperative and void; and that a creditor who had executed the assignment was not precluded from repudiating it, though he might have received sev- eral partial payments under the assignment.? In the United States district court of Maine, an assignment with a stipulation for a re- lease as a condition of participating in the fund, the surplus result- ing to the assignor, was held fraudulent.’ But under the act of March 21, 1844, chapter 112, amending that of 1836, and now the law of the state, a debtor may require a release from creditors who become parties to the assignment and shall forever discharge him from their claims on his making oath that he has assigned all his estate, real and personal, for their benefit. § 156. Releases — Maryland.— In Maryland, under statute, stip- ulations for a release, in assignments of all the debtor’s property, as conditions of preference, have been sustained. But the assign- ment must, on its face and by its terms, convey all the property of the grantor, and unless it does so it is void, no matter whether it does in fact convey all his property or not. And when it is made by partners it must convey all their property, as well their individual estate as their partnership effects.* The whole estate must be surrendered for the benefit of the creditors, and a direc- tion to the assignee to pay over to the grantor the balance remain- ing after satisfying creditors who execute releases will invalidate the assignment;‘ and a failure to provide in express terms for the 1 Pearson v. Crosby, 23 Me. 261; Wheeler v. Evans, 26 id. 182. 2'Vose v. Holcombe, 31 Me. 407. 3The Brig Watchman, Ware, 232. 4 McCall v. Hinckley, 4 Gill, 128. The trusts in this case were, first, to pay in full certain creditors absolutely ; second, to appropriate the residue among such of the creditors as should within ninety days assent to the assignment and execute a full release; third, out of the residue, if any, to pay all the other creditors; with areservation of the ultimate surplus to the grantors. And see Kettlewell v. Stewart, 8 Gill, 472, where the assignment was of asimilar character. In Hol- lins v. Mayer, 3 Md. Ch. Dec. 343, a trust deed directing the shares of non-releas- ing creditors to be held subject to the future order and control of the grantor was held valid. But see Peters v. Cunningham, 10 Md, 554, 5 Rosenberg v. Moore, 11 Md. 876; Barnitz v. Rice, 14 id. 24; Farquharson v. Eichelberger, 15 id. 63; Green v. Trieber, 3 id. 11; Sangston v. Gaither, 3 id. 40; Coakley v. Weil, 47 id. 277; Maennel v. Murdock, 13 id, 164. But a reserva- tion of the surplus to the grantor after the payment of releasing creditors makes the deed void on its face. O’Connell v. Ackerman, 62 id. 337. 6 Insurance Co. v. Wallis, 23 Md. 173; Maughlin v. Tyler, 47 id. 545; Loney v. Bayly, 45 id. 447; Malcolm v. Hodges, 8 id. 418, 7 Bridges v. Woods, 16 Md. 101; Green v. Trieber, 3 id. 11; Hollins v. Mayer, 8 Md. Ch, 843. ' 200 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. XI. disposition of this surplus among the non-releasing creditors will be equally fatal.! § 157. Releases — Massachusetts.— In Massachusetts there have been several cases before the supreme court where the assignments contained stipulations for a release of the debtor; but there seems to have been no decision made in that court fully to the point upon the abstract question of the validity of such stipulations. In the case of Halsey v. Whitney,’ in the circuit court of the United States, Mr. Justice Story observed that the point appeared not to have met with any direct decision; and so far as the cases examined by him went, they were considered as leaving the question 7m equéli- brio The learned judge, in deciding the case before him, in which he upheld such a stipulation, expressed himself as yielding to what he considered to be the weight of general authority in its favor, though the inclination of his own mind, had the question been new, would have been the other way. In Borden v. Sumner,‘ Parker, C.J., spoke of the question as not then having been decided in the supreme court of the state; and in several subsequent cases in which questions arose upon assignments containing stipulations for a release this question was not raised.’ In the case of Nostrand v. Atwood,* however, the point was expressly made, the assignment being objected to on the ground that it contained such a stipula- tion, which, it was said, operated compulsorily upon the creditors, and prescribed such conditions for the benefit of the assignors as would render the whole assignment fraudulent and void in law. The assignment was sustained by the court, the stipulation being regarded as wholly immaterial to the rights of the plaintiffs in the case, as there was no property transferred for their benefit. But Dewey, J., who delivered the opinion, observed that it was wholly unnecessary “to pronounce any opinion upon the abstract question of the effect of the introduction into an assignment of a stipulation for a release by the creditors who become parties to it, in a case where such a stipulation might be prejudicial to a creditor 1 Whedbee v. Stewart, 40 Md. 414; Malcolm v. Hughes, 8 id. 418. See Nat. Bank v, Lanahan, 60 id. 479. 24 Mason, 206, 229. 5The cases of Widgery v. Haskell, 5 Mass. 144; Ingraham v. Geyer, 13 id. 146; and Harris v. Sumner, 2 Pick. 129, were considered as inclining against the va- lidity of the stipulation; and those of Hatch v. Smith, 5 Mass. 42, and Hastings v. Baldwin, 17 id. 552, as going in its support. 44 Pick. 265. 5 Andrews v. Ludlow, 5 Pick. 28; Lupton v. Cutter, 8 id. 298; Gloucester Bank v. Worcester, 10 id. 529; American Bank v. Doolittle, 14 id. 123, As late as the cases of the Erig Watchman, Ware, 232, and Grover v, Wakeman, 11 Wend. 187, the question was regarded out of the state as an open one. 619 Pick. 281. § 158.] RELEASES. 201 indisposed to assent thereto, and who might thus be deprived of receiving his share of the fruits of the assignment.”! It is to be observed that the opinion in this case was adapted to the state of the law when the assignment was executed, which was prior to the statute of 1836. § 158. Releases — New York.— In New York the law is to be considered as definitely settled against the validity of assignments containing a stipulation for the release of the debtor, whether as a condition of receiving any benefit under the assignment or only as a condition of preference. The following is a brief review of the cases : In Hyslop v. Clarke? the assignment was in trust, first, to sat- isfy a debt due to a particular creditor; second, to pay all the other creditors ratably on condition of their discharging the assignors from all liability to them; and in case the creditors, or any of them, should refuse to give such discharge, then the last-mentioned trust was to cease and the trustees were directed not to execute it; third, in case of such refusal of the creditors, or any of them, to give such discharge, then in trust (after paying the first-mentioned creditor) to pay the whole of the avails of the property to such of the cred- ators as the assignors should appoint as soon as such refusal should be known; fourth, to pay the surplus, in any event, to the assignors. The assignment was held by the supreme court to be void; the stip- ulation for a discharge being considered coercive in its character, and the provision reserving to the assignors the right to declare a new trust being viewed as an attempt to retain the power to give future preferences, and, until such new trust should be declared, creating in effect a trust for the assignors themselves.* In Austin v. Bell‘ the assignment was in trust® to pay all the debts of the grantors specified in a schedule annexed, in which the creditors were arranged in six classes, giving preferences according to the classes; provided that the said several creditors should, before a day specified, become parties to the assignment (which contained a 119 Pick, 284, The rule established by the decisions in Massachusetts is consid- ered by the learned authors of the Notes to American Leading Cases as favoring the validity of these stivulations. 1 Am, Lead. Cas, (Hare & Wall. Notes), 100 (72, ed. 1857]. 214 Johns, 458. 3See the opinion of Van Ness, J., 14 Johns. 462, 463. 420 Johns. 442. 5 The assignment, before declaring this trust, contained certain reservations of moneys for the support of one of the assignors and his family for a limited time, and which, on the authority of Murray v. Riggs, 17 Johns. 571, was adjudged valid; though on this point, as we shall see hereafter, the decision of the court has since been overruled. 202 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. XL release of all their demands) by executing the same; and upon the further trust that in case any of the said creditors should not, within the time limited, become parties to the assignment, then the grant- ees (or assignees) should pay to the grantors the proportion of such of the creditors as-should neglect or refuse to execute the assign- ment. The court declared the assignment invalid; considering it to be a stronger case of legal fraud than that of Hyslop v. Clarke, as it gave to the assignors themselves the absolute disposal of the shares of those creditors who should refuse to execute the assign- ment, to apply them to their own use or to pay to their creditors, as they pleased. It was pronounced to be “not only an attempt to coerce creditors, and to place the property beyond their reach on execution,” but to be “the reservation of property which ought to have been devoted to the payment of their debts to their own private benefit and use.”? In Seaving v. Brinkerhoff,? in the court of chancery, the assign- ment was of certain real estate in trust for the benefit of all the creditors who should prove their debts, bat upon condition that each creditor “should seal and deliver a full and complete discharge of his demand.” The chancellor held this provision to be rigor- ous, coercive and unjust; on the ground, however, that it was an assignment of only a part of the debtor’s property. This case will be referred to again in the course of this chapter. In Wakeman v. Grover,’ in the same court, the assignment was in trust, first, to pay certain preferred creditors of the first class; secondly, to pay to such creditors of the second class as should, within a specified time, agree in writing to receive such propor- tion of their debts as could be paid out of the surplus avails of the assigned property, after paying the preferred creditors, in full dis- charge of their debts; thirdly, to apply the residue to the payment of the creditors of the third class, and all other debts of the assign- ors; and lastly, to pay the residue, if any there should be, to the assignors. The court held the assignment to be fraudulent and void; and, on error to the court of errors,‘ the decision of the chan- cellor was sustained. It will be seen that this case goes farther than any of the previous cases, laying down the rule broadly, that the requirement of a release from any of the creditors, and as a consideration of preference merely, without any direct reservation of the share of the non-releasing creditors to the assignor himself, avoids the assignment. 1Spencer, C. J., 20 Johns, 450. 25 Jobns, Ch. 329, 34 Paige, 23. 4Grover v. Wakeman, 11 Wend. 187. § 158.] RELEASES. 203 In Armstrong v. Byrne,' in the same court for the first circuit, the trust of the assignment was to divide the proceeds of the assigned, property among the creditors ratably, on condition of their releasing the balance of their debts; excluding non-releasing creditors from all benefits, and directing the shares of the latter to be equally di- vided among such of the creditors as should accept of the compo- sition. The vice-chancellor declared the assignment void for fraud upon the face of it; pronouncing it to be an attempt to coerce creditors into the debtor’s own terms, which was against the policy of the law, and vitiated the assignment entirely.’ In Lentilhon v. Moffatt,’ in the same court, the assignment was of part of the debtor’s property in trust for all his creditors, and to be paid to them ratably, as they should respectfully execute under their hands and seals a full release and discharge of their respective debts, claims and demands against him, with a proviso that unless all the creditors should accept of the assignment within sixty days, the debtor should have power to appoint so much of the proceeds as might not be accepted by the creditors to be paid to such creditors as he might think proper; and that the said appointment should take effect and go into operation either at the expiration of the said sixty days, or as soon as such non- acceptance could be ascertained. The vice-chancellor held the as- signment to be void, as being an attempt to place the debtor’s property beyond the reach of his creditors unless they should agree to accept of it upon the terms proposed; and so, in effect, hindering and delaying creditors. In the subsequent case of Mills v. Levy,‘ in the same court, the trusts of the assignment were first, to sell, collect debts, etc. ; sec- ond, to pay certain preferred debts in full; third, to pay ratably, as far as the proceeds would go, certain debts specified, and all other creditors who should, within six months, agree to release the debtors; fourth, out of the residue to pay ratably such creditors as might not within the six months agree to release. And, in case none of the creditors referred to in the third and fourth trusts should agree to give such release within the period limited, then the assignees were to apply the proceeds which might remain after satisfying the first and second trusts to the payment, so far as they would extend, of all the creditors ratably. On a bill filed to over- throw the assignment as fraudulent, on the ground of its trust tending to delay, hinder or defraud ‘creditors, the vice-chancellor decided against its validity, principally on the authority of the case 11 Edw. Ch. 70, 21 Edw. Ch. 80. 31d. 451. 42 Edw. Ch, 188, 204 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XI. of Burrall v. Leslie,! then lately decided by the chancellor, in which an assignment containing similar trusts was held fraudulent and void.? But where certain creditors had executed a conditional release on payment of fifty per cent. of their claims, and the debtors failed to comply with the terms of the release, and afterwards executed a general assignment by which they preferred, first, certain confi- dential creditors; secondly, the creditors who had executed the conditional release, and then directed that the residue of the cred- itors be paid, this assignment was not regarded as coming within the rule of Wakeman v. Grover, inasmuch as the preference to the releasing creditors was absolute, and there were no terms to be agreed to, and no conditions to be fulfilled* The creditors were not to be paid if they would consent to the compromise, but be- cause they Aad agreed to it. § 159. Releases— Pennsylvania.—In Pennsylvania the law was at one time settled in favor of the validity of these stipulations to their fullest extent. In the early case of Burd v. Smith,‘ in the 1 Reported in 6 Paige, 445; but the point of the invalidity of the assignment is not noticed in the report. It appears, however, from a copy of the chancellor’s order, given in the note to Mills v. Levy, 2 Edw. Ch. 187. The case of Grover v. Wakeman was relied on in the argument before the vice-chancellor, but was not examined by the court, the report of the case not having then been published. 2 And see the observations of Sandford, A. V. C., in Jackson v. Cornell, 1 Sandf. Ch. 848, 354; and of Selden, J., in Dunham v. Waterman, 17 N. Y. 9. But a release may be stipulated for in a different form. Thus where, by an ar- rangement between a debtor and a portion of his creditors, the former assigned his property to trustees in trust for his creditors generally, and the trustees, in consideration of the assignment, and pursuant to the arrangement, personally bound themselves to the debtor to procure for him a release and discharge from all his creditors, except certain ones who were specified, it was held that the as- signment was not conditional or partial, or liable to the objection of being in- tended to coerce a release from the creditors. Hastings v. Belknap, 1 Den. 190. Mr. Justice Parker, in the case of Strang v. Spaulding, 88 N. Y. 12, remarks: “The law is undoubtedly well settled that such assignments (in which creditors are preferred on condition of their subsequently executing releases of their re- spective demands) are mala fide on their face, and void as against creditors.” And see Mr. Justice Fullerton, to the same effect, in the same case, 37 N. Y. 189; and Mr. Justice Monell, in Powers v. Graydon, 10 Bosw. 659. See, also, Chad- wick v. Burrows, 42 Hun, 39. 3 Spaulding v. Strang, 37 N. Y. 185; s. c., 88 N. Y. 9; rev’g s. c., 36 Barb. 310; 8. 0., 32 Barb. 235; Low v. Graydon, 50 id. 414; Powers v. Graydon, 39 id. 548; s. C., 25 How, Pr. 512; Renard v. Graydon, 39 Barb. 548; s. o., 25 How. Pr. 178. See remarks of Savage, C. J., in Hone v, Henriquez, 18 Wend. 243, 44 Dall. 76, sometimes cited as ‘Burd v. Fitzsimmons.” This case is generally considered to have involved the point of a release of the debtor. Walworth, C., in Wakeman v. Grover, 4 Paige, 23, 89. But one of the justices, in delivering his opinion, said there was no stipulation in the deed for a release in favor of the grantor. Coxe, J., 4 Dall. 92. § 159.] RELEASES. 205 high court of errors and appeals, the trustees of the assignment were to dispose of the property and distribute the proceeds ratably among such creditors as should agree, in writing, to accept the same within nine months, and to pay to the assignor the propor- tion of all such creditors as should not signify their acceptance within the time. The court (two judges dissenting) declared the assignment invalid. But in Lippincott v. Barker, where the as- signment was of the debtor’s property to trustees for the benefit of such creditors as should, within four months, execute a general release of all demands, after elaborate argument the deed was held valid.2, In Pearpoint v. Graham,’ where the same questicn arose, it was held by Mr. Justice Washington, in affirmance of the same doctrine, that an assignment in trust for the benefit of such cred- itors as should release their debts was founded upon a sufficient consideration in law. So in the cases of Cheever v. Imlay,‘ Wilson v. Kneppley,® Sheepshanks v. Cohen,® Bayne v. Wylie,’ and Me- chanics’ Bank v. Gorman,’ assignments containing stipulations for a release were adjudged valid. Inthe case of Brashear v. West ® the supreme court of the United States considered the decisions in Lippincott v. Barker and Pearpoint v. Graham as embodying the settled construction of the Pennsylvania statute of frauds on the subject of assignments, and, in accordance with those decisions, pro- nounced an assignment valid which excluded all creditors from participating in its benefits who should not, within ninety days from its date, execute a release of all claims and demands. In Liv- ingston v. Bell! an assignment in trust for the payment of debts 12 Bivn. 174. Itis to be observed that in this case the assignment was first submitted to the creditors of the assignors at a general meeting, which all but one or two attended, and was accepted by them. A doubt was raised in the case whether assignments made without the privity of creditors, and excluding all who do not execute releases, are valid on general principles. 2In Wakeman v. Grover, 4 Paige, 23, 39, Walworth, C., after citing the case of Burd v. Fitzsimmons [Smith], said it was not intended to be overruled by Lip- pincott v. Barker. But the Pennsylvania judges have held otherwise. See In re Wilson, 4 Barr, 480, 441, Coulter, J. And see the explanation given by Tilgh- man, C. J., and Yeates, J., in Wilt v. Franklin, 1 Binn. 515, 522. In Austin v. Bell, 20 Johns. 442, 450, Spencer, C. J., pronounced the case of Burd v. Smith to be expressly in point, 34 Wash. C. C. 232. See Brockley v. Brockley, 122 Pa. St. 1; 8. 0, 15 Atl. Rep. 646. 47 Serg. & R. 510. 510 Serg. & R. 439, 614 Serg. & R. 35. 710 Watts, 309. 88 Watts & 8. 304, #7 Pet. 608. 103 Watts, 198, 206 ASSIGNMENTS WITH SPECIAL PROVISIONS. [ou. XI. was held good, although it contained a provision excluding all cred- itors who should not execute a release, and directing the payment to the assignor of the surplus that might remain after satisfying the creditors provided for. In the later case of Lee’s Appeal! it was held that the right to stipulate for a release was not taken away by the Pennsylvania act of April 17, 1843, “to prevent preferences in assignments,” and that under that act non-releasing creditors were not entitled to dividends under an assignment in trust for such creditors as should release.? But, to make the assignment good in any of these cases, it was uniformly held that it must be of all the debtor’s property and effects, without reserving, either expressly or by the effect of the assignment, any portion of the effects for the debtor. According to the present law of Pennsyl- vania, as established by the act of April 16, 1849, section 4, any condition in an assignment of property made by debtors to trustees, on account of inability at the time of the assignment to pay their debts, within the meaning of the act of April 17, 1843, for the pay- ment of the creditors only who shall execute a release, is required to be taken as a preference in favor of such creditors, and is de- clared void, and the assignment is to be held and construed to inure to the benefit of all the creditors in proportion to their respective demands. § 160. Releases — Rhode Island.—In Rhode Island stipulations in general assignments, as conditions of preference, have always been allowed.* And it has been further held that an assignment of all the debtor’s property for the benefit of creditors, with pref- erences in favor of certain creditors, and with a provision that no creditor shall receive any dividend or profit from the assignment except upon the condition that he execute a discharge in full of all his claims, and that the dividends of the creditors who refuse such a discharge shall result to the assignor, is valid.’ But this is al- 19 Barr, 504, But in the case of Seal v. Duffy, 4 Barr, 274, it was said in argument, and al- lowed by the court, that clauses for a release were, in effect, expunged by the act of 1848. See the observations of Gibson, C. J., id. 275. Inthe case of In re Wilson, 4 Barr, 430, however, the assignment contained such a stipulation, to which no objection was made, though it was held void on other grounds. 3 Thomas v. Jenks, 5 Rawle, 221; Hennessy v. The Western Bank, 6 Watts & 8. 300; In re Wilson, 4 Barr, 480; Fassitt v. Phillips, 4 Whart. (Pa.) 399. See ante, p. 159, note 4. ; 4See Angell on Assignments, 112. . 5 Dockray v. Dockray, 2 R. I. 547; Haydock v. Stanhope, 1 Curt. 471; Night- ingale v. Harris, 6 R. I. 321; Sadlier v. Fallon, 40 id, 490; Allen v. Gardner, 7 id. 22, See Beckwith v. Brown, 2R. I, 811, An assignment provided that the §§ 161, 162.] RELEASES. 207 lowed only in cases free from fraud. In a case in the United States circuit court for the Rhode Island district,! an assignment made by a debtor who had absconded to a foreign country, carrying with him a large sum of money, and which contained a stipulation for a release as a condition of obtaining a preference under the assign- ment, was held to be fraudulent and void as to creditors. § 161. Releases — Virginia — West Virginia — South Caro- lina — Vermont —New Hampshire.—In Virginia assignments containing stipulations for a release of the debtor, and wholly ex- cluding non-releasing creditors from the benefit of the trust, have been held valid. And the same doctrine has been maintained in West Virginia*® and South Carolina.t In the latter state, however, it has been held that an express reservation of the surplus to the grantor would be fraudulent.? In Vermont, before the act of No- vember 1, 1843, prohibiting general assignments, stipulations for a release as conditions of preference were held valid.6 So in New Hampshire before the act of July 5, 1834, conditions of release were valid.? But since that act, which provides for an equal dis- tribution of assigned property, they are considered fraudulent.® § 162. Releases in Other States. In Ohio,’ North Carolina," dividends of such creditors as did not execute a release within three months from the date of the assignment should be paid to the assignors. Certain creditors ex- hausted their remedy at law against the assignors and filed a bill to establish a lien on the dividends of such non-releasing creditors in the hands of the assignee, Held, that they were entitled to the relief claimed. Smith v. Millett, 12 R. L. 59. Sees. c., 11 id. 528, 1 Stewart v. Spencer, 1 Curt. 157. 2 Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271; Kevan v. Branch, 1 Gratt. 274; Pearpoint v. Graham, 4 Wash. C. C. 232. But this is only where all the debtor’s property isconveyed. But this need not appear on the face of the deed. Gordon v. Cannon, 18 Gratt. 387. And where two or three partners conveyed all the effects of the firm and their individual property and the third had none, a stipu- lation requiring a release, both of the firm and all the members, by the creditors who accepted the deed was sustained. Gordon v. Cannon, supra. And see 2 Tuck. Com. [442], 481. See Phippen v. Durham, 8 Gratt. 457, 3 Clark v. Figgins, 27 W. Va. 654, 4 Aiken v. Price, Dudley, 50; Niolon v. Douglas, 2 Hill Ch. 443; Le Prince v. Guillemot, 1 Rich. Eq. 187; Pfeifer v. Dargan, 1458. C. 44, 5 Niolon v. Douglas, 2 Hill Ch. 443; Jacot v. Corbett, 1 Cheves’ Ch. 71; Claflin v. Iseman, 23 S. C. 416. 6 Hall v. Denison, 17 Vt. 410. But see the act of November 14, 1855, requiring all assignments to be for the benefit of all the creditors in proportion to their respective claims. Laws of 1855, p. 15. 7 Havens v. Richardson, 5 N. H. 1138. 8 Hurd v. Silsby, 10 N. H. 108. 9 Atkinson v. Jordan, 5 Ohio, 178; 5 Ham. 293; Woolsey v. Urner, Wright N. Pri. (Ohio), 606 ; Barrett v. Reids, id. 701. 10 Hafner v. Irwin, 1 Ired. L. 490. 208 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XI. Mississippi,! Missouri,? Georgia,’ Texas,! Tennessee*® and Florida,’ the courts have adopted the principle established by the New York decisions.’ In Connecticut * and Illinois® the requirement of a release as a condition of participation in the fund assigned, the surplus result- ing to the assignor, has been held to be fraudulent and to avoid the deed; but the cases in these states have not decided the ques- tion whether a release being made a condition of preference merely is fraudulent. In Indiana a stipulation for a release in an assign- ment not embracing all the debtor’s property has been held to avoid the assignment." In the same case the court expressed a 1 Robins v. Embry, 1 Sm. & M. Ch. 208; Mayer v. Shields, 12 Rep. 759. See Seale v. Vaiden, 10 id. 881. In Mayer v. Shields, 59 Miss. i07, it is held that whether an assignment which exacts from creditors releases in full as a condi- tion of receiving dividends is valid or not, one which fixes no time within which they must make their election is void. 2 Brown v. Knox, 6 Mo. 802; Drake v. Rogers, id. 317. An assignment pro- fessing to be for the benefit of all the creditors whether named or not, although reciting by way of consideration the release of some of the creditors, but con- taining no stipulation that those only who release shall share in the benefits of the assignment, does not fall within the rule which avoids assignments con- taining stipulations for the release of the debtor. Jeffries v. Bleckman, 86 Mo. 350. 3 Miller v, Conklin, 17 Ga. 430. In this case an assignment by a firm in in- solvent circumstances of all their assets, for the use and benefit of such creditors as should within ninety days file their claims with the assignee and release the firm from all liability therefor, was held to be illegal and void as against object- ing creditors. See McBride v. Bohanan, 50 Ga. 527; Lay v. Seago, 47 id. 82; Johnson v. Farnam, 56 Ga. 144; Francis v. Herz, 55 id. 249; Cohen v. Summers, 54 id. 501. : 4 Carlton v. Baldwin, 22 Tex. 724; Baldwin v. Peet, 22 id. 708: Bayne v. Denny, 1 Tex. App. Civ. Cas, 460; s.c., 13 Rep. 542; Boyd v. Haynie, 83 Tex. 7; 1S. W. Rep. 156; Turner v. Douglass, 77 id. 619; 145. W. Rep. 221; Baylor County v. Craiz, 69 id. 330; 6S, W. Rep. 305. 5 Wilde v. Rawlings, 1 Head (Tenn.), 34. 6 Greeley v. Dixon, 21 Fla, 412; Sperry v. Gallagher, 77 Iowa, 107;.14 N. W. Rep. 586. 71 Am. Lead. Cases (Hare & Wall. Notes), 100 |72, ed. 1867]. See the argument of counsel in Livermore v. Jenckes, 21 How. (U. 8.) 183, 143. 8 Ingraham v. Wheeler, 6 Conn. 277. This was before the changes introduced by the statute of 1853. » Howell v. Edgar, 2 Scam. 417; Ramsell v. Sigerson, 2 Ill. 78. In the case of Conklin v. Carson, 11 Ill. 508, where the assignment required creditors who shou'4 come in and receive dividends to release their demands, this provision was cousidered fraudulent, but an amendment of the obnoxious clause having been made by the parties and creditors the objection was removed. See Hardin v. Osborne, 60 III, 98, 101 Am. Lead. Cas., ubé sip. N Henderson v. Bliss, 8 Ind. 100. So an assignment which required each cred- itor, upon payment of his pro rata share of the proceeds, to release his entire debt, was held fraudulent and void. Butler v. Jaffray, 12 Ind. 504. And see McFarland v. Birdsall. 14 id. 126. § 163.] STIPULATIONS FOR RELEASE. 209 strong inclination against the validity of these stipulations in gen- eral, but waived a decision of that question. In Michigan the question has been settled in accordance with the New York de- cisions. § 163. Stipulations for Release — Summary.— It has been con- sidered * that the weight of American authority was in favor of the validity of these stipulations upon general principles, and the decision in Halsey v. Whitney has been relied on as establishing such a proposition.? The only American authorities examined in that case were the decisions of the courts in Massachusetts, New York and Pennsylvania. The decisions in Massachusetts were ad- mitted by the learned judge who delivered the opinion of the court to leave the question in eqguilibrio,! and the law was deemed to be settled in that state only by professional opinion, usage and practice.» The New York decisions were considered as inappli- cable on the ground that they did not “turn upon the naked point of a release, but upon that as incorporated into a peculiar trust ;”® and, so far as authority was concerned, the case appears to have been decided on the strength of the Pennsylvania case of Lippin- cott v. Barker,’ the case of Pierpont v. Lord,’ in the circuit court, and the English exchequer case of The King v. Watson.° In Lippincott v. Barker it will be seen that the assignment had been formally accepted by the great majority of the creditors be- fore it was acted upon, and Chief Justice Tilghman, in delivering 1 Hubbard v. McNaughton, 43 Mich. 220. See the remarks of McLean, J., in Marsh v. Bennett, 5 McLean, 117, 128, 129. In this case an assignment contain- ing a provision postponing the payment of such creditors as should commence or have commenced any legal proceedings for the recovery of their claims, until all the other creditors should have been paid in full, was held to be fraudulent and void as being made with an intent to coerce the creditors into a settlement on the debtor’s own terms by embarrassing and delaying their remedy. 2 Angell on Assignments, 114. Mr. Angell remarks that the general practice and the general current of authority in England are decidedly in favor of intro- ducing such clauses into assignments, and refers to the principal books of prece- dents in conveyancing. See Bump on Fraud. Con., p. 483. 3 Angell on Assignments, 105, 44 Mason, 230. 5 «* When we take into consideration the great length of time during which stip- ulations of this nature have prevailed in this state without objection, there is much reason to believe that the profession have deemed the law settled in favor of the debtor on this point.” 4 Mason, 230. See the observations of Ware, J., in Lord v. The Brig Watchman, Ware, 232; of Sutherland, J., in Grover v. Wakeman, 11 Wend. 199, 200; and of Wright, J., in Atkinson v. Jordan, 5 Ohio, 178. 64 Mason, 230. 72 Binn. 174, : 84 Wash. C. C. 232, So cited, the correct title being ‘‘ Pearpoint v. Graham,’’ 93 Price (Exch.), 6. 14 210 ASSIGNMENTS WITH SPECIAL PROVISIONS. [oH. XI. his opinion, expressly confined it to the circumstances of that particular case, observing that there were “many and strong objec- tions to deeds of assignment made without the privity of the cred- itors and excluding all who do not execute releases.”’ The re- maining American case of Pierpont v. Lord [or Graham] does not appear to have been very closely examined, and is in fact pro- nounced to be “not in point, but probably decided on the general principle.” The English exchequer case of The King v. Watson was held to be decisive. The weight of Mr. Justice Story’s decision in Halsey v. Whitney is considerably affected by his own free admission that if the ques- tion had been new, and many estates had not been passed upon the faith of such assignments, the strong inclination of his own mind would have been against their validity? The decision itself has been critically examined and its soundness upon principle ques- tioned in several American cases.° In the New York case of Grover v. Wakeman,‘ where the decis- ion was fully discussed, and the English and American decisions reviewed, Mr. Justice Sutherland considered it doubtful on which side the preponderance of authority lay; but the decision in that case, and in the subsequent cases in the same state, already noticed, have clearly settled the rule against the validity of the stipulations in question; and the decisions in Ohio, Missouri, Alabama, Missis- sippi and Georgia have thrown great weight into the same scale. In Brashear v. West,* it is true, the supreme court of the United States sustained an assignment containing a stipulation for a re- lease; but this was done with marked reluctance,’ and only because 12 Binn. 182, There was also a strong dissenting opinion by Breckenridge, J., in this case. See opinion of Walworth, C., in Wakeman v. Grover, 4 Paige, 23, 39, in which he quotes and relies on the earlier case of Burd v. Smith, 4 Dall. 76, as not intended to be overruled by Lippincott v. Barker. And see the opinion of Wright, J., in Atkinson v. Jordan, 5 Ohio, 178. But the Pennsylvania courts have held the contrary opinion. In re Wilson, 4 Barr, 430. 24 Mason, 2380. 3See McCall v. Hinckley, 4 Gill (Md.), 228; Lord v. Brig Watchman, Ware, 232; Miller v. Conklin, 17 Ga. 480. And see White v. Winn, 7 Gill, 446. 411 Wend. 187. 57 Pet. 608; Marshall, C. J., id. 614; followed in Clayton v. Johnson, 86 Ark. 406. 6 The objection that the deed excluded all creditors who should not within ninety days execute a release of all claims and demands was considered the most serious one in the case. The court admitted that the release was not a volun- tary one, but was induced by the necessity arising from the certainty of being postponed to all those creditors who should accept the terms by giving the re- lease. And of the objection to the deed on this ground, they say it ‘ is certainly powerful in its tendency to delay creditors. If there be a surplus, this surplus is placed, in some degree, out of the reach of those who do not sign the release and na entitle themselves under the deed. The weight of this argument is felt.” § 163.] STIPULATIONS FOR RELEASE. 2141 the court felt itself bound by the construction which had been pre- viously given by the courts of Pennsylvania to the statute of that state' The assignment on which the question arose had been executed in Pennsylvania by a citizen of that state, and the court observe that its validity appears never to have been questioned there. But the inclination of the court is pretty clearly indicated by the expression of Chief Justice Marshall: “ We are far from being satisfied that upon general principles such a deed ought to be sustained.” In the case of Marsh v. Bennett,? in the circuit court of the United States for the district of Michigan (June, 1850), the ques- tion as to the validity of these stipulations was not formally pre- sented, but the court made use of the reasoning of the adverse cases in condemning a coercive stipulation of another kind. The opinion of Chief Justice Marshall in Brashear v. West was quoted, and the ground upon which the decision was placed referred to, with the observation that “the argument and expressed opinion of the chief justice on the point considered is adverse to the de- cision pronounced.” After remarking that the question was still an open one in Michigan, the court proceed to quote the opinion and decision of Mr. Justice Story in Halsey v. Whitney, and seem to adopt his conclusion that the weight of authority was in favor of these stipulations, at least as law for the case when the question should arise.’ In the case of Stewart v. Spencer,’ in the circuit court for the district of Rhode Island (June, 1852), the assignment con- tained a stipulation for a release as a condition of preference, but it had been made by a debtor who afterwards absconded to a foreign country, carrying with him a large sum of money. On this latter ground, and this only, the assignment was held fraudu- lent and void as to creditors. The court, following the law of Rhode Island, assumed to be settled law for the case, that a debtor might stipulate for a release by which his future earnings would be discharged; and cited Brashear v. West and Halsey v. Whitney; although, if such a stipulation was designed to be an instrument of fraud, it would avoid the deed.® In his Commentaries on Equity Jurisprudence,’ Mr. Justice Story appears to have still inclined in favor of his conclusion in Halsey v. Whitney; but his language is not more confident than 1 Lippincott v. Barker and Pearpoint v. Graham were relied on, 25 McLean, 117. 35 McLean, 128, 129. 41 Curt, 157. 51 Curt. 162, 163. 6 Vol. ii, ch, 28, § 1036, 212 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. XI. in that case,! and the’authorities cited are few.? Taking into con- sideration the opinion expressed by Chief Justice Marshall in Brashear v. West,’ it seems probable that should a case be brought before the supreme court of the United States which could be de- cided on general principles and free from the controlling influence of state constraction, the decision would be against the right to stipulate.‘ § 164. Stipulations for Release, Excluding Non-releasing Creditors.— So far as stipulations for a release are coupled with provisions cutting off from a// participation in the assignment those creditors who refuse to accede to its terms, by reserving to the debtor himself the shares to which such creditors, had they agreed to release, would have been entitled, the weight of American au- thority may now be fairly pronounced to be against their validity.® And where, after opposition by creditors, a condition of release is sustained, equity will decree the surplus to the creditors who have not acceded to the deed.’ But the rule is not so clearly settled against the validity of these stipulations, as conditions of prefer- 1“ Even a stipulation on the part of the debtor, in such an assignment, that the creditors taking under it shall release and discharge him from all their fur- ther claims beyond the property assigned, will (it seems) be valid and binding on such creditors, 2 Halsey v. Whitney, 4 Mason, 206; Spring v. South Carolina Ins, Co., 8 Wheat. 268; Pearpoint v. Graham, 4 Wash. C. C. 232; Brashear v. West, 7 Pet. 608; and Wheeler v. Sumner, 4 Mason, 183. But in Spring v. South Carolina Ins. Co. the point does not appear to have been made; and in Wheeler v. Sumner it is expressly said that the assignment contained no such stipulation. McClure v. Campbell, 71 Wis. 350; 87 N. W. Rep. 348, citing Nat. Bank v. Lanahan, 60 Md. 477. 37 Pet. 608. 4In the case of Livermore v. Jenckes, 21 How. (U. 8S.) 126 (1859), the supreme vourt of the United States sustained an assignment executed in Rhode Island, between citizens of that state, stipulating for releases; but the case went upon the point that the complainant’s judgment creditors had not acquired a lien upon the property, the judgment having been obtained and execution issued in New York subsequent to the removal of the property from that state. 52 Kent’s Com. [534], 693, 694, and note. See, also, Miller v. Conklin, 17 Ga. 430; Henderson y, Bliss, 8 Ind. 100; Sangston v. Gaither, 8 Md. 11; Bridges v. Wood, 16 id. 10 , Whedbee v. Stewart, 40 id. 414; Farrow v. Hayes, 51 id. 498; Malcolm v. Hodges, 8 id. 418; Hollins v. Mayer, 3 Md. Ch. Dec. 343; Wilde v. Rowlings, 1 Head (Tenn.), 34; Conkling v. Carson,‘11 Ill. 503; Butler v. Jaffray, 12 Ind. 504; Carlton v. Baldwin, 22 Tex. 724; Baldwin v. Peet, 22 id. 708; Reavis v. Garner, 12 Ala, 661. But see Dockray v. Dockray, 2B. I, 547; Heydock v. Stanhope, 1 Curt. 471; Gordon v. Cannon, 18 Gratt. 388; Nightingale v. Harris, 6 R. I, 321; Allen v. Gardner, 7 id. 22. And see Collier v, Davis, 47 Ark, 897; 1 S. W. Rep. 684; 58 Am. Rep. 758, supra, 6 Brashear v. West, 7 Pet. 608; Vaughan v. Evans, 1 Hill Ch. 414; Vernon v. Morton, 8 Dana, 247; Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271, 275. But ‘ see Hollins v. Mayer, 3 Md. Ch. Dec. 343, § 165.] OBJECTIONS TO STIPULATIONS FOR RELEASE. 213 ence only, where the non-releasing creditors are left by the assign- ment to share in any surplus which may remain after the satisfac- tion of the others. In New York the decisions have indeed established the rule to this extent, but these have not yet been supported by the prevailing current of decisions in other states; and the general rule, as laid down by Chancellor Kent,! is in favor of the right of the debtor to prefer some of his creditors to others, through the medium and by the effect of such a stipulation. § 165. Objections to Stipulations for Releases.— The objec- tions to the allowance of these stipulations in assignments to trust- ees are, first, that they operate by way of coercing the creditors into a relinquishment of part of their demands. “The debtor,” observes Mr. Justice Story,’ “surrenders nothing, except upon his own terms. He attempts to coerce his creditors by withholding from them all his property unless they are willing to take what he pleases to give, or is able to give, in discharge of their debts. This is certainly a delay, and, if the assignment be valid, to some extent a defeating of their rights.” “If he can be allowed,” says Vice-Chancellor McCoun,’ to lock up his property by means of such an assignment until the creditors comply with his terms, he can successfully delay, hinder and defraud his creditors.” The force of this objection lies not in the mere circumstance of stipu- lating for terms with a creditor, but in so stipulating when the debtor’s property is nc longer accessible to the debtor’s remedies. “If a debtor with his property in his own hands,” observes Mr. Justice Sutherland,‘ “and open to the legal pursuit of his credit- ors, can satisfy them that it is for their interest, or the interest of any of them, to accept 2s. 6d. in the pound, and give him an absolute discharge, there is no legal objection to it; they treat upon equal terms; the ordinary legal remedies of the creditor are not obstructed. But the case is materially changed when the debtor first places his property beyond the reach of his creditors, and then proposes to them terms of accommodation.” ® Another objection to assignments containing such a stipulation is that they operate to reserve to the debtor himself a material and substantial benefit as the direct result of the transfer; namely, an absolute discharge from his debts.* “The debtor,” observes Vice- 12 Kent’s Com. [584], 698, 694; Id. [536], 696, 697, note. 2In Halsey v. Whitney, 4 Mason, 206, 228. 3In Armstrong v. Byrne, 1 Edw. Ch. 79, 81. 4In Grover v. Wakeman, 11 Wend. 187, 201. 5 And see, to the same effect, the observations of Assistant Vice-Chancello: Sandford, in Jackson v. Cornell, 1 Sandf. Ch. 888, 354, See, also, White v. Winn 8 Gill, 499, 6See the observations of Sutherland, J., in Grover v. Wakeman, 11 Wend. 187 201. 214 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XI. Chancellor McCoun,! “does not benefit himself by merely creating a preference of payment amongst his creditors; because he re- mains liable to the others until all his debts are paid; but if he stipulates for an absolute discharge before a creditor shall have the benefit of the property, he thereby assumes to himself a power over the creditors for his own personal advantage, namely, of being discharged from his debts by a payment of a part only.” A third objection to assignments of this character, not less for- cible than either of the preceding, is that they are expressly de- signed to effect for the debtor a discharge from his liabilities on better terms to himself than insolvent laws allow to debtors who apply for their benefit. “The law of this state,” observes Chan- cellor Walworth,? “does not recognize any right on the part of an insolvent debtor to an absolute discharge from his debts, although he may honestly and fairly make a cession of all his property to his creditors, to be applied to the payment of his debts equally or ratably. Much less does it recognize the right or the justice of such a discharge where he has singled out favorite creditors and devoted the mass of his property to the payment of the whole of their debts, leaving the rest of his creditors to come in for a share of the residue. In such a case he is barred from all relief under our insolvent laws, even if two-thirds of his creditors consent to his discharge. And without such consent his future earnings are, in all cases, liable for the payment of the balance of the debts, after his property has been fairly distributed among the creditors.” Assignments of this character, indeed, secure to the assignor the full result of a bankrupt law in the absolute character of the dis- charge for which they stipulate, while at the same time they avoid complying with the essential requisite to a bankrupt discharge, namely, an entire and unconditional surrender of property; the debtor thus making, in the language of Chief Justice Parsons,’ “a bankrupt law for himself.” § 166. Stipulations for Releases in Partial Assignments.— What has been said thus far as to the validity of stipulations for a release in assignments by debtors is to be understood as applying exclusively to general assignments. In regard to partial assign- ments there is much more uniformity in the decisions, it being held, almost without exception,‘ that such a stipulation in an as- 1In Armstrong v. Byrne, 1 Edw. Ch. 79, 81. 2In Wakeman v. Grover, 4 Paige, 23, 38. 3In Widgery v. Haskell, 5 Mass. 144, 152, And see Thomas v. Jenks, 5 Rawle, 221, Gibson, C. J.; Miller v. Conklin, 17 Ga. 430, 482, 434, Starnes, J.; Hender- son v. Bliss, 8 Ind. 100, 103, 104, Perkins, J. ‘The rule in Massachusetts is considered to be an exception, 1 Am. Lead. § 166.] | STIPULATIONS FOR RELEASES IN PARTIAL ASSIGNMENTS. 215 signment of part of the debtor’s property is fraudulent.! The rule, to this extent, has been laid down in no state more strongly than in Pennsylvania, where such stipulations in general assign- ments were, previous to the statute, invariably sustained. Thus, in Thomas v. Jenks,’ it was held that an assignment by partners of the partnership effects, and not of their separate property also, if it contain a condition that the creditors shall release ther clairas against the assignors, individually and as copartners, is fraudulent and void. In Hennessy v. The Western Bank? it was held that an assignment by copartners, stipulating for a release, was not valid without containing a transfer of the separate property of each of the partners, though it might not appear affirmatively that a partner who omitted to execute the deed had separate property. In the subsequent case of In re Wilson‘ it was decided that a gen- eral assignment by two partners, stipulating for a release to them- selves and a third partner, was fraudulent on its face, though the non-assenting partner had no estate but such as passed to the as- signee. The opinion of the court was expressed by Mr. Justice Rogers in language peculiarly strong and emphatic.> In the still Cases, 94, citing Nostrand v. Atwood, 19 Pick. 281. In the case of Stewart v. Spencer, 1 Curt. 157, Mr. Justice Curtis seems to have inclined to the opinion that an assignment of part of a debtor’s property for the benefit of all his cred- itors, stipulating for a release, was not void by the law of Rhode Island. The language of the learned judge, after citing the New York and Pennsylvania cases, is as follows: ‘‘ Although it is difficult to resist the force of some of the reasoning in these cases, J] am not prepared to say that such a deed is neces- sarily fraudulent on its face. Ifthe property not conveyed by the assignment is Jeft within the reach of creditors, if no actual fraudulent intent by the debtor existed, and upon the whole case it appears that the instrument was not de- signed to aid any fraud, and could not so operate, because in point of fact no fraud was either practiced or intended, perhaps it would be going too far to say that under the laws of Rhode Island such an instrument would be void.” Id. 166. The learned judge further expressed his opinion that ‘‘ the only possible question as to the soundness of these decisions arises from the fact that they hold the presumption of fraud to be conclusive and refuse to look beyond the instru- ment.” Id. \Seaving v. Brinkerhoff, 5 Johns. Ch. 329; Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271; Green v. Trieber, 3 Md. 11; Sangston v. Gaither, id. 40; Clayton v. Johnson, 86 Ark. 406; Dodd v. Martin, 15 Fed. Rep. 888 And see ante, ch. X. The act of April 17, 1843, applies to partial as well as general assignments, and such assignments inure to the equal benefit of all creditors. Miner’s National Bank Appeal, 57 Pa. St. 193. 25 Rawle, 221. And see Henderson v. Bliss, 8 Ind. 100. 36 W. & S. 300. 44 Barr, 480. 5 See ante, p. 159, note 4, It was further said in this case (4 Barr, 449) that Thomas v. Jenks and Hennessy v. Western Bank introduced no new principle, but were nothing more than a correct application of a principle already settled in McAllister v. Marshall, 6 Binn, 388; Passmore v. Eldridge, 12 S. & R. 201; Adlum v. Yard, 1 Rawle, 173; Johnston’s Heirs v. Harvey, 2 Pa. 92; and McClurg v. Lecky, 3 Pa. 83. 216 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. XI. later case of Weber v. Samuel! the preceding cases were relied on; and it was held that an assignment by the members of a firm, pur- porting to convey merely the partnership goods and effects, with certain specific real estate, in trust for certain preferred creditors, and then in trust for such as should execute a release, while it con- tained no words of conveyance of the private or individual estate of either member of the firm, and did not even purport to convey all the real estate of the firm, was invalid.? In Maryland the rule is established that an assignment for the benefit of creditors, exacting releases as the condition on which they may participate in the fund, must transfer all the debtor’s estate, and this must appear affirmatively upon the face of the deed.’ In South Carolina an assignment of part of the debtor’s property to such creditors as should release, the surplus to be divided among the creditors generally, where the existence of a residue was con- cealed by the debtor, has been considered to be fraudulent in fact ;* and a reservation to the grantor of the surplus, after paying to re- leasing creditors forty per cent., if the estate would yield as much, was decided to be fraudulent.® But in a case in Rhode Island, where the grantor preferred cer- tain creditors by giving one class thirty per cent. and another fifteen, and turning the balance over to the general creditors, when it was plain that no interest would result to the grantor, the assign- ment was sustained.® As regards the manner of stipulating, it is effected, on the part of the creditors, either by executing an assignment containing a release, or by executing a separate agreement to release.’ The former is the usual practice. The particular form of the release to be given is sometimes prescribed in the assignment, and such a 17 Barr, 449. 2The objections to conditional assignments, in general, have been very forci- bly expressed in Sutherland, J., in Grover v. Wakeman, and Gibson, C. J., in Thomas v. Jenks. The eminent judge last named observed in the case referred to: ‘It is difficult, at a glance, to reconcile the mind to the decisions in support of these conditional assignments in any case, or comprehend how a conveyance which puts the debtor’s property beyond his creditor’s reach, except on terms prescribed by himself, can be anything else than an act to ‘delay, hinder and defraud,’ within the purview of the 18 Elizabeth.” And see the opinion of Gas- ton, J., in Hafner v. Irwin, 1 Ired. L. 490, 499, 500. 3Sangston v. Gaither, 3 Md. 40; Green v. Trieber, id. 11; Rosenberg v. Moore, 11 id. 371; Barnitz v. Rice, 14 id. 24, Farquharson v. Eichelberger, 15 id. 63; Insurance Co. v. Wallace, 23 id. 173; Coakley v. Weil, 47 id. 277; Maennel v. Murdock, 13 id. 164; Maughlin v. Tyler, 47 id. 545; Loney v. Bayly, 45 id. 447. 4Le Prince v. Guillemot, 1 Rich. Eq. 187. 5 Jacot v. Corbet, 1 Cheves’ Ch. 71; Claflin v. Iseman, 24 8, C. 416, ® Nightingale v. Harris, 6 R. I. 321. ‘This was the form in Ludwig v. Highley, 5 Barr, 182. § 167.] RESERVATIONS — GENERAL RULE. 217 provision has been held valid.'' It is necessary, also, to specify a time within which the release is to be executed ;? and this period must be a reasonable one,’ neither too long‘ nor too short ;* other- wise the assignment will be considered fraudulent.* The deed should in such cases give to the creditors all the in- formation in the power of the debtor as to the nature and value of the property conveyed, and the amount of the debts intended to be provided for, in order to enable the creditors to determine whether they will accept or reject the assignment.’ II. Reservations or Benerit to THE Desrtor. § 167. Reservations — General Rule as to.—JIn the largest sense of the term “reservation,” comprehending any benefit se- cured to the debtor, immediately or ultimately, by implication or in express terms of the instrument, this division may be considered to include not only the previous head of “stipulations for a release,” but most of the provisions which form the subject of the present chapter. But the reservations now proposed to be considered are those which are directly made to the debtor by express provisions for the purpose. “When a debtor fails,” it has been well observed,® “ his property, in moral justice, belongs to his creditors.” Assignments of his property, therefore, considered as modes of provision for creditors, should in all cases be, actually and to the full extent, what (as usually designated) they profess to be — for the benefit of the ecred- ators, and not for the benefit of the debtor himself, at their expense. Hence, it is a settled general rule in American law, that a clause or provision in an assignment by which any benefit or advantage is reserved to the debtor at the expense of the creditors, whether such benefit be temporary or permanent, whether it be in the shape of payment of a gross or annual sum, employment at a compensa- tion or otherwise, and whether reserved to the debtor himself or 1 Bayne v. Wylie, 10 Watts, 309. 2Pearpoint v. Graham, 4 Wash. C. C, 232; Henderson v. Bliss, 8 Ind. 100; 2 Kent’s Com. [533], 693. 3In Halsey v. Whitney six months was held not to be an unreasonable time. Nine months has been considered too long. Burd v. Smith, 4 Dall. 76. The un- reasonableness of the period of limitation will depend on circumstances, 2 Kent’s Com. [533] 693, note a. Ninety days isa common period. 4Pearpoint v. Graham, 4 Wash. C. C. 232, 5 Fox v. Adams, 5 Greenl. 245; Ashurst v. Martin, 9 Porter, 566, 62 Kent’s Com. [533], 693. And see post, V, in this chapter. 7 Gordon v. Cannon, 18 Gratt. 387. 8 Savage, C. J., in Mackie v. Cairns, 5 Cow. 547, 580. 218 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. xX. for the support of his family, is a fraud in law, and vitiates and avoids the whole assignment.! § 168. Reservations of Property.— Thus, in the case of Means v. Dowd,? it was held that an insolvent debtor making an assign- ment cannot reserve to himself the beneficial interest in the prop- erty assigned, or interpose any delay or make any provision which would hinder or delay creditors. : In Massachusetts, where the assignment contained a reservation to the debtor, in the form of an agreement that the trustees might pay the sum of $1,000, or a certain proportion of it, in a certain event, it was held void on this account.? So, in New York, where several assignments had been made, all subject to the trust to pay to the assignor, for the support of himself and family, at the rate of $2,000 per annum for a limited time, they were held void zn toto as being a fraud upon creditors. And in the same state it was held that retention of money, amounting to about one per cent. of the total assets, by a firm for living expenses prior to making an assignment, is not conclusive evidence of fraud.* But in another case ® it was held that where unusually large sums were drawn out by one of the assignors for household expenses, other large sums were paid out of the firm assets to several of the assignors, and to the wife of the first-named assignor, and falsely charged on the 1 Rogers, J., in McClurg v. Lecky, 3 Penr. & W. (Pa.) 83, 91, 98; Ingraham v. Grigg, 13 S. & M. 22, 27; Claflin v. Iseman, 23 S. C. 416; Mackie v. Cairns, 5 Cow. 547; Harris v. Sumner, 2 Pick. 129; Richards v. Hazard, 1 Stew. & P. 139; Bronson, J., in Goodrich v. Downs, 6 Hill (N. Y.), 488, 489. -*To say that an insolvent debtor can put any portion of his property not exempt by law be- yond the reach of creditors for his own benefit is a monstrous proposition.” Id. And see Gazzam v. Poyntz, 4 Ala. 374. A debtor cannot stipulate in the deed for any benefit to himself. He has no right to make such a reservation at the expense of his creditors and with intent to defraud them. Stokes v. Jones, 18 id. 784, 737. And see Sheppards v. Turpin, 3 Gratt. 873; Leadman v. Harris, 2 Dev. 144; Byrd v. Bradley, 2 B. Mon. 239; Henderson v. Downing, 24 Miss. 106; Green v. Trieber, 3 Md. 11; Waldron v. Wilcox, 13 R. I. 518. In Cheatham v. Hawkins, 76 N. C. 385, it is said: ‘‘ An assignment cannot cover up and preserve the property for the debtor’s use or protect it from the remedies and demands of the creditors. Here is not only a retention of possession by the assignor, which is presumptive evidence of fraud, but there is the further power to dispose of it for the debtor’s benefit, and still more, the exercise of that power annihilates the thing itself, We have, then, one of the strongest cases of presumptive fraud.” 2128 U.S. 173: 98. Ct. 793, 3 Harris v. Sumner, 2 Pick, 129, 4 Mackie v. Cairns, Hopk. Ch. 373; 5 Cow. 547. Soa sale of land by one in- debted at the time, in consideration of supporting his family, is fraudulent and void as to creditors. Jackson v. Parker, 9 Cow. 73, 5 Fay v. Grant, 53 Hun, 44; 5 N. Y. S. Rep. 910. 6 Rothschild v. Salomon, 52 Hun, 486; 5 N. Y. S. Rep. 865. § 168.] RESERVATIONS OF PROPERTY, 219 books as a loan returned to her, the assignment and whole proceed- ing were void. So, in Pennsylvania, where a debtor conveyed his property to his sons, in trust to pay off certain judgments, and then to maintain the grantor and his wife as long as they should live, and the rest of his family until they should be able to maintain themselves, the deed was held to be fraudulent and void as against creditors.'| And it is immaterial whether such reservation for the debtor or his family be expressed on the face of the assignment or not, or whether it is made in a direct or indirect form. Thus, in Pennsylvania, an assignment of all the debtor’s property, with an understanding that part of the property assigned should be reconveyed to trustees for the benefit of the debtor’s family, was held, so far as respected that. part of the property, to be fraudulent and void as to all creditors who did not assent to the arrangement, though the assenting cred- itors’ claims might exceed the amount of the property assigned ; and the dissenting creditors might take it in execution? And where a debtor executed an assignment of all his estate and effects (being a certain factory and machinery, etc.), and an agreement was entered into between him and his assignees, by which they agreed to employ him as agent in conducting the business, and to allow one-third of the profits for his support and that of his family; and it was further agreed that in case of the death of the assignor, or of his being otherwise prevented from managing the factory, another agent was to be employed by the assignees, who was to be paid a reasonable salary out of the third of the profits allowed to the assignor, it was held in the same state that the stipulation ren- dered the assignment fraudulent and void.’ So, in Tennessee, it was held that a trust deed giving preferences to certain creditors, and stipulating that the business of merchan- dising is to be carried on for two years and three months, that the stock of goods is to be replenished from the proceeds of sale of the goods, and that the assignee is to be retained to assist in the man- agement of the business, is void on its facet So, in New York, an understanding, though not expressed in the assignment, that the assignee should allow to the assignor a weekly sum for his services, 1 Johnston’s Heirs v. Harvey, 2 Penr. & W. (Pa.) 82. 2 McAllister v. Marshall, 6 Binn. 338, 3 McClurg v. Lecky, 8 Penr. & W. (Pa.) 83. But where a debtor made an as- signment of his personal property to a creditor, and at the same time made a distinct agreement with the creditor for the employment of his apprentices, whose wages were to be paid to the debtor, it was held that, as the contract was collateral to the assignment, and afforded the only mode by which the wages of the apprentices could be reached on execution, the assignment was not on that account void. Faunce v. Lesley, 6 Barr, 121. 4 Lowenstein v. Love, 16 Lea (Tenn.), 653. 220 ASSIGNMENTS WITH SPECIAL PROVISIONS. (cH. XI. the same being nominal, was held to be evidence of fraud.’ In North Carolina, where a debtor, upon being applied to by a bona Jide creditor to secure him by a deed of trust on his property, re- fused to secure any part of the debt unless the creditor would transfer one-half to a trustee for the benefit of the debtor’s wife and children; and that the half so transferred should also be se- cured by such deed; and the creditor, though reluctantly, con- sented, it was held that this was tantamount to a reservation by the debtor himself of so much of his property for the use of his wife and children, and was therefore fraudulent and void as against other creditors. In Minnesota,’ where the debtors (partners), on the eve of assign- ment, each took $600 from the firm’s moneys for the support of their families, it was held not to show a fraudulent intent. But in Maine‘ it was decided that a debtor’s conveyance of all his property to secure the maintenance of himself and wife was fraudulent as against existing creditors. In Virginia, where an assignment contained a stipulation that the debtor should be allowed to have possession of the assigned property for sixteen months, and should be considered the agent of the trustee, with full power and authority to sell or dispose of any of it, it was, for this and other reasons, held fraudulent on its face.” And in Mississippi, where a deed, besides extending the time of payment for five years, contained a stipulation that the family expenses of the grantors should be paid out of the product of the property conveyed before payment of any part of the debts, it was held to be void upon its face.° So, in Kansas, where the assignment made provision for the pay- ment of a claim in which, by previous arrangement, the assignor 1 Currie v. Hart, 2 Sandf. Ch, 353. ?Kissam v, Edmonston, 1 Ired. Eq. 190. The reason of the doctrine on this point is well expressed by Ruffin, C. J., who delivered the opinion of the court in this case. A creditor may, out of a debt due to him, or any property belonging to him, give a bounty to the family of his debtor, or to the debtor himself; but it must be a voluntary act, not coerced by the debtor, nor made the price of any favor or preference by the debtor towards such creditor. It must be independent of any arrangement between the debtor and creditor at the time or asa part of the contract to convey the property. Id. 183. 3In re Shotwell, 43 Minn. 889; s. c., 45 N. W. Rep. 842, 4 Graves v. Blondwell, 10 Me. 190. 5 Spence v. Bagwell, 6 Gratt. 444. But in the later case of Dance v. Seaman, in the same state (11 Gratt. 778), where a deed of trust was not to be enforced for two years, and the profits were in the meantime reserved to the grantor, the possession also remaining with him, it was held to be not fraudulent per se, though made without the knowledge of the creditors. See the observations on the case of Spence v. Bagwell, by Allen, P., 11 Gratt. 783, § Henderson v. Downing, 24 Miss. 106, 117. And see Johnson v. Thweatt, 18 Ala. 741; Montgomery v. Goodbar, 69 Miss. 333, § 169.) TRUSTS FOR THE ASSIGNOR. 221 had an interest, this was such a secret reservation for the benefit of the assignor as to render the assignment void.! And in another case in the same state, where the assignment by its terms reserved to the assignors $800 worth of the property assigned, to be after- wards selected by the assignors themselves, was held to be void upon its face? But the fact that an assignment contemplates that the planting operations of the debtors shall be continued for the current year under their supervision, and that future advances to continue such operations shall be made by a creditor, is not inconsistent with an absolute unconditional appropriation of the property to the pay- ment of debts; nor is it, in effect, a reservation for the use of the debtor.* § 169. Trusts for the Assignor.— The general rule on the sub- ject of these reservations for the benefit of assignors (and which is one of the most important in the whole law of voluntary assign- ments) may be very comprehensively expressed in the language of the decision in Mackie v. Cairns,! viz.: that an insolvent debtor can make no assignment of any part of his property in trust for him- self And this rule is so rigidly enforced in New York that an assignment containing such a trust is held void, not only for the portion reserved, but for the whole.6 And even a distinct secu- rity, such as a judgment, intended to come in aid of an assignment which contains such a provision, is, by the effect of such connec- tion, rendered void also.’ And in Goodrich v. Downs? it was held 1 Kayser v. Heavenrich, 5 Kan. 324. Same doctrine confirmed, Grocery Co. v. Records, 40 Kan. 119; 19 Pac. Rep. 346. 2 Clark v. Robbins, 8 Kan. 574, 3 Perry Ins. & Trust Co. v. Foster, 58 Ala. 502. See Commercial Bank v. Brewer, Tid, 574, 45 Cow. 547, 548. See Kingman, C. J., in Kayser v. Heavenrich, supra; Roose- velt, J., in Nichols v. McEwen, 17 N. Y. 22; Selden, J., in Jessup v. Hulse, 21 N. Y. 168. 5Id.; Goodrich v. Downs, 8 Hill (N. Y.), 488; Shaffer v. Watkins, 7 W. & S. 219; Greed v. Trieber, 3 Md. 11; Hoopes v. Knell, 31 id. 550; Banks v. Clapp, 12 Ga. 514; Wheeler, J., in Wright v. Linn, 16 Texas, 34, 42. And see post, ch. XXV. 6 Mackie v. Cairns, 5 Cow. 547, 7 Mackie v. Cairns, 5 Cow. 547; reversing on this point the decision of the court below. D’Ivernois v. Leavitt, 23 Barb. 63, 64. Where the debtor authorized the assignees to use a judgment previously confessed by him, to secure them against contingent liabilities as his sureties, for the purpose of perfecting title to his reat estate, declaring all that should be realized from the real estate should be assets in the hands of the trustees to be distributed according to the terms of the as- signment, but he did not assign his statutory right of redeeming the land from a sale on the judgment, or his right to the rents and profits before the expiration of the period of redemption, held, that this was not such a reservation of property as vitiated the assignment. Dow v. Platner, 16 N. Y. 563. 86 Hill (N. Y.), 488, But see Curtis v. Leavitt, cited infra. 222 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. XI. that where, on a trial before a jury, an assignment shows on tts face that it was made in trust for the use of the assignor, either in whole or in part, the court is bound to pronounce the transaction void, without submitting the question to the jury. So in Pennsyl- vania a fraudulent trust of this kind avoids the assignment 77 ‘oto, and the property which is made the subject of it is held to remain in the debtor, liable to the execution of those creditors who have not assented to the assignment.’ In New York it has been expressly provided by statute that “ all deeds of gift, all conveyances, and all transfers or assignments, verbal or written, of goods, chattels, or things in action, made in trust for the use of the person making the same, shall be void as against the creditors, existing or subsequent, of such person.” ? And similar provisions have been enacted in other states.’ The New York statute (which has been recently termed “the statute of personal uses,” and “the personal statute of uses”)* was ex- pressly relied on in the case of Goodrich v. Downs as the ground of the decision. But in the case of Curtis v. Leavitt,’ in the New York court of appeals, it was held that this statute applied only to conveyances wholly or primarily for the use of the grantor, and not to instruments for other and active purposes, such as to secure debts or procure money on loan, where the reservations are inci- dental and partial only; and the case of Goodrich v. Downs, so far as it maintains the contrary, was overruled. It was further held that if the statute could be applied to the latter description of cases, it avoids only so much of the grant as is not sustained by the valid purposes for which it was made; it does not avoid the entire instrument which contains the invalid use. But so far as the case of Goodrich v. Downs applies to ordinary assignments by insolvent debtors, its principle seems to have been clearly recog- nized, the court holding that if an assignment is made by a debtor, when in failing circumstances, which looks to a final liquidation, and implies an inability to meet his engagements, it will be invalid unless it is an unqualified devotion of the assets assigned to the payment of all his debts, without any reservation of an interest therein to the prejudice of his creditors.$ 1 McClurg v. Lecky, 3 P, & W. 83. See McAllister v. Marshall, 6 Binn. 338. 28 R. S. (7th ed.), p. 2327, § 1. 3 Indiana — Statutes of Indiana, vol. I, p. 353, § 18; R. S. of Indiana (1881), § 4921. Georgia —Code (1892), § 1952. Michigan— Compiled Laws (ed. 1871), vol. II, p. 1456. Minnesota— Statutes at Large (ed. 1873), vol. I, p. 692, § 14; Stat. of Minn. (1878), p. 548. New Jersey —R.5S., p. 499, § 1; Rev. of N. J. (1878), p. 446; Nixon’s Digest (ed. 1868), p. 355, § 1. And in other states. See post, ch. XXV. 4 Curtis v. Leavitt, 15 N. Y. 119, 147, 149, 515 N.Y. 9. 6 Paige, J., 15 N. Y. 208; Comstock, J., id. 182. In Collomb v. Caldwell, 16 N. § 170.] WHAT RESERVATIONS ARE ALLOWED. 223 § 170. What Reservations Are Allowed.— But the rule against the reservation of benefits to the assignor, in deeds of assign- ment, has not always been inflexibly applied by the courts, with- out regard to amount or circumstances.! Thus, in Virginia, where the grantor reserved the sum of $350 to his individual use and disposition, for the purpose of paying some small claims due from him of high honorary obligation, which were not then liquidated or specifically ascertained, it was held that such reservation did not of itself avoid the deed.2. And in a Maryland case® the court held that if the assignor applied a part of the proceeds of the sale of his stock to the support of his family ard himself, it could hardly be said that he had made a fraudulent application of it, or that he intended by thus selling his property to benefit himself and defraud his creditors. And clauses in assignments, giving the trustees power, ¢f they think proper, to employ the debtor as agent or man- ager of the property for a limited time, and in subordination to the objects of the assignment, have been held valid. Thus, in Ala- ‘bama, a deed conveying a plantation to trustees for the bene- fit of creditors was held not to be void on account of a provision that the trustees might, if they thought proper, permit the grantor to have the management of it, under their supervision, until the growing crop was sold.* And in England assignments are con- stantly drawn with clauses enabling the trustees to employ the debtor in winding up his affairs, and in collecting and getting in Y. 484, Mr. Justice Comstock made use of the following language: Goodrich v. Downs, so far as it may have been understood to have turned upon the statute (2 R. S. 185, § 1) relating to conveyances ‘‘in trust for the use of the person mak- ing the same, has been overruled by this court (Curtis v. Leavitt, 15 N. Y. 9). But in overruling the decision in that respect, we by no means called in question the doctrine that an assignment by an insolvent is void for actual fraud, if, while he provides for only a part of his creditors, he makes the attempt in the instru- ment to reserve any portion of the fund to himself. In this view of the ques- tion, Goodrich v. Downs was well enough decided, and the decision depending on this principle was approved in Barney v. Griffin, 2 N. Y. 865.” See McClel- land v. Remsen, 36 Barb. 622. 14 Am. Lead. Cases (Hare & Wall. Notes), 98 (70, ed. 1857). 2Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271. And see Dance v. Seaman, 11 Gratt. 778; Shattuck v. Knight, 25 W. Va. 590. Ina case in England, where the assignment provided that the trustees might make the debtor such allowance, or return to him such part of his household furniture or effects, not exceeding the value of 201, as they might deem expedient, it was sustained. Coate v. Will- iams, 21 Law J. Exch. (N. S.) 176; 9 Eng. L. & Eq. 481. 3 Luckemeyer Vv. Seltz, 61 Md. 313. 4 Planters’ & Merchants’ Bank of Mobile v. Clarke, 7 Ala. 765; Rindskoff v. Guggenheim, 3 Cold. (Tenn.) 284. But in Constantine v. Twelves, 29 Ala. 607, where the debtor reserved the possession of a stock of goods assigned, with the , vight to carry on the business and sell the goods, accounting only for the pro- ceeds, this was held to create a presumption of fraud, which, unless rebutted, would render the deed void. 224 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XI. his estate and effects, and in carrying on his trade; and to allow him, out of the trust estate, such sum as they may deem proper. Such employment of the debtor by the trustees of their own ac- cord is usually less objectionable in itself, and has been frequently sustained, as will be more fully shown under a future head. But if he be permitted as their agent to use and control the assigned effects in a manner wholly inconsistent with the purposes of the trust, and as his own, it will be evidence that the assignment was not made in good faith. And in a case in Alabama, where, on the same day with the execution of a deed of trust by the debtor, a power was executed by the trustees to him, by which they ap- pointed him their agent to sell the goods, collect the debts, com- pound with the creditors of the concern, etc., vesting in him the most ample powers, the court say: “If these deeds can be consid- ered as one act, we should be strongly inclined to think it would of itself be conclusive evidence of a fraudulent intent, as it would, in effect, be the same thing as if this power had been reserved in the deed itself.” ® § 171. Reservations or Exceptions of Property.‘— There seems to be a distinction between provisions in assignments excepting from the operation of the conveyance itself a certain portion of the property for the use of the debtor, and reservations of a benefit out of the property after it has been assigned; and the former have in some cases been held not to vitiate the assignment.> But as exceptions of this kind are usually inoperative and sometimes fatal, they are of very questionable propriety, and ought to be avoided. The reservation of such property as is exempt by law from levy and sale under execution is consistent with the rights of creditors. § 172. Stipulations for the Use of Property.— Stipulations that the debtor making the assignment may retain, for a time, posses- sion of the assigned property, so as to have the use of it, appear to 1See Janes v. Whitbread, 20 Law J.C. P. (N. S.) 217; 5 Eng. L. & Eq. 431; Coate v. Williams, ubi supra, The deeds in these cases are said by the court to be ‘‘the ordinary printed forms,”—“‘ stereotyped deeds to be had at any law sta- tioner’s in London.” Coate v. Williams, ubi sup. 2Smith v. Leavitts, 10 Ala, 92, 3 Ormond, J., in Smith v. Leavitts, 10 Ala. 92, 105. 1 See post, § 252. 5 Thus, property incumbered beyond its value (Fassett v. Phillips, 4 Wheat. 399), or of small value (Phippin v. Durham, 8 Gratt. 457; Skipwith’s Ex’r v. Cun- ningham, 8 Leigh, 271); so a claim in suit against certain persons, there being no reservation to the assignor. Carpenter v. Underwood, 9 N. Y. 520. Contra, Baker v. Crookshank, 1 Phila. 198. See Knight v. Waterman, 36 Pa, St. 258; Hickman v. Messenger, 49 id. 465, § 172.] STIPULATIONS FOR THE USE OF PROPERIY. 225 fall under the head of reservations for the debtor’s benefit, though in some instances such stipulations have been sustained. Thus, in Massachusetts, prior to the changes introduced by statute, a cove- nant in a general assignment that the assignor should be permitted to use and occupy the property, committing no waste thereon until it should be sold or disposed of in the due execution of the trust, was held to be not per se fraudulent (though possession might be evidence of fraud) as against creditors not parties to the assign- * ment.’ So in Virginia, a provision that the grantor should remain in possession for six months was held not to be fraudulent.? But where adeed of trust contained a stipulation that the debtor should be permitted to remain in possession of the property and to use the same and enjoy the profits thereof for sixteen months, and that he should be considered the agent of the trustee with full power and authority to sell or dispose of any of the property conveyed at private or public sale for cash, and to give title thereto, and to collect the proceeds of sale upon condition that he should immedi- ately pay over the same to the trustee, and provided also that any creditors intended to be secured by the deed, who should during that time proceed by suit or by any legal process whatever against the debtor for the recovery of their respective debts, should be de- barred from any right or benefit under the deed, the deed was held in the same state to be fraudulent upon its face.* In North Carolina a stipulation in the deed for possession by the debtor for a long time has been distinguished from a mere retention of pos- session by the sufferance of the trustee and creditors, it being an express trust for the debtor, which might lead to great abuses if tolerated, and must be prima facie fraudulent unless the period should be so short as to leave it indifferent whether it was for the convenience of the trustee or the benefit of the estate on the one hand, or, on the other, for the benefit of the debtor.‘ In Alabama a deed of trust providing for the security of credit- ors designated in the deed, but providing also that the debtor 1 Baxter v. Wheeler, 9 Pick. 21. In Russell v. Woodward, 10 Pick. 448, the assignment contained a similar stipulation, which was made a formal ground of objection to it on the argument, but the court took no notice of the objection. 2 Kevan v. Branch, 1 Gratt. 274, 3 Spence v. Bagwell, 6 Gratt. 444, 450. See Dance v. Seaman, 11 id. 778, where this case was commented on. As the practice in Virginia, in cases of deeds to trustees for the purpose of selling and paying debts, is for the debtor to remain in possession until a sale can be made, a mere stipulation to that effect in the deed seems not objectionable. See 1 Tuck. Com. [838, 340], 328, 380; Sipe v. Earman, 26 Gratt. 563. 4 Ruffin, C. J., in Hardy v. Skinner, 9 Ired. L, 195. For the rule in Tennessee, see Galt v. Dibrell, 10 Yerg. 146. 15 226 ASSIGNMENTS WITH SPECIAL PROVISIONS. {cH. XI. should retain the use of the property until a day subsequent to that when the debts were due, was held to be invalid as a convey- ance without the assent of all the beneficiaries, the contrary not being expressed in the deed.1_ And in another case it was further held that until such assent the property conveyed is liable to exe- cution against the grantor.2, And where a debtor conveys prop- erty in trust as security for certain creditors, reserving the use of perishable effects which might be consumed in the use, it was held in the same state that any other creditor might, notwithstanding, have all the debtor’s estate reduced at once to its money value over and above the amount of the debts secured.’ It has also been held that an assignment which, after empowering the trustee to expose the property to sale on the best terms practicable, either at private sale or public auction, for cash or on credit, as should in his opin- ion most comport with the interest of all parties concerned, re- quired him, if the property was not sold within six months, to sell it at public auction, etc., was not rendered fraudulent on its face by a provision that the debtor should retain possession of some of the property conveyed until a favorable opportunity for the sale of it should offer, such possession being expressly limited to the time for the sale at public auction.*. And in another case a deed of trust for the benefit of creditors, conveying all the debtor’s es- tate, was held not to be rendered fraudulent upon its face by a stipulation contained in it that the grantor should retain the pos- session of his dwelling-house and the slaves conveyed until the trustees, in the exercise of the discretion conferred upon them, should think proper to sell. And in another case a deed of trust was held not to be fraudulent on its face which was made without the knowledge of the preferred creditor, whose debt was past due, and which reserved to the grantor the use of the property until the creditor ordered a sale. But where a deed of trust executed by an insolvent debtor conveyed all his property in trust to secure the payment of a portion of his debt, then past due, leaving other creditors unprovided for, and stipulated that the grantor should retain the possession of all the property until the law-day of the deed, and for such longer period as the sale might be postponed by the secured creditors, and that the surplus, after paying the secured debts and expenses, should be refunded to him, it was 1 Lockhart v. Wyatt, 10 Ala. 281. 2 Hodge v. Wyatt, 10 Ala. 271. 3 Graham v. Lockhart, 8 Ala. 9. 4 Abercrombie v. Bradford, 16 Ala. 560. 5Shackelford v. P. & M. Bank of Mobile, 22 Ala. 288, See Commercial Bank v. Brewer, 71 id. 574. 6 Lanier v. Driver, 24 Ala, 149. § 1738.) STIPULATIONS FOR THE USE OF PROPERTY. 227 held to be fraudulent and void in law as against the unsecured creditors. And in a later case a deed of trust which was made by an in- solvent debtor to his partner to secure moneys advanced by the debtor’s wife, and which authorized possession of the property by the grantor, and delayed the sale for three years, and instructed the trustee to wind up the business if creditors should attempt to subject the property to the payment of their debts, was adjudged void? § 173. Stipulations for the Use of Property — Continued.— In Missouri it has been held that a deed conveying to a trustee a stock of goods for the benefit of creditors, but providing that the grantor may continue to have possession, sell and dispose of the same in the regular or usual course of his business until default be made in the payment of some of the notes intended to be secured, is void as matter of law. In North Carolina, where an assignor was much embarrassed financially, and owed debts other than those secured by his assign- ment, and the deed contained a clause providing that he should remain on the assigned premises for two years and retain the rents and profits for his own benefit, reserving also his homestead and personal property exemptions, it was held that such conveyance raised a strong presumption that it was in fraud of creditors, and, nothing to the contrary appearing, should be declared void.‘ In Pennsylvania® and New Jersey ‘a stipulation in an assign- 1Montgomery’s Ex’rs v. Kirksey, 26 Ala. 172. Chief Justice Chilton, in de- livering the opinion of the court in this case, observes: ‘‘It is not permissible for any one thus to avail himself of a part of his indebtedness to tie up all his property and exempt it from liability for his other debts, while he has the tem- porary benefit of the use of it, and a contingent residuum. Such assignments, when these facts appeared on their face, have uniformly been declared fraudu- lent inlaw. That the facts do not appear on their face only puts the party upon whom the burden of proving fraud is devolved to the necessity of otherwise es- tablishing their existence, and of showing that the beneficiaries were cognizant of them. Several adjudged cases of this court show that such deeds cannot be upheld.” Id. 185. The learned judge cites Gazzam v. Poyntz, 4 Ala. 882; Hindman v. Dill, 11 id. 689; Planters’ & Merchants’ Bank v. Clark, 7 id. 776; Wiswall v. Ticknor, 6 id. 178; Grimshaw v. Walker, 12 id. 102; Cummings v McCullough, 5 id. 824; and Rugeley v. Harrison, 10 id. 731. 2 King v. Kenan, 38 Ala. 63, See Reynolds v. Cook, 31 id: 684. 3Brooks v. Wimer, 20 Mo. 502; Stanley v. Bunce, 27 id. 269; Reed v, Pellestier, 28 id. 178; Billingsley’s Adm’r v. Bunce, 28 id. 547; Hatcher ~. Winters, 71 id. 30. 4Booth v. Grant, 107 N. C. 395. 5Klapp’s Assignees v. Shirk, 13 Pa. St. 579. But the mere circumstance of the property being left in the assignor’s possession after the assignment will not in this state avoid it. Id. The subject of delivery of possession of the assigned property will be fully considered heréafter under a distinct head. See ch, XIX 6 Knight v. Packer, 12 N. J. Eq. 214. 228 ASSIGNMENTS WITH SPECIAL PROVISIONS. [oH. XI. ment for the retention by the assignor of the possession of the property assigned avoids the deed. And in New York and other states where actual and immediate delivery of possession to the assignee is essential to the validity of the transfer, such a stipula- tion would of course be fatal. And on the whole, clauses of this character, like all those which have just been considered under the present head of reservations for the debtor’s benefit, should always. bé avoided as tending at best to give rise to questions as to their validity, and in this way to embarrass or perhaps defeat the opera- tion and object of the whole assignment. "§ 174. Reservations in Mortgages and Deeds of Trust.— Reser- vations and provisions beneficial to the debtor and which would be fatal to a general assignment for the benefit of creditors are frequently inserted and sustained in mortgages and deeds of trust. in the nature of mortgages. In these instruments the debtor may reserve the possession and use of the assigned property,' subject to the qualifications that the sale of the property shall not be un- reasonably delayed,? and that the property be of such a nature that it will not be consumed or lost in the use.’ Provisions have also been sustained in such instruments by which the property vests in the assignee until the profits pay the debts and then re- verts to the assignor.* The distinction is to be found in these cases in the right of redemption.» When it exists, the contingent and residual interest of the debtor in the property still remains open to the pursuit of creditors. § 175. Reservations of Surplus Moneys or Property.— Assign- ments are sometimes drawn with a provision stipulating for the repayment to the assignor of the surplus moneys remaining after distribution among the creditors provided for, or for the reconvey- ance to him, by the assignee, of such property as may not have been converted into money. Such a stipulation is sometimes in- noxious in its consequences, while, in other cases, it has the effect of invalidating the whole assignment; its validity depending upon the consideration whether or not it be a reservation of a benefit to the debtor at his creditors’ expense. Thus, a reservation to the 1Hempstead v. Johnson, 18 Ark, 123; Marks v. Hill, 15 Gratt. 400; Sipe v. Earman, 26 id. 563, ? Hafner v. Irwin, 1 Ired. L. 496; Hardy v. Skinner, 9 id. 191; Hempstead v. Johnson, 18 Ark, 123. 3 Elmes v. Sutherland, 7 Ala. 267; Darwin v, Hundley, 3 Yerg. 503; Hemp- stead v. Johnson, 18 Ark. 123. 4 Balt. & Ohio R. R. Co. v. Glenn, 28 Md. 287. This was a deed made in Virginia and construed under the laws of that state. Robins v. Embry, 1 Sm. & M. 207, And see Arthur v. Commercial Bank, 9 Sm. & M. 394; Fellows v. Commercial Bank, 6 Rob. (La.) 246, 5 Hannah v. Carrington, 18 Ark. 85; Briggs v. Davis, 21.N. Y. 574, § 176.] RESERVATIONS OF SURPLUS. 229 assignor of the surplus remaining after payment of aid the cred- itors is not fraudulent, for it is no more than the law itself would imply.’ So, a provision in an assignment by copartners of all the partnership effects, for the payment of all the partnership debts, directing the surplus of the assigned property, if any, to be paid to the assignors, will not render the assignment fraudulent against creditors of the individual partners.2 But where the estate as- signed consists in part of the individual property of the members of the firm (as where it consists in part of real estate owned by them as tenants in common), a reservation to the assignors of the surplus remaining after payment of the partnership debts, with- out providing for the payment of the debts of the individual part- ners, will avoid the assignment.? § 176. Reservations of Surplus Moneys or Property in Pref- erential Assignments.— Whether an assignment providing for only a part of the creditors, and without making provision for the rest, directing the assignee to pay back or re-assign to the assignor the surplus which may remain after satisfying the debts provided for, will be sustained, has given rise to much conflict of opinion. The weight of authority is in favor of the validity of such an as- signment.! The contrary rule, however, prevails in New York® 1 Wintringham v. Lafoy, 7 Cow. 735; Savage, C. J., id. 788; Story, J., in Hal- sey v. Whitney, 4 Mason, 206, 222; Hall v. Denison, 17 Vt. 310; Bennett J., id. 318; Burgin v. Burgin, 1 Ired. L. 453; Ruffin, C. J., id. 458; Gamble, J., in Rich- ards v. Levin, 16 Mo. 596; Ring v. Ring, 12 Mo. App. 88; Douglas v. Cissna, 17 id. 44; Wing, P. J., in Hollister v. Loud, 2 Mich. 809, 822; Van Rossum v, Walker, 11 Barb. 8. C. 237; Ely v. Cook, 18 id. 612; Comstock, J., in Curtis v. Leavitt, 15 N. Y. 120; Brown, J., id. 146; Paige, J., id. 206. See Wilkes v. Ferris, 2 Johns, 885; Finlay v. Dickerson, 29 Ill. 9; Estate of Potter v. Paige, 54 Pa. St. 465; Van Hook v. Walton, 28 Tex. 59; Farquharson v. McDonald, 2 Heisk. 404; Liniger v. Raymond, 9 Neb, 40; Hays v. Hostetter, 125 Ind. 60; 25 N. E. Rep. 134, 2 Bogert v. Haight, 9 Paige, 297; Walworth, C., id. 302, 3 Collomb v. Caldwell, 16 N. Y. 484. This case was again before the court of appeals (24. N. Y. 505), and it having then been shown that the real estate so con- veyed was copartnership property, and so applicable in the first instance to the payment of partnership debts, it was held to have been lawfully included in the assignment to a trustee for the payment of such debts. In this case the indi- vidual property of the partners was not conveyed, and no provision was made for the payment of their individual debts. 4 Miller v. Stetson, 82 Ala. 161; Brown v. Lyon, 17 id. 659; Hindman v. Dill, 5Goodrich v. Downs, 6 Hill, 488; Strong v. Skinner, 4 Barb. 8. C. 546; Lan- sing v. Woodworth, 1 Sandf. Ch, 48; Barney v. Griffin, 4 id. 552; affirmed on appeal, 2.N. Y. 865; Leitch v. Hollister, 4 id. 211; Collomb v. Caldwell, 16 id. 484; Sutherland v. Bradner, 39 Hun, 184. See Jacobs v. Remsen, 35 Barb. 384: 8. 0, 86 N. Y. 668. Buta conveyance by a solvent debtor of part of his prop- erty in this wav is not as matter of law fraudulent. Knapp v. McGowan, 96 N.Y. 75. 230 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. XI. and in some other states,! and in these states it has been held to’ make no difference whether the surplus be large or small, or whether there be any at all.2. And even if there be no express res- ervation of the surplus to the assignor, it has been held in Ver- mont and Michigan that an assignment of all the debtor’s property for the benefit of a portion of his creditors, without a provision that the surplus shall be distributed among all the creditors, is fraudulent, by reason of the resulting trust of the surplus,’ even (in Vermont) if it turns out that there is no surplus.* § 177. Resulting Trusts for Assignor.— In regard to resulting trusts for the debtor, it has been held in New York that where such a trust arises on an assignment of part of the debtor’s prop- erty for the benefit of certain specified creditors, the assignment 11 id. 689; Conklin v. Carson, 11 Ill, 508; Finlay v. Dickerson, 29 id. 9; New Albany & Salem R. R. Co. v. Huff, 19 Ind. 444; McFarland v. Birdsall, 14 id. 126; Burgin v. Burgin, 1 Ired. L. 453; Ely v. Hair, 16 B. Mon. (Ky.) 2380; Bigelow v. Stringer, 40 Mo. 195: Johnson v. McAllister’s Assignee, 30 id. 327; Richards v. Levin, 16 id. 596; Bailey v. Mills, 27 Tex. 484; Kneeland v. Cowles, 4 Chand. (Wis. ) 49: Livingston v. Bell, 3 Watts, 198; Mechanics’ Bank v. Gorman, 8 W. & S. 304; Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271; Phippen v. Durham, 8 Gratt. 457; Dance v. Seaman, 11 id. 778; Morgan v. Bogue, 7 Neb. 429; Floyd v. Smith, 9 Ohio St. 546. In the last case cited, the cases of Hoffman v. Mackall, 5 Ohio St. 184, and Dickinson v. Rawson, id. 224, are discussed, and held that so far as they follow Goodrich v. Downs, 6 Hill, 438, and Barney v. Griffin, 2 N. Y. 365, they do not apply under the Ohio act of 1853, The reason upon which these decisions rest is that such a reservation results by operation of law, and is simply an incident to the trust, and not an express trust for the debtor, and that creditors are not defeated or unlawfully delayed in their remedies against the debtor in following the surplus of the estate, either in his hands or those of his trustees. The English case of Estwick v. Caillaud, 5 Term R. 420, has been much relied on for the principle that an express reservation to the debtor, where the assignment is of a portion only of his property, is not necessarily fraudulent. See the observations of Putnam, J., in Harris v. Sumner, 2 Pick. 129, 134. 1Dana v. Lul!, 17 Vt. 390; Goddard v. Hapgood, 25 id. 851; Therasson v. Hickok, 87 id. 454; Truitt v. Caldwell, 3 Minn. 364; Banning v. Sibley, 3 id. 889: Green v. Trieber, 3 Md. 11; Pierson v. Manning, 2 Mich. 445; Seiz v. Evans, 6 Til. App. (Bradw.) 466; Lill v. Brant, id. 366; Thompson v. Parker, 83 Ind. 96. 2 Barney v. Griffin, 2 N. Y. 365; Leitch v. Hollister, 4 id. 211. Butin Beck v. Burdett, 1 Paige, 305, it was held that a mere hypothetical reservation of the surplus to the assignor would not vitiate the deed. And in Richards v. Levin, 16 Mo. 596, Gamble, J., in delivering the opinion of the court, remarked that ‘“where the parties have agreed that the whole amount assigned is insufficient to pay the preferred debts, the idea that the reservation of a surplus to the grantor will render the deed fraudulent is a mere mistake.” Id. 595, 599. 3Dana v. Lull, 17 Vt. 390; Redfield, C. J., in Merrill v. Englesby, 28 id. 155; Pierson v. Manning, 2 Mich, 445; Pratt, J., id. 449; Palmer v. Mason, 42 id. 150. See Burd v. Smith, 4 Dall. 76; West v. Snodgrass, 17 Ala. 549. ‘Dana v. Lull, ubé supra, But in Merrill v. Englesby the assignment in such a case is declared to be merely defective, and such as may be remedied by a new oo or by a new declaration of trust in favor of all the creditors. 28 Vt. 150, § 178.] RESERVATIONS WITH STIPULATIONS FOR RELEASE. 231 is not void unless it were merely colorable, and made for the sake of the resulting trust; and that where the assignment does not purport to convey all the assignor’s property, and it does not ap- pear on its face that there are other creditors not provided for, or that the value of the assigned property exceeds the amount of the preferred debts, the mere omission of the assignor to direct that any contingent surplus which may remain after the payment of the preferred creditors shall be applied in payment of his other cred- itors will not render the assignment void on its face.?2 But it it can be shown that the assigned property exceeds in value the amount of the debts preferred, or that the assignor, at the time of the execution of the assignment, contemplated a surplus which would revert to him after the payment of the preferred debts, the assignment will be fraudulent and ‘void. In Illinois it was held that although an assignment of a property right be made upon a valuable and ample consideration, without any intention to defraud any one, yet if there be a secret trust re- served, not disclosed by the writing, the law will treat the trans- action as lacking the element of good faith and conclusively infer fraud.! § 178. Reservations with Stipulations for Releases, and Other Conditions.— A reservation of the surplus to the assignor, where it is made to depend upon certain conditions to be complied with ‘by the creditors, and particularly upon the condition of releasing the debtor, will also avoid the assignment. This rule may now be 1 Wilkes v. Ferris, 5 Johns. 335; Oliver Lee & Co. Bank v. Talcott, 19 N. Y. 146. 2In the case of Spies v. Joel, in the superior court (1 Duer, 669), the assign- ment, which was of all the debtor’s property, contained no provision relative to the disposition to be made by the assignee of any surplus that might remain after the satisfaction of the debts specified. But it was conclusively shown that the preferred debts largely exceeded in amount the whole value of the property assigned, and that this was known to the parties when the assignment was made. The court held that the omission only raised a presumption of fraud, which might be repelled, and that such a presumption was in fact repelled by the evidence in the case. And where an assignment was made by a debtor of all his property in trust to pay two creditors, and the instrument was silent as to the surplus, but it appeared that there was not enough property’ to pay the debts provided for, this was not regarded as an unlawful reservation to the debtor. Bishop v. Halsey, 3 Abb. Pr. 400, 3Doremus v. Lewis, 8 Barb. 8. C. 124. In the case of Hooper v. Tuckerman, 3 Sandf. 8. C. 311, it was held that an assignment which transfers to a trustee in trust for creditors a larger amount of property than the assignee is empowered to distribute among the creditors is void upon its face; the legal effect being to create a resulting trust to the assignor after the trust for creditors is satisfied. Moore v. Collins, 8 Dev. 126; Beck v. Burdett, 1 Paige, 305; Hastings v. Bald- win, 17 Mass. 552; Rahn v. McElrath, 6 Watts, 151. 4Beidler v. Crane, 135 Tl]. 92; 25 N. E. Rep. 655; 25 Am. St. Rep. 349. 232 ASSIGNMENTS WITH SPECIAL PROVISIONS. {oH. x1. considered to be established by a preponderance of authority, though in some of the states it does not prevail.’ This statement of the rule has been expressly approved in Indiana,’ and in Penn- sylvania an assignment of property in trust for the payment of such creditors as should agree to accept the same within a specified time, and to pay the assignor the proportion of all such creditors as should not within such time signify their acceptance, was held fraudulent and void against a creditor who had obtained judg- ment.? So, in New York, where an assignment contained a pro- viso that if any of the creditors named should not become parties to it within a time limited, their shares should be paid by the as- signees to the assignor himself, the assignment (which contained a release of the debtor) was held fraudulent and void, and the prop- erty in the assignees’ hands liable to the execution of a judgment creditor before the expiration of the time limited for creditors to execute the assignment.’ So where an assignment was made of part of the debtor’s property for the benefit of such creditors only as should become parties to it, containing provisions highly favor- able to the assignor, and reserving to him the surplus which should remain after payment of such creditors, it was held to be coer- cive and void as against creditors.’ So, in Maryland, the reserva- tion to the grantor of the surplus that may remain after paying the assenting creditors has been held to have the effect of avoiding the assignment.’ So, in Alabama, an assignment of all the debtor’s 1In the Virginia case of Phippen v. Durham, 8 Gratt. 457, Moncure, J., re- marked as follows: ‘ If the question were res integra, whether a deed of trust conveying all the property of a debtor for the benefit of such of his creditors as may within a specified time release him from all further claims, and providing that the surplus of the trust fund after satisfying the accepting creditors should be paid to the debtor, is valid against the creditors who do not accept, I would be inclined to answer it in the negative. While the many cases on this subject are conflicting, I think the preponderance is against the validity of such deed.” The case of Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271, was, however, con- sidered to have settled the rule the other way in that state. Id. 464. See post, p. 233. 2 McFarland v. Birdsall, 14 Ind. 126, 3 Burd v. Smith, 4 Dall. 76. 4 Austin v. Bell, 20 Johns. 442. 5 Berry v. Riley, 2 Barb. S. C, 307. 6Green v. Trieber, 3 Md. 11; Barnitz v. Rice, 14 id. 24; Rosenberg v. Moore, 11 id. 876; Whedbee v. Stewart, 40 id. 414. In Sangston v. Gaither, 3 Md. 40, the assignment was held fraudulent and void where it provided in express terms that the balance, after paying the releasing creditors, should be paid to the as- signors; and in Malcolm v. Hodges, 8 id. 418, it was further held that an implied reservation in such a ease avoids the deed equally with an express reservation. This ruling was affirmed in Bridges v. Hindes, 16 id. 101. The decision in McCall v. Hinckley, 4 Gill, 128, affirmed the judgment of the court below on an equal division of the court of appeals. The case is doubtless overruled on the point under discussion by the decision in Sangston v. Gaither, supra. §178.] | RESERVATIONS WITH STIPULATIONS FOR RELEASE. 238 property, in trust, first to pay certain preferred creditors, the sur- plus, if any, to be appropriated to the other creditors ratably who should within a specified time execute a release of their claims, and the ultimate surplus to be paid over to the assignor, was held to contain such a stipulation for the benefit of the debtor as ren- dered the deed fraudulent and void.' So, in South Carolina, a res- ervation to the grantor of the surplus after paying to releasing creditors forty per cent., if the estate would yield as much, was decided to be fraudulent.? In Tennessee also it is held that an assignment exacting releases and reserving a surplus to the assignor is void.' On the other hand, in Pennsylvania‘ and Virginia,’ a reservation to the debtor, in an assignment of all his property, of the surplus remaining after satisfying such of the creditors as should agree to release him, has been held not to invalidate the deed containing it. The same was held in Halsey v. Whitney,’ in the case of a partial assignment; and under the insolvent law of Minnesota an assign- ment is not invalidated by a stipulation therein that any surplus. which may remain in the hands of the assignee after payment of the releasing creditors shall be returned to the assignor.’ The effect of certain special conditions which have been passed upon by the courts may be referred to in this connection though releases were not exacted. In Alabama an assignment appropriating the property uncondi- tionally to the payment of certain preferred creditors, and the resi- due pari passu to all other creditors who should within six months execute the deed, was held not to be vitiated by the implied reser- vation of such residue to the grantor, in the event the latter class of creditors should fail or refuse to comply with the conditions prescribed.? In Illinois and Indiana a clause in an assignment au- thorizing the payment to the assignor of the surplus that might remain after the satisfaction of the debts of such creditors as should 1 Grimshaw v. Walker, 12 Ala. 101. See Seavis v. Garner, id. 661. 2Jacot v. Corbet, 1 Cheves’ Ch, 71. An assignment preferring creditors who shuld accept and release, but making no provision for non-accepting creditors, aud directing the assignee to pay over the surplus, if any, to the assignor, after paying creditors who accepted, is null and void. Claflin v. Iseman, 23 S, C. 416. 3 Wilde v. Rawlings, 1 Head (Tenn.), 34. — 4 Livingston v. Bell, 3 Watts, 198; Mechanics’ Bank v. Gorman, 3 W. & S. 304. But as to stipulations for a release in this state, see ante, pp. 204, 205. 5Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271. In Phippen v. Durham, 8 Gratt. 487, this case was considered as of binding authority, though the principle of it was disapproved. : 64 Mason, 206. As to this case, see ante, pp. 158, 210, 212. 7In re Mann, 32 Minn. 60. But this statute does not apply to partial assign- ments. May v. Walker, 28 N. W. Rep. 252. 8 Brown v. Lyon, 17 Ala. 659, 234 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cu. XI. become parties to it does not invalidate the assignment, as cred- itors not parties can pursue their remedies against the debtor, fol- lowing the surplus either in his hands or those of the trustee.’ And in Missouri it has been held that a provision in an assignment that the assignees should pay the surplus, if any, after paying all the debts, exclusive of cost of suits commenced or to be commenced, to the assignor, did not avoid the assignment.? ° In New York it has been held by the court of appeals that the rule prohibiting the reservation of a surplus to the assignor does not apply to assignments made directly to creditors themselves for the purpose of securing their particular demands.* An assignment of goods for the payment of a debt due to the assignee is not rendered fraudulent in law by a parol agreement for the payment of the surplus to the assignor. If the value of the property assigned be out of proportion with the debt, this may be evidence of fraud in fact, which is for a jury to pass upon, and is not a subject of legal direction.* But a secret reservation of the surplus, upon a conveyance absolute upon its face, is admitted to be a fraud. III. Avrropriation or Assets 1n ASSIGNMENTS BY Firms AND THEIR MeEmsBeERs. a § 179. Preference of Individual Creditors.— Assignments may be made by copartners of the partnership property for the payment of the partnership debts, and by individuals of their interest in the copartnership, for the benefit of their creditors; but assignments are also frequently made in which firm and individual property ® is assigned for the payment of firm and individual debts, and in such 1Conkling v. Carson, 11 Ill. 503; Finlay v. Dickerson, 29 Ill. 9; New Albany & Salem R. R. Co, v. Huff, 19 Ind. 444; McFarland v. Birdsall, 14 Ind. 126. 2Gates v. Labeaume, 19 Mo. 17. See Johnson v. McAllister, 30 id. 327. 3 Leitch v. Hollister, 4 N. Y. 211. 4Rahn v. McElrath, 6 Watts, 151. 5McCullough v. Hutchinson, 7 Watts, 434; Smith v. Lowell, 6 N. H. 67; Smith v. Smith, 11 id. 459, 6 Whether the conveyance is of individual as well as firm property will depend upon the intention of the parties as shown by the terms employed by them in the instrument. Thus where the assignment was by W. A. & E. A. P. of all their property, this was held broad enough to include the separate. property of each of the partners as well as the common property of both. Coggill v. Bots- ford, 29 Conn. 439; Von Wettberg v. Carson, 44 id. 287; Coffin v. Douglas, 61 Tex. 406. An assignment of firm property for the payment of firm debts is valid, although it does not embrace the individual property of any of the partners. Ex parte Hopkins, 104 Ind. 157; Auley v. Osterman, 65 Wis. 118. Such an assign- ment, however, is not contemplated or authorized. by the Minnesota statute. May v. Walker, 28 N. W. Rep. 252. § 179.] PREFERENCE OF INDIVIDUAL CREDITORS. 235 cases the priorities of the different classes of creditors have given rise to some conflict of decision. When the law marshals and distributes the individual and co- partnership assets of the different members of a firm, it has respect. to the several equities of the creditors of the firm and its individ- ual members respectively. In that case the copartnership assets are in the first place applied to the payment of the firm debts, and the individual funds of the several copartners to the payment of their re- spective individual debts.' But, remarks Chancellor Walworth in the case of Kirby v. Schoonmaker,? where the copartners are adminis- tering their own funds, the copartnership creditors have no lien upon the joint funds; nor have the individual creditors any lien or priority of claim upon the separate property of the debtors. Such being the case, the copartners may assign their joint property for the payment of their joint creditors, with such preferences as they may see fit. And the same principle would apply to dispositions of their individual property by the individual members of the firm. The case is entirely different, however, where copartners who are insolvent and unable to pay the debts of the firm, either out of their copartnership effects or of their individual property, have made an assignment of the property of both to pay the individual debt of one of the copartners only.’ 1Mr. Justice Allen in O’Neill v. Salmon, 25 How. Pr, 251; Parsons on Partner- ship, 347, 480. A partnership made an assignment, and each of the partners a separate one, It was held that the firm creditors were not entitled, after exhaust- ing the firm assets, to resort to the individual assets until after the individual creditors’ claims had been satisfied. Davis v. Howell, 33 N. J. Eq. 72 (citing many cases). See Schiele v. Healy, 10 Daly, 42. 23 Barb. Ch. 49; Smith v. Howard, 21 How. Pr, 124. In Maine it was held that where two debtors are in insolvency as a firm and also individually, and one has assets exceeding his own private indebtedness, a firm creditor is interested in the private estate of the insolvent partner, and may cSntest the allowance of claims against such estate presented by other creditors. Chadhourne v. Harding, 80 Me. 580; 16 Atl, Rep. 248. When an assignment for the benefit of partnership and individual creditors includes all the property of the grantors as partners and individually, it should be construed distributively, partnership assets: being ap- plied to the payment of partnership debts and individual assets to individual lia- bilities. Peters v. Bain, 133 U. S. 670; 10 S. Ct. Rep. 354. But a voluntary assignment by a firm doing business in the names of the individual partners, treating all their property as firm property and all their debts as firm debts, is not fraudulent as to creditors, although they did not know of the copartnership. Severson v. Porter, 73 Wis. 70; 40 N. W. Rep. 577. 3 Kirby v. Schoonmaker, 3 Barb. Ch. 51; Wilson v. Robertson, 21 N. Y. 592. A. and B., partners, gave a joint and several bond and warrant of attorney toa creditor for a firm debt; judgment was entered and execution issued; soon afterward A, and B, assigned, B. being also individually insolvent. The judgment being only partly satisfied, and A. having made an assignment, it was held that the creditor may, under A.’s assignment, share equally the personal effects of A., and is not to be subordinated to his individual creditors. Howard v. Teel, 29 N. 236 ASSIGNMENTS WITH SPECIAL PROVISIONS. fou. x1. This would, in effect, be a gift from the firm to the partner —a reservation for the benefit of such partner or his creditors, to the direct injury of the firm creditors.' Having such an effect, it has been frequently decided that such an appropriation of the assigned fund is a fraud upon copartnership creditors.? And in such a case the proportion of the capital contributed by each partner is an im- material consideration.® § 180. Preference of Firm Creditors.— What has been said of an assignment by copartners preferring their individual debts has “been held to be equally true of assignments in which partnership creditors are preferred to individual creditors in the distribution of individual property. This rule, however, has been doubted. Thus it has been said that neither the reason nor the rule applies to an appropriation of individual property to the payment of firm debts. Copartners are individually liable for the firm debts; the firm, however, is in no sense liable for individual debts of the partners. Individual creditors have no equitable claim upon the individual J. Eq. 490. A general assignment transferring the property of the firm for the purpose of paying the individual debts of the partners, as well as the firm debts, is wholly void as to the firm creditors, and must be set aside. It cannot be sus- tained in so far as it transfers the firm property to pay firm debts and set aside as to that portion which provides for the payment of individual debts. Nat. Bank v. Cohn, 42 Hun, 381. See Newell v. Martin, 81 Iowa, 238; 46 N. W. Rep. 120; Sherwood v. His Creditors, 42 La. Ann. 108; Boos v. Marion, 129 N. Y. 586; 29N. E. Rep. 832. 1 Wilson v. Robertson, 21 N. Y. 592; s. c., 19 How. Pr. 350. See Davis, J., in Hurlbert v. Dean, 2 Abb. Ct. App. Dec. 432. In Stratton v. Tabb, 8 Ill, App. (Bradw.) 225, it was held that a partner cannot prove a claim against the joint estate in competition with the creditors of the firm, and thereby take part of the fund, to the prejudice of those who are not only creditors of the firm but of himself. A preference to a dormant partner avoids the assignment. Claflin v. Hirsch, 19 N. Y. Weekly Dig. 248; Whitney v. Hirsch, 39 Hun, 325. But the rule avoiding an assignment which prefers the debtsof a partner in the firm ‘does not apply where the debts preferred are those of a firm composed of a por- tion of the members of the firm assigning. Such an assignment is not fraudu- lent against creditors. Peckham v. Mattison, 15 Abb. N, C. 867; Welsh v. Britton, 55 Tex, 118, 2 Wilson v. Robertson, supra; Knauth v. Bassett, 84 Barb, 31; Cox v. Platt, 32 id. 126; s. c., 19 How. Pr. 121; Keith v. Fink, 47 Ill. 272; Heye v. Bolles, 33 How. Pr, 266; s. c., 2 Daly, 281; Kirby v. Schoonmaker, 3 Barb. Ch. 46; Lester v. Ab- bott, 28 How. Pr. 488; s. c., 3 Robt. 691; Schiele v. Healy, 61 How. Pr. 78; Friend v. Michaelis, 15 Abb. N. C, 254; Platt v. Hunter, 11 N. Y. Weekly Dig. 300; Vernon v. Upson, 60 Wis. 418; Willis v. Bremner, id. 622; Henderson v. Hadden, 12 Rich. Eq. (S. C.) 893; French v. Lovejoy, 12 N, H. 458; Thomas v. Penrich, 28 Ohio St. 55. Only firm creditors suing as such can raise the objec- tion. Haynes v. Brooks, 17 Abb. N. C, 152, 3 Wilson v. Robertson, 21 N. Y. 591. 4 Jackson v. Cornell, 1 Sandf, Ch. 348; Smith v. Howard, 20 How. Pr. 121; Lord v. Devendorf, 54 Wis, 491, § 180.] PREFERENCE OF FIRM CREDITORS, 237 property, except to see that the firm property is primarily applied to the payment of firm debts. Hence, an application by one partner of his individual property primarily to the payment of partnership debts would be a payment by him of debts for which he was liable, and although it would create a preference yet it would not be unlawful? In Jackson v. Cornell,’ in the court of chancery for the first cir- cuit, the subject was extensively considered, and the cases bearing upon it reviewed; and the assistant vice-chancellor held that a general assignment of his separate property, made by an insolvent copartner, which preferred the creditors of the firm, to the exclu- sion of his own, was fraudulent and void as to the latter. The con- verse of the rule was also considered as established, viz.: that an assignment by a copartnership, preferring the creditors of the indi- vidual copartners to those of the firm, was invalid against the lat- ter, on the same principles. The decision was rested essentially om the rule of equity (which was held to be uniform and stringent) that the property of a copartnership must all be applied to the partnership debts, to the exclusion of the creditors of the individual member of the firm; and that the creditors of the latter are to be first paid out of the separate effects of their debtor before the partnership creditors can claim anything.‘ But in the later case of Kirby v. Schoonmaker,’ before the chancellor, it was held that the rule relied on in the last case applied only where a partnership 10’Neill v. Salmon, 84 How. Pr. 252, Allen, J.; Eyre v. Beebe, 28 id. 333; Kirby v. Schoonmaker, 3 Barb. Ch. 46; Van Rossum v. Walker, 11 Barb. 240; Gadsden v. Carson, 9 Rich. Eq. (S. C.) 351; Newman v. Bagley, 15 Pick. 517. But this objection cannot be made by a partnership creditor who is preferred. Fox v. Heath, 16 Abb. Pr. 168; Scott v. Guthrie, 25 How. Pr. 512, It seems to have been assumed by Mr. Justice Robertson, in Scott v. Guthrie, 25 How. Pr. 512, that such a disposition of the individual property would be void as against indi- vidual creditors, under the decisions in Collomb v. Caldwell, 16 N. Y. 484, and Wilson v. Robertson, 21 N. Y. 587. 2And so where a firm has made a general assignment for the benefit of its creditors, a conveyance by one of its members of his individual property to the assignee, to be disposed of and applied, in accordance with the terms of the as- signment, to the payment of the partnership debts, is not per se fraudulent or unlawful and void. None but individual creditors can object to the transfer, Royer Wheel Co. v. Fielding, 101 N. Y. 504, See Saunders v. Reilly, 105 N. Y. 12; 12 N. E. Rep. 170; 59 Am. Rep. 472; Schisster v. Rader, 18 Colo. 829; 22 Pac. Rep. 505. m1 Sandf. Ch. 348. This case is cited with approval in 8 Kent’s Com. [65], 78, note b. But see Whiteley v. May, in the Virginia circuit court, where a contrary doctrine is strenuously maintained. U.S, Law Mag., May, 1850, p. 442; Editor’s note (4) to 8 Kent’s Com. (7th ed.) 78. 4Sandford, A. V. C., 1 Sandf. Ch. 350; citing Wilder v. Keeler, 3 Paige, 167; Egberts v. Wood, id. 517; Payne v. Matthews, 6 id. 19; Hutchinson v. Smith, 7 id, 26; 1 Story’s Eq. Jur. 625, § 675. 53 Barb. Ch, 46. See Newman v, Bagley, 16 Pick. 570. 238 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XL was dissolved by the death of one of the copartners, or where one or both of the-copartners had become bankrupt or were discharged under the insolvent acts, so that their property was placed in the hands of the assignees appointed by Zaw to make distribution; and that the rule did not go so far as to deprive the partners them- selves of the power, while they have the legal control of their prop- erty, of distributing it among all their creditors in such a manner as they might see fit, provided no injustice was done to any of them. It was accordingly decided that copartners may assign their individual property as well as their partnership property to pay the joint debts of the firm; thereby giving the creditors of the firm a preference in payment out of the separate estate of the assignors over the separate creditors! It was further held that each copartner, with the assent of the others, has the corresponding right to give his individual creditors a preference in payment out of the share of the effects of the firm, which, as between him and his copartners, and without reference to the debts for which they are all jointly liable, is legally his own property. And that copartners may make an assignment of their respective interests in the partnership prop- erty to trustees, giving a preference in payment to the individual creditors of each copartner out of his share of the partnership funds. But that a partner who is insolvent and unable to pay the debts of the firm has no right to assign his share of the partner- ship effects to pay the individual debts of his copartner, for which neither he nor his property is legally or equitably liable. The general doctrine established by the case last cited is that there is an equity existing between the members of an insolvent copartnership, by virtue of which any of them may insist that the copartnership effects shall be applied to the payment of the debts of the firm in preference to the payment of the private debts of the individual partners; and this gives to the creditors of the firm a guasi-equitable lien, to be worked out through the medium of the equity of the copartners as between themselves and with their assent, or at least with the assent of one of them;? but that this equity of the members of the firm, as between themselves, does not deprive them of the right to apply the partnership effects to the payment of their joint and separate debts as they please, provided no injustice is done to any of their creditors.’ In the case of Nicholson v. Leavitt,‘ in the superior court of the city of New York, the court (Duer, J.) gave to the equitable rule 1Van Rossum v. Walker, 11 Barb. S. C. 287, acc. 2 Walworth, C., 3 Barb. Ch. 49, citing Story on Part., §§ 97, 826, 360. And see 8 Kent’s Com. [65], 78. 33 Barb. Ch. 47. 44 Sandf. 8S. ©. 252, § 180.] PREFERENCE OF FIRM OREDITORS. 239 of distribution in the case of insolvent copartnerships the same application as the assistant vice-chancellor had given in Jackson v. Cornell; and in an elaborate opinion held that a preference given in an assignment of partnership property to the creditors of one of the partners over the creditors of the firm was invalid; and that the partnership creditors might avoid it by a suit brought for the benefit of ali such creditors. It was held, however, that such preference did not render the whole assignment fraudulent or void, as decided in Jackson v. Cornell, which was considered as over- ruled on that point by Kirby v. Schoonmaker.! The preference violated a rule of equity, but not any statutory prohibition. The views of the court in Jackson v. Cornell, and Nicholson v. Leavitt, in regard to the applicability of the equitable rule of dis- tribution to cases of voluntary assignments by copartners, are in accordance with those of the court of appeals of Virginia, in the case of McCullough v. Sommerville,’ and of the supreme court of the United States, in the case of Merrill v. Neill.‘ But an assignment of the individual property for the payment of partnership debts, reserving the surplus to the grantors, without any provision for the individual creditors where there are such, is fraudulent and void as against an individual creditor. This is illus- trated by the case of Collomb v. Caldwell,’ where partners holding certain real estate as tenants in common assigned it with other property for the payment of the firm debts, reserving the surplus. This case was again before the court of appeals,® and it having been shown that the real estate assigned was partnership property, 13 Barb. Ch. 46. 2 The distinction was taken in this case between an assignment of partnership property, giving a preference to debts due from the partners individually, but containing a general trust for the partnership creditors, and such an assignment devoting the whole property to the exclusive payment of separate debts. In the former case the security and equal distribution of the fund would be at once at- tained, by holding the trust to be valid, and the preference only to be void; but in the latter, the illegality running through all its provisions would of necessity vitiate the entire instrument. But in this case the suit for setting aside the as- signment must be brought in behalf of all the partnership creditors. Id. 301. See, also, Kemp v. Carnley, 3 Duer, 1. In Jones v. Bartlett, 50 Wis. 589, it was held that a claim for work on stock in trade of B., who afterward entered into partnership with H.,— the latter agreeing to assume half of the ‘‘debts owing the stock,” — is payable out of the assigned estate of the firm. 38 Leigh, 415. 48 How. 414. And see the case of Andress v. Miller, in the supreme court of Pennsylvania (15 Pa. St. 316). 516N, Y. 484. 624 N. Y. 505, sub nom. Collomb v. Read. In the case of Scott v. Guthrie, 25 How. Pr. 512, where the assignment provided for applying the property of one of the partners to the payment of the partnership debts, it was held that the as- signment was not void as against partnership creditors who were preferred. But see Smith v. Howard, 20 How. Pr. 121; O’Neill v. Salmon, 25 id, 254. 240 ASSIGNMENTS WITH SPECIAL PROVISIONS. [oH. xr. the assignment was sustained. It will be observed that this is a distinct question from that which arises where the individual prop- erty of one partner is applied to the payment of the individual debts of his copartners, for in such case the creditors benefited have plainly no claim in law or equity upon the fund out of which pay- ment is provided for them.! In the absence of an express provision directing an unlawful ap- propriation of the funds the law will interpret the instrument according to the rights of the parties and the respective equities of the creditors.2 Proof has been admitted to show that the as- signment included sufficient individual property of each partner to pay his individual debts directed to be paid by the assignee.? Evi- dence may also be given to show that there are no individual debts, but the burden is on the part of those supporting the assignment, and if the proof fails the assignment must be declared invalid. But where it is apparent that such an unlawful disposition of the firm proceeds has been attempted, this will invalidate the entire 1 Wilson v. Robertson, 21 N. Y. 587; Smith v. Howard, 20 How. Pr. 121; Mor- rison v. Atwell, 9 Bosw. 508; Eyre v. Beebe, 28 How, Pr. 340; O’Neill v. Salmon, 25 id. 254, 2¥Forbes v. Scannell, 18 Cal, 242; Farquharson v. Eichelberger, 15 Md. 63; Heckman v. Messinger, 49 Pa. St. 465; Black’s Appeal, 44 id. 503; Andress v. Miller, 15 id. 816; Eyre v. Beebe, 28 How. Pr. 840; Matter of Duncan, 10 Daly, 95. An assignment by partners of all their property directed the assignee, after paying certain preferred creditors and all firm liabilities, to apply the re- mainder, if any, to the payment of the individual debts of the partners in full,. if the remainder was sufficient. If it was not sufficient to pay the said individual debts in full, then such remainder was directed to ‘‘be applied pro rata, share and share alike, to the payment of said debts, demands and liabilities, according to their respective amounts.” The partners owned individually different amounts. of property, and their individual debts differed in amount. It was held that the individual creditors of one partner would be defrauded by allowing the indi- vidual estates of all the partners to be treated as a joint fund for the payment ot all their debts, and that this illegal direction could be set up by a firm credito:. Crook v. Rindskopf, 34 Hun, 457, 3Knauth v. Bassett, 34 Barb. 31; Van Nest v. Yoe, 1 Sandf. Ch. 4; Hollister v. Loud, 2 Mich. 309. See Smith v. Howard, 20 How, Pr. 121; Lester v. Abbott, 28 id. 488; s. c., 3 Robt. 691. 4In Hurlbert v. Dean, 2 Abb, Ct. App. Dec. 428; 2 Keyes, 97, the court of ap- peals held that the burden of showing the non-existence of individual debts,. where an assignment of partnership property on its face provided for the pay- ment of such debts, rested on the parties claiming under the assignment. And in the later case of Turner v. Jaycox, 40 N. Y. 470, where the assignment directed. the assignee to pay the individual debts of the members of the firm out of the surplus remaining after the partnership debts should be discharged, to rebut any presumption of fraud which might arise from the fact that it did not appear from the face of the instrument that the individual creditors were entitled to share equally in this surplus, each of the assignors testified that he owed no indi-. vidual debts and owned no individual property, and this was deemed sufficient to rebut the presumption of fraud, § 180.] PREFERENCE OF FIRM CREDITORS. 241 instrument,! though in several cases this has been doubted and the instrument has been sustained, while the illegal provision has been set aside.’ Where, however, one of the copartners has in good faith parted with his interest in the firm effects, and the remaining partners assign the firm property, including that in which the retiring part- ner was interested, for the payment of their debts, to the exclusion of the creditors of the former copartnership, no injustice is done, for the rights of the retiring partner in the property have ceased and the equities of the firm creditors are lost.? Indeed, the assign- ment of the new firm property for the payment of the indebted- ness of the former partners would be a violation of the rights of existing creditors and the application of the property to the pay- ment of the debts of strangers.‘ If the executor of a deceased partner consents to the surviving partners continuing the business with the assets of the firm, his lien on property thereafter acquired will be postposed to that of creditors, when a case arises for an equitable marshaling of assets, as where the surviving partners make a general assignment for the benefit of creditors. 1 Wilson v. Robertson, 21 N. Y. 587; Keith v. Fink, 47 Ill. 272; Smith v. How- ard, 20 How. Pr. 121. In Wilson v. Robertson, supra, Mr. Justice Wright re- marks: ‘It seems very plain that the insertion of such a provision in an assign- ment of the partnership effects of an insolvent firm is a violation of the statute in respect to fraudulent conveyances, and furnishes conclusive evidence of a fraudulent intent on the part of the assignors.” 2McCullough v. Sommerville, 8 Leigh. 415; Read v. Baylis, 18 Pick. 497; Kemp v. Carnley, 3 Duer, 1; Nye v. Van Husan, 6 Mich. 329; Lassel v. Tucker, 5 Sneed, 1; Gordon v. Cannon, 18 Gratt. 387. See Eyre v. Beebe, 28 How. Pr. 333. See remarks of Hogeboom, J., in Cox v. Platt, 32 Barb. 126. In Morrison v. Atwell, 9 Bosw. 508, where the assignment provided that after all partnership creditors were paid in full the individual creditors of both partners should be paid out of the residue of the partnership fund, share and share alike, without making any provision for the application of the fund to the payment of such creditors, in accordance with the right and interest of each partner in the fund, it was held that this was good ground for an individual creditor to avoid the as- signment, but was not a ground of complaint as to partnership creditors. 3 Dimon v. Hazzard, 82 N. Y. 65: Smith v. Howard, 20 How. Pr. 121; Crane v. Roosa, 40 Hun, 455; Gutman v. McNulty, 22 N. Y. Weekly Dig. 241; Price v. Ford, 18 Md, 489; Miller v. Ewtell, 5 Ohio St. 508; Mandel v. Peay, 20 Ark, 325; Whitworth v. Benbow, 56 Ind. 194; Vosper v. Kramer, 31 N. J. Eq. 420. See Matison v. Demarest, 4 Robt. 161; Cox v. Platt, 32 Barb. 126; Heye v. Bolles, 2 Daly, 231; Paton v. Wright, 15 How. Pr. 481; Lester v. Pollock, 3 Robt. 691; Phelps v. McNeely, 66 Mo. 554; Case v. Beauregard, 99 U. S. 119; Fitzpatrick v. Flannagan, 106 id. 648, 4 Lester v. Abbott, 28 How. ‘Pr. 488; Smith v. Howard, 20 id, 121, 5 Hoyt v. Sprague, 103 U. S. 613, 16 242 ASSIGNMENTS WITH SPECIAL PROVISIONS. cH. xi. IV. Streviations ror tHe ContTinuaNcE oF Assicnor’s Busrvzss. § 181. Assignor’s Business May be Continued, When.— As- signments are sometimes drawn with stipulations for the continu- ance of the debtor’s business, either by the assignees or by the debtor himself under their direction; and where this is done as an- cillary to winding up the debtor’s affairs, and with the view of roore effectually promoting the interests of the creditors, they will be sustained as valid. But in a case in New York,’ where the property assigned was an iron foundry, and the assignees were au- thorized to continue the business for the purpose of completing the manufacture of any of the assigned property, or fitting it for sale and working up materials, etc., so as to realize the greatest possi- ble amount of money therefrom, as in their judgment should seem most advisable; and were expressly directed to pay out of the pro- ceeds of the property all such sums of money as they might find proper and expedient in and about such business and manufacture, it was held that the assignment was thereby rendered absolutely void on its face, thus reversing on this point the previous decision of the court of errors in the important case of Cunningham v. Freeborn Mr. Justice Selden, in delivering the opinion of the court of appeals, makes use of the following language: “ The true 1This has been decided in England in James v. Whitbread, 20 L. J.C. P. (N. 8.) 217; 5 Eng. L. & Eq. 481. But in Owen v. Body, 5 Ad. & E. 28, where one of the express purposes of the trust was to carry on the trade, the deed was held to be invalid. The English forms have for a long time been drawn with clauses authorizing the trustees to carry on the business if they think fit. Nunn v. Wils- more, 8 Term R. 521, 522; Coate v. Williams, 21 L. J. Exch. (N. S.) 176; 5. co, 9 Eng. L. & Eq. 481. And by what is called ‘‘adeed of arrangement” a debtor may make an assignment of his property to carry on his business, and to divide the profits ratably among such of his creditors as shall execute the deed, with a provision that as soon as the debts of all the creditors are satisfied the trustees shall hold the residue of the trust property in trust for the assignor. Hickman v. Cox, 86 Eng. L. & Eq. 400. In this case the creditors executing the deed were held to be partners quoad third persons. 2Dunham v. Waterman, 17 N. Y. 9; reversing s. c., 3 Duer, 166. But an au- thority to the assignee to finish incomplete work on buildings, if it should be necessary to the better performance of the trust, does not render the assignment fraudulent, as it gives the assignee no additional right beyond what the law im- poses in all cases of trust. Watson v. Butcher, 87 Hun, 391. Where an assign- ment contained a provision that ‘‘should it be necessary to the better perform- ance of the trust” the assignee shall have power ‘to finish such work as is unfinished,” paying the necessary expenses before paying the debts provided for in the assignment, it was held that no power to determine as to the necessity was vested in the assignee by the instrument, and as therefore he could not act except under order of the court, that the provision did not vitiate the assign- ment. Robbins v. Butcher, 104 N. Y. 575; 11 N. E. Rep. 272. 31 Edw. Ch. 256; s. c. on appeal, 11 Wend. 240. Compare Perry Ins, & Trust Co, v. Foster, 58 Ala. 502, given below, § 182.] WHEN ASSIGNOR’S BUSINESS CONTINUED. 243 principle applicable to all such cases is that a debtor who makes a voluntary assignment for the benefit of his creditors may direct in general terms a sale of the property and collection of the dues as- signed, and may also direct upon what debts and in what order the proceeds shall be applied, but beyond this can prescribe no con- ditions whatever as to the management or disposition of the assigned property. In all other respects the assignee must be left to act un- der the ordinary rules and principles which apply to trustees in analogous cases.” Where, by an assignment, the whole of the debtor’s real and personal property was conveyed to trustees upon trust, “to man- age and improve, sell, etc., and convert into money all the assigned property,” etc., and it appeared that the real estate was heavily incumbered with mortgages, some of which were about to be fore- closed, it was held by the supreme court of New York that the power “to manage and improve” did not invalidate the assign- ment; the construction given to the clause in question being that it was not intended to embrace any act that could delay the avowed object of the assignment —“to provide for the payment of the debts.” ! § 182. Assignor’s Business May be Continued, When — Illus- trations.— In Connecticut an assignment of the contents of a country store and raw materials of a factory, empowering the as- signees to dispose of the property and apply the avails as directed, also to carry on the business of the factory, and to purchase such additional articles as should be necessary, until all the raw materi- als on hand at the time of the assignment should be worked up, was held valid.? So in Massachusetts, where in an assignment by a manufactur- ing company it was stipulated that, until default of payment of debts mentioned, the trustees should permit the assignors to re- main in possession of all the property, and to sell and dispose of the personal property according to the usual course of their busi- ness, unless the trustees should be of opinion that the safety of creditors would require them to take immediate possession, in which case they should have the right to do so; and that they 1 Hitchcock v. Cadmus, 2 Barb. 381. But was held to render the assignment void in Schlussel v. Willett, 34 id. 615; s.c., 12 Abb, Pr. 397; 22 How. Pr. 15. And see Renton v. Kelly, 49 Barb. 536; affirmed, 51 N. Y. 633. 2 De Forest v. Bacon, 2 Conn. 633; s. P., Kendall v. New England Carpet Co., 11 id. 888, If the provision for carrying on the business is merely ancillary to winding up the debtor’s affairs and made with the view of more effectually pro- tecting the interests of creditors it is valid, but not if made for the benefit of the debtor, or with the intention of hindering and delaying creditors. De Wolf v. Swayne Manuf. Co., 49 Conn, 282, 326, 244 ASSIGNMENTS WITH SPECIAL PROVISIONS. (cH. XI. should also have the right to take possession of subsequently ac- quired property and apply it to the payment of subsequently con- tracted debts, the transaction was held to be lawful.!| And in a subsequent case in the same state, a clause in an assignment made under the statute of 1836, chapter 238, empowering the assignees. to work up unwrought stock was held not to invalidate it.’ So in Alabama a deed of trust conveying land, slaves, mules, plantation utensils, etc., also corn, fodder and bacon, giving to the trustee the management of the plantation during the current year, and devot- ing the proceeds thereof to the payment of the debts to secure which the deed was made, was decided to be not fraudulent per se.* In Maryland a clause in an assignment authorizing the assignee to. conduct the business “for such time as in his judgment it shall be beneficial to do so,” etc., was held to avoid the deed,— the certain effect of the clause being to hinder and delay creditors; and evi- dence that the assignor intended that the discretion vested in the assignee should be exercised for the exclusive benefit of the credit- ors is inadmissible.‘ Similar principles are applied, though the assignment provides. 1 Foster v. Saco Manufacturing Co., 12 Pick. 451. This was before the statute of 1836. The court in this case remark that “this assignment, as to the personal. estate, was inoperative and void against any creditor who should have attached before the trustees took possession. The stipulation that the vendors should re- main in possession and have the use of the property would have rendered it void against creditors, But it was a good executory contract, and when the posess- sion was actually taken in pursuance of its terms the sale became complete.” Shaw, C. J., 12 Pick. 454. In the case of Bull v. Loveland, 10 Pick. 9, an assign- ment was given in evidence, having the same feature of a stipulation that the assignor should continue the business under the direction of the assignees, who- were creditors, but no question arose upon it. 2 Woodward v. Marshall, 22 Pick. 468. 3 Ravisies v. Alston, 5 Ala. 297. And see Planters’ & Merchants’ Bank of Mobile- v. Clarke, 7 id. 765. The fact that the assignment contemplates that the planting operations of the debtors shall be continued for the current year under their supervision, and that future advances shall be made by the creditor for their suc- cessful operation, is not inconsistent with an absolute unconditional appropriation of the property to the payment of the enumerated debts, nor is it in effect a reser- vation for the use of the debtor. If it appears that a stipulation for continuing the business is made, ‘‘ not for the interest and benefit of the debtor, and to the prejudice of unsecured creditors, but to promote the interests of the creditors. who are preferred, they (assignments) are sustained. . . . If the assignment contemplated the indefinite continuance of planting operations it could not be sustained. But when the provision is simply for the temporary use profitably to the creditor of the property conveyed until a sale can be effected judiciously, it is difficult to perceive any substantial objection to it.” Perry Ins. & Trust Co. v. Foster, 58 Ala. 502; Price v. Mazange, 81 id. 701. See Commercial Bank v. Brewer, 71 id. 574, But see Hill v. Agnew, 12 Fed. Rep. 230. See 21 Alb. L. J. 24. 4 Jones v. Syer, 52 Md. 211; Malcolm v. Hodges, 8 id. 418; Price v. Pitzer, 44 ~ id. 521; Webb v. Armisted, 26 Fed. Rep. 70. § 183.] REASONABLE TIME FOR EXEOUTING TRUST. 245 that the power of the assignee to carry on the business shall cease whenever a majority of the creditors so desire! Where stipula- tions of this kind are intended chiefly for the benefit of the assignor, or are coupled with provisions of an onerous or coercive character towards creditors, they will have the effect of avoiding the assign- ment. Thus, where there was a provision in the assignment that the assignor should be at liberty to continue his business for the term of six months without any proceedings being taken against him, either at law or in equity, and that in case any suit or pro- ceeding should be commenced against him he should be at liberty to plead the assignment in discharge and acquittance thereof, such assignment was for this and other reasons held to be coercive and void as against creditors. V. Provisions Respectina tae Time ror Exxrourine tur Trost. § 183. Reasonable Time Allowed for Executing the Trust.— It is sometimes the practice to stipulate in assignments that the trust shall be executed by sale of the assigned property and distri- bution of the proceeds within a specified time. If the period fixed be a reasonable one such a stipulation will be valid.’ But care should be taken that it be not on the one hand too short, and on the other so long as to be liable to the charge of hindering or de- laying creditors, which would render the assignment fraudulent and void at law. Postponing to an unreasonable time the period of sale and payment will avoid the assignment; and the reasonable- ness of the delay depends on the character of the property and the circumstances of the case.6 An interval of three years before the 1 Gardner v. Commercial Bank, 95 Ill. 298; Peters v. Light, 76 Pa. St. 289. 2 King v. Kenan, 38 Ala. 68. And see Doyle v. Smith, 1 Cold. (Tenn.) 674; Furman v. Fisher, 4 id. 626; Rindskoff v. Guggenheim, 3 id. 284; Inloes v. American Ex. Bank, 11 Md. 178; Marks v. Hill, 5 Gratt. 406; Berry v. Riley, 2 Barb. S. C. 807. The assignment in this case was of a portion of the debtor's property for the benefit of such creditors only as should become parties, and reserved to the assignor the surplus which should remain after payment of such creditors. In Holmes v. Marshall, 78 N. C. 262, it is held that the presumption of fraud arising from the provision that the trustor ‘shall have the privilege of con- tinuing his business for one year” is not rebutted by proof that the insolvency of the trustor was unknown to the trustee and cestui que trust at the time of the execution of the deed. An authority to the assignee to make such small pur- chase of goods as will better enable him to sell the stock on hand to the best advantage of creditors will not render the assignment void on itsface. Mattison v. Judd, 59 Miss, 99. 3 Rundlett v. Dole, 10 N. H. 458. 4 Ruffin, C. J., in Hardy v. Skinner, 9 Ired. L. 191, 195; Phelps v. Curts, 80 Til. 109. 5 Hafner v. Irwin, 1 Ired. L. 490; Rundlett v. Dole, 10 N. H. 458; Hardy v. Skinner, 9 Ired. L. 191; Grover v. Wakeman, 11 Wend. 187; Robins v. Embry, 246 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. x1. sale of real estate assigned has been held, in Pennsylvania and Tennessee, to be unreasonably long.! But in North Carolina, where a deed of trust contained a stipulation that a sale should not take place for three years, and that in the meantime the grantor should remain in possession of the property, consisting of lands, negroes, etc., it was held that the deed could not be regarded by the court as fraudulent in Jaw upon its face; the opposing creditor having admitted that it was not fraudulent in fact.2 So, in Alabama, a deed of trust to secure certain creditors, which postponed a sale of the property for nearly three years from the date of the deed, pro- viding also that the grantor should in the meantime retain posses- sion of the property, but devoted all the property as well as the profits to the payment of the debts, was sustained by the court.® And in Virginia a deed of trust conveying land, slaves, crops, etc., and which was not to be enforced till the end of two years from its date, the profits being in the meantime reserved to the grantor, was held to be not fraudulent as to creditors. A year’s suspen- sion of proceedings, where the expressed object of the conveyance was to prevent a sacrifice of the property, was decided in Ken- tucky to be fraudulent.® But twelve months to collect the debts and sell the property of an insolvent company was considered, in Mississippi, not unreasonable, the debts being numerous and widely scattered, and the creditors residing at a distance.’ The same pe- riod has been adopted in Pennsylvania as the proper limit beyond which a delay will not be allowed. Thus, where an assignment contained a provision allowing the assignees to delay payment of the creditors provided for for more than a year from the date of the assignment, it was held to render it absolutely void as to non- 1Sm. & M. 207; Arthur v. Commercial & Railroad Bank of Vicksburg, 9 id. 396; Farmers’ Bank v. Douglass, 11 id. 469; Henderson v. Downing, 24 Miss. 106; Mitchell v. Beal, 8 Yerg. 184; Bennett v. Union Bank, 5 Humph. 612; Hemp- stead v. Johnson, 18 Ark. 123; Knight v. Packer, 12 N. J. Eq. 214; Perry Ins. & Trust Co. v. Foster, 58 Ala. 502. 1 adlum v. Yard, 1 Rawle, 163; Mitchell v. Beal, 8 Yerg. 134: Young v. Hail, 6 Lea (Tenn.), 175, where the delay was four years and six months. See Lowen- stein v. Love, 16 Lea, 658; ante, p. 219. 2 Hardy v. Skinner, 9 Ired. L. 191. Chief Justice Ruffin, who delivered the opinion of the court, admitted this to be ‘‘a singular and extremely suspicious transaction,” and spoke of the provision as “a very extraordinary one,” which might justify a jury in finding it to be fraudulent in fact; but said that the cred- itor, by admitting that there was no fraud in fact, had given up the case. 3 Elmes v. Sutherland, 7 Ala. 262; commented on and approved in Johnson v. Thweatt, 18 id. 741, 746. +Dance v. Seaman, 11 Gratt. 778. And see Cochran v. Paris, id. 848; Lewis v Caperton’s Ex’r, 8 id, 148; Shattuck v, Knight, 25 W. Va. 597, 5 Ward v. Trotter, 3 Monr. (Ky.) 1. 6 Robins v. Embry, 1S, & M. Ch. 207, § 184.] REASONABLE TIME, WHAT. 247 assenting creditors.' But in a later case it was decided that a pro- viso in an assignment that the trust should be closed within two years, and, if not then closed, that the assignees should, within six months, sell remaining assets sufficient to pay the debts preferred, but stipulating also for payment and distribution among the pre- ferred creditors, from time to time, as often as there should be moneys in hand, did not postpone the liability of the assignees to account, or protect them from being cited after a year, and was therefore no objection to the validity of the assignment.? In Ken- tucky three months’ delay of payment, for the purpose of matur- ing a crop and fattening stock, was held to be not unreasonable.* And in Alabama a provision in the deed delaying a sale for two months was held not to invalidate it. In Arkansas it is provided by statute that the assignee must sell within one hundred and twenty days after the execution of his bond, and must give thirty days’ notice of the time and place of sale. § 184. Reasonable Time, What.— In the Mississippi case of The Farmers’ Bank of Virginia v. Douglas * it was said to be “ difficult, indeed impossible, to lay down any precise and definite rule appli- cable in all cases. In general, no further indulgence should be granted than the usual time of collecting debts by due course of law.?’ Yet there may, perhaps, be circumstances in which it would not be fraudulent to stipulate for greater delay; as where the debts are very large, the property likewise large, and where the personal exertions of the debtor are also relied on as one means of pay- ment.”® In the later case of Henderson v. Downing,’ in the same state, the rule was laid down in more absolute terms, the court 1 Sheerer v. Lautzerheizer, 6 Watts, 543. 2Dana v. Bank of the United States, 5 W. &S. 223. A deed of land to a trustee containing power to sell in two years to pay a specified creditor, ‘‘and if any balance remain, then to pay over the same to the grantor,” is valid against sub- sequent creditors. And if the power is not executed within two years, the trust remains good, and the land cannot be sold by subsequent creditors of the grantor. Phillips v. Zerbe Run, etc. Co., 25 Pa, St. 56, 3 Christopher v. Covington, 2 B. Mon. 857. See Perry Ins. & Trust Co. v. Fos- ter, 68 Ala. 502. 4Hindman v. Dill, 11 Ala. 689, And see further, subd. VI, post, in this chapter. 5 Mansf. Dig. (1884), § 309. 6118S. & M. 469; Clayton, J., id. 589, A provision requiring the assignee to sell the choses in action remaining in his hands at the end of nine months does not allow him sufficient time to collect by legal process, and avoids the deed. Richardson v, Stapleton, 60 Miss. 97. Twenty-two months has been held suffi- cient, however. Wickham v. Green, 61 id. 463. Mitchell v.. Beal, 8 Yerg. 134; 3 Humph. 180. 8Bennett v. The Union Bank of Tennessee, 5 Humph, 612, 924 Miss. 106, 116. 248 ASSIGNMENTS WITH SPECIAL PROVISIONS. [oH. XI. (Yerger, J.) disclaiming the exception suggested in the preceding case, as not justified by good policy or a fair construction of the statute of frauds. In this case the deed of trust contained a stip- ulation extending the time of payment for five years; and this was held to render it fraudulent and void as to existing creditors. An omission to limit any time for the assignee to apply the pro- ceeds of the assigned property has been held, in Massachusetts, to be not objectionable; because the law in such cases requires it to be done in a reasonable time.! In the New York case of Cunning- ham v. Freeborn,? there was no limitation of time within which the trust was to be executed. But this was not considered objection- able, especially where, from the nature of the business, it was im- possible to fixa time. ‘All convenient dispatch,” observed Mr. Justice Nelson in that case, “was the best limit; and it put the execution of the trust under the control of a court of equity, and with it the conduct and fidelity of the trustee.”* But in another case in New York, where an assignment provided that, after pay- ing the preferred debts, the assignees should distribute the funds realized from the assigned estate among the general creditors, “at such reasonable time or times as they in their discretion might think proper,” it was held to be, on that ground, void.‘ In Michigan, however, an assignment containing a similar provis- ion has been held to be unobjectionable, on the ground that no time was limited by it for closing the trust.’ A provision that the assignee may, in his discretion, pay credit- ors in instalments, or retain the money until all the assets are col- lected and then close up the estate at once, will not avoid the assignment, though any improper delay would render the assignee liable in damages, or subject him to removal.§ § 185. Indefinite Postponement.— But where the provisions of the assignment itself have the effect of postponing indefinitely the time for closing the trust and making distribution, the delay, unless assented to by the creditors, will be considered fraudulent. A conveyance by a debtor in failing circumstances of all his property to trustees, in trust, to retain it for an indefinite time, until, after defraying the expenses of the trust, they have, out of the profits, 1Stevens v. Bell, 6 Mass. 339. And see Hower v. Geesaman, 17 S. & R. 251; New Albany & Salem R. R. Co. v. Huff, 19 Ind. 444; Wilt v. Franklin, 1 Binn. 502. 211 Wend, 241, 31d. 255, 256. 4D’Ivernois v. Leavitt, 23 Barb. 68. See p. 245, ante. But see Townsend v. Stearns, 82 N, Y. 209; post, p. 252, 5 Hollister v. Loud, 2 Mich, 309, 321. 6 Ricks v. Copeland, 53 Tex, 581. § 186.] LIMITATION MUST BE REASONABLE. 248 . paid all the debts of the grantor, where the property thus conveved is to revert or be reconveyed to him, is fraudulent and void as hindering and delaying creditors.! Where, therefore, an incorpo- rated railroad and banking company, being in failing circumstances, and by its charter owning in fee-simple the site of the railroad and other buildings and lots attached to it, assigned by deed all of its real and personal estate to assignees, to pay therewith, and out of the profits of the railroad when completed, it being then unfinished, a certain debt to be contracted by the assignees for the completion of the road, and all the expenses of the trust and of the corporation, and then the debts of the corporation; and no provision whatever was made for the sale of the fee-simple of the corporation in the site of the road, etc.; and the assignment of the profits of the road was indefinite in its duration, except that it was to last until the debts were paid, when the fee, with the road, was to revert to tke corporation, it was held that the tendency of the assignment was to lock up the estate indefinitely, to create a perpetuity, to hinder and delay creditors unreasonably, and to secure an ultimate and permanent advantage to the corporation, and that it was therefore void” VI. Luration or Time For Crepitors To Become Partius or ASSENT. § 186. Limitation Must be Reasonable — Illustrations.— As- signments are sometimes drawn with a provision requiring the creditors for whose benefit they are made to become parties to them, or to assent to them within a limited time. Where this is the case the time so limited must be a reasonable one.* What is to be deemed a reasonable time is matter dependent upon the particular circumstances of each case, the situation of the creditors, etc. A time may be so short, or so long, as justly to raise a presumption of fraud.4 It must neither be too long, so as thereby to improp- erly delay the creditors in the collection of their debts, nor so short es not to afford time for examination, and therefore be merely 1 Arthur v. The Commercial and Railroad Bank of Vicksburg, 9 Sm. & M. 396. 2 Arthur v, The Commercial, etc. Bank, supra. The doctrine of this case was confirmed by the supreme court of Louisiana in Fellows v. The Commercial & R. R. Bank of Vicksburg 6 Rob. 246; and by the supreme court of the United States, in Bodley v. Goodrich, 7 How. 276. The decision in the last case went chiefly on the ground that the creditors had not assented to the assignment. The same deed of assignment had been previously held good by the court of chan- cery of Mississippi, in Robins v. Embry, 1 Sm. & M. Ch. 207. 3Green v. Trieber, 3 Md. 11. 4Story, J., in Halsey v. Whitney, 4 Mason, 206, 225. See Pearpoint v. Graham, 4 Wash. C. C. 282; Fox v. Adams, 5 Greenl. 245. 250 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XI. illusory.| In Pennsylvania, in the case of Burd v. Smith,’ the cred- itors were required to accept the assignment within nine months. The deed not having been delivered to the assignees for about two months after its date, the court held this to be too short a time, under the circumstances, for the whole of the creditors to receive notice of the deed and signify their assent within the limited time. In Massachusetts, in the case of Halsey v. Whitney,’ six months were allowed for the creditors to come in under the assignment; and this was held to be not too long, considering the state of the affairs of the debtor. Inthe case of Dedham Bank v. Richards,‘ in the same state, two calendar months were limited by the assign- ment for creditors to become parties, with a proviso for extending it not to exceed in the whole six calendar months, to which no ob- jection was taken. In Virginia, in the case of Phippen v. Durham,’ in which the assignment was sustained, the creditors were required to signify their acceptance within thirty days. In Alabama, in the case of Ashurst v. Martin,’ one hundred and fifty days after notice of the deed was held a reasonable time, the creditors being scat- tered over a large space. In Brown v. Lyon,‘ in the same state, the assignment required the residuary creditors to execute it within six months. In Illinois, in the case of Howell v. Edgar,® an assign- ment requiring all creditors wishing to become parties to it to affix their signatures thereto within twelve months from its date, it. being stipulated that the debtor should not be held liable to pay any creditors who might sign the same any deficiency that should remain unsatisfied of their respective demands, was held to be fraudulent and void. So ina late case in the same state, where the deed of assignment relieved preferred and resident creditors from the necessity of any acceptance, but excluded from the benefit of the assignment all other creditors, some of them residing at great distances, who should not signify their ac- ceptance within a fixed time, which under the circumstances was unreasonably short, the assignment was held void.® In Ten- nessee, a provision in a deed of assignment requiring the creditors to present their claims within a specified time — twenty months — was not thought objectionable.” A provision requiring creditors 1 Ashurst v. Martin, 9 Port. 566, 24 Dall. 76. 34 Mason, 206, 42 Metc. 105. 58 Gratt. 457. 69 Port. 566. 717 Ala., 659, 83 Scam. 417. 9 Hardin v. Osborne, 60 Ill. 98. 10 Meyer v. Pulliam, 2 Head (Tenn.), 846, § 187.] TIME OF SALE. 251 to prove their claims before receiving a dividend is no evidence of an intent to hinder or delay them.!’ In some states provision is made by statute regulating the time within which creditors may come in and present their claims.? If no time be prescribed within which the conditions of the assignment are to be complied with, where it contains or stipulates for a release of the debtor, or if the -time named be unreasonable, it seems that the deed will be consid- ered fraudulent. VII. Provisions Resrrorine tor Sate or tue Property AssIGNep. § 187. Time of Sale We have already seen that a clause un- reasonably postponing the time of sale of the assigned property will avoid the assignment. Ifthe assignee be directed to delay the sale, for the purpose of obtaining higher prices for the property, unless by the consent of the creditors, it will be considered a fraud upon them.‘ So if the sale be made conditional upon a certain event. Thus, in a case in Michigan, where the assignment contained a clause that the real estate conveyed by it should not be sold by the assignees until all the personal property and assets assigned should be exhausted, unless with the consent of the assignor, it was. held to be not an unconditional assignment, and therefore fraudu- lent and void in law as against creditors not preferred or not pro- vided for in the assignment.> So where the deed of assignment provided that the real estate assigned should be sold at private sale, at the most favorable opportunity which should occur within two 1U. S. Bank v. Hutte, 4 B. Mon. (Ky.) 423. 2See Appendix, I. 3 Pearpoint v. Graham, 4 Wash. C. C. 232; 2 Kent’s Com. [538], 693; Green v.. Trieber, 3 Md. 11; Henderson v. Bliss, 8 Ind. 100, 104. In Shackelford v. P. & M. Bank of Mobile, 22 Ala, 238, it was held that when the deed conveys all the grantor’s property of every description, and places all his creditors on an equality, the failure to provide any mode of giving notice to the creditors, or to make them parties to the deed, is not sufficient to render it void upon its face. 4 Hart v. Crane, 7 Paige, 37; Phelps v. Curtis, 80 Ill. 109. Where a clause in a deed of assignment directed the sale of the assigned property ‘‘ when convenient and as soon as it can be done without material sacrifice,” it did not operate to. render the assignment invalid. Wooster v. Stanfield, 11 Iowa, 128. A provision allowing the assignee ‘‘to retain the property to await arise in price or a more favorable market, as they may think most advisable,” avoids the assignment. Maughlin v. Tyler, 47 Md. 545. In Maennel v. Murdock, 13 id. 164, the assignees were authorized to sell ‘‘ whenever they shall think proper and most conducive to the interest of the trust,” and this was held not unreasonable. In Maughlin v. Tyler the court says: ‘‘ But a general sound discretion like this, to be exercised in the interest of the trust, and in the exercise of which the discretion of a court of equity may be invoked, is a very different thing from an express power to re- tain property to await a specified event, which can only occur at some indefinite future period.” 5 Pierson v. Manning, 2 Mich. 445, 448, 449. 252 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. Xi. years, of which the assignee was to be the sole judge, and if the property could not be sold at private sale within two years with- out great loss, then, at the expiration of that period, it should be sold absolutely at public sale, it was adjudged that the necessary effect of this clause was to hinder, delay and defraud creditors, and that it rendered the assignment void.' But, in some cases, direc- tions for delaying a sale until the happening of a certain contin- gency or event have never been held valid. Thus where a deed conveying all the estate of a debtor, in trust to pay debts and secure sureties and indorsers, provided that the estate should not be sold until the estates of the sureties and indorsers were levied on upon judgments obtained against them, it was held in Alabama that the deed was not objectionable as being made “to hinder, delay or defraud creditors.”? So an assignment of a similar character was held in the same state not to be void on account of a condi- tion that there should be no sale until the security debt was first paid? § 188. Time of Sale— Discretion of Assignee.— The assignee has.a discretion as to the time of sale, but it is a legal discretion, subject to the control of a court of equity,’ and directions which simply in terms confer such a discretion, and which are entirely in harmony with the duty of the assignee as trustee, are harmless. Thus, a direction to convert the property into cash “as soon as the same may conveniently and properly be done,” ® “to sell the same without delay,” ® “to sell, dispose of and convey the said real es- tate and personal property at such time or times and in such manner as shall be most conductive to the interests of the credit- ors, and convert the same into money as soon as may be consistent with the interests of said creditors,” ? and such like,’ have been ordi- 1 Hardin v. Osborne, 60 Ill. 98. ? Planters’ & Merchants’ Bank v, Clarke, 7 Ala. 765. 3 Tarver v. Roffe, 7 Ala. 873. 4Thornton, J., in Hardin v. Osborne, 60 IIL. 98. 5 Ogden v. Peters, 21 N. Y. 23, Comstock, J. ®Griffin v. Marquardt, 21 N. Y. 121. 7 Jessups v. Hulse, 21 N. Y. 884, And see remarks of Selden, J., in this case. In Brigham v. Tillinghast, 15 Barb. 618, the assignment directed the assignees to sell ‘‘as soon as practicable and expedient for the best interests of all con- cerned.” In Bellows v. Partridge, 19 Barb. 176, the direction was to sell ‘‘as soon as reasonably practicable, with due regard to the rightful interests of the parties concerned.” In Hollister v. Loud, 2 Mich. 309, $21, the direction was to sell “‘ within such reasonable time as to them shall seem meet.” In Mussey v. Noyes, 26 Vt. 462, the direction was to sell ‘‘as soon as practicable and in the most beneficial manner.” 8In Townsend v. Stearns, 32 N. Y. 209, the direction was “to sell and dis- pose of the assigned premises at such time or times and in such manner as to § 188.] TIME OF SALE— DISCRETION OF ASSIGNEE. 253 narily inserted in assignments, and although sometimes questioned as tending unduly to extend the powers of the assignee to the prej- udice of creditors have been generally sustained. And even where the time of sale has been left to the option of the trustees or creditors, it has been held not to affect the validity of the assignment. Thus, in Alabama, a provision that the as- signed property might remain in the trustee’s possession until he might choose to sell, or be required to do so by the beneficiaries. of the deed, was held to afford no inference of fraud.!. And in the same state an assignment by the members of a mercantile com- pany conveying land for the payment of the debts of the partner- ship, and requiring the trustee to sell at the instance of any cred- itor of the firm, was held to be founded on sufficient consideration.” And in a later case in the same state it has been held that a deed of trust conveying property absolutely to the trustee for the pay- ment of certain specified debts of the grantor, imposing no condi- tion prejudicial to the creditors or restrictive of their rights, and stipulating for no benefit to the grantor, is not fraudulent on its face, although it gives the trustee a discretion as to the time and manner of selling the property conveyed by it. Such a power, it. was said, does not affect the bona fides of the transaction, or tend to delay the creditors in the collection of the debts secured. Were the trustee to refuse to act promptly or within a reasonable time, they might compel him in equity to do so, or have him displaced and one appointed who would faithfully execute the trust created by the deed.? Even the reservation to the debtor himself of the power of fixing the time of sale has under certain circumstances been permitted. Thus, in North Carolina, where a deed of trust to secure certain creditors, prescribed a time alter which the prop- erty should be sold, but reserved to the debtor the power of order- him (the assignee) may seem to be most for the benefit and advantage of the creditors.” In all these cases the clauses in question were held to be unobjec- tionable. And see Wilson v, Robertson, 21 N. Y. 587; Benedict v. Huntington, 32 N. Y. 219; Meeker v. Saunders, 6 Iowa, 61. And see observations of Duer, J., in Nicholson v. Leavitt, 4 Sandf. (S. C.) 252, 297. But in Woodburn v. Mosher, 9 Barb. 255, where the assignment directed the assignees to sell ‘‘ within conven- ient time as to them shall seem meet,” it was held that this clause authorized the assignees to discharge their duties whenever it should suit their convenience, and that it rendered the assignment void as operating to hinder or delay credit- ors. Monson, J., id. 257. And see the general rule laid down in Brigham v. Tillinghast, 18 N. Y. 220. 1Dubose v. Dubose, 7 Ala. 235. * Griffin v. Doe, 12 Ala. 783. 3 Evans v. Lamar, 21 Ala. 833; Ligon, J., id. 386. The deed in this case em-, powered the trustee to sell, ‘‘ either at private or public sale, as he might deem best, and at such times as he might deem proper, either for cash or on credit.” Id. 334, See Perry Ins. Co. v. Foster, 58 Ala. 502, 254 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XI. ing a sale at an earlier day, it was held that such a provision did not per se make the deed fraudulent in law against other cred- itors.' And in a later case in the same state it has been held that a provision in a deed of trust for the postponement of the sale of property for nine months, and then to be sold on a credit for six months, is not a fraud in law, so as to require the court to declare it void on its face And in Virginia, where a deed of trust pro- vided that the property assigned should not be sold for two years, unless with the consent of the debtor, and that after that time the trustee should sell the property on a credit, as to the land, of one and two years, it was held that the deed was not fraudulent per se.’ In the forms of general assignments now in use it has been the practice not to fix or limit a particular time for the sale of the as- signed property, but to leave it to the discretion of the assignees in general terms, they being only directed to sell “ with all rea- sonable speed,” or “as soon as reasonably practicable,” or “from time to time, and at such time as they may deem reasonable and proper,” or the like.t A provision that a trustee “may sell” was construed to mean “must sell” in Kintner v. Jones. § 189. Mode of Sale.—It has been a common practice in draw- ing voluntary assignments to leave the manner as well as time of sale to the discretion of the assignees, authorizing them to sell “at public or private sale,” as they may deem proper, they hay- 1Cannon v. Peebles, 2 Ired. L. 449; s. o., 4 id. 204. 2 Gilmer v. Earnhardt, 1 Jones’ L, 559, 3 Dance v. Seaman, 11 Gratt. 778. See, however, the observations of Allen, P., id, 780. See, also, Shattuck v. Knight, 25 W. Va. 590. With regard to the length of time for which the sale may be delayed, it has been held that forty days (Hafner v. Irwin, 1 Ired. L. 490), three months (Christopher v. Covington, 2 B. Mon. (Ky.) 357), four months (Cannon v. Peebles, 2 Ired. L. 449; 8. ©., 4 id. 204), nine months (Gilmer v. Earnhardt, 1 Jones’ L. (N. C.) 559), eleven months (Young v. Booe, 11 Ired. L, 347), have been considered good; but one year (Sheerer v. Lautzerheizer, 6 Watts, 548; contra, Graham v. Lockhart, 8 Ala. 9; Farquharson v. McDonald, 2 Heisk. 404; Rindskoff v. Guggenheim, 3 Cold. (Tenn.) 284), eighteen months (Barcroft v. Snodgrass, 1 id. 480), two years (Quarles v Kerr, 14 Gratt. 48), three years (Adlum v. Yard, 1 Rawle, 108), and five years (Storm v. Davenport, 1 Sandf. Ch. 135), have been held fatal. Bump on Fraud. Con, 412, 418. 4See form in Illinois, Sackett v. Mansfield, 26 Ill, 21. In Ohio, Thomas v. Tal- madge, 228; Abbott’s Conveyancer. 5122 Ind. 148; 23 N. E. Rep. 701. 6 Sackett v. Mansfield, 26 Ill. 21; Halstead v. Gordon, 34 Barb. 422. In Work v. Ellis, 50 Barb, 512, a restriction requiring the assignee to sell at public sale was looked upon as a strange provision, and tending to confirm the idea that the _ assignment was made to coerce creditorsinto a settlement. In Farquharson v. Hichelberger, 15 Md: 63, it was said to be no valid objection to an assignment that it provides that the assignee may sell at private sale; similarly in Kyle v. § 190.] TERMS OF SALE — POWER TO SELL ON OREDIT. 255 ing such a discretion in the absence of any express direction or au- thority contained in the instrument.’ In some cases objections have been raised against assignments on this ground. But in Ala- bama a discretion of this kind, given to the trustee in a deed of trust, has repeatedly been held to be not indicative of fraud.2- And in North Carolina a provision authorizing a trustee to sell at pri- vate sale was held, at most, to be only evidence of fraud, to be left to a jury, and was no ground for the court to pronounce the deed fraudulent per se.® In Arkansas a sale by the assignee must be at public auction, and, as before stated, within one hundred and twenty days after the execution of the assignee’s bond;‘* and a provision in the assignment contrary to these requirements renders it void. The discretion given to assignees, on this point, is sometimes ex- pressed in more general terms; the assignment empowering them to sell “in such manner as they shall consider expedient, and most for the interests of all parties.”* And sometimes both modes of sale are designated, the assignees being authorized to sell in such manner as they may think most advisable, within a limited time (as one year), and then to close the sale at auction.’ § 190. Terms of Sale — Power to Sell on Credit.— It has also been a common practice, in drawing assignments, to leave the terms, as well as the time and mode of sale, to the discretion of the assignees, authorizing them to sell “upon such terms as they shall think most expedient or advantageous;”*® and sometimes Harveys, 25 W. Va. 716. And see observations of Duer, J., in Nicholson v. Leavitt, 4 Sandf. 8. C. 252; reversed, 6 N. Y. 510; North River Bank v. Schu- mann, 63 How. Pr. 476. The modern English forms are drawn with a similar clause. See James v. Whitbread, 20 L. J. C. P.(N.S.) 217; 5 Eng. L. & Eq. 431. 1 Hart v. Crane, 7 Paige, 87. In Waldron v. Wilcox (R. I. Index P. 128), pro- visions allowing the assignee to sell at public or private sale, to buy in the prem- ises and resell without responsibility for loss, did not invalidate the assignment as against creditors, it not appearing that any benefit accrued to the assignor at their expense from the powers given. 2 Brock v. Headen, 13 Ala. 37); Abercrombie v. Bradford, 16 id. 560; Evans v. Lamar, 21 id. 883; Shackelford v. P. & M. Bank of Mobile, 22 id. 238. 3 Burgin v. Burgin, 1 Ired. L. 453. It was observed by Ruffin, C. J., in this case, that a higher price may sometimes be got by private contract than by auc- tion. Id. 458. In point of fact, a public sale appears to have been intended by the assignment in this case, the word ‘‘ private” being inserted by the misprision of the writer. Id. 454, 458, 4R. 8S. of Ark. (1874), § 387, p. 208. 5 Bartlett v. Teah, 1 McCrary, 176; Raleigh v. Griffith, 37 Ark. 150. 6 Neally v. Ambrose, 21 Pick. 185, In this case it was held that under such an assignment the assignee might sell on a credit. Farquharson v. Eichelberger, 15 Md. 68; Ely v. Hair, 16 B. Mon, 230. But see Clark v. Fuller, 21 Barb. 128, contra. 7 Hopkins v. Ray, 1 Metc. 79. 8 Ashurst v. Martin, 9 Port. 566; Pierce v. Brewster, 32 Ill. 268. 26 ASSIGNMENTS WITH SPECIAL PROVISIONS. (cH. x1. more particularly empowering them to sell “for cash or upon credit,” ! as they may deem proper or most for the advantage of par- ties? In regard to the power to sell on credit, it was formerly held in New York that a clause expressly giving such a power did not vitiate the assignment on the ground of hindering and delaying creditors;* that the power itself was, in many instances, benefi- cial to the interests of creditors, and in some cases essential to. the due execution of the trust;* and that where it was not ex- pressly given it was usually implied in trusts for the payment of debts.> But the court of appeals of this state have, in several cases, determined that a clause of this kind avoids the whole assignment;® its tendency and effect being to “hinder, delay and 1 When the instrument is silent, the assignee will have the power of sale for cash or on credit, in his discretion as trustee. Hoffman v. Mackall, 5 Ohio St. 124, 2 The forms now in use in England allow the trustees to give any credit and. take any security for the purchase-money. See Janes v. Whitbread, 5 Eng. L. & Eq. 431. 3 Rogers v. De Forest, 7 Paige, 272; Nicholson v. Leavitt, 4 Sandf. S. C, 252). reversed on appeal, 6 N. Y. 510. 4 Nicholson v. Leavitt, 4 Sandf. S, C. 25%: Duer, J., id. 289, 290. 5 Walworth, C., in Rogers v. De Forest, 7 Paige, 272; Nicholson v. Leavitt, ubi supra. 6 Barney v. Griffin, 2 N. Y. 865, 371; Nicholson v. Leavitt, 6 N. Y. 510; Bur- dick v. Post, id. 522; Porter v. Williams, 5 N. Y. 142; Kellogg v. Slauson, 11 id. 802; Brigham v. Tillinghast, 3 id. 215. The question, having been thus repeatedly passed upon by the court of last resort, is to be considered in this state as judi- cially settled. But as the contrary has also been held in able and well-reasoned: opinions, a brief view of the course of the decisions, with the grounds of each, may not be without value or interest to the profession in other states. The first case in which the question appears to have arisen was that of Rogers v. De For- est, which came before the court of chancery in 1888 (7 Paige, 272). In this case the assignment, which was of both real and personal property, contained an ex~ press power to the assignee to sell on credit, and also to lease and mortgage the assigned estate for the benefit of creditors. The chancellor held that the power to sell on credit did not render the trust invalid under the provisions of the Re- vised Statutes relative to uses and trusts; neither did it render the assignment fraudulent and void as against the creditors of the assignor. ‘‘The express power to sell on credit,” he observed, ‘‘ is a power which is usually implied in trusts of this description, and it is not a violation of the provisions of the Revised Stat- utes relative to uses and trusts. Neither does the creation of such a trust tend. in any manner to delay or hinder the creditors of the assignor in the collection of their debts. For if the assignees do their duty they will not sell the property on credit without obtaining therefor the difference in value between a sale for cash and a sale upon credit. And the creditors, should they think proper to do so, have a right to insist that such securities should be immediately converted into money and applied towards the satisfaction of their respective debts, or as soon as they shall deem it for their interest to have it done.” But as to the power: or trust in the assignment fo lease or mortgage, the chancellor held that such a trust was not authorized by the Revised Statutes, and that for that reason no estate in the real property vested in the assignees. On an appeal from the de- cree in this case to the court of errors (Darling v. Rogers, 22 Wend. 483), the § 190.] TERMS OF SALE— POWER TO SELL ON OREDIT. 257 defraud creditors,” within the meaning of the statute. The same chancellor’s decision was reversed, the court holding the assignment to be so far valid as to vest the estate in the real property in the assignee. But the question as to the validity of the power to sell on credit was not brought before the court, nor was it noticed in the opinion delivered on the appeal. The chancellor’s decis- ion, therefore, sustaining the assignment on that point, may be considered to have been left undisturbed. In the case of Meacham v. Sternes, which came be- fore the court of chancery in 1842 (9 Paige, 398), the assignee was directed by the assignment to sell the trust property at such reasonable times as should seem proper to him; and it was held that this did not authorize him to sell at retail and on credit, nor to send to agents to sell on commission. The chancellor, in the course of delivering his opinion, observed that it was a breach of duty in the assignee to retail the property upon credit. ‘‘ For the creditors were entitled to have the assigned property converted into money and applied to the payment of their debts, without any unnecessary delay. And the assignment itself would have been clearly fraudulent if the assignors had in terms directed their as- signees to dispose of the property in the manner in which it was disposed of by the trustee in this case; they being at the time of the assignment in failing cir- cumstances, and making this assignment of all their partnership effects in trust to pay their debts.” In the case of Barney v. Griffin, which came before the vice- chancellor of the first circuit in 1847 (4 Sandf. Ch. 552), the assignment authorized the assignees to sell the real estate assigned at public or private sale, for cash or upon credit, or partly for cash and partly upon credit, and generally upon such terms as the assignees should think most advantageous. But it also contained other and highly obnoxious clauses, especially a reservation to the assignor of the residue of the assigned property remaining after payment of certain specified creditors to the exclusion of the general creditors, upon which the vice-chancellor’s decision declaring it void seems to have been essentially based, the only author- ity cited and relied on by the court being that of Goodrich v. Downs, in the su- preme court (6 Hill, 488), in which such a clause was the principal ground of the decision. On an appeal to the chancellor the vice-chancellor’s order appointing a receiver was affirmed, and the case was then carried to the court of appeals. In Barney v. Griffin, as it came before the court of appeals in 1849 (2 N. Y. 365), the principal grounds of objection to the assignment were two, namely, the clause reserving the residue, as above stated, to the assignor, and the clause authorizing a sale of the assigned property on credit. On the first point the opinion of the court was unanimous against the validity of the assignment; the point having been in fact already conclusively settled. And on the second point it was held by Bronson, J., who deli vered the opinion of the court, to be an unanswerable objection to the deed that the assignees were authorized to sell the property on credit. ‘‘An insolvent debtor,” he observed, ‘‘ cannot, under color of providing for creditors, place his property beyond their reach, in the hands of trustees of his own selection, and take away the right of the creditors to have the property con- verted into money for their benefit without delay. They have the right to deter- mine for themsel ves whether the property shall be sold on credit; and a convey- ance which takes away that right and places it in the hands of the debtor, or in trustees of his own selection, comes within the very words of the statute: it is a conveyance to hinder and delay creditors, and cannot stand.” Id. 871. The learned judge relied on the case of Meacham v. Sternes, observing that the ques- tion was considered by the chancellor in that case, and that his views fully ac- corded with his own, The case of Rogers v. De Forest was not noticed. In Nicholson v. Leavitt, a very important case, involving the validity of several vol- untary assignments, came tefore the superior court of the city of New York in 1350 (4 Sandf. S. C. 252) Some of the assignments contained a clause directing a sale of the assigned property “‘ for cash or upon credit, or partly for cash and 17 > 258 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XI. doctrine has been recognized by the supreme courts of Vermont,! partly upon credit, and by and under such terms and conditions as the assignees should deem reasonable and proper;” and upon this and several other grounds the assignments were assailed as invalid. The case was fully considered by Duer, J., in a long and elaborate opinion; and the court, through him, held that a discretionary power given to the assignee in an assignment for the benefit of creditors to sell the assigned property on credit was not evidence of an intent to defraud creditors, and did not vitiate the assigument. The court adopted the opinion, and followed the ruling of the chancellor in the case of Rogers v. De Forest, which was considered to have not been disturbed either by the judgment of the court of errors in Darling v. Rogers, or by the chancellor’s own remarks in Meacham v. Sternes. The decision of the court of appeals to the contrary, in Barney v. Griffin, was not considered as of binding authority; the opinion ex- pressed by Mr. Justice Bronson in that case, on the point of an authority to sell on credit, being regarded (from the form of the reporter’s note and other circum- stances) merely as his own, and not that of the court. The question was consid- ered upon principle as well as upon authority, and the analogies derived from the practice of courts of equity and the course of the legislature itself; and it was held, in accordance with the views in Rogers v. De Forest, that such a power did not necessarily hinder or delay creditors; that it more frequently facilitated the distribution of the assigned property, and increased the amount of the fund beyond what would be produced by a sale for cash only; that it was indeed in some cases essential to the due execution of the trust; that where it was not given in terms, the law would imply its existence; and that an authority which the Jaw itself would give by implication could not be regarded as illegal and fraudulent when given in terms. An appeal was taken from the decree of the court in this case, and the cause carried to the court of appeals, the result of which will be stated below. In Burdick v. Post, 12 Barb. 168, which came before the superior court of the second district at the Kings county general term, in 1851, an assignment containing a clause conferring upon the assignee power to sell on credit, was held by a majority of the court (Brown, J., dissenting) to be void on that ground alone. The decision of the court of appeals, in Barney v. Griffin, was considered as of binding authority, and that in Nicholson v. Leavitt disapproved. The court in this case say that a clause authorizing a sale on credit vitiates an assignment on the same principle and for the same reason as would a provision directing the assignee to wait twelve months before proceeding to exe- cute his trust. This case also was carried to the court of appeals. , 483; Planck v. Schermerhorn, 3 Barb. Ch. 644, 646. 2Durling v. Rogers, 22 Wend. 483; Sandford, A. V. C., in Van Nest v. Yoe, 1 Sandf. Ch. 4, 6. 3 Darling v. Rogers, ubi supra. 4 Ibid. 5 Montgomery v. Galbraith, 11 Sm. & M. 555. 6 Beatty v. Davis, 9 Gill, 211. 7City of Richmond v. Davis, 103 Ind. 449; 3 N. E, Rep, 130. 8Gardner v. Commercial Bank, 95 Il. 298. 9 Waldron v. Wilcox, 18 R. I. 518. See Beatty v. Davis, 9 Gill (Md.), 211; Montgomery v. Galbraith, 19 Miss. 555, 268 ASSIGNMENTS WIfH SPECIAL PROVISIONS. {oH. x1. other portion of the property, so long as in their judgment it shall be necessary.! Neither will it be vitiated by a provision authoriz- ing the assignees, if they shall deem it necessary, to pay the ¢nterest on a mortgage which is a prior lien upon the assigned property, and the principal and interest on another mortgage, if they shall deem it for the interest of the creditors to do so,’ the assignees having, of themselves, the power to do these acts without any ex- press authority from the assignor.’ § 197. Power to Employ Agents.— So a power in an assign- ment authorizing assignees to appoint and dismiss agents and to pay them out of the proceeds of the assigned property is unobjec- tionable, they having the same authority without such provision.* But a trustee cannot delegate his powers calling for the exercise of judgment or discretion, except when the instrument gives him that authority. § 198. Power to Compound and Compromise Debts.— But a power given to assignees to declare future preferences, or change the order of preferences already given, will render the assignment void. So a power to assignees to compound with all or any of the creditors in such manner and upon such terms as they should deem proper was regarded, in a leading case in New York,’ as peculiarly objectionable and one that it was impossible to sustain,’ although it was expressed with a proviso that it did not interfere with the 1 Whitney v. Krows, 11 Barb. 198. 21d. Soa direction to pay the rents and taxes on real estate until sold does not invalidate the assignment. Van Dine v. Willett, 38 Barb. 319; Eyre v. Beebe, 28 How, Pr, 333. 311 Barb. 198; Harris, J., id. 201, 202. See Gough v. Clift, 81 Md. 371. 4Vernon v. Morton, § Dana, 247; Henessy v. Western Bank, 6 W. & S. 300; Mann v. Whitbeck, 17 Barb. 3888; Van Dine v. Willett, 838 Barb. 319; Casey v. Jones, 37 N. Y. 608; Nye v. Van Husan, 6 Mich. 329; Maennel v. Murdock, 13 Md. 164; Langdon v. Thompson, 25 Minn. 509; Richardson v. Marqueze, 59 Miss. 80. When the assignment contained a direction that the assignee should employ certain particular persons as attorneys in collecting in the estate, this direction asa badge of fraud. Carlton v. Baldwin, 22 Tex. 724. So an agreement to em- ploy the assignor in winding up the business as part consideration for the trans- fer renders it illegal. Smith v. Craft, 11 Biss. 340; Burgaman v. Hickman, 115 Pa. St. 420. 5 Cassady v. Wallace, 102 Mo. 574; 15S, W. Rep. 188. See Patterson v. Johnson, 113 Ill. 559. Also see post, p. 487, 6 Barnum.v. Hempstead, 7 Paige, 568; Green v. Grieber, 3 Md. 11; Strong v. ‘Skinner, 4 Barb. 546; Sheldon v. Dodge, 4 Denio, 217; Kercheis v. Schloss, 49 How. Pr. 284; Brown v. Guthrie, 39 Hun, 29; Moody v. Paschal, 60 Tex. 483. See Stimpson v. Fries, 2 Jones’ Eq. 156. 7 Wakeman v. Grover, 4 Paige, 24; s. c. on appeal, Grover v. Wakeman, 11 Wend. 187. 8 Walworth, C., in Wakeman v. Grover, 4 Paige, 41; Sutherland, J., inGrover wv, Wakeman, 11 Wend. 203, § 198.] POWER TO COMPOUND DEBTS. 269 order of preference established by the assignment, the effect of the provision being considered to be to perpetuate the right of giving preferences by vesting in the assignees an arbitrary power in rela- tion to the several classes of creditors, and of compounding with any one upon such terms as they might think proper.!’ But where an assignment contained a provision that nothing contained in the instrument should be considered as restricting or preventing the assignee from liquidating or compounding with any of the credit- ors by making over, assigning or transferring any of the choses in action, debts or accounts due to the assignors, the court held this to be rather the reservation of a supposed existing right than the grant of a power, and declined to presume a fraudulent intent from the clause.” In a late case in the same state® it was held that while a grant of power to the assignee to receive payment of debts by instal- ments did not avoid the assignment, yet a clause authorizing the assignee to “compromise with the creditors” of the assignor for all his debts and liabilities, if in the opinion of the assignee “ it would be advantageous” to the creditors and the assignor, was held to render the assignment void; for its effect and intent was to delay the payment of debts and create a trust for the assignor. But in the same state it is held that an assignment is not invali- dated by a provision authorizing the assignee to compound or com- promise debts owing to the assignor.' In Illinois 5 and Kansas ° a clause in a general assignment author- izing the trustee to compound with the creditors renders it void. In a case in the latter state the assignment directed the assignee in the usual way to convert the assets into money, unless the in- debtedness of the assignors could be paid or settled otherwise by amicable arrangement. This condition was held to render the as- signment. void in connection with the fact that the assets were slightly more than the liabilities, and that the plan was to induce a settlement with creditors.’ But a clause authorizing the assignee to compound with the assignor’s debtors has been sustained; as where the assignee was empowered “to compromise all bad and doubtful claims,”* or “to compound, compromise and settle the claims assigned in his discretion.” ® 1 Walworth, C., ubi supra; Sutherland, J., ubi supra. 2Van Nest v. Yoe, 1 Sandf. Ch. 4, 5. 3 McConnell v. Sherwood, 84 N. Y. 522, affirming s. c., 19 Hun, 519. 4 Bagley v. Bowe, 105 N. Y. 171; 11 N. E. Rep. 386; 59 Am. Rep. 488 5 Hudson v. Maze, 3 Scam. 578, § Keevil v. Donaldson, 20 Kan. 165, 7 Keevil v. Donaldson, supra. & Brigham v., Tillinghast, 15 Barb. 618. 9 Bellows v. Partridge, 19 Barb, 176; White v. Monsarrat, 18 B, Mon. 809; Price 270 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. Xz. In New York it is provided by statute! that the county judge may authorize the assignee to compromise or compound any claim or debt belonging to the estate of the debtor. But it has been de- cided? that a clause in the assignment simply authorizing the as- signee to compromise such claims as in a sound discretion the interests of the trust require does not conflict with the statute nor invalidate the assignment. § 199. Notice to Creditors by Assignee.’ — An assignment may contain a clause directing the trustees to give notice before making a dividend and requiring the creditors to prove their debts before they should be entitled to a dividend.! So where preferences are allowed it has been held that an assignment may have a clause di- recting the assignee to give notice to the creditors to present their claims to him at a reasonable time and place and preferring such creditors as should comply with such notice over others. § 200. Power to Defend Suits. A power may sometimes be given to an assignee to defend suits brought by creditors, and to defray the costs out of the assigned property. Thus in Kentucky, where the assignment authorized the trustees to defend certain at- tachment suits against the debtors and to retain so much out of the proceeds of the assigned effects as would indemnify them, it was held to be no objection to its validity.6 So in New York, where an assignment contained a power to the assignee to defend all law, equity and other proceedings which they [he] might deem neces- sary to the execution of the trusts, it was held to afford no marked v. Ford, 18 Md. 489; Carlton v. Baldwin, 22 Tex. 724; Watkins v. Wallace, 19 Mich. 57; Murphy v. Bell, 8 How. Pr. 468. See Conklin v. Conrad, 6 Ohio St. 611; Woodburn v. Mosher, 9 Barb. 255. Where the intention of a provision that the assignee may compromise choses in action when he deems it expedient to do soe is simply to give him authority to settle doubtful claims, and is restricted to that class alone, the assignment is not void on its face. Lininger v. Raymond, 9 Neb. 40. An assignment executed with the intent of thereby affecting a compromise is void. Bennett v. Ellison, 23 Minn. 242. 1 Laws of 1877, ch. 466, § 28; Bliss’ Ann. Code, 1890, p. 2280. 2Coyne v. Weaver, 84 N. Y. 386; Ginther v. Richmond, 18 Hun, 232. See Matter of Ransom, 8 Daly, 89; Jessup v. Herzfeld, 1 N. Y. Weekly Dig. 241; Master of Youngs, 5 Abb. N. C. 346, 3 See ch. XXIX. ‘Garland, J., in U. 8. v. Bank of U. 8., 8 Rob. (La.) 412. See Ashurst v. Mar- tin, 9 Port. 566; U. 8S. Bank v. Huth, 4B, Mon. 423. The English forms some- times contain a clause requiring creditors to verify their debts or lose the benefit of the assignment. See Jones v. Whitbread, 20 Law J.C. P. (N. S.) 217; & ©, 5 Eng. L. & Eg. 481. 5 Ward v. Tingley, 4 Sandf. Ch. 476. 6 Vernon v. Morton, 8 Dana, 247; Ewing, J., id. 252, 265. Nor does the fact that the defense proved unavailing make any difference. Id. § 200.] POWER TO DEFEND SUITS. 271 evidence of fraud, and the court could not perceive much in it that the assignee could not have done if the whole clause had been omitted.' But where a debtor in an assignment giving preferences first provided for the payment of all costs and expenses necessarily incurred by the assignee in defending any suits that might be in- stituted against him by any creditor or other person for anything out of the assignment or in any way connected with it, it was held that the assignment was fraudulent against his creditors.2 And if a debtor have ample property to pay all his debts, it is a fraud upon his creditors for him to assign all his property to an assignee and to authorize such assignee to employ its proceeds in defending suits which might be brought against the assignor by his creditors to recover their several debts, the effect of such assignment being to delay his creditors in the collection of their debts.? In Missouri, aclause providing that the assignees shall not pay costs on the debts that have accrued or that may accrue on them by suit has been held not to avoid an assignment. An assignment may have a stipulation and direction to the as- signee to deliver merchandise im specte to certain preferred credit- ors at prime cost, the value to be settled by the assignee.’ So it may have a stipulation and direction that no ¢nterest shall be paid out of the effects conveyed till the principal of all the debts is paid. But an assignment of a bond and mortgage payable in five years, in trust for the benefit of certain creditors, with a proviso that it should be held by the assignee until the expiration of the period it had to mature, and in no case parted with until that time; and that the assignee should then, and not before, proceed to collect the principal, was held to be fraudulent as against creditors, carry- ing on its face an intent to hinder and delay them.’ A provision empowering an assignee, “generally, to adopt such measures in relation to the settlement of the estate as will, in his judgment, promote the true interests thereof,” has been held not to render an assignment fraudulent and void upon its face.® 1Sandford, A. V. C., in Van Nest v. Yoe, 1 Sandf. Ch. 4, 6. 2 Mead v. Phillips, 1 Sandf. Ch. 83. 3 Planck v. Schermerhorn, 3 Barb. Ch. 644. A provision in an assignment au- thorizing the assignee to use or employ the proceeds of the assigned estate in defending suits that might be brought against the assignor by his creditors to recover their several debts would have the effect to hinder and delay creditors, and would render the assignment void. Levy’s Accounting, 1 Abb. N. Cas. 181, -and cases cited. 4Gates v. Labeaume, 19 Mo. 17. 5 Bayne v. Wylie, 10 Watts, 309. ¢Ingraham v. Grigg, 18 Sm. & M. 22, 7 Storm v. Davenport, 1 Sandf. Ch. 135, 8 Mann v. Whitbeck, 17 Barb. 388. 272 ASSIGNMENTS WITH SPECIAL PROVISIONS. (cH. x1. An assignment containing the clause “ provided, however, that. the said party of the second part (the assignee) shall pay no claims unless the correctness of the same shall be established to his satis- faction,” the directions extending to all claims, and not being re- stricted to the creditors not named, is fraudulent and void as to. the creditors named, the amounts of whose claims are given.' 1X. Srrpu.ations FoR THE Benerir or ASSIGNEES. § 201. Assignee Liable for Misconduct of Others, When.— A clause in an assignment exempting the assignees from liability for effects that should not come to their hands, and for losses, etc., from the misconduct of agents, has been approved.? And where there are two or more assignees, it is usual to stipulate that each shall be liable only for his own acts and defaults, and not for those of his co-assignees. A clause in an assignment providing that the assignees shall not be answerable or accountable for the acts, re- ceipts, neglects or defaults of any attorney or attorneys, agent or agents, that they may employ, nor for any misfortune, loss or dam- age which may happen without their wilful neglect, does not vitiate the assignment where it contains a clause binding the assignees to act faithfully and justly in the execution of the trust.* But a pro- vision that the assignee shall not be accountable for any defalcation committed by any clerk, agent or assistant necessarily employed by the assignors or either of them, in the execution of the trusts of the assignment, has been considered a badge of fraud.‘ And a. stipulation limiting the liability of an assignee or trustee to his own gross negligence or wilful misconduct exonerates him from a great portion of the responsibility which the law attaches to his office, is considered evidence of an intent to hinder, delay and de- fraud creditors, and has therefore been held to render the assign- ment void as against them.’ So a provision that the assignee, “while acting in good faith, shall not be made or held personally 1 Hill v. Agnew, 12 Fed. Rep. 230. 2 Henessey v. The Western Bank, 6 W. & S. 300. 3 Jacobs v. Allen, 18 Barb. 549; Baldwin v. Peet, 22 Tex. 708; Gordon v. Can- non, 18 Gratt. 387; Henessey v. The Western Bank, 6 W. & S. 300; Rankin v.. Loder, 21 Ala. 880. In Missouri it has been held, where a trustee is authorized by the deed of trust to appoint agents or substitutes to assist in the management of the trust business, and he accepts the trust upon the express condition that he shall not be responsible for the negligence or misfeasance of any person except himself, should an agent or substitute appointed by him be guilty of malfeasance: a court of chancery will not hold him liable. O’Fallen v. Tucker, 13 Mo. 262. 4Van Nest v. Yoe, 1 Sandf. Ch. 4, 6. 5 Litchfield v. White, 3 Sandf. 8, C. 545; affirmed on appeal, 7 N. Y. 438; De Wolf v. Sprague Mfg. Co., 49 Conn. 282, §§ 202, 203.] MISCELLANEOUS. 273 liable in the premises, in any manner,” is such a restriction upon the liability of the assignee as renders the assignment fraudulent and void as against creditors, the rule being that a reservation or restriction of the liability of the assignee to a degree less than that which the law imposes upon trustees renders the assignment void.! The clause “being responsible only for his actual receipts or wil- ful defaults,” annexed to the acceptance of the assignee, will not , vitiate the assignment. It does not release the assignee from the exercise of due diligence in collecting the debts due the assignor.? § 202. Provisions for Expenses and Services of Assignees.— A provision may be made for the payment from the fund of the just and reasonable expenses, costs, charges, damages,’ and com- missions of executing and carrying the assignment into effect,‘ and may also provide for all reasonable and proper charges for attorney and counsel fees respecting the same.’ But where the assignment provided that the assignee, who was a lawyer, should retain, over and above the expenses of the trust, a reasonable counsel fee, this was held to render the assignment void § X. Reszrvations or Powers to AssiaNnors. § 203. Reservations of Powers to Assignors Invalidate Assign- ments.— Clauses in assignments, reserving to the assignor any power or control over the provisions of the instrument itself or the property assigned by it, or over the disposition of it by sale or the appropriation of its proceeds, are more uniformly fatal to their validity than even those which reserve to him a benefit out of the property through the assignee. 1 Hutchinson v. Lord, 1 Wis. 286. See Keep v. Sanderson, 2 id. 42; Whipple v. Pope, 33 Ill. 334; McIntire v. Benson, 20 id. 500; Finlay v. Dickerson, 29 id. 9; True v. Congdon, 44 N. H. 48; Olmstead v. Herrick, 1 E. D. Smith, 310; Met- calf v, Van Brunt, 37 Barb. 621. A provision that the assignee shall not be ac- countable for property which does not actually come to his possession renders the deed void, for he is bound to use due diligence to obtain possession. MclInutire v. Benson, 20 Ill, 500; Finlay v. Dickerson, 29 id. 9; True v. Congdon, 44 N, H. 48; Pitts v. Viley, 4 Bibb, 446. 2 Thomas v. Clark, 65 Me. 296. 3 Blow v. Gage, 44 Ill, 208, 4 Eyre v. Beebe, 28 How. Pr. 333; Islen v. Dalrymple, 27 id. 137; s. a, 2 Robt. 142; Jacobs v. Remsen, 36 N. Y. 668; Halstead v. Gordon, 34 Barb, 422, 5 Butt v. Peck, 1 Daly, 88. See remarks of Robinson, J., in Levy’s Accounting, 1 Abb. N. Cas. 182. But the debtor cannot contract with attorneys for services after the execution of the assignment. Hill v. Agnew, 12 Fed. Rep. 330; Matti- son v. Judd, 59 Miss, 99, 6 Nichols v. McEwen, 17 N. Y. 22; Heacock v. Durand, 42 Ill. 280. But in Thompson v. Childress, 1 Tenn, Ch, (Cooper), 369, it was held that an assignee who is also a solicitor or attorney will be allowed compensation for professional services as such in matters touching the trust estate. 18 274 ASSIGNMENTS WITH SPECIAL PROVISIONS. [CH. XI. Thus a clause reserving to the assignor a general power of revo- cation and the declaration of other trusts renders the assignment fraudulent on its face and void.! Powers of this kind are, in the emphatic language of Chancellor Kent, “fatal to the instrument and poison it throughout. »2 And “the law,” in the words of the same eminent judge, “is so jealous on this subject, that if the deed contains a power in any way equivalent in its effects to a power of revocation, it is fatal.”* Thus in an early case in England‘ it was held by the king’s bench that a conveyance by an insolvent debtor in trust to pay debts was fraudulent because, among other things, it had a proviso enabling the grantor to make leases for any term without rent, and this was considered as putting it in his power to defeat the whole settlement; for, though the consent of the trustees was necessary, yet they were trustees of his own nomination. And in Maryland it has been held that the reserva- tion to the grantor of the power of making leases avoids an assign- ment. Soin another English case,* where the deed reserved to the grantor a power to mortgage the estate conveyed, it was held to be fraudulent because, the grantor having reserved a power to mortgage and charge the estate with what sums he thought fit, he might have charged it to the full value, which amounted in fact to a power of revocation, rendering it fraudulent against the creditors. In a New York case where a general assignment, although com- pletely executed and acknowledged, was not delivered and was not intended by the parties to take effect at the time, but was retained by the assignor and by him delivered to his attorney with instruc- tions to keep it until further orders from the assignor, or until he should think it necessary for the best interests of all the creditors to file it, it was held that there is a reservation of power which renders the assignment void.’ § 204. Reservation of Power to Assignor Over Preferences.— So a clause reserving, even indirectly, to the assignor the power of changing the order of preferences expressed in the assignment will render the deed fraudulent. But in North Carolina it has been 1 Riggs v. Murray, 2 Johns. Ch. 565; Reichenbach v. Winkhaus, 67 How. Pr. 512; Cannon v. Peebles, 4 Ired. L. 204; 2 Tuck. Com. [442], 481; Green v. Trieber, 8 Md. 11; Price v. Pritzer, 44 id. 521. 22 Johns. Ch. 579, 31d. 579, 580. 4 Lavender v. Blackstone, 3 Lev. 146; 3 Keb, 256, pl. 11. 5 Green v. Trieber, 3 Md. 11. 6 Tarbuck v. Marbury, 2 Vern. 510. 7 Reichenbach v. Winkhaus, 12 Daly, 525; 67 How. Pr. 512, § Averill v. Loucks, 6 Barb. 470; ante, p. 190. The debtor must settle the respective rights of the creditors under the assignment at the time of the trans- § 204.] RESERVATION OF POWER TO ASSIGNOR. 275 held that where the maker of the deed only reserves the privilege of adding to the number of preferred creditors others of the same class, the deed cannot be pronounced by the court fraudulent on its face, but it must be left to a jury to determine whether such provision was inserted with a fraudulent intent.. “It is not the mere fact,” observes Chief Justice Ruffin in this case, “that the appropriation of the trust fund may be changed, or that the debtor may modify the appropriation by letting in other creditors exist- ing at the time, that converts the power to do those acts into a fraudulent power of revocation, either literally or substantially. The true principle is that if it appears expressly to be for the ben- efit of the grantor —as every general power of revocation must be — or to be a contrivance designed for that end, although cov- ered by some form with a view to conceal that end, then it is fraudulent under the statute, but otherwise there must be a pur- pose actually to deceive, found by the jury.” ? A clause reserving to the debtor the power to appoint new trustees as a consequence of the power of revocation renders the assignment fraudulent and void.’ So a clause reserving to the as- signor the right to name the successor of the assignee, in case such assignee should wish to resign the trust, is good ground of objec- tion to an assignment.‘ An assignment of property in trust to sell part of it to pay for advances, and to retain part of it subject to the future order of the assignor, is intended only as a cover to keep off execution credit- ors, and has premeditated fraud upon the face of it.® fer, and cannot reserve the power to create preferences to himself or give it to the assignee. Brown v. Guthrie, 39 Hun, 29. 1 Cannon v. Peebles, 4 Ired. L. 204. But where the assignment directed the assignee to pay such other debts as the assignors should thereafter specify out of any surplus which might be left after paying all the claims and debts provided for in the assignment, this was held not to make the assignment void per se. Hall v. Wheeler, 13 Ind. 371. 24 Tred. L. 209, 210. And see Stimpson v. Fries, 2 Jones’ Eq. 156. 3 Riggs v. Murray, 2 Johns. Ch. 565. 4Planck v. Schermerhorn, 3 Barb. Ch. 644. But in Connecticut it has been held, even under the statute of 1853, that an assignment is not rendered void by a provision that, if the trustee therein named should decline to accept and exe- cute the trust, the assignor should have the power of appointing another trustee in his stead although the provision would be inoperative. Vansands v. Miller, 24 Conn. 180, 184. In Wright v. Thomas, 1 Fed. Rep. 716, it was held that an assignment was not void under the statutes of Indiana because, among other things, the assignors reserved in the deed the right to instruct the trustees as to their duties, and also the right to remove one or all of the trustees with the con- sent of two-thirds in value of the creditors. 5 Hart v. McFarland, 13 Pa. St. 182. A reservation of property to be subse- quently selected by the assignors rendors the assignment void on its face. Clark v. Robbing, 8 Kan, 574. In Burr’s Ex’r v. McDonald, 8 Gratt. 215, a provision in 276 ASSIGNMENTS WITH SPECIAL PROVISIONS. [cH. XL § 205. Reservation of Power to Assignor Over Sales.— A clause in a deed of trust reserving to the debtor the power of ordering & sale at an earlier day than that prescribed by the deed was held in North Carolina not to be objectionable! But the reservation to the debtor of the power to direct the terms and places of the sale was considered more objectionable, and one which, if allowed as a precedent, might lead to great abuses. The court considered that the reservation of such a power was not easily reconciled with the absolute and bona fide appropriation by the debtor of his prop- erty to the payment of his debts. The deed, however, was not. held void on this ground. In Virginia, where a deed of trust contained a provision that if the debts secured by the deed were not paid by a day designated, then the trustee, when required by a creditor named, or the debtor himself, should proceed to sell at auction as prescribed in the deed, and should first pay off the debts for which such creditor was. bound, and then all others secured by the deed which the debtor should certify as correct, and a proper charge upon the fund, it was held, in affirmance of the judgment of the court below, that. the deed was fraudulent on its face. And in Michigan, where an assignment reserved to the assignor a control over the sale of the real estate assigned, by providing that it should not be sold until all the personal assets should be exhausted unless with the consent. of the assignor, it was held fraudulent and void in law as against. creditors not preferred or not provided for in the assignment.‘ A conveyance by one indebted in trust to sell, the grantor re- serving a power of appointment of the proceeds, is fraudulent as to- a prior creditor recovering judgment after the grantor had ap- pointed the proceeds to creditors.° The general rule, in fine, under this head, is that the debtor must. not only part with the property, but must also surrender up all. power over the estate, and all power to interfere authoritatively in the appropriation of the proceeds.§ an assignment by a corporation that the company should have power to direct the abandonment of any part of the property conveyed was argued to be a power reserved to the grantors incompatible with the grant. But the objection was not noticed by the court. See Sipe v, Earman, 26 Gratt. 563, 1Qannon v. Peebles, 2 Ired. L, 449. 2 Cannon v. Peebles, 2 Ired. L. 449; s. c., 4 id. 204. 3 Spence v. Bagwell, 6 Gratt. 444, 450, -) Pierson v. Manning, 2 Mich, 445; Pratt, J., id. 449; Sipe v. Earman, 26 Gratt. 5 Mitchell v. Stiles, 18 Pa. St. 806. 6 Whallon v. Scott, 10 Watts. 237; Sheerer v, Lautzerheizer, 6 id. 549; Coulter, J., in Mitchell v. Stiles, 18 Pa, St. 806, 309; Phelps v. Curts, 80 Il. 109, : CHAPTER XII CONSIDERATION OF ASSIGNMENTS, § 206. Sufficient Consideration, What, 207. Assent of Creditors. § 206. Sufficient Consideration, What.— There can be no ques- tion whether an assignment of a debtor’s property to a trustee for the benefit of his creditors is for a valuable consideration or not, because the debts due to the creditors constitute a valuable con- sideration in the highest sense of the terms, and the obligation of the trustee to perform the trust according to the provisions of the deed is a sufficiently valuable consideration so far as he is con- cerned. This was the opinion of Mr. Justice Story in the case of Halsey v. Whitney,! and it has been repeatedly recognized by the highest authority in this country as the general American rule on the subject. In the New York case of Dey v. Dunham it was held by Chancellor Kent that “a conveyance in trust to pay debts is a valid conveyance founded on a good consideration.”? The opinion of Mr. Justice McLean * was that an assignment for the benefit of creditors cannot be considered void for want of consideration. In Pennsylvania a voluntary conveyance by a debtor in failing cir- cumstances of property not subject to any lien has always been ‘considered as founded on sufficient consideration.t In New York the nominal consideration of one dollar, or the fact that the assignee was a creditor as appearing on the face of the assignment, is held sufficient to transfer the legal title to the property and vest it in him. The amount of the consideration was never material for this purpose, and it seems to be well settled that the relation of debtor 14 Mason, 206, 214; cited by Garland, J., in United States v. Bank of the United States, 8 Rob. (La.)405; and followed by Bennett, J., in Hall v. Dennison, 17 Vt. 310, 316. In the latter case there was a nominal consideration specified in the deed and also a direct covenant on the part of the trustee for the faithful per- formance of the trust. Hudson v. Maze, 4 Ill. 678; Meeker v. Saunders, 6 Iowa, ‘61; Nutter v. Harris, 9 Ind. 88; Exchange Bank v. Knox, 19 Gratt. 789; Haven v. Richardson, 5 N. H. 118; United States Bank v. Huth, 4 B. Mon. 428; Feimes- ter v. McRorie, 12 Ind. 287; Thomas v. Clark, 65 Me. 296; Marsalis v. Oglesby, 1 ‘Tex. App. Civ. Cas. 101. See Mackintosh v. Corner, 33 Md. 598; Hoopes v. Knell, 31 id. 550, 22 Johns. Ch. 182, 189; citing Stephenson v. Hayward, Prec. inCh, 310, And see Kelloge v. Slauson, 15 Barb. 58, Allen, J. 3 Lawrence v. Davis, 3 McLean, 177. 4 Burd v, Smith, 4 Dall. 76; Wilt v. Franklin, 1 Binn. 502. 278 CONSIDERATION OF ASSIGNMENTS. [cH. XI. and creditor between the parties and the legal consequences of the assignment constitute a sufficient consideration as between them. In Missouri a deed of assignment. to a trustee for the benefit of creditors is held to be for a valuable consideration.? In Michigan suca a deed containing covenants on the part of the assignees and stipulations beneficial to the creditors is in law to be deemed and taken as founded upon a valuable consideration.’ In Georgia an assignment to creditors for the payment of their debts or to trustees for that purpose cannot be said to be without consideration, espe- cially if one of the trustees be himself a creditor and the conveyance purport to be founded upon a consideration however small.* And in Virginia the insertion of a nominal consideration (as of five dol- lars) in a deed of trust for creditors is no ground of objection to its validity.» In Mississippi it has been held that a deed of trust as se- curity for a debt is prima facie valid, and a claimant under such deed is not bound to show a consideration for it in the first in- stance. And in Kentucky, where the facts proved amount to prima facie evidence of the assignor’s indebtedness, further proof will be dispensed with in the absence of countervailing evidence.’ § 207. Assent of Creditors.— In Massachusetts, however, prior to the statute regulations on the subject of assignments, a different rule prevailed, growing out of the local law which required the assent of creditors to give them validity. The consideration of an assignment in this state was held to depend upon the circumstance whether the creditors had become parties to it or had otherwise assented to its provisions. If no creditor became a party, the deed was without consideration, or, as it was expressed, there was no cestuis que trust, and so no trusts, and the consideration entirely failed. If the creditors elected to become parties, or to assent, 1 Nelson, J., in Cunningham v. Freeborn, 11 Wend. 240, 250, 2 Gates v. Labeaume, 19 Mo. 17. 3 Hollister v. Loud, 2 Mich. 309. 4Jones v. Dougherty, 10 Ga. 273. The promise of the assignee to sell and divide the proceeds of the property assigned among the creditors is a sufficient consideration for the assignment. Block v. Peter, 63 Ga. 260. See Code, § 2744. 5 Johnston v. Zane’s Trustee, 11 Gratt. 552, 564. In Exchange Bank v. Knox, 19 Gratt. 789, it is said to be well settled that the trustees and beneficiaries in a deed of trust to secure bona fide debts are purchasers for a valuable considera- tion; citing Wickham v. Martin, 13 Gratt. 427; Evans v. Greenhow, 15 Gratt. 153. 6 Brown v. Bartee, 10 Sm. & M. 268. 7Vernon v. Morton, 8 Dana, 247, 253. 8 Morton, J., in Fall River Iron Works Co. v. Croade, 15 Pick. 11, 15. Assign- ments in trust for the benefit of creditors, the only consideration for which is the acceptance of the trust, are of no effect against creditors who do not assent to them, and who by trustee process or otherwise attach the property described in the instrument of assignment. Swan v. Crafts, 124 Mass. 453; Faulkner v. Hynian, 6 N. E. Rep. 846. § 207.] ASSENT OF CREDITORS. 279 and their debts amounted to as much as the assigned property, this completed the intended consideration, rendered the conveyance effectual against other creditors, and vested the whole property in the assignees.’ If the debts of the assenting creditors were of less amount than the property assigned they constituted a good con- sideration pro tanto and gave the assignee a right to retain to the amount of such debts.? In other words, it was the rule that the creditors must assent in sufficient numbers and value to cover the property assigned, otherwise the consideration might be deemed inadequate and void as to the non-assenting creditors, though good as to those assenting.’ This was closely following the rule, as long settled in England, that to constitute a valid consideration for a conveyauce to a trustee for the payment of debts, within the stat- ute of Elizabeth, one or more creditors must have become parties to the conveyance,‘ or have agreed or assented to it, or in some manner have become privy to it. This rule has already been al- luded to in considering the parties to assignments and will receive further attention under a future head. 1415 Pick. 16. See Everett v. Walcott, id. 94, 97; Douglass v. Simpson, 121 Mass. 281. 215 Pick. 16. 3 Woodbury, J., in Adams v. Blodgett, 2 W. & M. 237; citing Russell v. Wood- ward, 10 Pick. 408. 4 Roberts on Fraud. Conv., pp. 429, 431, 482, 484, 437. 5 Acton v. Woodgate, 2M. & K. 492; Smith v. Keating, 6 M., G. & S. 186. It wads remarked by Mr. Justice Story, in the case of Halsey v. Whitney, 4 Mason, 206, that ‘‘as to trusts created for the benefit of creditors and to which they are not, technically speaking, parties, if bona fide made, they are unquestionably valid by the law of England, and pass a legal estate to the trustee.” Id. 214. But the following extracts from Mr. Roberts’ work, just cited, present the sub- ject in a different view: ‘‘A general conveyance or assignment to a stranger, in trust to pay the debts of the person conveying, isclearly not a consideration sufficient even to raise a use upon a covenant to stand seized.” Rob. Fraud. Conv., p. 429. ‘‘ That the mere destination of the property to the object of pay- ing the debts of the grantor is not sufficient to raise the use upon a covenant to stand seized, or bargain and sale, appears from Lord Paget’s Case, 1 Leon. 194.” Id. ‘‘That such a conveyance for payment of debts, to which no cred- itor is a party, cannot support itself, under the statutes of Elizabeth, against purchasers or discontented creditors, is a proposition flowing pretty clearly from the general analogy of the reported decisions, and deducible from the very plan and spirit of the statutes themselves.” Id, 431. ‘ But if a creditor be a party to such a conveyance to a trustee for payment of debts, however open the transac- tion may still be considered to the imputation of fraud, from concomitant cir- cumstances, there is a clear valuable consideration to support the deed.” Id. And as to the present rule in England, see further, ante, p, 127, note 3. CHAPTER XIII. TRUSTS OF ASSIGNMENTS, § 208, Trusts of Assignments Defined and Distinguished, 209. Trusts Must be Declared. 210. Implied Trusts. 211, Express Trusts. 212. Passive Trusts. 213. Trusts for Assignor. § 208. Trusts of Assignments Defined and Distinguished.— The ¢rusts of an assignment for the benefit of creditors constitute a very important feature of the transfer. These trusts, in one form or other, enter into the composition of all assignments which contemplate provision or security for creditors (as distinguished from transfers in absolute and final payment and satisfaction); em- bracing not only such as are made to trustees formally appointed by the assignor, distinct from the creditors or cestwis que trust, but such as are made darectly to creditors themselves. In one sense of the word there is but a single trust created by any assignment for the benefit of creditors, the term being, prop- erly, expressive of the confidence reposed by the assignor in the trustee or assignee to carry into effect the entire arrangement and disposition of the assigned property and its proceeds, as declared and directed by the assignment; and also of the whole line of duty devolving upon the assignee in consequence. In this general sense the assignor is said to create and the assignee to ezecute the trust; and the trust itself is said to be entered upon by the latter, and to be closed when all the purposes of the assignment are accomplished. But the term is also used in a more limited sense, and with refer- ence to certain particular objects or results of the assignment, as distinguished from others. In this sense there may be: several trusts created by or growing out of one assignment; but they are all reducible under two general heads — express, and implied or resulting trusts. § 209. Trusts Must be Declared.— The express trusts of an as- signment are the expressions or designations by the assignor of the particular objects or purposes for which it is made, and they usu- ally take the form of directions, more or less minute, to the as- signee or trustee, how to dispose of the property assigned. In the f § 210.) IMPLIED TRUSTS. 281 great majority of cases they are expressed in the same instrument which contains the transfer; but they are sometimes embodied in a separate instrument called a declaration of trust, bearing even date with the absolute conveyance, and accompanying it.! They may even be declared by parol,? but this is not usual. It. may be considered as well settled that every valid assignment must declare the uses to which the property assigned is to be ap- plied, and must settle the rights of creditors under it, and not leave to the assignee or reserve to the assignor himself the right of subsequently doing so.’ The trustee is always bound by any restrictions contained in the writing which creates the trust.‘ The conditions attached to the trust are regarded asa part of the transfer, and the conditions and the transfer stand or fall together.’ § 210. Implied Trusts.— Jmplied or resulting trusts are such as result from the transfer by intendment and operation of law. A trust may be thus implied for the benefit of a creditor. Thus, in a recent case, where a debtor made an assignment of his property in trust, to pay any judgment which the United States might re- cover against him and the sureties on his official bond as collector of customs, and after the recovery of such judgment the plaintiffs in it filed a bill for an account by the trustees, and the application of the trust funds to the payment of the judgment, it was held that a trust in favor of the plaintiffs was created by the assignment by implication of law and that the bill was properly filed. But re- sulting trusts are, properly, those which arise out of an assignment 1See ante, p. 130. 2Lord Nottingham, in Cook v. Fountain, 3 Swanst. 585; 2 Story’s Eq. Jur. § 1195, note. See Boyden v. Moore, 11 Pick. 362; Thomas v. Merry, 113 Ind. 83; 15 N. E. Rep. 244, Trust in personalty may be created and proved by parol. Harris v. Bratton, 34 8. C. 259; 13S, E. Rep. 259, 580; Hon v. Hon, 70 Ind. 185; Wright v. Gay, 101 Il]. 238. But declarations of trust in real estate are almost uni- formly required to be in writing. In Britton v. Lorenz, 45 N. Y. 51 (affirming 3 Daly, 23), parol proof was introduced to show that a bill of sale, absolute on its face, was really made upon a trust to pay certain debts and distribute the residue among other creditors. The instrument, however, was held invalid as a general assignment because not acknowledged. A trust may be established by parol proof, but the evidence must be clear and cogent to establish a parol trust as to land. Lewis v. Ziegler, 105 Mo. 604; 16 S. W. Rep. 862; Ingham v. Burnell, 31 Kan. 833, See ante, pp. 129, 180. 3 Averill v. Loucks, 6 Barb., 476; Sheldon v. Dodge, 4 Den. 220; Caton v. Mosely, 25 Tex. 874; Kercheis v. Schloss, 49 How. Pr. 284; Malcolm v. Hodges, 8 Md. 418. 4 Ogden v. Peters, 21 N. Y. 23; Goodrich v. Proctor, 1 Gray, 567; Purdy v. Whitney, 20 Pick. 25; Gould v. Lamb, 11 Mete. 84, 5 Jessup v. Hulse, 21 N. Y. 168, Selden, J. United States v. Hoyt, 1 Blatchf. C. C. 332; Field v. Flanders, 40 Ill. 470, 282 TRUSIS OF ASSIGNMENTS. [cH. XIII. for the benefit of the assignor himself; and such a result takes place whenever there is a surplus of property or its proceeds re- maining undisposed of after the execution of the express trusts,’ whether all the creditors are paid or not.? If all are paid and there is no express reservation of the surplus to the assignor, it constitutes a resulting trust for his benefit by mere operation of law,’ whicl he may enforce against the assignee. And so if only a portion of the creditors are paid and a surplus of property or proceeds re- mains with the assignee,a trust for the assignor results by the operation of the instrument; with this very material difference, however, that such a resulting trust frequently avoids the whole assignment, being held equivalent to an express reservation for the debtor’s own benefit.‘ § 211. Express Trusts.— The principal express trusts of every assignment for creditors are the trusts to collect the property; to convert it into money by sale, and to distribute it among the cred- itors provided for. But these are sometimes varied by the as- signor. Thus, instead of the trust to sell and pay there may be a trust to deliver certain goods in specie to certain creditors.’ So the leading trusts just mentioned may be and usually are subdivided into minor trusts, or specific directions to the assignee, such as to collect the debts due the assignor; to sell in a certain way; to re- serve the expense of the trust; to pay the creditors in a certain order, and the like.® In some of the states the trusts of an assignment are governed by statute provisions regulating trusts generally.’ 12 Story’s Eq. Jur., § 1196a; Weaver v. Leiman, 52 Md. 708. Where there is an express trust there cannot be a resulting or implied trust. Stevenson v. Crap- nell, 114 Ill. 19. 2See Wilkes v. Ferris, 5 Johns. 335; Dubose v. Dubose, 7 Ala. 235. 3 Halsey v. Whitney, 4 Mason, 206; Story, J., id. 223. In the Matter of the Estate of Potter Paige, 54 Pa. St. 465. The designation of a voluntary assign- ment as being for the ‘‘ benefit of creditors” was held to imply a conveyance to trustees for the benefit either of the creditors at large, or for some other credit- ors than the immediate grantees. United States v. McLellan, 8 Sum. 345, 354, 355. In the case of Corder v. Corder, 124 Ill. 289; 16 N. E. Rep. 107, it was held that the evidence to establish a resulting trust must be very clear and is always received with great caution. Soin the ease of Richardson v. Haney, 76 Iowa, 101, it was held that in a resulting trust resting on parol the evidence must be clear and satisfactory. 4Dana v. Lull, 17 Vt. 390, 397; Burd v. Smith, 4 Dal. 76; Hooper v. Tucker- man, 3 Sandf. (S. C.) 311; Malcolm v. Hodges, 8 Md. 418. 5 Bayne v. Wylie, 10 Watts, 309. 6 An assignment in trust for each and all creditors of the firm is sufficiently specific; such a trust under the law imposes well-defined duties. Forbes v. Scannell, 13 Cal. 242, An assignment for the payment of debts generally with- out any limitations or directions confers upon the trustee the right to sell. Planck v. Schermerhorn, 3 Barb. Ch. 644, ‘See Appendix, I. 8§ 212, 213.] passive TRUSTS — TRUSTS FOR ASSIGNOR. 283 § 212. Passive Trusts.— A mere passive trust to hold property for another’s use cannot exist under the laws of New York. It must be created for one of the active objects enumerated in the statute, and every estate or interest not embraced in the trust and not otherwise disposed of reverts to the grantor as a legal estate.' So when the assignor conveyed property to a trustee to sell, and directed that the avails over and above the expenses should con- stitute a fund for the payment of his debts, “and the residue, if any, should be invested in some safe and proper manner for the grantor’s use during life, or, in case of his death before the comple- tion of the trust, paid over and distributed to his heirs at law as by statute in case of persons dying intestate,” held, that what re- mained after the payment of the debts vested at once in the grantor, and that after a settlement by the trustee and the death of the grantor his heirs at law could not maintain an action for an ac- counting against the trustee. Where a trust, valid under the statute, is coupled with another trust which is invalid, as where a trust to sell land is coupled with another trust not authorized by statute, as to mortgage or incum- ber, this was held valid as a trust to sell, though void as a trust to mortgage, and the assignment operates as a transfer vesting a title in the assignee. But the rule, as we shall see, is different where one of the trusts is fraudulent, for in that case the fraudulent inter- est permeates and vitiates the whole instrument.’ § 218. Trusts for Assignor.— Another important statute pro- vision in New York and some other states is that which declares that “all conveyances, and all transfers or assignments, verbal or written, of goods, chattels or things in action, made in trust for the use of the persons making the same, shall be void as against the cred- itors, existing or subsequent, of such person.” 4 Under this section of the New York statute it was held in Goodrich v. Downs ® that. where an assignment shows on its face that it was made in trust for the use of the assignor either in whole or in part, the court is bound to pronounce the transaction void. In the case of Curtis v. Leavitt,$ in the court of appeals, the exposition and application of this statute was made the subject of very elaborate discussion both in, the arguments of counsel and in the opinions of the court. And 1 Kittell v. Osborn, 4 Sup. Ct. (T. & C.) 45. 2 Tbid. 3 Darling v. Rogers, 22 Wend. 488; reversing Rogers v., De Forest, 7 Paige, 272. See Barnum v. Hempstead, 7 id. 568. 43 Rev. Stat. (7th ed.), p. 2327, §1; 4 R. S. (1889), p. 2590, §1. See posé, ch. XXV, where similar enactments in other states are noticed. 56 Hill, 438. $15 N. Y. 9 297. See Wilson v. Robertson, 21 id. 587. 284 TRUSTS OF ASSIGNMENTS. (cH. XII. it was then determined that the statute applies only to convey- ances, etc., wholly or primarily for the use of the grantor, and not to such as are created for other and active purposes where the res- ervations are incidental and partial only. The principal rules in regard to the trusts of an assignment, which remain to be considered, are the following: that all express trusts must be openly declared by the assignor, a secret trust being always void,! and when once declared cannot afterwards be revoked or altered ;? that there must be no express trust for the use or ben- fit of the assignor,} nor any resulting trust in his favor until after payment of all the debts;‘ that the trusts declared must be co- extensive with the property assigned ;> and that there must be no trust to hinder, delay or defraud creditors.® These topics have already been partially considered and will re- ceive further illustration under the head of “Fraudulent and void assignments.” 1 Passmore v. Eldridge, 12 S. & R. 198; McAllister v. Marshall, 6 Binn. 338; McCullough v. Hutchinson, 7 Watts, 434; Russell v. Woodward, 10 Pick. 407; Foster v. Saco Manufacturing Co., 12 id. 451; Shaw, C. J., id. 453; Parker, C. J., in Hills v. Elliott, 12 Mass. 26, 31; Anderson v. Fuller, 1 McMullen, 27; Edring- ‘ton v. Rogers, 15 Tex. 188; Wheeler, J., in Wright v. Linn, 16 id. 42; Caldwell v. Williams, 1 Ind. 305; Comstock, J., in Curtis v, Leavitt, 15 N. Y.120. ‘‘ There is no plainer evidence of fraud than an absolute paper transfer by an insolvent, with a secret parol trust in contravention of such conveyance.” Chilton, J., in Bryant v. Young, 21 Ala, 264, 273; Nesbitt v. Digby, 11 Ill. 387; Humphries v. Freeman, 22 Tex. 45; Golden’s Appeal, 110 Pa. St, 581. 2See ante, p. 252. 3 See ante, p. 221. 4See ante, p. 230. 5 See ante, p. 231. See post, ch. XXV,. CHAPTER XIV. EXECUTION OF THE ASSIGNMENT, § 214. Assignment, Executed How. 215, Execution by Assignor. 216. Execution by Assignee. 217. Execution by Creditors. 218, Attestation of Execution, 219. Oath to Assignment. 220. Acknowledgment of Execution. 221. Acknowledgment of Execution Before Proper Officer, § 214. Assignment, Executed How.— The assignment having been drawn up in due form, and the necessary schedules attached, the next proceeding is the execution of it by the persons named as parties. In most cases the instrument is under seal, and where it conveys real estate, or contains covenants by either party, this formality should not be omitted. The schedules should be dated and executed, as well as the assignment itself, § 215. Execution by Assignor.—It is of course indispensable that the assignment should be executed by the assignor, or, if there be several, by all of them. This may, however, be done by attor- ney, under proper power for that purpose.’ In cases of partner- 1A power of attorney, executed by one of several partners subsequent to the execution of the assignment by the others, authorizing the assignment of the property of the firm, but omitting all reference to the separate estate of the part- ner giving the power, does not amount to a sufficient execution on the part of ‘such partner. In re Wilson, 4 Barr, 430. Where the deed of assignment offered in evidence by a plaintiff purported to have been executed by one of the assign- ors by attorney, and the defendants objected that there was no proof of the execution of the power, it was held that the acknowledgment of the deed in the probate bond sued on extended to everything necessary to prove the due execu- tion of the deed, and superseded further proof of the power. Clark v. Mix, 15 Conn. 152. A power of attorney to convey or sign away real estate in payment, or to secure the payment, of debts, authorizes the attorney to make an assign- ment of such real estate for the benefit of creditors. Marshall v. Shibley, 11 Kan. 114. There are cases from which it seems that under the New York stat- ute requiring assignments to be acknowledged, an assignment cannot be exe- cuted by an attorney in fact. Adams v. Houghton, 3 Abb. Pr. (N. S.) 46; Cook v. Kelly, 14 Abb. Pr. 466, affirming 12 id. 35, But this rule does not preclude the partners who remain after one of their number has absconded from execut- ing an assignment of the assets of the firm. National Bank v. Sackett, 2 Abb. Pr. (N. 8.) 286. And it seems that non-resident members of a firm are not nec- essarily included in the statutory requirement of a personal execution and ac- 1 286 EXECUTION OF THE ASSIGNMENT. [cH. XIV. ship we have seen that one partner may execute the assignment in behalf of the firm, if with the concurrence or by the authority of his copartners.! The better course is to have it executed by all. But where the assignmett was executed by all the partners, it was deemed to be their joint act, and not to pass their individual prop- erty, there being no specific reference to their individual property in the body of the assignment.? In Indiana * it is provided by statute that a surviving partner or partners of any firm doing business in that state shall have full power to make assignments under the act. Notwithstanding the rule that one partner cannot bind his copartners by deed, the mere circumstance that an assignment by one or more of several part- ners is under sead will not invalidate it, if the property proposed to be conveyed is of such a description as might have been con- veyed without deed, or that a title to it would have passed by the mere act of delivery; the rule being that, where a seal is not es- sential to the validity of a contract, the addition of a seal will not vitiate it? The cases in which assignments are executed by the wives of the assignors have already been noticed.$ In regard to schedules it has been held that schedules not dated, but referred to in the assignment as bearing even date with the assignment, will be taken to have been executed at the same time, and this fact may be proved by parol.’ § 216. Execution by Assignee.— Where the assignee is formally named as a party to the assignment, as where it is drawn in bi- partite or tripartite form, and especially where the instrument contains any provision for its execution by him, or a covenant to knowledgment by each of the assignors. Darrow v. Bruff, 36 How. Pr. 479, dis- tinguishing Adams v. Houghton, supra, But in the late case of Lowenstein v. Flauraud, 82 N, Y. 494, affirming 11 Hun, 399, it is settled that an assignment may be executed and acknowledged by attorney. Sees. o., post, p. 290, n. 4, and Baldwin v. Tines, 19 Abb. Pr. 32. 1See ante, p. 125. In the English case of Bowker v,. Burdekin, 11 Mees, & W. 128, a deed of assignment purporting to be made by three partners of a firm, but executed by one of them only, was held to operate to convey the share of the one who executed. But see Havens v. Hussey, 5 Paige, 30, contra. 2Derry Bank v. Davis, 44 N. H. 548, 3R. S. of Ind. (1888), § 2683. 4 Anderson v. Tompkins, 1 Brock. 456; Tapley v. Butterfield, 1 Metc. 515, 519; Everitt v. Strong, 7 Hill (N. Y.), 585; Deckard v. Case, 5 Watts, 22; Sale v. Dishman’s Ex’rs, 3 Leigh, 548; McCullough v. Sommerville, 8 id. 415. In this last case the partner did not even execute the assignment in the name of the firm, but in his own individual name; and yet it was held to be no objection. 5 Robinson v. Crowder, 4 McCord’s L, 519. 8 Ante, p. 125. 7Dana v. Bank of the United States, 5 W. & S. 223. § 217.] EXEOUTION BY OREDITORS. 287 be performed by him, it is necessary that he should execute it as well as the assignor. But where this is not the case, he need not become a party by signing.' An assignment is good if the as- signee does not execute it, or enter into any covenant to perform the trusts. If it is executed by the assignor, and delivered to the assignee, and he accepts it, and enters upon the performance of the trusts, he is as much bound as if he had executed it? In some of the states assignees execute by signing and sealing a written acceptance at the foot of the deed, immediately follow- ing the signature of the assignor.* § 217. Execution by Creditors.— Assignments tripartite, as we have seen,‘ are drawn with express reference to their being exe- cuted by the creditors, as well as the assignor and assignee; and unless executed by some of the creditors they are inopera- tive.® It is usual, in such assignments, to limit a time within which they must be executed by the creditors, as a condition of their participating in their benefits. Where this is the case, the condition must be complied with; and creditors will not be per- mitted to’ become parties by signing after the expiration of the time limited, provided they have had seasonable notice of the as- signment, or provided proper means have been taken to give the notice.6 In some states the time for creditors to become parties is fixed by statute. In Massachusetts, before the statute of 1836, regulating assign- ments, it was held that a creditor who did not execute, within the time limited, an assignment for the benefit of such creditors as should become parties within a certain time, was not entitled to become a party to it, or to have the benefit of it, although no dis- tribution had been made before he requested permission to execute it, and although it contained no release to the debtor.’ And where the assignment contained a release, it was held that a creditor ex- ecuting the deed after the time limited did not become a party so as to release his debt. But an assignment under the statute of 1836 was held not to be void, as against subsequent attaching 1 Flint v. Clinton Co., 12 N. H. 480. See ch. XVIII. 2 Cunningham v. Freeborn, 1 Edw. Ch. 256; affirmed on appeal, 11 Wend. 240, 3 Kennedy v. Winn, 80 Ala. 185; s. ©., post, p. 401. 4 Ante, pp. 186, 155. 5 Marston v. Coburn, 17 Mass, 454, But see Shearer v. Loftin, 26 Ala. 703; ‘Gale v. Mensing, 20 Mo. 461. 6 Phoenix Bank v. Sullivan, 9 Pick. 410. See,Dedham Bank v. Richards, 2 Mete. 105. 7Phoenix Bank v. Sullivan, 9 Pick, 410. See Battles v. Forbes, 21 id. 239; Dedham Bank v. Richards, 2 Metc. 105. 8 Battles v. Forbes, 21 Pick. 239; s. c., 2 Mete. 93. 288 EXECUTION OF THE ASSIGNMENT. [cH. xIv. creditors, because it was not executed by any creditor within a rea- sonable time.! A promise to a creditor to pay his demand in full, though it should not be so paid from the proceeds of the assigned property, in order to induce him to become a party to an assign- ment, is fraudulent and void. In Missouri it has been held that an assignment by a debtor for the benefit of certain preferred creditors, the balance to be dis- tributed pro rata among the remaining creditors, provided they will release the debtor from further liability, is of no avail until executed by the creditors; and the levy of an execution before the deed is executed will prevail over it. And in another case in the same state, it was held that a deed of assignment for the benefit of such creditors as should, within a given time, become parties. thereto and execute a release, would be of no avail until executed by the creditors, even though such deed were not void on account of the stipulation for a release.* But in a much later case, where the deed required that the creditors should sign it in order to receive any benefit from it, but none signed it, it was held that this did not render the conveyance void, as matter of law. And in a case in Alabama it has been held that a deed of trust which conveys. property absolutely for the benefit of specified creditors, although it purports on its face to be tripartite, does not require to be signed. by either the trustee or the creditors, to give it effect. As assignments intended to be executed by creditors generally contain a release of the debtor, a creditor ought to satisfy himself on this point before signing. A want of knowledge that the in- strument contained a release will not, after signing, avail him.” In an English case, where a deed of composition with an assign- ment in trust for creditors was construed to include a release of a. debt guarantied, it was held, in an action against the surety, to be no answer, either on legal or equitable grounds, to a plea setting out the release, that the plaintiffs executed as creditors but as. trustees, and solely for the purpose of accepting and declaring the trusts, and not with the intention of releasing the debt; that they did not sign the list of creditors; and that, if the deed operated to. release the debt, it was executed by mistake and in ignorance that. such would be its legal effect. 1Shattuck v. Freeman, 1 Metc. 10. 2 Ramedell v. Edgarton, 8 Metc, 227, 3 Swearingen v. Slicer, 5 Mo. 241, 4 Drake v. Rogers, 6 Mo. 317. 5Gale v. Mensing, 20 Mo. 461. Shearer v. Loftin, 26 Ala. 703. And see Tennant v, Stoney, 1 Rich. (S. C.) 222. 7See Parsons v. Gloucester Bank, 10 Pick. 583, 5Teed v. Johnson, 34 Eng. L. & Eq. 545. §§ 218-220.] MISCELLANEOUS. , 289 In a case in Massachusetts, where an assignment by an insolvent debtor of a part of his property in trust for the benefit of his creditors provided for the payment, first, of certain sureties, also creditors, including the plaintiff, who was one of the assignees, in full, if the property should be sufficient, otherwise pro rata, and then of such other creditors as should become parties to the assign- ment, in full or pro rata, and the assignees covenanted to dispose of the property, and pay over the proceeds within one year; and the creditors becoming parties to the assignment agreed “upon being paid in manner aforesaid, to cancel und discharge their re- spective demands,”— it was held that the execution of the assign- ment by the plaintiff, and his acceptance of the trust, operated as a full and immediate discharge and satisfaction of his claims, both as surety and as creditor, so that a subsequent conveyance to him, by the debtor, of other property, as further security for those claims, was without consideration, and invalid against a creditor not a party to the assignment.! § 218. Attestation of Execution.— The assignment, like all other conveyances of property, should be executed before wit- nesses, who attest it in the usual manner. Formerly in New Hamp- shire it was required by statute that an assignment, embracing real estate, in order to be valid, must be attested by two witnesses.” If it was not thus attested, the title to the real estate assigned re- mained in the debtor, subject to attachment. And where a deed was attested by one witness only, notice of the deed did not remedy the defect in the attestation.‘ § 219. Oath to Assignment.— In some of the states it has been made necessary to the validity of an assignment that it should be sworn to by the assignor. The oath which the assignor is required to make is generally to the effect that the assignment conveys all his property not exempt by law and is not made with the intention of delaying or defrauding his creditors. § 220. Acknowledgment of Execution.— In New York the stat- ute declares that every assignment in trust for the benefit of cred- itors “shall be duly acknowledged before an officer authorized to take the acknowledgment of deeds.” . . . “The assent of the assignee, subscribed and acknowledged by him, shall appear in writing, embraced in or at the end of or indorsed upon the assign- 1King v. Moore, 18 Pick. 376. 2Gen, Laws (ed. 1878), ch. 140, p. 886, §2. See P. S, (1891), p. 559, 3 Barker v. Bean, 25 N. H. 412, 41d. 5 See Appendix, I. 19 290 EXECUTION OF THE ASSIGNMENT. [cH. XIV. ment before the same is recorded, and, if separate from the assign- ment, shall be duly acknowledged.” ! This requirement is mandatory and not merely directory, and every assignment which does not comply with the statute in this respect is void.? It has been held that the acknowledgment must be made by the debtor in person; that it cannot be made by his attorney, or proved through the medium of a witness.’ But it is now settled that an assignment executed in the name of the debtor and acknowledged by an attorney duly constituted for that purpose is valid under the New York statute, and etfectual to vest in the assignee the title to the assigned property.‘ Where several debtors make an assignment each must join in the acknowledgment.° Where an assignment in trust for the benefit of creditors, made by a partnership firm, is executed by all the partners, the acknowl- edgment which the statute requires should be made by all.® But where there are non-resident members of a firm, they are not nec- essarily included in the requirement of a personal execution and acknowledgment by each of the assignors.’ The old rule that an assignment could not be executed by an at- torney in fact did not preclude the partners who remained, after one of their number had absconded, from executing an assignment of the assets of the firm.® An acknowledgment before an officer who had no previous knowledge of the parties, and who received no more evidence of their identity at the time of execution, is fatally defective, and the defect renders the assignment null and void? 1R. S. (8th ed.), Part II, ch. V, n. 1a, § 2; Laws of 1877, ch. 466. 2 Hardman v. Bowen, 39 N. Y. 196; s.c, 5 Abb. Pr. (N. 8.) 832; Fairchild v. Gwinne, 16 Abb. Pr. 23; rev’g s. c., 14 Abb. Pr. 121; Britton v. Lorenz, 45 N. Y. 51; Rennie v. Bean, 24 Hun, 123. It has been held, also, to compre- 1See Appendix, I. 2 Purdon’s Digest (Brightley, 11th ed.), p. 121, § 18, 3 Where the assignee named in a deed of assignment for the benefit of creditors declines to accept the trust and in his stead another is appointed, the thirty days allowed by the act within which to record the deed runs from its date and not from the time of the appointment of the new trustee. Hence, when the assignee did not record the deed of assignment until after thirty days from its execution, it was as to creditors null and void, and the fund in the hands of the assignee was liable to attachment by them. Johnson v. Herring, 46 Pa, St. 415. See Lane’s Appeal, 82 Pa. St. 289. 4Stewart v. McMinn, 5 W. & S. 100. It is not sufficient that the deed is re- corded in the county in which the property is situated. Schuylkill Bank v. Rei- gart, 4 Barr, 477, ; 5Englebert v. Blanjot, 2 Whart. 240; reversing the judgment in 1 Miles, 224; : Murphy’s Assignment, 2 Pitts. R. 271. § 224.) RECORD ESSENTIAL. 293 hend instruments subsequently executed by the assignor, for the purpose of extending the provisions of the assignment to creditors not provided for by it as originally executed. Thus, where an as- signment was made for the benefit of certain creditors who should release, which assignment was duly recorded, and there being a surplus in the hands of the assignee, after paying the releasing creditors, two instruments were executed under seal by the as- signors, by one of which they assigned the surplus to the same assignee, in trust, to pay the same to certain creditors who had signed a letter of license; and by the other of which they also as- signed the surplus to the same assignee, in trust, to pay the same to such creditors as should release within a certain time, it was held that these instruments came within the provisions of the stat- ute, and ought to have been recorded in conformity with it.! The same statute has been held to extend to assignments made in the form of absolute conveyances, with separate declarations of trust,? and to all instruments of transfer for the benefit of cred- itors, whether in the particular form of an assignment or not. Hence, a power of attorney, if virtually an assignment, must be recorded, to make it valid against the attachment of a creditor.’ An assignment of numerous claims and judgments “in pay- ment” of certain creditors’ demands has been held to be an as- signment for the benefit of creditors; and not having been re- corded within thirty days, to be void as against a subsequent attaching creditor.‘ The same statute has been held to extend to assignments of property in another state, and for the benefit of foreign creditors. Thus, where A., residing in Philadelphia, assigned to B., also re- siding at that place, real and personal estate situated in New York, in trust, to pay a creditor of A. in London, and then his creditors generally, and the assignment was not recorded according to the statute, it was held that it might be avoided by the creditors of AS But the statute has been held not to apply to assignments made directly to creditors for their own benefit only, although with an understanding that any surplus should be accounted for to the debtor;® nor to judgments confessed by the debtor to a trustee 1Flanagan v. Wetherill, 5 Whart. 280. 2 Schuylkill Bank v. Reigart, 4 Barr, 477. 3 Watson v. Bagaley, 12 Pa, St. 164. 4 Wallace v. Wainwright, 87 Pa. St, 263, 5 Weber v. Samuel, 7 Barr, 499, § Chaffee v. Risk, 24 Pa. St. 482; approved in Henderson’s Appeal, 31 Pa. St. 502. See Lane’s Appeal, 82 id. 289. - 294 RECORD OR REGISTRY OF THE ASSIGNMENT. [CH. XV. for the payment of certain specified creditors;' nor to mortgages. in trust to secure creditors.’ It has been further held in Pennsylvania that an assignment of real estate must, under the general act of March 18, 1775 (declaring all deeds and conveyances of land fraudulent and void against sub- sequent purchasers, unless recorded within six months after execu- tion), be recorded in the county in which the land is situated, in order to make it valid against a subsequent purchaser from the as- signor, without notice of the assignment, even though it were duly recorded in the county in which the assignor resided, pursuance. of the act of 1818.? By the act of May 6, 1854, section 1, in all cases where lands and tenements have been or shall hereafter be conveyed to any person or persons in trust, for the use and benefit of others, by a deed of trust, the trustee or trustees, on request of any person interested, and at the cost of the party requesting it, shall cause the said deed to be recorded in the proper county where the lands and tenements. are situate; and in case such deed be in the possession of any per- son other than a trustee, on request as aforesaid, and at the proper cost of the person requesting the same, it shall be the duty of such person, trustee or otherwise, to cause said deed to be recorded in the proper county where the lands and tenements may be situate ;. and in case of neglect or refusal to cause such deed to be recorded on request as aforesaid, it shall be lawful for the court of common pleas of the proper county, on the petition of any person interested, set- ting forth the facts of the case to issue a citation to the person or persons having such deed as aforesaid, to appear within such time as the court shall direct and show cause why he or they refuse to cause said deeds to be recorded; and on failure to appear or to- show satisfactory cause, said court shall order such persons, trust- ees or otherwise, to cause said deed to be recorded as aforesaid, with costs against such delinquent, which said order or decree may be enforced by attachment.’ But though not recorded according to the statute the assign- ment will still remain valid as against a subsequent voluntary as- signee ;* and dissenting creditors can only avoid it pro tanto.§ 1Guy v. Mcllree, 26 Pa. St. 92. 2 Ridgway v. Stewart, 4 Watts & Serg. 383. 3 Dougherty v. Daraach, 15 Pa. St. 399; Follweiler v. Lutz, 102 id, 585. 4 Laws of 1804, p. 603; Purdon’s Dig. (Brightley, 11th ed.), p. 1659, § 75. 5 Seal v. Duffey, 4 Barr, 274. Creditors, by levying on the property assigned, avoided the deed pro tanto only, and are estopped from availing themselves of the first assignment, to prevent the operation of a second assignment on the 8Ibid. And see Weber v. Samuel, 7 Barr, 499. § 225.] RECORD ESSENTIAL, 295 The deed may be taken to be recorded by any one of the cred- itors for whose use the conveyance was made, or any party inter- ested in the trust.' As soon as the assignment is placed by the assignor or any one interested in the office of the recorder, the beneficial interest of creditors is completely vested.’ By the act of May 3, 1855,° assignments by non-residents of property within the state may be recorded in any county where such estate, real or personal, may be, and take effect from its date; provided that no bona fide purchaser, mortgagee or creditor, hav- ing a lien thereon before the recording in the same county, and not having had previous actual notice thereof, shall be affected or prejudiced.! § 225. Record Essential — Cases — Continued.— In Connecti- cut it is one of the requisites of a valid assignment that it be lodged for a record in the office of the court of probate for the dis- trict where the assignor or assignees of some of them reside.> But no time is limited by the statute within which this must be done; and if the assignment be recorded before the lien of a creditor at- taches it will avail against it.6 Nor is such record necessary where the parties reside in another state. Thus, where an assignment made in Ohio, the assignor and assignee both residing in that state, embraced a debt due from an incorporated company in Connecti- cut, but was not lodged for record in the office of any court of probate in Connecticut, it was held that the assignment, being valid by the laws of Ohio was also valid in Connecticut, against the subsequent attachment of a creditor residing in Pennsylvania.’ The Massachusetts statute of 1836 did not require assignments property thus levied on, and included in the first assignment. Id., ibid. But an unrecorded assignment for the benefit of a single creditor is invalid against the assignee under a subsequent recorded assignment for the benefit of all the creditors. Kern v. Powell, 98 Pa. St. 253, 1 Read v. Robinson, 6 Watts. & Serg. 329. 2 Mark’s Appeal, 85 Pa. St, 231. 3 Laws of 1855, p. 415; Purdon’s Dig. (Brightley, 11th ed.), p. 122,§ 14. See Philson v. Barnes, 50 Pa. St. 230. 4 Evans v, Dunkelberger, 3 Grant (Pa.), 134, 5Gen. Stat. of Conn. (1888), § 503. In the case of copartnerships and corpora- tions, the assignment should be recorded in the office of the court of probate for the district where such copartnership or corporation had its office or principal place of business. And where the assignment includes partnership and individ- ual property, and the office or principal place of business of the partnership is in one district and the residence of one or more of the individual partners is in an- other district, it would seem that the assignment should be recorded in both dis- tricts. Coggill v. Bottsford, 29 Conn. 439, 6 Strong v. Carrier, 17 Conn. 819, 7 Atwood v. Protection Ins. Co., 14 Conn, 555. 296 RECORD OR REGISTRY OF THE ASSIGNMENT. [cH. xv. made under it to be recorded, but only notice of them to be pub- lished by advertisement.! This was held to have been intended as a legal notice to all creditors,? and to have been not inconsistent with the general provisions of law as to the registry of convey- ances. In Virginia all deeds of trust are declared void as to creditors until admitted to record in the county or corporation wherein the property embraced in the deed may be,‘ provided that where the property is situated within the jurisdiction of a corporation or hustings court, the record shall be made in the clerk’s office of such corporation or hustings court. In North Carolina a deed of trust must be proved and registered within six months or it will be utterly void as against a creditor; and the circumstance of the registration before a creditor has got his judgment and execution makes no difference, as notice of a deed of trust not duly registered raises no equity against a cred- itor Where a creditor, knowing that another creditor has taken a deed of trust, but which is not registered, takes another deed of trust on the same property to secure his own debt and procures it to be first registered, this is held to be no fraud against any per- son, at least at law; more especially it is not a fraud against those who do not claim under the creditor secured by the first deed.° In the revised code of this state it is now declared that no deed of trust shall be valid at law to pass any property as against cred- itors or purchasers for a valuable consideration, but from the reg- istration of such deeds of trust in the county where the land lies, or in case of personal estate where the donor resides,’ In Alabama a deed of trust not delivered for registration or re- corded until thirty-one days after its execution has been declared void as against judgment creditors not having actual notice of the deed.* 1 Stat. of 1836, ch. 288, § 5. 2 Guilford v. Childs, 22 Pick. 434; Wilde, J., id. 485, 426. See Johnson v. Whitwell, 7 Pick. 71. 3 Wilde, J., in Guilford v. Childs, 22 Pick. 484, 485, 436. 4See Act of January 16, 1867, amending and re-enacting section 5 of chapter 119, Code of 1860, p. 566; Code of 1873, p. 897; Code (1887), § 2465. See, also, Blackfcrd v. Hurst, 16 Gratt. 203; Burr’s Ex’r v. McDonald, 8 id. 215; Shanks v. Lancaster, 5 id. 110. In Kirkland v. Brune, 31 Gratt. 126, it was held that an assignment of a mere chose in action as a debt or claim on another for money due need not be recorded, and will be good against a subsequent attachment. 5 Dewey v. Littlejohn, 2 Ired. Eq, 495; Ruffin, C. J., id. 503; citing Davidson v. Cowan, 1 Dev. Eq. 470. 6 Burgin v. Burgin, 1 Ired. L. 453, 7 Rev. Code of N. C., ed. 1855, ch. 27, § 22, p, 245; Battle’s Rev., p. 345, § 12; Code, 1888, vol. I, § 1254. 8 Wallis v. Rhea, 12 Ala. 646, § 226.] REOORD ESSENTIAL. 297 In Kentucky all deeds of trust are required to be recorded in the offices of the county courts.! And the practice seems to be to record all assignments, whether of real or personal prop- erty? In Indiana the assignment must, within ten days after its exe- cution, be filed with the recorder of the county in which the as- signor resides; and until the assignment is recorded as provided, it conveys no interest in the assigned property to the assignee.* § 226. Record Essential — Continued.— In Arizona,' California,’ Connecticut,® Colorado,’ Florida,? Illinois, Indiana," Iowa," Kansas,” Kentucky, Maryland," Mississippi, Missouri,'® Nebraska,” New 1 Brown & Morehead’s Stat. Law, vol. I, pp. 448, 449; Session Acts of 1836, 1837, p. 255; Session Acts, 1838, 1839, p. 96; Gen. Stats. of Ky. 1881, p. 256; G. S. 1887, pp. 313, 314, 2See Vernon v. Morton, 8 Dana, 247; Cogar v. Stewart, 78 Ky. (Rodm.) 59; Zaring v. Cox, id. 627. 3R. S. of Ind. 1881, § 2663. The title to the property, whether real or personal, does not pass to the assignee until the assignment has been duly recorded. New v. Reissner, 56 Ind. 118; Forkner v. Schafer, id. 120. The assignment must be recorded in each of the counties in which real estate thereby conveyed is situ- ated. Switzer v. Miller, 58 Ind. 561. An assignment which has neither been assented to by an execution creditor nor recorded is not binding upon such cred- itor, even though after it was made he had verbally assented thereto, nor does any property pass until the deed has been filed or recorded. Eden v. Everson, 65 Ind. 118, A complaint by an assignee which does not allege recording is bad on demurrer (Foster v. Brown, 65 Ind, 234; Wheeler v. Hawkins, 101 id. 486), and an assignment not recorded within ten days is not admissible in evidence. Fordyce v. Pipher, 84 id. 86. 4B. S. 1887, § 22. 5 Hittell’s C. & S., §§ 8458, 8459. Gen. Stats. 1888, § 503. 7TMills’ A. S, 1891, § 169. ®R, S, 1892, § 2309; Eldridge v. Post, 20 Fla. 579, SR. S. 1889, p. 118. 10 R, S, 1888, § 2663. See Switzer v. Miller, 58 Ind. 561; New v. Reissner, 56 id. 118. ll McClain’s Ann. Code, § 8294. But where possession accompanies the convey- ance of personal property it is not necessary that the deed should be acknowl- edged and recorded. Meeker v, Saunders, 6 Iowa, 61. Title passes on delivery. American & Co. v. Frank, 62 id. 202. 2G. S. 1889, § 342. 8G, S, 1887, ch. 24, § 11, ch. 109a, § 1. 14 Pub, Gen. Laws 1888, 8§ 205, 206. See Houston v. Nowland, 7 Gill & J. 480; Brooks v. Marbury, 11 Wheat. 78; Farquharson v. Eichelberger, 15 Md. 63; Hoopes v. Knell, 31 id. 550. 15 Prewett v. Dobbs, 18 Sm. & M. 481. 16 R, S, 1889, § 424. Rendleman v. Willard, 15 Mo. App. 375; Winn v. Madden, 18 id. 258; Hartzler v. Tootle, 85 Mo. 23, 17C, S, 1891, ch. 6, § 6. 298 RECORD OR REGISTRY OF THE ASSIGNMENT. {CH. Xv. Jersey,! New Mexico, New York,? North Carolina,’ North Dakota,° Oregon,’ Pennsylvania,’ South Dakota,’ Tennessee,’ Texas,” Ver- mont," Virginia,” and West Virginia,” assignments and deeds of trust are required to be recorded. But the recording act of Mis- sissippi does not embrace deeds of trust executed in other states, and a failure to record such deeds in that state after a removal of the property into it does not impair their validity even against bona jide purchasers and creditors without notice of their existence." An Arkansas " title vests in the assignee, not only as against the assignor, but also as against the execution creditors, without regis- tration. By statute, however, the assignee must not take posses- sion, sell, or in any way manage or control the property assigned until he files the schedule and executes the bond. In Nebraska an assignment must, within twenty-four hours after its execution, be filed for record in the clerk’s office of the county in which the assignee resides. Within thirty days after the execu- tion thereof it must be filed for record in every other county of the state in which it purports to convey real estate. Failure to comply with the statute avoids the assignment." The recording of an un- acknowledged deed is a nullity." In New York it is provided that every assignment made under the provisions of the act of 1877 shall be recorded in the clerk’s office of the county in which the debtor resided or carried on his business at the date thereof. IR. S. 1877, p. 37. 21, 1889, ch. 71, § 1. 34, S. (8th ed.), post I, ch. V, t. 1a, § 2 4 Code 1883, $§ 1246, 1254. 5 Comp. Laws, § 4660. 6 Hill’s A. L, 1887, § 3174, Laws of 1878, p. 87. Recording is not essential to the validity of the deed where possession accompanies conveyance of personal property. Dawson v. Crossen, 10 Oreg. 41. 71 Purd. Dig., ed. of 1888, p. 121. §Comp. Laws, § 4660. § Brevard v. Neely, 2 Sneed, 164; Simpkinson v. McGee, 4 Lea (Tenn.), 432; Code of Tenn. § 2030. See Miller v. O’Bannon, 4 Lea (Tenn.), 398, 101 Sayles’ C. S. 1888, art. 65a, 65s; Act of February 5, 1840; Paschal’s Dig. vol. 1, p. 833; Acts of 1879, ch. 53; R. S. 1879, Appendix, p. 5. The validity of the assignment does not depend upon the act of registering the deed. Piggott v. Schram, 64 Tex. 447, NR. L. 1880, § 1886. 12 Code 1887, 2674, 13 Code, p. 639. 14 Palmer v. Cross, 1 Sm. & M. 48; Dobbs v. Prescott, 18 id. 431, cited and con- firmed in Presley v. Rogers, 24 Miss. 520, 524. 15 Thatcher v. Franklin, 37 Ark. 64, OR. S. of Ark. 1874, § 385; Mansf. Dig. 1884, § 305. "Laws of 1883, ch. 7, § 6; G. S. 1891, p. 8; Wells v. Lamb, 19 Neb. 355, 18 Heelan v. Hoagland, 10 Neb. 511. § 227.] NOTICE IN LIEU OF RECORD. 290 An assignment by copartners must be recorded in the county where their principal place of business is situated. When real property is a part of the property assigned, and is situated in a county other than the one in which the original assignment is re- quired to be recorded, a certified copy of such assignment must be filed and recorded in the county where such property is situated.! But such filing in the clerk’s office is not constructive notice of the conveyance of real estate.? An assignment of real estate should therefore likewise be recorded in the register’s office of the county where the real estate is situated. Sometimes, instead of recording the assignment itself, it has been the practice, where real estate is. conveyed by it, to have a deed of the same property prepared in the ordinary form, and bearing even date, which, after being exe- cuted and acknowledged by the proper parties, is put on record like any other conveyance. An assignment by a non-resident should be recorded in the county where the property is situated.’ Neg- lect to record the assignment does not render it fraudulent and the property liable to attachment as the assignment takes effect from the time of delivery, and statutory requirements subsequent to de- livery are merely directory.4 Buta recording of an assignment without the written assent of the assignee, required by statute, is. void against attaching creditors.’ § 227. Notice in Lieu of Record.— The public notice of the as- signment, which is usually given by the assignee on accepting the trust (and sometimes by the assignor), of which more will be said hereafter, operates in some instances with the effect of a record.® In Massachusetts, under the statute of 1836, chapter 238, it was. held that an assignment of real estate, duly notified in a newspaper as required by the statute, was valid as against an attaching cred- itor, although not recorded in the registry of deeds; and this, not- withstanding the provisions of the Revised Statutes (ch. 59, § 28), as to the registry of conveyances of real estate in general.’ In Mississippi it was held, in the case of Dixon v. Doe,’ that creditors, 1 Laws of 1877, ch. 466, § 2; 3 B.S. (7th ed.), p. 2276; Fay’s Dig., p. 394; 4B. S 1889, p. 2536, 2Simon v. Kaliske, 6 Abb. Pr. (N. 8S.) 224; 5. c., 87 How. Pr. 249; Wagner v. Hodge, 34 Hun, 524, 3 Scott v. Guthrie, 10 Bosw. 408, 4Denzer v. Mundy, 5 Robt. 636; Warner v. Jaffray, 96 N. Y. 248; Pancoast v. Spowers, 52 N. Y. Superior Ct. 523; McBlain v. Spelman, 35 Hun, 263. 5 Rennie v. Bean, 24 Hun, 123, 6Van Hook v. Walton, 28 Tex. 59, citing Givens v. Taylor, 6 id. 815; Bennett v. Cocks, 15 id. 67. 7Guilford v. Childs, 22 Pick. 434, 81 Sm. & M. 70. 300 RECORD OR REGISTRY OF THE ASSIGNMENT. [OH. Xv. equally with subsequent purchasers, were affected by notice of an unregistered deed. This case was referred to by the court in Hen- derson v. Downing,' without controverting the decision, and with no other comment than to say that it would not be extended any farther than the case there made. In North Carolina, as already mentioned, notice of a deed of trust, not duly registered, raises no equity against a creditor? 124 Miss. 106; Yerger, J., id. 114, 115. ? Dewey v. Littlejohn, 2 Ired. Eq. 495. CHAPTER XVI. DELIVERY OF THE ASSIGNMENT. § 228. Delivery Necessary. 229. What Amounts to a Delivery. 280. Evidence of Delivery. § 239. Delivery Necessary.— In order to complete’the transfer intended by the assignment it is necessary not only that the instru- ment should be executed with all the requisite formalities, but that it should be actually delivered to the assignee.! Thus in Pennsylvania in a case where, among other circum- stances, there was no delivery of the assignment to the assignee until several weeks after its date, the assignment was held to be fraudulent and void against a creditor who had obtained judgment.” And in another case in the same state, it was held to be indispens- able to the effect of an assignment for the benefit of creditors as well as of other deeds, that it should be actually delivered, or put in a course of transmission beyond the grantor’s control, to the as- signee; otherwise an execution would be preferred.* So in Massa- chusetts where an assignment purporting to be an indenture tri- partite between the debtor, the assignees and the creditors who should execute it, was executed by the debtor and assignees, and then taken by the debtor to procure its execution by his creditors, no counterpart having been made; and after some of the creditors had executed it, and before it was delivered to the trustees another creditor attached the property assigned, the attachment was held good against the assignees, the assignment being incomplete until delivery to them.‘ In Tennessee delivery is an essential incident 1Van Hook v. Walton, 28 Tex. 59; Brackett v. Barney, 28 N. Y. 383; Wadleigh v. Merkle, 57 Wis. 517; Truss v. Davidson, 90 Ala. 359; 7 S. Rep. 812; Thatcher v. Franklin, 87 Ark. 64; Golden’s Appeal, 110 Penn. St. 581; 1 A. Rep, 660; Kingston v. Koch, 57 Hun, 12; 10 N. Y. 8. Rep. 363; McIlhargy v. Chambers, 51 id. 882; 4. N. Y. S. Rep. 698. Buta deed which provides for delivery ‘‘forth- with” is fraudulent. Lincoln v. Field, 54 Ark. 471; 16 S. W. Rep. 288. Also where a trust deed is actually delivered to the grantee the rights of the cestuis que trustent attach, and the effect of the delivery cannot be impaired by any mental reservation on the part of the grantor or oral condition repugnant to the terms of the deed attached to the delivery. Wallace v. Berdell, 97 N. Y. 13. 2Burd v. Smith, 4 Dall. 76. 8 McKinney v. Rhoads, 5 Watts, 345. See Klapp’s Assignees v. Shirk, 18 Pa, St. 589. 4 Marston v. Coburn, 17 Mass. 454. 302 DELIVERY OF THE ASSIGNMENT. [cH. XVL to the proper execution of a deed of trust, as well as of all other deeds.! In New York it is held that the assignment takes effect from the time of its delivery.’ § 229. What Amounts to a Delivery.— A deposit of the deed in the postoffice directed to the assignee, who resided at some dis- tance, was held in Pennsylvania to be sufficient as against an exe- cution which was levied between the deposit in the office and the actual delivery to the assignee.’ In a case in Ohio‘ it was held that the assignment took effect from the time of placing it in the postoffice, for the assignor thereby ceased to have control of the property, and the assignee, by his previous conduct in preparing the assignment and sending it to the assignor, had accepted the trust. The possession of the carrier must therefore be regarded as the possession of the assignee. In a case in Michigan the debtor assigned to a member of a firm to which he was indebted, who had previously agreed to act as assignee. The debtor delivered the assignment to an agent of the firm, who took it to the residence of the assignee. The latter was absent, but on his return accepted and set out to take posses- sion. On the day the assignment was executed, after the agent had departed, an attachment was levied on the goods by another creditor. It was held, in view of the previous understanding and the representative character of the agent, that the assignment, be- ing unconditional, took effect as soon as the agent started for his principal and it was beyond the assignor’s control, and that it was sufficiently perfected by acceptance and delivery to defeat the levy. The delivery of an assignment to the clerk to be recorded may be considered as a delivery to a stranger for the use of the cred- itors, there being no condition annexed to the assignment making it an escrow.’ And the record of the deed amounts to prima facie evidence of delivery.’ A delivery to the trustees is equivalent to a delivery to the cestuis que trust. In Pennsylvania, where a debtor executed an assignment in M. county, and handed it to his son to 1 Brevard v. Neely, 2 Sneed, 164; McKinney, J., id. 169. 2 Warner v. Jaffray, 96 N. Y. 248; Pancoast v. Spowers, 52 N. Y. Super. Ct. 523; McBlain v. Spelman, 35 Hun, 263, 3 McKinney v. Rhoads, 5 Watts, 345. 4 Johnson v. Sharp, 31 Ohio St. 611. 5 Stamp v. Case, 41 Mich. 267. 6 Tompkins v. Wheeler, 16 Pet. 106. See Brevard v. Neely, 2 Sneed, 164, As to delivery as an escrow, see Bowker v. Burdekin, 11 Mees. & W. 128; Johnson v. Baker, 3 B. & Ald. 440; Ward v. Lewis, 4 Pick. 518. ‘Ingraham v. Griggs, 13 Sm. & M. 22, But see Webb v. Dean, 21 Pa. St. 29. 8Ingraham v. Griggs, 13 Sm. & M. 22. And see Moir v. Brown, 14 Barb. 39, 44, § 280.] EVIDENOE OF DELIVERY. 303 take to Philadelphia to a third person, who called with it on the assignee in that city, and desired him to take it, but he refused to have anything to do with it, it was held that a presumption arose, from the nature of the case, that the tender was made by author- ity of the grantor.) The moment an assignment is placed by the assignor or any one interested in the office of the recorder of deeds, the beneficial in- terest of the creditors — the cestuis que trust — is completely vested, and it is totally immaterial when the assignee accepts the trust, or whether he ever accepts it.? In Tennessee it is held that a deliv- ery, to be valid, must be such as not only deprives the grantor of the power to recall the deed, but likewise such a consummation of the formalities of execution as to make the deed effectual to trans- fer the title? Where the assignors duly executed and acknowledged the deed of assignment, and the assignee accepted the trust and directed the attorney of the assignors to do whatever was necessary to perfect the assignment, it was held that this constituted a delivery to the assignee and carried with it the title to the property.* Where an assignment by an in- denture of three parts was signed and sealed, and purported to have been delivered by the debtor, the trustees and some of the creditors; and one part was found in the hands of the trustees, and another, several months after the date, in the hands of the creditors, and in adjusting their claims was often referred to, as well by the trustees as by the creditors; and the debtor’s property passed into the hands of one of the trustees, who appeared before the creditors in the character of trustee, and made proposals to the creditors in the name of all trustees, and it was often spoken of by him as being held under the assignment, and was sold by him for the benefit of the creditors; and the debtor, when he requested one of his creditors to execute the indenture, informed such cred- itor that he had assigned his property for the benefit of his cred- itors, it was held in Massachusetts that this was sufficient evidence of a delivery of the deed by the debtor to the trustees and to the creditors. A subsequent fraudulent sale by an assignee has no bearing upon the question of the delivery of the assignment.® 1 Read v. Robinson, 6 W. & S. 3829. 2 Mark’s Appeal, 85 Pa. St. 231. 3McKinney, J., in Brevard v. Neely, 2 Sneed, 164, 170. 4 American & Co. v. Frank, 62 Iowa, 202, See Reichenbach v. Winkhaus, 12 Daly, 525; supra, p. 274, 5 Ward v. Lewis, 4 Pick. 518, See the New York case of Moir v. Brown, 14 Barb. 89, where the evidence showed that the assignment was not delivered to one of the assignees until after a levy of execution on the property assigned. 6 Leeds v. Commonwealth, 83 Pa. St. 453. CHAPTER XVII. AMENDMENTS AND ADDITIONS TO ASSIGNMENTS, § 281. Amendments, How Made. 232. By Consent of Parties. 233. By tHe Court. 234, In Other Cases. 235, Additions. § 231. Amendments, How Made.— After an assignment has been executed it may be corrected and amended if necessary by the con- sent of all the parties or on application to a court of equity. § 232. By Consent of Parties.—It may be amended by the con- sent of parties so as to purge it of any objectionable features, And where creditors have become parties by actually assenting to the assignment, or where their assent is assumed, their consent to any alteration or modification of the assignment is essential. When the deed is fraudulent there is no presumption of an assent to it on the part of the creditors, and it has been held that such a convey- ance is revocable until all the creditors have assented, and may be canceled, abrogated or modified at pleasure by those who are par- ties toit.2 In Illinois, where the assignment was fraudulent because. it empowered the assignee to sell on credit, a subsequent agreement entered into between the assignor and assignee, excluding the ob- jectionable power, was held to purge the instrument of fraud, no- rights of creditors having attached. And in another case in the same state it was held that if an assignment be so modified by the 1 See post, ch. XX 2 Insurance Co. v. Wallis, 23 Md. 173. 3 Pierce v. Brewster, 32 Ill. 268. The rule in Illinois seems to follow the Eng- lish doctrine. See ante, § 170. The assent of creditors is not assumed even where the instrument is beneficial; they are not regarded as parties to it, there- fore, unless they were privy to its execution or have actually assented. Mr. Justice Walker in Gibson v. Rees, 50 Ill. 383, after citing Wilson v. Pearson, 20 id. 81, and Pierce v. Brewster, 32 id. 268, and English cases, remarks: ‘‘ These au- thorities abundantly establish the doctrine that where such a deed is made and the creditors are not parties to it, it may under proper limitations be altered, changed or canceled by the parties to the instrument.” In Ryhiner v. Ruegger, 19 Ill. App. 156, an attaching creditor was also one of the assignees. He had ac- cepted the trust and consented to the alteration of the assignment and the elimination of certain fraudulent provisions. This was held to operate as a dis- solution of the attachment and so leave the attaching creditor to take his chances- with the other creditors. § 233.] BY THE COURT. 305 consent of all parties, prior to the time when any creditor is in a position to attack it, it becomes a valid assignment and the rights of the creditors in respect to the property assigned must be gov- erned by it.! But in a later case? it has been held that where a debtor has exe- cuted and delivered the deed to the assignee, the assignor has no power afterward to change its terms and conditions without the ~ consent of the assignee and the creditors. .» After the execution and delivery of an assignment, a schedule (previously omitted) may be annexed to it by the consent of all the parties, and it may then be redelivered with the same effect as before. In a case in Georgia,! where the debtor had provided in the as- signment for a release, and subsequently relinquished any benefit he might be supposed to have reserved to himself therefrom, it was held that after the execution of such a relinquishment and its ac- ceptance by the assignee, before the plaintiffs obtained judgment, the assignment would stand. § 233. By the Court.— Mistakes in assignments will also: some- ‘times be corrected and the instruments be reformed by a court of equity in the absence of any express ‘statute provision to the con- trary on application for that purpose. Ina case in Alabama, where ‘a debtor executed a deed of trust to secure certain of his éreditors and sureties, and included in it certain notes on which one of the beneficiaries was supposed to be bound as surety, describing them as notes on which said beneficiary was security, under the belief that if he was not bound; the misdescription would exclude the ‘holder of' them from any benefit under the deed — the deed was reformed in equity, upon proof of the mistake, and that the grantor intended to secure the said’ beneficiary only and not the notes. But in a case in Connecticut the supreme court of errors refused to reform an assignment so as to include a claim which ‘was in- ‘tended and agreed by the assignor to be included in it and con- veyed to the assignee, but had been, through the mistake of the draughtsman, omitted; on the ground that, as the statute of 1828 ‘against fraudulent conveyanees, expressly required the assignment to be in writing and lodged for record in the probate office, the ordinary principles which are adopted in chancery, as to the cor- 1Conkling v. Carson, 11 II]. 503, 2Union Nat. Bank v.' Bank of Commerce, 94 Ill) 27, 3 Clap v. Smith, 16 Pick. 247; Hand, J., in Moir v. Brown, 14 Barb, 39, 48, 4Cohen v. Summers, 54 Ga. 501. 5Trapp v. Moore, 21 Ala. 693. See Moale v. Buchanan, 11 Gill & J. (Md.) 314, 20 « 306 AMENDMENTS AND ADDITIONS TO ASSIGNMENTS. [CH. XVIL rection and reformation of mistakes in instruments, did not apply to the case.' And in a later case the same court adhered to the former decision, with the distinction that, a3 to the assignor, if it should become necessary to reform the assignment in consequence of a mistake attending its execution, the ordinary principles on which such relief is granted by courts of equity would apply. But such relief would not be granted against his creditors for the obvious reason that, as to them, the instrument was rendered fraud- ulent and void.? § 234. In Other Cases.— Sometimes the effect of amendment has been allowed to be obtained by the mere act of the assignor by means of a new and distinct instrument. Thus, in Connecti- cut, it has been held that an instrument referring to a former deed of trust, which was void by reason of a clause prescribing terms to the cestuz que trust renewing and confirming such deed, exclusive of the exceptional clause, and assigning the same property for the same purpose, and giving the same authority to the trustee, not by a specification of such property, but by terms of reference to the former deed, might have effect as a new and independent in- strument of conveyance.’ In a late case in Vermont, where an assignment was defective on account of its containing a resulting trust before providing for all the assignor’s creditors, it was held by the supreme court that the defect might be supplied by a new assignment providing in terms for the payment of all the assignor’s debts. The court (Redfield, C. J.) said this was not only allow- able, but it was certainly commendable; and they saw no reason why it might not be done by a mere declaration of trust in favor of all the creditors, in addition to the former assignment, without making the whole paper anew.’ It was also held in the same case that where an assignment was voidable or inoperative as to cred- itors under the statute on account of its generality, the defect might be cured by a new assignment, excepting some substantial portion of the estate and leaving it open to attachment.’ But ina case in the court of appeals of New York, where an assignment was invalid by reason of its containing an authority to the assignee to sell the assigned property on credit, it was held that it could not 1 Whitaker v. Gavit, 18 Conn. 522, 2 Whitaker v. Williams, 20 Conn. 98; Storrs, J., id. 102. See Farrow v. Hayes, 51 Md. 498. 3 Ingraham v. Wheeler, 6 Conn. 277. As to the revocation and canceling of assignments, see post, ch. XXVII. 4 Merrill v. Englesby, 28 Vt. 150, 155, 156. 51d, § 235.) ADDITIONS. 307 be made valid by any new instrument directing the property to be sold for cash only, executed by the assignor after the assignee had accepted the assignment and taken possession of the assigned prop- erty. By the assignment the assignor had divested himself of all control over the property; and he could neither revoke nor alter it to the prejudice of a creditor whose lien on the property had already attached.! The insertion of a provision of the assignment that schedules may be corrected if necessary has already been noticed.? § 235. Additions.— In regard to additions to assignments, it has been held that a subsequent additional assignment, to be valid, must be made with the consent of all the parties to the instru- ment.’ The rights of creditors are fixed by the assignment, and without their knowledge or consent cannot be varied by any sub- sequent act of the assignor or assignee. Thus, in a case in New York, it was held that no subsequent agreement by the assignees to apply a portion of the property for any other purpose than that specified by the assignment could be upheld.t And in a case in Maine it was held that an instrument discharging such creditors as should have become parties to an assignment from the effect of their release to the debtor contained therein would not defeat an assignment made for the benefit of creditors pro rata as to cred* itors who had not become parties.’ But the operation of an assign- ment may be extended by a new deed, as where it directs the appropriation of a surplus in the hands of the assignee not appro- priated by the first deed.6 And supplemental assignments are 1 Porter v. Williams, 9 N. Y. 142; Willard, J., id., 152; Sutherland v. Bradner, 39 Hun, 134. And the same rule was applied where the assignment was invalid by reason of a provision unlawfully exempting the assignee from liability. Met- calf v. Van Brunt, 87 Barb. 621. And see Gates v. Andrews, 37 N. Y. 657; Haines v. Campbell, 8 Wis. 187. But when the instrument is void by statute, and not merely voidable, no title vests in the assignee, and the assignor may therefore convey the property, by a proper instrument, to the assignee or to a third party. Juliand v. Rathbone, 39 N. Y. 369. And see Brahe v. Eldridge, 17 Wis. 184. In a special term case in New York it is held that an assignment can- not be amended, even by order of court, although the schedules may be. Matter ‘of Wilson, 1 Monthly L. Bul. 5. 2See ante, § 80; Dedham Bank v. Richards, 2 Metc. 105; Halsey v. Whitney, -4 Mason, 206. 3 Ramsdell v. Sigerson, 2 Gilm. 78. 4Bell v. Holford, 1 Duer, 58, 78. 5 Howe v. Newbegin, 34 Me. 15. 6 Flanagan v. Wetherill, 5 Whart. 280. In this case there were two additional instruments executed by the assignors, by which they assigned the surplus to the same assignee for different purposes, 308 AMENDMENTS AND ADDITIONS TO ASSIGNMENTS. [OH. XVII. frequently made in order to include property not comprised in the first instrument or to pass a more perfect title to the property already assigned.! The filing of a supplemental assignment containing property un- intentionally omitted from the original assignment does not carry forward the date of its taking effect.” A subsequent assignment may be made by one of two partners for the purpose of correcting the first.’ 1See Conkling v. Coonrod, 6 Ohio St. 611; Metcalf v. Van Brunt, 37 Barb. 621. 2 Krug v. McGilliard, 76 Ind. 28, 3 Rumery v. McCulloch, 54 Wis. 565; Morrison v. Shuster, 1 Mackey (D. C.), 190. CHAPTER XVIII ACCEPTANCE BY THE ASSIGNEE, § 236. Acceptance Necessary. 237. When and How to be Signified, : 238, Effect of Acceptance. 239. Presumed Acceptance, 240. Proceedings Where Trustee Refuses to Accept. 241. Proceedings Where Assignee Renounces After Acceptance. § 236. Acceptance Necessary.— In order to give the assignment validity and render it operative, it is essential that there should be an acceptance of the instrument, and of the trust created by it, on the part of the assignee; a delivery of the instrument without ac- ceptance is nugatory.! § 237. When and How to be Signified.- The acceptance should he signified by the assignee immediately on the delivery of the as- signment, otherwise creditors. may gain a priority which will not be divested. Where an assignee delayed an express acceptance of the trust, but received the deed, and executions came to the sheriff’s hands, it was held that the assignee’s Sapeequcns acceptance could not deprive the creditors of their priority. 1Crosby -v. Hillyer, 24 Wend., 280; Lawrence v. Davis, 3 McLean, 177; Pierson. -v. Manning, 2 Mich. 446; Pratt, J., id. 462; Royer Wheel Co. v. Fielding, 31 Hun, 274. Both the appointment and the acceptance of the trust are necessary to amake one an assignee, and when these are denied they are facts to be proved. Dougherty v. Bethune, 7 Ga. 90. The mere making a deed to a trustee does not vest him with title if he never in any form accepted the trust (Armstrong v. Morrill, 14 Wall. 120); but when created for the benefit of a third party, though without his knowledge at the time, he may affirm thetrust and enforce it. Bank of Metropolis v. Guttschlick, 14 Pet. 19. The fact that an act of the legislature recites the assignment to a certain person and confirms it does not constitute him an assignee without his acceptance. Bethune v. Dougherty, 21 Ga. 257, But in the case of Furman v. Fisher, 4 Cold. (Tenn.) 626, Mr. Justice Shackelford expressed a contrary opinion. ‘‘The assent of the trustee,” he observes, ‘‘is not necessary to the validity of a trust deed. He may refuse to act, be unable to comply with the statutes, or die, and in such or similar cases a court of chancery will execute it.” So where theclerk of the court was named as assignee, but was incompetent to act, it was held that this in no way affected the validity of the deed. Barcroft v. Snodgrass, 1 Cold. (Tenn.) 480. In Rendleman v. Willard, 15 Mo. App. 875, it is held that ‘‘after the recording a refusal of the trust by the assignee will leave the assignment intact, while it will devolve upon the proper tribunal the duty of vitalizing the trust by appointing a trustee.” 2Crosby v. Hillyer, 24 Wend. 280, See Pierson v. Manning, 2 Mich. 44; Sig- gers v. Evans, 32 Eng, Law & Eq. 139. 310 ACCEPTANCE BY THE ASSIGNEE. [cH. Xvt.. The acceptance must be actually signified by the assignee; the mere taking the instrument into his hands, and retaining it, amounts. to nothing! It may be signified verbally ;? but it is sometimes ex- pressed by the assignee’s signing and sealing a written acceptance: appended to the assignment. Such an acceptance is decisive evi- dence against him? Entering into possession of the property as- signed,‘ or the qualifying of the assignee,’ operates as an accept: ance of the trust. An assignee having previously agreed to accept can accept by an agent.® In Michigan it was held in the case of Stamp v. Case that an as-- signment was accepted so as to defeat the levy of attachment upon the goods conveyed therein when it had passed beyond the con-. trol of the assignor and into the hands of his agent to be deliv- ered to the assignee. When an assignment is made by two, and one accepts and the other refuses the trust, the assignment is operative as to the as- senting trustee, unless there be a condition that it shall be void if’ both trustees do not assent.’ In New York the assent of the assignee, subscribed and ac-. 1Nelson, C. J., in Crosby v. Hillyer, 24 Wend. 284. In Wisconsin the assignee: is required to indorse his acceptance upon the assignment filed with the clerk. R. S. of Wis, (1878), § 1696. The names of the assignees may be affixed in their: presence and at their request. Scott v. Seaver, 52 Wis. 175. The mere fact that the assignee has failed to affix his certificate required by Revised Statutes, sec-- tion 1697, does not invalidate the assignment, Steinlein v. Halstead, 52 Wis. 289. There is no ‘‘ execution of the assignment” until it is delivered to the as- signee, and he accepts the same and gives his bond. Wadleigh v. Merkle, 57° Wis, 517. In Rowland v. Hewitt, 19 Ill. App. 450, it was held that the posses-- sion of the deed of assignment by the assignee at any time after its execution will constitute a presumption of his acceptance of it from the time it was exe-- cuted and rendered. 2 Drew Glass Co. v. Baldwin, 27 Mo. App. 44. See Salter v. Salter, 80 Ga. 178;: 48. E. Rep. 391; 12 Am. St. Rep. 249. The acceptance having been made may- be shown by oral testimony. Singer v. Armstrong, 70 Iowa, 397; 42 N. W. Rep. 332; post. p. 311. 3 Mead v. Phillips, 1 Sandf. Ch. 83, 85. Where a trust deed contains a provis-- ion that the trustee shall accept by signing and the deed is signed by the trustce it is accepted. Patterson v. Johnson, 113 Ill. 559, 4 Prica y, Parker, 11 Iowa, 144. 5 Shyer v. Lockhard, 2 Tenn, Ch, (Cooper), 865. The bringing and prosecuting: a suit to a final decree furnish conclusive evidence of the acceptance of the trust by a trustee in insolvency. Taylor v. Atwood, 47 Conn. 498. Acceptance of his. trust by the assignee is indicated by his taking possession of the property and notifying creditors; but it is shown conclusively by his joining in the act of as-- signment, and recording it when executed. Commercial Nat. Bank of Detroit: v. Mosser, 27 Mich, 386; 24 N. W. Rep. 115. 6 Stamp v. Case, 41 Mich. 267. See ante, p. 302. 7Shockley v. Fisher, 75 Mo. 498; Gordon v. Coolidge, 1 Sum. 537, See King v. Donnelly, 5 Paige, 46; Moir v. Brown, 14 Barb. 39, and cases cited by Hand, J.,. id. 45: Matter of Stevenson, 3 Paige, 420. See ante, p. 92, § 238.] EFFKOT OF ACCEPTANCE, aly knowledged by him, must appear in writing embraced in or at the end of or indorsed upon the assignment.' After acceptance, the assignees cannot be relieved of the duties and responsibilities of their office except by the order of a court of competent juris- diction.* The provisions of the statute being mandatory, an as- signment recorded without the assent of the assignee subscribed azd indorsed by him thereon, though he may have orally agreed to act, is void against creditors claiming under attachments against the property of the assignor,? and even as between the par- ties! It seems that an agreement to act as assignee, made prior to the execution of the assignment deed, is effective as an ac- eeptance of the assignment soon after made. For in the Iowa case of Singer v. Armstrong, before the deed of assignment was executed, the person named as assignee had orally agreed with the assignor’s brother to act as assignee in case an assignment should be made. The deed was afterwards placed in the hands of K., whom the assignor and his brother had requested to act for the assignee, who was absent. K. filed the deed for record, and after- wards an attachment was levied on the property. Held, that the deed was delivered and the trust prior to the attachment. And in the same case it was held that where it becomes material to determine whether a deed of assignment was delivered prior to the levy of an attachment, it may be presumed, in the absence of any showing to the contrary, that the deed was delivered to the assignee as long a time as thirty seconds before he caused it to be filed for record.° § 238. Effect of Acceptance.— By the acceptance of an assign- ment for the benefit of creditors the assignee becomes a trustee for the creditors, and equity will compel the execution of the trust. for their benefit.6 An assignment once accepted by the assignee is vested for the benefit of creditors, and a subsequent renuncia- tion does not affect the validity of the conveyance.’ But an 13 R. S. (7th ed.), p. 2276. 2 Brennan v. Wilson, 71 N. Y. 502; s. c., 4 Abb, N. C. 279. 3 Rennie v. Bean, 24 Hun, 123, 4 Schwartz v. Soutter, 41 Hun, 323; Noyes v. Wernberg, 15 Abb. N. C, 164. 577 Iowa, 397; 42 N. W. Rep. 382, 6 Moses v. Murgatroyd, 1 Johns. Ch. 119; Shepherd v. McEvers, 4 id. 186; Nicoll v. Mumford, id. 523; Ward v. Lewis, 4 Pick. 518; New England Bank v. Lewis, 8 id. 113; Pingree v. Comstock, 18 id. 46; Weir v. Tannehille, 2 Yerg. 57; Robertson v. Sublett, 6 Humph. 813; Pearson v. Rockhill, 4B. Mon. 296; Furman v. Fisher, 4 Cold. (Tenn.) 626; Barcroft v. Snodgrass, 1 id. 430; Thatcher v. Franklin, 87 Ark. 64; Boardman v, Willard, 73 Iowa, 20; 84 N. W. Rep. 487; Sleeper v. Iselin, 62 id. 583; 17 N. W. Rep. 922; Nailer v. Young, 7 Lea (Tenn.), 735. 7Seal v. Duffy, 4 Barr, 274. See Brooks v. Marbury, 11 Wheat. 78; Curtis, J., 312 ACCEPTANCE BY THE ASSIGNEE. (cH. xvmq. ceptance by an assignee who is a creditor has been held not to bind other creditors in the case of a fraudulent assignment.’ Where one accepts a trust by which a debtor devotes all his property to the payment of his creditors, the trustee thereby waives any specific lien he may have on the property by virtue. of execution, and must take according to she stipulations of the deed of trust.? § 239. Presumed Acceptance.— The assent of the trustees is presumed until the contrary be shown; and if the assignment be made without their knowledge, they may, when it comes to their knowledge, affirm it, and it will be binding.’ Where the trustee is not present his assent may be presumed for the purpose of giving operation to the deed.* § 240. Proceedings Where Trustee Refuses to Accept.—If the person named in the assignment as assignee or trustee refuse to accept the trust, the execution of the trust devolves upon the court of equity having jurisdiction, which may appoint one or more new trustees if necessary.5 in Stewart v. Spencer, 1 Curt. 157, 166; McKinney, J., in Brevard v. Neely, 2 Sneed, 164, 170; Bethune v. Dougherty, 30 Ga. 770. 1Cook v. Smith, 3 Sandf. Ch, 333. * Harrison v. Mock, 10 Ala. 185. As tothe effect of an acceptance by an as- signee who is also a creditor, see King v. Moore, 18 Pick. 367; Harrison v. Mock, 16 Ala. 616. 3Galt v. Dibrell, 10 Yerg. 146; Nicholl v. Mumford, 4 Johns. Ch. 522, 529; Brown v. Minturn, 2 Gall. 557; Small v. Marwood, 9 B. & Cress. 300; Smith v. Wheeler, 1 Vent. 128; Marbury v. Brooks, 7 Wheat. 556: Weston v. Barker, 12 Johns, 276; 2 Kent’s Com. [533] 692, note; Bank v. Holmes, 85 Pa. St. 231; Kennedy v. Winn, 80 Ala. 185. Acceptance relates back to the day of filing. National Bank v. Ridenour, 46 Kan. 718. See p. 818, note. 41 Am. Lead. Cases, 96; McKinney, J., in Brevard v. Neely, 2 Sneed, 164, 170. 5 King v. Donnelly, 5 Paige, 46. From what was said by the court in Seal v. Duffy, 4 Barr, 274, 277 (Bell, J.), it would appear that, as the legal title does not pass until acceptance, it remains in the assignor, or at least becomes revested in him by way of remitter, so that he may select a new assignee and assign the property to him. But where interests of creditors have in the meantime at- tached, it has been held in Pennsylvania that a refusal, from the beginning, of a named assignee to accept the trust would not operate to divest these interme- diate interests. See Read v. Robinson, 16 W. & 3. 329, 332; approved by the court in Seal v. Duffy, ubi supra. And in a case in the same state, where an assignment of all the debtor’s estate had been executed and recorded, but the assignees never acted nor were others appointed in their stead, and there was no evidence of the delivery of the assignment to either of them, it was held that, though an assignment of real estate for the benefit of creditors passes the legal title, which is not defeated by the refusal or neglect of the assignees to act, but vests in those whom the court appoint to execute the trust, yet that a trust results to the debtor by operation of law which entitles him to the possession of ae ts remaining unconverted. Webb v. Dean, 21 Pa, St. 29; Woodward, + id, 82, § 241.] PROCEEDINGS WHERE ASSIGNEE RENOUNCES. 313 In Virginia the general rule of equity is recognized that a trust shall never fail for want of a trustee, and therefore, if the trustee dies or refuses to accept the trust or is incapable of performing it, a court of equity will give to the cestwis gue trust the proper relief, either by executing the trust or appointing a trustee for that pur- pose! The same rule is recognized in Georgia,? Pennsylvania, Kentucky,' Tennessee,’ and South Carolina.’ But in 4 case in Vir- ginia where a debtor had conveyed a large property, real and per- sonal, in trust to secure numerous creditors, and the trustees not having signed the deed refused to act, and two of the creditors filed a bill on behalf of themselves and the other creditors secured by the deed against the grantor and the trustees, praying for the appointment of other trustees, which prayer was granted, it was held by the court to be error simply to appoint trustees in the place of those named in the deed, but that the court should have the trust administered under its own supervision and control, and that the proper course would have been to appoint commissioners to sell and administer the trust under the supervision and control of the court,’ A disclaimer of a non-accepting trustee relates back to thesdate of his appointment.’ § 241. Proceedings Where Assignee Renounces After Accept- ance.— After once accepting the assignment.for the purposes of the trust, the assignee cannot divest himself of the legal estate (which by the acceptance became vested in him) by a mere refusal to carry the trust into execution, or withdraw. from its support 1 Reynolds v. The Bank of Virginia, 6 Gratt. 174. 2 Dawson v. Dawson, Rice’s Ch. 248. 3 Webb v. Dean, 21 Pa. St. 29. In Marks’ Appeal, 85 Pa. St. 281, it is held that an assignment vests title forthwith in the assignee, and it is immaterial when the assignee accepts the trust or whether he ever accepts it. 4 Harris v. Rucker, 13 B. Mon. 564. 5 Field v. Arrowsmith, 3 Humph. 442; Brevard v. Neely, 2 Sneed, 164. ‘‘ The acceptance of the assignment is necessary to constitute the assignee a trustee for the creditors, but it may be valid though he refuse to accept. If made for the benefit of creditors, the assent of the trustee is not essential to its validity, and a court of equity on behalf of the creditors will enforce the execution of the trust.” McKinney, J., id. 171; Furman v. Fisher, 4 Cold. (Tenn.) 626; Barcroft v. Snodgrass, 1 id. 430. See Young v. Cardwell, 6 Lea (Tenn.), 168; Nailer v. Young, 7 id. 735. 6 Brooks v. Brooks, 12 8. C. 422. 7 Reynolds v. The Bank of Virginia, 6 Gratt. 174, The reasons of this decision are given by Baldwin, J.,. id. 179, 186. The deed in this case was one of that class which has been before noticed, combining the qualities of a security to creditors with that of a provision for their payment, or in other words a mort- gage in trust; and the court held that it should have been treated as a mortgage and commissioners appointed as in cases of that kind. 3 Hughes v. Brown, 88 Tenn, 578; 13S. W. Rep. 286, 31t ACCEPTANCE BY THE ASSIGNEE. [oH. XVIIL. without the consent of all the parties interested.'' He is not per- mitted to defeat the trust in this way by his own act; and if he does so renounce or refuse to act under the assignment, it is com- netent to any of the parties interested in it to call upon the proper court to appoint another assignee in his place.? Such a refusal vests’ no right in the assignor to execute another distinct conveyance of the same property to another assignee, though substantially on the same trusts.? In the New York case of Brennan v. Wilson,* it was held that where there are several assignees and all have ac- cepted the trust, they cannot afterwards collectively or severally renounce or repudiate the duties and responsibilities of the office, or divest themselves of the title so vested in them, save in the per- formance of the trust, and all must unite in a transfer of the trust property. Nor can the assignor appoint a new assignee even in pursuance of a power reserved in the assignment itself.’ 1 Lewin on Trusts, 464; Jones v. Stockett, 2 Bland, 409. See Strong v. Willis, 3 Fla. 124; Bethune v. Dougherty, 80 Ga. 770. This is the general doctrine in regard to trustees. Mr. Perry, in his work on Trusts (vol. IT., p. 558), says: ‘‘ A mere relinquishment of the trust or of the property, which does not purport to con- vey the property to some person authorized to receive it, does not discharge the trust,” citing Dick v. Pitchford, 1 Dev. & Bat. Eq. 480; Richardson v. Cole, 2 Swan, 100; Diefendorf v. Spraker, 10 N. Y. 246; Waugh v. Wyche, 28 L. J. Ch. 883; Thatcher v. Candee, 3 Keyes, 157; Webster v. Vanderventer, 6 Gray, 429; Gilchrist v. Stevenson, 9 Barb. 9. 2Seal v. Duffy, 4 Barr, 274; Bell, J., id. 278. See Dawson v. Dawson, Rice’s Ch. 248; Shyer v. Lockhard, 2 Tenn. Ch. (Cooper), 865. 3Seal v. Duffy, 4 Barr, 274, 471 N. Y. 502 : 5See Planck v. Schermerhorn, 3 Barb. Ch. 644. CHAPTER XIX. DELIVERY OF POSSESSION OF THE PROPERTY ASSIGNED. § 242. Time of Delivery of Possession. 248, When Essential. 244, The Different Rules that Prevail. 245. Delivery Indispensable. 246. Possession Prima Facie Evidence. 247. The Rule in New York. 248, The Rule in the United States Courts. 249, Possession Not Evidence of Fraud. 250. The Prevailing Rule and Exceptions, 251. Time and Mode of Delivery. 252. Constructive Delivery. 253. Actual and Continual Charge. 254. Retention of Part. 255. Delivery of Chattel Not in Schedule. § 242. Time of Delivery of Possession.— The acceptance of the assignment by the assignee after its execution and delivery by the assignor completes the proceedings necessary to the transfer be- tween those parties so far as the instrument itself is concerned; but ‘there usually remains a very important act to be done with refer- ence to the property conveyed by it, and which it is now proposed to consider, namely, the delivery of possession. § 243. When Essential.— In order to complete the transfer of the property intended to be conveyed by the assignment and to give it every quality of validity as against creditors, the execution or delivery of the instrument should be accompanied, or at least followed, as soon as practicable by delivery of possession of the property itself to the assignee. This is particularly desirable in regard to personal property; the real estate assigned passing by mere delivery of the deed.’ As it is, however, sometimes the prac- tice for the assignor to retain possession after the assignment, and even to stipulate for such a privilege in the deed itself, it becomes. an important consideration how far a change of possession is actu. 1In connection with the subject of this chapter, see post, ch. XXX. 2 Marshall, C. J., in Brashear v. West, 7 Pet. 608, 618. “And see Phettiplace v. Sayles, 4 Mason, 312, 821. And the argument in Tompkins v. Wheeler, 16 Pet. 106, 112; Hempstead v. Johnson, 18 Ark. 123; Wooten v. Clark, 23 Miss. 5; Noble v. Coleman, 18 Ala, 77; Seuter v. Turner, 10 Iowa, 617. See Bump on Fraud. Conv., p. 161. 316 DELIVERY OF POSSESSION. [cH. XIX. ally essential to the validity of the conveyance, and what is the effect upon the assignment of withholding it. The general question whether the retention of possession by a vendor or assignor of goods sold or assigned is fraudulent per se, or only presumptive evidence of fraud and susceptible of explana- tion; or, in other words, whether fraud in such a case is an infer- ence of Jaw to be drawn by the court and resulting inevitably from the fact, or an inference of fact to be drawn by a jury, has been the subject of much discussion and numerous adjudications in the courts, both in England and the United States. The question has been justly termed “a very vexatious one,”! the decisions in both countries being marked by much fluctuation and diversity, and the preponderance of authority inclining at one time in favor of the stern rule of fraud in law, and at another in favor of the laxer rule of presumptive fraud. It is not within the scope of this work to take even a summary view of these decisions;? but only to notice the rules which they have tended to establish in this country, so far as relates to the particular subject under consideration. § 244. The Different Rules that Prevail.—In regard, then, to the necessity of the delivery of possession of personal property as- signed, three different rules appear to have been at different times established in the United States by decision or statute: first, that such delivery is zndispensable to the validity of the assignment, and the want of it is conclusive evidence of fraud; second, that the want of possession is only presumptive evidence of fraud, and may be explained so as to be consistent with the validity of the trans- fer; and third, that non-delivery of possession is not even presump- tive evidence of fraud, but is entirely consistent with the validity and operation of the deed until the sale of the property assigned. § 245. Delivery Indispensable.— The first and most rigid of these rules formerly prevailed in the state of Pennsylvania, where the delivery of possession of personal property assigned was held to be essential to the validity of the assignment; and the retention of possession by the assignor was conclusive evidence of fraud, or was fraudulent per se as against creditors. This was the doctrine established in the cases of Dawes v. Cope? and Hower v. Geesa- man.* In the latter case an assignment in trust for creditors was 12 Kent’s Com. [515], 664, ?They may be found fully collected and ably commented on in 2 Kent’s Com. (515-532), 664-668. And see 1 Smith’s Lead, Cas. (Am, ed 1852); note to Twyne’s Case [9-14c], 39-46, and the very complete and elaborate note by the American ed- itors, id. 47-85 [ed. 1855], 46-80, See, also, Bump on Fraud. Conv., chs. V and VI. 34 Bion. 258, 417 Serg. & Rawle, 251. § 245.] DELIVERY INDISPENSABLE 317 held void as against a judgment creditor because the grantor re- tained possession and held, used and disposed of the property as his own, although the creditor had notice of the assignment. Mr. Justice Todd, who delivered the opinion of the court, declared that, to make such an assignment valid in any case, the possession must accompany and follow the transfer. This, he asserted, was settled, if anything could be settled, by precedents.'' In Carpenter v. Mayer? the same doctrine was sustained, the court holding that the continuance of possession of an assignor of goods was a fraud in law, and was a question for the court and not for the jury. In Young v. McClure? it was further held that there must be not only a delivery of the thing to the assignee at the time of the transfer, but a continuing possession; and that must be shown by the claim- ant. The question in such cases, it was said, ought not to be left to the jury, whether the transfer is in good faith and without de- sign to cover the property, or to delay or hinder creditors; but it is a question of fraud in Jaw for the court. The rule thus established, however, had been so far relaxed’ by the statute of June 14, 1836,° and the construction given to it that an assignee under a voluntary deed of assignment for the benefit -of creditors might suffer the goods to remain in possession of the assignor for thirty days without subjecting them to an exécution of a creditor of the assignor, such delay being given to afford time to comply with the requisitions of the statute. And later decisions have now established a rule directly the reverse of that’ which' was formerly so repeatedly considered as settled. Thus, in Fitler v. Maitland,’ it was held to be not fraudulent for the assignior to re- tain possession of the property assigned when the assignment: has been recorded and the other requisitions of law complied with. And in the latter case of Klapp’s Assignees v. Shirk,® the doctrine is laid down that a voluntary assignment for the benefit of credit- ors, in the manner authorized’ by law, ‘is not: avoided by the prop- erty being left in the possession of the assignor; ‘that, to avoid the 1'See Clow v. Woods, 5 Serg. & Rawle, 275-278; Cunningham v. Neville, 10 id. 201; Babb v. Clemson, id. 419; Martin v. Mathiot, 14 id. 214; Coursey y. Mor- ton, 182 N. Y. 556; 80 N. E, Rep. 231. A reasonable time, however, will be al- lowed the assignee to take possession, ‘Wilt v. Franklin, 1 Binn, 502. 25 Watts, 483, 32 Watts & Serg. 147, 150. : 4 And see McBride v. Clelland, 6 Watts & Serg. 94. 5 Purdon Dig. (Brightley, 10th ed.), p. 118, 62 Kent's Com. [522], 673, note e, 76 Watts & Serg. 307. See Dallam v. Fitler, 6 id. 228; Mitchell v. Willock, 2 id: 258; Mackintosh v. Corner, 38 Ind. 598. eee 813 Pa. St. 589. See, also, Dunlap v. Bournonville, 26 Pa, St. 72; Milne v. Henry, 40 id. 352, And see Smith’s Lead. Cas, (Hare & Wallace’s Notes, ed. 1855), 72-76. 318 DELIVERY OF POSSESSION. (oH. xIx. deed, the fraud must be in the assignment itself; that, on delivery of the deed, the property in the goods vests in the assignee for the benefit of creditors, and no subsequent fraudulent dealing between the assignor and assignee can re-invest the goods in the assignor or render them liable to levy as his property. In Vermont, where the rule has always been maintained that an absolute sale of personal chattels unaccompanied by possession is fraudulent per se as against the creditors of the vendor,' the same strict rule has been applied to assignments for the benefit of cred- itors. In Hall v. Parsons? it was held that the same change of possession which was required in case of the sale of personal prop- erty was required where personal property was assigned for the benefit of the assignee as creditor of the assignor, and, after pay- ment of his claims, for the benefit of the creditors generally? In Illinois, also, it appears to be the rule that a// conveyances of goods and chattels, where the possession is permitted to remain with the donor or vendor, are fraudulent per se and void as to creditors, ‘though an exception is made where the retention of possession is consistent with the deed.‘ And in South Carolina it has been held that leaving. property assigned in the hands of the debtor raises the - presumption of a secret trust between the debtor and the preferred creditor, and the deed is void so far as the rights of creditors are affected. The law in such a case raises the conclusion of fraud, in- capable of being rebutted or explained.® In a case in Maryland* where the assignment provided for the retention by the grantor of all his real estate and household goods and certain other property, and that he should pay rent to the trustee, it was held to be absolutely void as to the creditors of the grantor. 1See Boardman v. Keeler,1 Aiken, 158; Mott v. McNeil, id. 162; Weeks v. Wead, 2 id. 64; Beattie v. Robins, 2 Vt. 181; Judd v. Langdon, 5 id. 231; Farns- worth v. Shepard, 6 id. 521; Wilson v. Hooper, 12 id. 653; Mills v. Warner, 19 id. 609; Walworth v. Readsboro, 24 id. 252, 217 Vt. 271. The assignment in this case was made before the act of 1843. And see Rogers v. Vail, 16 Vt. 327. 38ee Rice v. Courtis, 32 Vt. 460; Hanford v. Paine, id. 442. See 1 Smith’s Lead. Cas. (Hare & Wallace’s Notes, ed. 1855), 78, 79. 4Thornton v Davenport, 1 Scam. 296; Rhines v. Phelps, 8 Gilm. 455. See 1 Smith’s Lead. Cas. (Hare & Wallace’s Notes), 55; Dexter v. Parkins, 22 Ill. 143; Ketchum v. Watson, 24 id. 591; Bay v. Cook, 81 id. 886; Corgan v. Frew, 39 id. 81; Wilson v. Pearson, 20 id. 81; Green v. Van Buskirk, 38 How. Pr. 52, 5 Anderson v. Fuller, 1 McMul. Eq. 27, citing Smith v. Henry, 1 Hill, 22. See 2 Kent’s Com. [522], 672, note ce; 1 Smith’s Lead. Cas. (Hare & Wallace's Notes), 65-67; Terry v. Belcher, 1 Bailey, 558; Smith v. Henry, 2 id. 118; Kennedy v. Rose, 2 Mills, 125; De Brodleben v, Beekman, 1 Desaus, 346, 6 Price v. Pitzer, 44 Md. 521, § 246.] POSSESSION PRIMA FACIE EVIDENCE. 319 In Colorado! it is held that until such a change of possession as the nature of the property will reasonably admit of takes place, the title does not pass to the assignee against a bona jide creditor without notice. So in Indiana it was held that where the possession of the goods is not delivered to nor taken by the assignee the assignment will not defeat the intervening liens of attaching creditors.’ § 246. Possession Prima Facie Evidence.— Another rule in re- gard to the possession of assigned property is that possession by an assignor after a transfer of personal property is only evidence of fraud, and not fraud per se, or such a circumstance as of itself necessarily invalidates the transfer; or in other words, that it is only prima facie and not conclusive evidence of fraud; and that it may always be explained so as to show the transfer to have been dona fide and upon sufficient consideration. This is the established rule in Massachusetts,’ Connecticut, New York,’ North Carolina,’ Indiana,’ and Arkansas;* and appears to prevail also in Maine, New Hampshire,” New Jersey," Ohio,” Mis- 1Ray v. Raymond, 8 Col. 467. 2 Woolson v. Pipher, 100 Ind. 306. 3Boyden v. Moore, 11 Pick. 8362; Macomber v. Parker, 14 Pick. 497; Fletcher v. Willard, 14 id. 464; Allen v. Wheeler, 4 Gray, 123. 4Ingraham v. Wheeler, 6 Conn. 277; Osborn v. Tuller, 14 id. 530; Strong v. Carrier, 17 id. 319. See Kirtland v. Snow, 20 id. 23; 1 Smith’s Lead. Cas. 76, 77 (Am. ed. 1875), 5 See post, p. 320. 6 Dewey v. Littlejohn, 2 Ired. Eq. 495; Hardy v. Skinner, 9 Ired. L. 191. But see Gaither v. Mumford, 1 N. C. Term R. 167. 7 Caldwell v. Rose, 1 Smith, 190; Hall v. Wheeler, 13 Ind, 371; Kane v. Drake, 27 id. 29. In this state as in Illinois even a joint possession by the assignor and assignee is evidence of fraud unless explained. Id.; Caldwell v. Williams, 1 Ind. 405. And see 1 Smith's Lead. Cas. (Am. ed. 1852), 56; Id. (ed. 1855), 57. 8 Field v. Simco, 2 Eng. 269; Cocke v. Chapman, id. 197; Stone v. Waggoner, 3 id. 204; George v. Norris, 23 Ark, 121; Danley v. Rector, 6 id. 224; Hempstead v. Johnson, 8 id. 123. 9The decisions in this state and those which follow are mostly in cases of sales and mortgages. Reed v. Jewett, 5 Green]. 96; Holbrook v. Baker, id. 309; Brin- ley v. Springs, 7 id. 241; Ulmer v. Hills, 8 id. 326; Cutter v. Copeland, 18 Me. 127; Bartlett v. Blake, 37 id. 124; Googins v. Gilmore, 47 id. 9 10 Haven v. Law, 2 N. H. 18; Coburn v. Pickering, 3 id. 415; Lewis v. White- more, 5 id. 364; Ash v. Savage, id. 545; Kendall v. Fitts, 2 Fost. 1. See 1 Smith’s Lead Cas, (Am. ed. 1855), 63, 64. 11 Sterling v. Van Cleve, 7 Halst. 285; Hendricks v. Mount, 2 South. 738; Bank of New Brunswick v. Hassert, Saxt. 1; Cumberland Bank v. Hann, 4 Harris, 166; Miller v. Pancoast, 5 Dutch. 250. See Livermore v. McNair, 34 N. J. Eq. 478. 12 Barr v. Hatch, 3 Ohio, 527; Shaw v. Lowry, Wright’s Ch. (Ohio), 190; Hom- beck v. Van Metre, 9 Ohio, 153. See 1 Smith’s Lead. Cas. (Am. ed. 1852), 56: Id. (ed. 1855), 80. 320 DELIVERY OF POSSESSION. (cH. XIx. souri,! Kentucky,? Tennessee,’ Virginia,‘ Georgia,’ Alabama,° Texas,” Mississippi,’ Louisiana,? Wisconsin, Michigan," and Nebraska.” § 247, The Rule in New York.— In New York the question as to the necessity of a delivery of possession of goods sold, mort- gaged or assigned to the validity of the transfer was, after much fluctuation in the decisions of the supreme court,” settled by the Revised Statutes, which provide that “ Every sale made by a vendor of goods and chattels in his possession or under his control, and every assignment of goods and chattels by way of mortgage or se- curity, or upon any condition whatever, unless the same be accom- panied by an ¢mmediate delivery, and be followed by an actual and continued change of possession of the things sold, mortgaged or as- signed, shall be presumed to be fraudulent and void as against the creditors of the vendor, or the creditors of the person making such assignment, or subsequent purchasers in good faith; and shall be conclusive evidence of fraud, wnless it shall be made to appear on the part of the persons claiming under such sale or assignment that the same was made in good faith and without any intent to. defraud such creditors or purchasers.” * The effect of this provision 1Milburn v. Waugh, 11 Mo. 369; Kuykendall v. McDonald, 15 id, 416; Claflin v. Rosenberg, 42 id. 489; s. c., 43 id. 595; State v. Tasker, 31 id, 445; State v.. ‘Smith, 31 ‘id. 566; State v. Evans, 38 id. 150; Howell v. Bell, 29 id. 185; Good- win v. Kerr, 80 id. 276. See 1 Smith’s Lead. Cas. 82. ” 2Vernon' v. Morton, 8 ‘Dana, 247; Christopher v. Covington, 2 B. Mon. 357. But see Gen. Stat.'(ed. 1881), p. 489, § 3. 3Callan v. Thompson, 3 Yerg. 475; Darwin v. Handley, id. 502; Maney v. Kil- lough, 7 id. 440; Mitchell v. Beal, 8 id. 142; 1 Smith’s Lead. Cas, 81. See Ragan: v. Kennedy, 1 Tenn, 91. 4Davis v. Turner, 4 Gratt. 422. See Curd v. Miller’s Ex’rs, 7 id. 185. See Bump on Fraud. Conv., pp. 149 et seq. 5 Fleming v. Townsend, 6 Ga, 108; Carter v. Stanfield, 8 id. 49; 1 Smith’s Lead. Cas. 82. 6Noble v. Coleman, 16 Ala. 77; Dearing v. Watkins, id. 20; Millard v. Hall, 23- id. 209. See 1 Smith’s Lead. Cas, 55-57; Constantine v. Twelves, 29 Ala. 607; Perry Insurance & Trust Co. v. Foster, 58 Ala. 502; Cooper v. Davidson, 86 Ala. 367; 5 South. Rep. 650. 7Bryant v. Kelten, 1 Tex. 415; McQuinnay v. Hitchcock, 8 id, 88; Van Hook v. Walton, 28 id. 59; Howerton v. Holt, 23 id. 51. 8Summers v. Rose, 48 Miss. 749; Jayne v. Dillon, 27 id. 283; Rankin v. Hollo- way, 3 Sm. & M. 614; Comstock v. Rayford, 1Sm. & M. 423; s. oc, 12 Sm. & M. 369. 9Keller v. Blanchard, 19 La, Ann, 58; Gruce v. Sanders, 21 id. 463; Haile v. Brewster, 13 id. 155. See Zacharie v. Kirk, 14 id. 433. 10 Whitney v. Brunette, 3 Wis. 621; Smith v. Welch, 10 id. 91; Bullis v. Bor- den, 21 id. 185, 11 Jackson v. Dean, 1 Doug. 519; Parsell v, Patterson, 47 Mich. 502, 12 Morgan v. Bogue, 7 Neb. 429, 13 See a review of the cases in Bump on Fraud. Conv., pp. 187 et seg. Also in 2 Kent’s Com, [526-529], 679-684-and note. 44 Rev. Stat. (8th ed.), p. 2591, § 5. § 247.) THE RULE IN NEW YORK. 321 is to throw upon the vendee, mortgagee or assignee of personal property, who suffers the possession to remain unchanged, the burden of destroying the presumption of fraud which the fact of withholding possession raises.' It is further declared that the question of fraudulent intent shall be deemed a question of fact, and not of daw.? A number of adjudications have taken place under these provisions, the result of which has been to settle the doctrine that the whole question of fraud, in these cases, is a question of fact for a jury.’ A court of equity, however, is com- petent to pronounce upon the question; and a large proportion of the cases in this state in which the principle has been applied to voluntary assignments by debtors have been cases in equity with- out the intervention of a jury. Thus, in Butler v. Stoddard,’ in the court of chancery, which was a case of an absolute assignment of goods and accounts to certain creditors, the assignor, after execu- tion of the assignment, was left in possession, to sell the goods and collect the accounts for the sole benefit of the assignees, they pay- ing him a certain compensation for his services as their agent. The assignment was declared fraudulent and void; the court holding that the nominal appointment of the assignor as agent of the as- signees, without any visible change in the mode of doing business at the store, was not a change of possession within the meaning of the statute; that there must be an actual and continued change of possession, as well as a nominal and constructive change, or the transaction would be deemed fraudulent as against creditors. So in Connah v. Sedgwick,’ where a bill was filed in the supreme court, in equity, to set aside an assignment, and for an injunction and receiver, it was held by the court that under the provisions of the statute, unless an assignment made by a debtor for the benefit of his creditors is accompanied by an immediate delivery of the as- signed property, and is followed by an actual and continued change of possession, the courts are bound to presume it fraudulent and void as against creditors; and te regard it as conclusively so, unless they are satisfied that it was made in good faith, and without any 12 Kent’s Com, [529], 681, note a. See Williams y. Lowdnes, 1 Hall, 579, 596. 24R, S. (8th ed.), p. 2593, § 4. 32 Kent’s Com. [529], 681-684, note, where the cases are reviewed. In Vance v. Phillips, 6 Hill, 433, it was decided that where a validity of a sale of chattels de- pends upon whether it was made with intent to defraud creditors, however clear and conclusive the evidence of fraudulent intent may be, the judge is bound to submit the case to the jury. But if the jury find against the evidence, the court will set aside the verdict and grant a new trial. Sec, also, Edgell v. Hart, 13 Barb. 380. And see 1 Smith’s Lead. Cases (Am. ed. 1855), 68-71. 4See the observations of Wing, P. J., in Hollister v. Loud, 2 Mich. 309, 3138. 57 Paige, 163; affirmed on appeal, 20 Wend. 507, 61 Barb. S. C. 210, : 21 322 DELIVERY OF POSSESSION. [cH. xIx. attempt to defraud. Several decisions to the same point have been made by the vice-chancellor of the first circuit.!. The circumstances of leaving the household furniture of the assignor in his possession for eleven months, without explanation, was held to be evidence of fraud. Nor will a lease of it by the assignee render the transac- tion valid, where the assignor continues in possession.? And the possession of things in action remaining in the assignor after they have been assigned for creditors requires explanation, as well as that of goods and chattels. And in a case where a substantial portion of the assigned property, consisting principally of promis- sory notes and household furniture, was suffered to remain in the assignor’s possession for three months after the execution of the as- signment, it was held indispensable, in order to rebut the presump- tion of fraud, that the assignee should prove the existence of the indebtedness in consideration of which the assignment was osten- sibly made * The rule in New York may now be regarded as settled, that the fact of there being no change of possession is presumptive evidence of fraud, and conclusive, unless rebutted by affirmative evidence of good faith and the absence of an intent to defraud.® ‘Where personal property has been levied upon under an execu- tion and is in the possession of the sheriff at the time of the assignment by the judgment debtor, the transaction is not within the above statute requiring immediate delivery.’ Real estate is not included in the express language of the stat- ute. The continuance in possession of a grantor of real estate 1Van Nest v. Yoe, 1 Sandf. Ch. 4; Mead v. Phillips, id. 83; Cram v. Mitchell, id. 251; Einstein v. Chapman, 42 N. Y. Super. Ct. 144; Ball v. Loomis, 29 N. Y. 412; Wilson v. Forsyth, 24 Barb. 105. See, also, Hart v. Acker and Scholefield v. Hull, cited in Edwards on Receivers (ed. 1857), 408, 410; Van Buskirk v. War- ren, 4 Abb. Dec. 457; Pine v. Rickert, 21 Barb. 469. And see post, ch. XXX. 2Cram v. Mitchell, ubi supra. 3 Dewey v. Adams, 4 Edw. Ch, 21, ‘Mead v. Phillips, 1 Sandf. Ch, 82. This is so held on the common-law prin- ciple that the non-delivery of a chose in action, at the time of its assignment, is a badge of fraud. Sandford, A, V. C., id. 88; Paige, P. J., in Browning v. Hart, 6 Barb. 91, 94. But the provision of the Revised Statutes (2 R. S. 136, §5;3 R.S. (7 ed.), p. 2828; 4 R.S. (Sth ed.), p. 2591, § 5) which requires the immedi- ate delivery, and an actual and continued change of possession of goods and chat- tels sold, mortgaged or assigned, has been repeatedly held not to embrace choses in action. Paige, P. J., in Browning v. Hart, ubi supra; Curtis v. Leavitt, 17 Barb. 309, 310. And see, as to the retention of choses in action assigned for the benefit of creditors, Tompkins v. Wheeler, 16 Pet. 106. 5 Jacobs v. Remsen, 86 N. Y. 668. And see Terry v. Butler, 43 Barb. 395; Van Buskirk v, Warren, 39 N. Y. 119; Miller v. Lockwood, 32 id. 293 ; Thompson v. Blanchard, 4 id. 303. ® Meade v. Phillips, 1 Sandf. Ch. 83; Tate v. McCormick, 23 Hun, 218. 7Mumper v. Rushmore, 79 N. Y. 19; affirming 14 Hun, 591. § 248.] THE RULE IN THE UNITED STATES COURTS. 323 after the conveyance does not of itself warrant a finding as a legal conclusion that the deed was fraudulent.' But where the debtor was permitted to retain possession of real estate which he had as- signed for a number of years, under a nominal lease to his son without paying any rent, the conveyance was declared fraudulent and void as against creditors.’ A failure, however, to comply with the statute is an objection which can be taken only by creditors. The fact that assignees, immediately after the acceptance of the assignment, refused to take possession of the entire property does not deprive them of their rights, nor relieve them of their obligations under it.* § 248. The Rule in the United States Courts.— The question of the necessity of a change of possession to the validity of a transfer of property, as against creditors, has also been discussed in the courts of the United States. In the case of Hamilton v. Russell * the strict rule was laid down by the supreme court that an abso- lute bill of sale of a personal chattel by an insolvent was fraudu- lent against creditors, unless possession of the property assigned or transferred accompanied or followed the deed, and that the ab- sence of such possession was not merely evidence of fraud, but was a circumstance per se which made the transaction fraudulent. In the subsequent case of United States v. Hooe® the court held that the rule did not apply to a deed of trust of lands to trustees by way of indemnity of a surety of the grantor. In Conrad v. At- lantic Insurance Company * the court avoided expressing an opin- ion on the question whether, in any case, the want of possession of the thing sold constitutes per se a badge of fraud, or is only prima facie a presumption of fraud; Mr. Justice Story, who deliv- ered the opinion of the court. observing that it was “a question upon which much diversity of judgment has-been expressed.”* It is to be observed, however, that the learned judge had, in an ear- lier case,’ in the circuit court of Massachusetts, adopted the more 1Clute v. Newkirk, 46 N. Y. 684; Every v. Edgerton, 7 Wend. 259. See Jack- son v. Cornell, 1 Sandf. Ch. 348. 2 Bank of Orange Co. v. Fink, 7 Paige, 87. See Mead v. Phillips, 1 Sandf. Ch, 83; Dolson v. Kerr, 5 Hun, 648; Hitchcock v. St. John, Hoffm. Ch. 511; Dewey v. Adams, 4 Ed. Ch, 21. 3 Sheldon v. Stryker, 42 Barb. 284; s, c., 27 How. Pr. 387, 41 Cranch, 309. 58 Craneh, 73. 61 Pet. 386. iId, 449, 8 Meeker v. Wilson, 1 Gall. 419, ‘*By the common law a grant or assignment of goods and chattels is valid between the parties without actual delivery thereof; and the property passes immediately upon the execution of the deed. But, as to creditors, the title is not considered as perfect unless possession ac- 824 DELIVERY OF POSSESSION. [cH. XIX. rigid rule, and applied it to the case of a voluntary assignment by a debtor. In Brooks v. Marbury! the supreme court refused to apply the doctrine of Hamilton v. Russell to the case of a deed of trust for the benefit of creditors; observing that the continuance of the possession with the donor until the trust could be executed might not be so incompatible with the deed as to render it abso- lutely void under all circumstances. The court, however, as in Conrad v. Atlantic Insurance Company, declined expressing any opinion on this point further than to say that it was not supposed. to be decided in Hamilton v. Russell. § 249. Possession Not Evidence of Fraud.—A third rule on the subject of delivery of possession of property assigned, which prevails in some states, is that retention of possession by an as- signor is not even presumptive evidence of fraud, but is consistent. with the validity of the assignment. This rule is constantly applied to those deeds of trusts, already mentioned as peculiar to the south- ern states, which are executed by way of security to creditors, and which provide for a sale of the property in case the debt secured is not paid, and in which also express provision is frequently made for the retention of possession by the debtor. The formality of a record or registry, which is usually necessary to the validity of these instruments as of mortgages, dispenses with the necessity of a delivery of possession; and the general principle applied is, that it is of the nature of a security, that the debtor should retain pos- session until the day of payment be past.? Thus in Virginia de- livery of possession to the trustee never occurs on the execution of a deed of trust, but possession remains with the debtor until the time to sell? In this state it has been decided that the inconsist- ency of the debtor’s possession with the deed is the matter which constitutes fraud.* In Mississippi® and Alabama‘ possession by the companies and follows the deed. The want of possession is considered, in some of the authorities as an evidence or badge of fraud to be submitted to the jury ;. but the more modern authorities hold it as constituting in itself, in point of law, an actual fraud, which renders the transactions, as to creditors, void.” Story, J., id. 422, 423, 111 Wheat. 78, 21 Tuck. Com. [838], 327; Hempstead v. Johnson, 18 Ark. 309. 31 Tuck. Com. [840], 329; Land v. Jeffries, 5 Rand. 211, 252. And see 1 Smith’s. Lead. Cas, (Am. ed, 1855), 58-63. 4Land v. Jeffries, ubi supra. 5 Layson v. Rowan, 7 Rob. (La.) 1; Comstock v. Rayford, 12 Sm. & M. 369. In this state delivery is not necessary to the completion even of a sale of personal property. The statute of frauds (29 Car. II., ch. 3) has not been re-enacted. Inger- soll v. Kendall, 13 Sm. & M. 611. 6 Ravisies v. Alston, 5 Ala. 297, But possession afler the sale is evidence of fraud, though capable of being rebutted by showing some sufficient reuson why § 250.] THE PREVAILING RULE AND EXCEPTIONS. 325 debtor until the sale is not inconsistent with the deed and raises no presumption of fraud. In the last-named state it has been de- cided that where a deed of assignment is not fraudulent on its face the possession and use of the property by the assignor, in conform- ity with the express provisions of the deed, cannot render it void.! And it has been declared to be well settled that the retention of possession by a grantor in a deed of trust, if such possession is con- sistent with the terms of the deed, is not a badge of fraud, nor is it a circumstance from which an inference of fraud would neces- sarily arise.2 A similar practice of retaining possession until a sale under a deed of trust prevails in North Carolina; the courts ap- proving it as being more convenient for all parties that the posses- sion should not be changed.? In Kentucky the same rule has been recognized; and in a case where one of a firm who had assigned their effects to trustees for the benefit of their creditors was re- tained by the trustees to aid them in executing the trust and so remained in possession of the goods conveyed, such continued pos- session was held to be no evidence of fraud. The same rule, as already mentioned, now prevails also in Pennsylvania, the record of the assignment and a compliance with other statutory requisi- tions being held to dispense with the: necessity of a delivery.2 In. this state, indeed, an assignment duly recorded stands upon the foot- ing of a transfer by law; because, as the statute gives the creditors aright to have the trust that is expressed in the deed executed for their benefit by the court, the whole trust becomes vested in them in equity under the immediate administration of the court; and therefore an assignment recorded ‘is in effect a transfer. to the. creditors by the act of law, and the recording gives the transaction all the publicity of a judicial proceeding.® .§ 250. The Prevailing Rule and Exceptions.— On the whole the predominant rule in the. United States appears to be that pos- session must accompany and follow a deed of assignment by a debtor; and the possession of the assignor after the transfer, un- less explained, will render the assignment void as against cred- itors. But this rule is limited and qualified by several exceptions the possession was permitted to remain. Id.; McGee v. Carpenter, 4 id. 469. See 1 Smith’s Lead. Cas. (Am. ed. 1852), 55; id. (ed. 1855), 55-57. 1 Abercrombie v. Bradford, 16 Ala. 560. 2 Hopkins v. Scott, 20 Ala. 179; Ligon, J., id. 184. 3 Dewey v. Littlejohn, 2 Tred. Eq. 495, 507, See Means v. Montgomery, 23 Fed, Rep. 421. Vernon v. Morton, 8 Dana, 247. See Christopher v. Covington, 2 B, Mon. 357. But see Gen. Stats. 1881, p. 489, $3; Gen. Stats. 1887, ch. 44, §.3. 5 Mitchell v. Willock, 2 W. & S, 253; Klapp’s Assignees v. Shirk, 13 Pa. St. 589. 61 Smith’s Lead. Cas. (Am, ed. 1852), '70, 71; id. [ed. 1855], "75. 326 DELIVERY OF POSSESSION. [ou. XIx. which will now be noticed. Thus the rule applies in a peculiar manner to personal property. The provision of the New York statute confines it, in terms, to “goods and chattels;! and the dis- tinction in this respect between personal and real estate has been clearly drawn by the courts in Connecticut”? and Ohio. The same limitation was admitted by Mr. Justice Story, in Phettiplace v. Sayles,‘ in the circuit court for the district of Massachusetts.® In Widdall v. Garsed® the court said: “ The familiar rule that. an assignment to be good against the creditors of the assignor must be accompanied by the delivery of possession refers to visible, tan- gible property.” Another exception to the rule has been admitted where the pos- session of the grantor or assignor is consistent with the deed ;’ that is, with its general nature and object,’ as well as its express pro- visions. The mere circumstance that the deed contains an express. provision for the continuance of possession in the grantor will not take the case out of the rule where it is inconsistent with the char- acter of the transfer itself. This branch of the subject has already been considered under a former head. Again the rule ceases to have application where the creditors expressly assent to the assignors continuing in possession. Thus, in Tompkins v. Wheeler! (which was a case of an assignment di- rectly to creditors), after the assignment, the creditors for whose: benefit it was made neglected to appoint an agent or trustee to execute it, and the property assigned remained in the hands of the assignor. The property consisted principally of choses in action, which the assignor went on to collect, and divided the proceeds. 13 Rev. Stat. (7th ed.), p. 2328, § 5; 4 R.S. (8th ed.), p. 2591, § 5. The bare fact that a grantor remains in possession of lands conveyed by him is not enough, uncorroborated by other circumstances, to subject the transaction to the imputa- tion of fraud. Every v. Edgerton, 7 Wend. 259. In Jackson v. Cornell, 1 Sandf. Ch. 348, the possession of real estate assigned, continuing in the assignor, was. considered to be evidence of fraud. It appears in this case that the assignor.had collected the rents of the property assigned and retained a portion for his own use. 2Church, J., in Strong v. Carrier, 17 Conn. 319. 3Sherman, J., in Barr v. Hatch, 3 Ohio, 527. 44 Mason, 312, 321. 5 For the reason ofthe distinction, see id. 321, 822; Tompkins v, Wheeler, 16. Pet. 112, arg. 6125 Pa. St. 358; 17 Am. Rep. 418, 7Story, J., in Meeker v, Wilson, 1 Gall. 419, 423; Putnam, J., in Bartlett v. Williams, 1 Pick. 295; Marshall, C. J., in Brooks v. Marbury, 11 Wheat. 78. And see Dawes v. Cope, 4 Binn. 258; Gibson, J., in Clow v. Woods, 5S. & R. 278, 279; Land v. Jeffries, 5 Rand. 211, 252. 8 Lord Mansfield, in Cadogan v. Kennett, Cowp. 482, 436. §1Tuck. Com, (338), 327; id. [841], 830. 1016 Pet. 106. And see Steel v. Brown, 1 Taunt. 381. § 251.] TIME AND MODE OF DELIVERY. 327 among the creditors under the assignment. No one of the cred- itors was dissatisfied, and at any time they could have taken the property out of the hands of the assignor. It was held by the su- preme court of the United States that leaving the property in the hands of the assignor, under these circumstances, did not affect the assignment or give a right to a creditor not preferred by it to set it aside. Finally, the application of the rule requiring a delivery of pos- session of property assigned depends upon the fact Whether such delivery be possible under the circumstances of the case. This will be more fully considered under the head immediately follow- ing. § 251. Time and Mode of Delivery.— As a general rule, in or- der to avoid all ground of objection to the validity of the assign- ment, possession of the personal property assigned should always, if practicable, accompany the assignment. But where, from the circumstances of the property, ¢mmediate possession is not within the power of the parties, as in the case of a ship or goods at sea, it will be dispensed with upon the plain ground of its impossibility ; and all that will be required will be that the assignee. take posses- sion of the property within a reasonable time after it comes within: his reach.1 And even where the property assigned is in its nature capable of immediate delivery the assignee will be entitled to a reasonable time to take possession.?- Thus in Pennsylvania, where the trustee lived at a distance and did not hear of the assignment until four days after it was made, when he assented, and the debtor continued in possession one day and part of another after the exe- cution of the deed, the assignment was sustained by the court.’ In regard to the mode of delivery it may be observed generally that possession of lands is delivered by delivery of the deed;# of. goods by an actual delivery of the goods themselves, or a con- structive delivery where this is impracticable;* and of debts or choses in action by delivery of the evidences.of them. Delivery of the evidence of a debt is a sufficient delivery of the possession 18tory, J., in Conard v. Atlantic Insurance Company, 1 Pet. 386, 449; Harris v. D'Wolf, 4:id. 147, 151; Meeker v. Wilson, 1 Gall. 419, 423; Wheeler v, Sumner, 4 Mason, 183; D’ Wolf v. Harris, id. 515; Bholen v. Cleveland, 5 id. 174; Brown, v. Minturn, 2.Gall. 557; Portland Bank v. Stacy, 4 Mass, 661; Gardner v. How- land, 2 Pick. 599; Hodges v. Harris, 9 id. 360; Dawes v. Cope, 4 Binn. 258; Carpenter v. Mayer, 5 Watts, 485; Eagle v.. Hichelberger, 6 id..29; Langdon. v. Horton, 1 Hare, 23 Eng. Ch. R. (Am. ed.) 549; Bump on Fraud. Conv., p. 198, 2Ingraham.v. Wheeler, 6 Conn, 267. 3 Wilt v. Franklin, 1 Binn. 502, 4See ante, p. 315. 5 See infra, § 250. 328 DELIVERY OF POSSESSION. (oH. XIX. of it. Notice to the debtor is necessary in some cases; but not in transfers of bills of exchange or notes payable to order previous to maturity; nor afterwards, but to prevent the parties bound from acquiring equities against the holder, to which they might be entitled if not notified.” § 252. Constructive Delivery.—In regard to goods or personal chattels, a constructive or symbolical delivery is allowed in many cases where an actual delivery is physically impracticable? Thus in the case of the assignment of a vessel while abroad or at sea, a delivery of the bill of sale and other documents or muniments of title will be sufficient to pass the property, if accompanied by an actual delivery of possession as soon as conveniently may be after the vessel arrives in port.! In case of the assignment of goods on board an absent vessel there should be a delivery to the assignee of the bill of lading and an invoice with an assignment indorsed ; ° and an assignment and delivery of a duplicate of the invoice alone, where there was no other paper in the hands of the assignor, has been held sufficient as a symbolical delivery of the property.® It has been held that a failure to deliver to the assignee copies of bills of lading in the assignor’s possession did not leave the prop- erty subject to the attachment of creditors who had no notice of the deed.?, And in D’ Wolf v. Harris,’ which was a case of an as- signment of goods at sea, it was held that an indorsement of the bill of lading was not indispensable to perfect the assignment, and that it was sufficient if there was a good assignment of the prop- erty by a conveyance with apt words. A symbolical delivery is also sufficient in those cases where the goods assigned, though physically accessible, are in the possession or custody of a third person under some lawful title. Thus ina case in Massachusetts, where the goods assigned had been previ- ously mortgaged and were at the time in the custody of an officer under an attachment, and the assignee went to the store, gave notice to the officer of the assignment and said that he took pos- 1 United States v. Bank of the United States, 8 Rob. (La.) 262. 21d, 3 Parker, C. J., in Gardner v. Howland, 2 Pick. 599, 602, 4 This is the rule in regard to sales and mortgages of vessels. 2 Kent's Com. [182, 133], 175, 176. 5 See Gardner v. Howland, 2 Pick. 602, 603; Balderston v. Manro, 2 Cranch’s C. C. 623, Where goods were shipped for a foreign port the delivery of the bills of lading and the policy of insurance was held sufficient in the first instance. Dawes v. Cope, 4 Binn. 258. Notice of the assignment is usually given to the master. See Langton v. Horton, 1 Hare, 28 Eng. Ch. R, (Am. ed.) 549, 6 Gardner v. Howland, 2 Pick. 602, 603. 7 Conard v. Atlantic Insurance Co., 1 Pet. 386, §4 Mason, 515, § 253.] ACTUAL AND CONTINUED CHANGE. 329 session of the goods and did take the account books, it was held that such a symbolical delivery of possession was sufficient.} A symbolical delivery, however, as of a small portion of the goods for the whole, will not be sufficient where an actual delivery is practicable.? Thus, in Pennsylvania in a case where possession was retained by the assignor, after such a symbolical delivery, the assignment, although accompanied by a schedule of the goods, was declared void. In Massachusetts a delivery of a portion of the goods in token of a delivery of the whole was held to be a con- structive delivery of goods embraced in the assignment, which were at a distance from the place where the actual delivery of the portion was made, and which were in the hands of a third person, and subject to a lien for his labor upon them.‘ § 253. Actual and Continued Change.— It is a further rule that possession of the goods assigned must not only be actually changed, but such change must be continued.’ This is the express language of the statute in New York,’ and was formerly the declared rule in Pennsylvania.’ The assignee must not only take but keep pos- session, and there must be no redelivery to the assignor.® As to the character of the possession thus delivered, it is also held that it must be an exelusive one. A joint possession by the assignor and assignee, of personal property assigned, is colorable, and an evidence of fraud unless explained.’ But this rule is more or less modified by the rule allowing the assignor to be employed, on certain conditions, as the assignee’s agent, and to remain in. pos- session in that capacity. 1Mann v. Huston, 1 Gray, 250; Dewey, J., id. 258. A symbolical delivery by a transfer of the keys of the place where the goods are stored makes a valid transfer of the title. Bullis v. Montgomery, 58 N. Y. 352; citing Hollingsworth v. Napier, 3 Caines, 182, note a; Dunham v. Pettee, 8N. Y. 508; Sullivan v. Smith, 15 Neb. 476. So, where the assignor secured a third person to execute to the as- signee a paper in which he acknowledged the receipt of the property from the assignee, and agreed to deliver the same to him by a certain day, and in default thereof to pay him a certain sum of money, this instrument was adjudged to have the effect of a delivery bond. Leverenz v. Haines, 32 Ill. 357. 2 Hitchcock v. St. John, 1 Hoff. Ch. 511, 522, 3 Cunningham v. Neville, 10 Serg. & Rawle, 201. This was before the act of June 14, 1836. 4 Legg v. Willard, 17 Pick. 140. 5 Hatcher v. Winters, 71 Mo. 30. 63 R. S. (7th ed.), p. 2328, §5;4 R. S. (8th ed.), p. 2591, § 5. 7 Young v. McClure, 2 Watts & Serg. 147. . 8 As to the effect of a lease of the property by the assignee to the assignor, see Hitchcock v. St. John, 1 Hoff. Ch. 511; Dewey v. Adams, 4 Edw. Ch. 21. : ®2This is the rule in Indiana. Caldwell v. Rose, Smith, 190; Caldwell v. Will- jams, 1 Ind. 405. In Vermont a concurrent possession of personal property by the vendor and vendee, after a sale, renders the sale fraudulent per se as to the creditors of the yendor. Hall v. Parsons, 17 Vt. 271. 330 DELIVERY OF POSSESSION. [CH. XIX. Where the delivery of the property to the assignee is complete, it is not essential that the property itself should be removed from the place of delivery. This was decided in New York in the case of Hitchcock v. St. John.! The assistant vice-chancellor, in deliv- ering his opinion in this case, after noticing the opinions of the supreme court to the contrary,” observed “that the sole question was whether there was an open and actual change of the posses- sioa and control, the exclusion of the assignor, and the notorious. and avowed dominion of the assignee. A possession and control might be resumed by the assignor after the removal, and removal was not, therefore, conclusive evidence of fairness. The exclusion of the assignor might be as absolute and the change of control as marked, while the property was retained upon the premises, as if it was removed.” 3 § 254. Retention of Part.— Where an assignment of the debt- or’s whole property has been made in good faith for the benefit of all the creditors, its validity will not be impaired by the assignor’s. withholding a portion of the property actually conveyed; for it has. become the property of the assignee and he can recover it. by ac- tion! In Michigan it was decided that an assignment is not neces- sarily fraudulent and void because some small portion of the assets. was withheld from the assignee. If the assignment is legal on its. face, and the assignee is acting in good faith, he may by proper remedies pursue and recover anything wrongfully detained from him But in Arkansas it was held that an assignment purporting to convey all the property of the assignor except that which is ex- empt by law is vitiated by the intentional withholding of any part of it not exempt.’ In a case in New York it was held that al- though it is a general rule that, to give full effect to an assignment. of personal property, delivery of the property and a continued change of possession are requisite, and the assignor’s continuing in possession of the whole or even a part of the assigned property is a badge of fraud, yet where there is no inventory of the as- signed property accompanying the assignment, the assignor’s re- taining some property that he might have assigned, or that (being covered by the general terms of his assignment) he might have de- 11 Hoff. Ch. 511, 2In Randall v. Cook, 17 Wend. 56, and in Collins v. Brush, 19: id. 199. com- mented on by the assistant vice-chancellor in Lee v. Huntoon, Hoff. Ch. 447, 457. 3 And see the opinion in Lee v. Huntoon, ubi supra. And see Hall v. Wheeler, 18 Ind. 371. 4 Pike v. Bacon, 21 Me. 280. See Wilson v. Forsyth, 24 Barb. 105; Eicks v. Copeland, 53 Tex. 581. 5 Parsell v. Patterson, 47 Mich. 505; 11 N. W. Rep. 291. ; 6 Penzel Grocer Co. v. Williams, 53 Ark. 81; 18S. W. Rep. 736. § 255.] DELIVERY OF CHATTEL NOT IN SCHEDULE. 331 livered under it, is not an act that of course makes his whole assign- ment void. § 255. Delivery of Chattel Not in Schedule.— On the other hand, a delivery of more property than has been specially conveyed, as of an article not named in the schedule annexed, will sometimes bind the assignor. Thus, in Massachusetts, where a debtor assigned property not described in a schedule, in trust for his creditors, and afterwards delivered to the assignee a chattel not included in the schedule, either knowing that it was not so included therein, or intending, whether it was so included or not, that it should be ap- propriated to the benefit of his creditors, it was held that the prop- erty in the chattel passed to the assignee in trust for the creditors, and that the assignor could not reclaim it.? 1Gould, J., in Wilson v. Forsyth, 24 Barb, 127, 128. But see Mead v. Phillips, 1 Sand. Ch. 83. 2 Faxon v. Durant, 9 Metc. 339, CHAPTER XX. ASSENT OF CREDITORS. § 256. When Necessary. 257. Assent to Assignments to Trustees. 258. The Rule in Various States. 259. The English Rule. 260. Assent Provided for. 261. Assent to Assignments Directly to Creditors, 262. Assent, How and When Given. 263, Assent of How Many Creditors, 264, Assent by Attorney. 265. Assent by Partners. 266. Limitation of Time to Assent. 267. Presumption of Assent from Lapse of Time. 268. Assent to Void Assignment. § 256. When Necessary.— Where property in which one or more individuals are interested as creditors has become, from the circum- stances of its owner, exposed to danger of loss, thé parties so in- terested would seem to have an equitable right to be apprised of any arrangements for the disposition of such property; especially where such arrangements materially affect the remedies with which the law has provided them. And the professed object of assign- ments by insolvent or embarrassed debtors being the benefit of their creditors, a desire for the most effectual accomplishment of that object would seem naturally to lead a debtor, whose circum- stances induce or compel him to contemplate such a disposition of his property, to acquaint his creditors with his intention and the reasons of it. This is, in some instances, actually done; the debtor not only informing his creditors, but consulting them with a view to their concurrence in the arrangements proposed; and to use the words of an eminent judge,! “the propriety of pursuing such a course will generally suggest it, where they can be conveniently assembled.” It is nevertheless clearly unnecessary to the validity of a voluntary assignment by a debtor that the creditors should be consulted previous to making it ;? and probably, in the majority of 1Marshall, C, J., in Brashear v. West, 7 Pet. 608, 613, 2 Brashear v. West, 7 Pet. 608, 618. See Reinhard v. Bank of Kentucky, 6 B. Mon. 252; Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271; Phippen v. Durham, 8 Gratt. 457; Lee, J., in Johnston v. Zane’s Trustees, 11 id. 552, 564; Allen, P., in Dance v. Seaman, id, 778, 781; Bank of Harlem v. Bayonne, 48 N, J. Eq. 246; 21 Atl, Rep. 478, § 257. ] ASSENT TO ASSIGNMENTS TO TRUSTEES. 303 actual cases, creditors are not only not consulted, but not even ap- prised of the debtor’s intention. Circumstances, indeed, often ren- der it necessary that assignments planned on the most equitable principles should, when once determined on, be carried into effect with the least delay possible. The previous communication of the debtor’s intention would tend to defeat the object or impair the efficiency of these conveyances, by stimulating some particular creditor to gain, by prompt action, that preference with which the law itself rewards superior vigilance and diligence, and thus pay himself in full out of property intended for general and equal dis- tribution. It has sometimes been held, however, that after an assignment has been made, it must receive the assent, sanction or approval of the creditors in order to give it validity, and render it an operative transfer. To what extent this doctrine is correct, becomes an im- portant consideration, which will form the subject of the present chapter. The necessity of assent, it may be observed, depends in a mate- rial degree upon the form of the assignment itself, as being either to an assignee in trust, or directly to creditors. § 257. Assent to Assignments to Trustees.— Where the assign- ment is to a trustee for the benefit of creditors not parties to the deed, it may be laid down as a general rule in American law, that the assent of the creditors is not necessary to its validity, and the legal estate or title will pass to the assignee without such assent, so as to prevent a judgment creditor from acquiring a lien, if real, by his judgment, or if personal, by his execution, unless upon the ground of fraud.? This rule is said to be founded on the estab- lished principle of the common law,’ that it is not necessary to the 1 An assignment for the benefit of creditors isin no sense a contract between the debtor aud his creditors, and does not depend for its validity upon their as- sent. Miles v. Parkhurst, 126 N. Y. 89. 2Nicoll v, Mumford, 4 Johns. Ch. 522, 529; Halsey v. Whitney, 4 Mason, 207, 214; Cunningham v. Freeborn, 11 Wend. 240, 248; Houston v. Nowland, 7 Gill & J. 480, 492; Garland, J., in United States v. Bank of the United States, 8 Rob. (La.) 262, 412; Reinhard v. Bank of Kentucky, 6 B. Mon. 252; Abercrombie v. Bradford, 16 Ala. 560; The Governor, use, etc. v. Campbell, 18 id. 556; Rankin v. Lodor, 21 id. 880; Jones v. Dougherty, 10 Ga. 273; Sadlier v. Fallon, 4 R. I. 490; Forbes v. Scannell], 13 Cal. 242; Valentine v. Decker, 43 Mo. 583. In Robbins v. Magee, 76 Ind. 381, a composition agreement and a voluntary assignment are held to differ in this: that the former depends for its force on the agreement of all the contracting parties, while the latter is not dependent for its validity upon the consent of creditors. 3 But see, as to the rule in England, post, p. 889. And see Gibson v. Rees, 50 Ill. 883. In some of the states by statutory enactment the assent of creditors is pre- sumed, See Iowa Code (1880), § 2116; McClain’s Ann. Code (1888), § 8293; Price 334 ASSENT OF CREDITORS. [ow. xx. creation of a trust by deed in favor of any persons that the cestut que trust should either be a party or assent to it. If the trust be for his benefit, the law presumes his assent to it until the contrary isshown. And it is clear that trusts may lawfully be created where there can be no present assent, for they may be in favor of persons not in existence. It is sufficient, in general, that in such cases there isa competent grantor to convey, and a competent grantee to take, the property! “Deeds of trust,” observes Chief Justice Marshall, “are often made for the benefit of persons who are absent,’ and even for persons who are not in being. Whether they are for the payment of money or for any other purpose, no expression of the assent of the persons for whose benefit they are made has ever been required as preliminary to the vesting of the legal estate in the trustee. Such trusts have always been executed on the idea that the deed was complete when executed by the par- ties to it.’”’? From these views the rule has been deduced, and very clearly laid down by Mr. Justice Story, in the leading case of Halsey v. Whitney,‘ that in case of an assignment to a trustee for the benefit of creditors, “where the trust is for the benefit of all, and no re- lease or other condition is stipulated for on behalf of the debtor, but the property is to be distributed equally among all the credit- ors pro rata, the assent of the creditor must be presumed, for the trust cannot be for his injury and must be for his benefit. It must always be for his benefit to receive as much of his debt as a debtor can pay. If then in such a case such an assent be necessary it may be inferred as a presumption of law until the contrary is shown.” “That which purports to have been done for the benefit of credit- ors,” observes Mr. Justice McLean in the case of Lawrence v. Davis,’ “and which was manifestly for their advantage, will be pre- sumed to have been done with their assent unless the contrary ap- pear.” The same rule has been approved by the supreme court of the United States,‘ and in the case of Tompkins v. Wheeler’ was expressly applied to the case of an assignment directly to creditors, the court observing ® that “ where the deed is absolute on its face v. Parker, 11 Iowa, 144; Derry Bank v. Davis, 44 N. H. 548; Fellows v. Green- leaf, 48 N. H. 421; Webster v. Harknes, 3 Mackey (D. C.), 220. 1§$tory, J., in Halsey v. Whitney, 4 Mason, 206, 214. ?The assent of absent persons to an assignment will be presumed until their dissent be expressed, if it be made for a valuable consideration and be beneficial to theron. North v. Turner, 9 Serg. & R. 224. 3 Marshall, C. J., in Brooks v. Marbury, 11 Wheat. 78, 97. 44 Mason, 206. 53 McLean, 177. 6 Brooks v. Marbury, 11 Wheat. 78; Brashear v. West, 7 Pet. 608, 613. 716 Pet. 118. 8Id, 119, Thompson, J. § 258.] THE RULE IN VARIOUS STATES. 335 without any condition whatever attached to it, and for the benefit of the grantees, the presumption is, in the absence of all evidence to the contrary, that the grantees accepted the deed.” § 258. The Rule in Various States.— The same rule has been . adopted in several of the state courts. In New York it has long been settled that it is not necessary to the validity of an assign- ment in trust for the benefit of creditors that the creditors should be parties to it or signify their assent thereto;' and it makes no difference in this respect whether the assignment be with prefer- ences” or without. In North Carolina it has been held that the assent of creditors to a deed of assignment in trust is to be pre- sumed unless the contrary be shown.* In Alabama there have been numerous decisions in regard to the necessity and the presumption of the assent of creditors. In the case of Rankin v. Lodor,} in the supreme court of the state, the general doctrine was stated by Phelan, J., who, in delivering the opinion of the court, laid it down as a “settled legal proposition” that where the provisions of a deed of assignment are clearly beneficial to a creditor his assent to the deed will be presumed without his signing it; but where it is not so his assent will not be presumed, but must be actually had.* The same doctrine was held in the later case of Lanier v. Driver, in the same court.’ In the previous case of Townsend v. Harwell ® the same doctrine was recognized,® but it was further said: “Such assignment will not be considered beneficial unless the deed devotes the property absolutely and under all circumstances to the pay- ment of the debts secured,” nor where it provides for the delay of 1 Nicoll v. Mumford, 4 Johns. Ch. 522, 529; Cunningham v. Freeborn, 11 Wend. 240, 248. 2Cunningham v. Freeborn, 11 Wend. 240, 248. 3 Nicoll v. Mumford, 4 Johns. Ch. 522, 529. 4Ingram v. Kirkpatrick, 6 Ired. Eq. 462. Chief Justice Ruffin, in delivering the opinion of the court in this case, places it on the grounds of ‘‘ the intrinsic soundness of the principle, the prevalent impression in the profession and the course of the adjudications in the United States.” Id. 476. See Moore v. Hin- nant, 89 N. C. 455. 521 Ala. 380. 6 As authority for these propositions the learned judge (Id. 389, 390) cited Robin- son v. Rapelye, 2 Stew. 86; Ashurst v. Martin, 9 Port. 566; Wiswall v. Ross, 4 Port. 321; Gazzam v. Poyntz, 4 Ala, 874; Kinnard v. Thompson, 12 id, 487: Governor, use, etc. v. Campbell, 17 id. 566; Brown v. Lyon, 17 id. 659; Elmes v. Sutherland, 7 id. 262; Maulden v. Armstead, 14 id. 702; Abercrombie v. Brad- ford, 16 id. 560; 2 Story’s Eq., § 1036. 724 Ala. 149. 818 Ala. 301. §Chilton, J., id. 303, citing Kinnard.v. Thompson, and Gazzam v. Poyntz. 10 Chilton, J., id., citing Dubose v. Dubose, 7 Ala. 235; Allen v. Montgomery & W. P. RB. R. Co., 11 id. 487. 336 ASSENT OF CREDITORS. [cH. xx. tine creditors secured to be paid.! In other words, the necessity and presumption of assent are made to depend upon the character and object of the deed. The doctrine is very clearly laid down with this distinction by Ligon, J., in the case of Evans v. Lamar.? “A deed,” said the learned judge, “which postpones a creditor in the collection of his debt beyond the time of its maturity is not valid as a conveyance of the property mentioned in it until it is as- sented to by the creditor. Until that time it is a mere power, and may be revoked by the levy.of an execution by the creditor on the property intended to be conveyed by it. Neither will the assent of the creditor to such a deed be presumed.’ But where the deed is absolute in its terms, and conveys property to the trustees for the benefit of certain specified creditors who have not executed it, but whose debts are not postponed beyond their maturity, the assent of the creditors will be presumed, and the deed is not a mere power, but will be regarded as a valid and operative con- veyance.”* In Rankin v. Lodor,® Phelan, J.,in delivering the opin- ion of the court, observed: “There is a class of deeds in trust or assignments which are not good at all without the assent of all the creditors.® . . . They are generally where a man seeks to post- pone the payment of his debts by conveying property in trust to secure or pay them. In sucha case ali the creditors must assent to give any validity to the deed, because that is the manifest in- tention of the grantor.”’ The qualities requisite in a deed of as- signment, in order to raise the presumption of assent by creditors, are very clearly stated in the case of Townsend v. Harwell ® in the following terms: ‘“ Where a deed of assignment for the payment of debts is made to a naked trustee with the intent on the part of the debtor to delay, hinder and defraud his creditors, the assent of the creditors will not be presumed, although the deed devotes the property conveyed absolutely and unconditionally to the payment of their debts, and the trustee did not participate in the fraudu- 1 Chilton, J., id., citing Lockhart v. Wyatt, 10 Ala. 231; Hodges v. Wyatt, id. 271, 221 Ala. 338, 335. 3 The learned judge here cites Nelson v. Dunn, 15 Ala. 502; Lockwood v. Nel- son, 16 id. 294; Smith v. Leavitts, 10 id. 93; Graham v. Lockhart, 8 id. 9; and Elmes v. Sutherland, 7 id. 262. 4 The learned judge cites Kinnard v. Thompson, 12 Ala, 487; Maulden v. Arm- istead, 14 id. 702; and Lockwood v. Nelson, 16 id. 295. 521 Ala. 380, 390. § The learned judge here adds: ‘‘The class of cases to which I refer is con- sidered, and the law applicable to them laid down, in the cases of Elmes v. ooo 7 Ala. 262; Hodge v. Wyatt, 10 id. 271, and Kemp v. Porter, 7 id. 1 7 The learned judge cites Elmes v. Sutherland, 7 Ala. 262, 818 Ala, 801, § 258.] THE RULE IN VARIOUS STATES. 337 lent intent; but such assignment will be void as against creditors who have acquired a lien on the property before actual assent is given.” ! A recital in an assignment declaring preferences, that “the cred- itors have assented to the terms herein stated,” is the mere declara- tion of the grantor, and does not conclude any creditor who is not otherwise shown to have assented to it.’ In Kentucky it is not sufficient ground to invalidate a deed made for the benefit of creditors that it was made without their request or knowledge;* and their assent will be presumed! The same rule prevails in Michigan.’ In Georgia, where a deed is for the pay- ment of creditors, their assent will be presumed unless their dissent be expressed.° In Tennessee the cases are not entirely in accord, but in a late decision‘ which reviews all the authorities it is held that where there is no evidence upon the subject of acceptance or renuncia- tion except that raised by the presumption that the beneficiaries accepted provisions made for their benefit, this presumption is suf- ficient to protect the rights of the beneficiaries against attaching creditors. Prima facie the presumption of acceptance arises, and the filing of an attachment bill does not furnish any evidence rebutting the presumption. The assent of creditors will always be presumed, provided all the formalities of execution essential to the validity of the deed have been complied with. In Louisiana the assent of creditors is pre- sumed, in case of an assignment for the benefit of all the creditors, where no release or other condition is stipulated for or on behalf of the debtor, but the property is to be distributed among all the creditors pro rata.’ In Missouri an assignment for the benefit of 1Townsend v. Harwell, 18 Ala. 801. And see Benning v. Nelson, 23 id. 801; Shearer v. Loftin, 26 id. 708; Ashley v. Robinson, 29 id. 112; England v. Rey- nolds, 88 id. 370; Hodge v. Wyatt, 10 id. 271. 2Lehman v. Tallassee Mfg. Co., 64 Ala. 567. 3 Reinhard v. Bank of Kentucky, 6 B. Mon. 252. 4Stewart v. Hall, 3 B. Mon. 218. 5 Suydam v. Dequindre, Harring. Ch. 347. 6 Jones v. Dougherty, 10 Ga. 273; McBride v. Bohanan, 50 id. 155. 7 Washington v. Ryan, 5 Baxter (Tenn.), 622, decided mainly on the author- ity of Farquharson v. McDonald, 2 Heisk. 404. See Dews v. Olwill, 3 Baxter, 432; Green v. Demoss, 10 Humph. 371; Brown v. Vanlier, 7 id. 239; Field v. Arrowsmith, 3 id. 442; Saunders v. Harris, 1 Head, 185; Breedlove v. Stump, 3 Yerg. 257. 8 Brevard v. Neely, 2 Sneed, 164; Furman v. Fisher, 4 Cold. 626. But see Mills v. Haines, 8 Head, 332; Brown v. Vanlier, 7 Humph. 239; Nailer v. Young, 7 Lea (Tenn.), 785; Truss v. Davidson, 90 Ala. 859; 78. Rep, 812. 9¥ellows v. The Vicksburg Railroad & Banking Co., 6 Rob. 246. 22 338 ASSENT OF CREDITORS. [cH. xx. creditors, containing no provision prejudicial to their interests, need not be signed by them; their assent thereto will be presumed in the absence of an attack upon the deed.’ And this is the rule in Maryland,? Arkansas,’ Ohio‘ and Texas.’ In Ohio and New Hampshire, by statutory enactment, the law presumes the assent of creditors to assignments executed for their benefit.’ In Rhode Island’ assignments without the assent of creditors are held valid; and, it seems, the same rule prevails in New Mexico.’ In Indiana® an assignment is valid without the consent of credit- ors, if made in good faith and in compliance with the statute. In Pennsylvania it seems to be no objection to the validity of an assignment to a trustee for the benefit of creditors that it has not been expressly accepted by the creditors. Acceptance will be presumed where it is shown that the assignment was for their benefit, and there is no stipulation for a release of the debts, nor anything calculated to delay the creditors unreasonably.” There are some cases, however, in which the previous assent of creditors is expressly required. Thus, by a special provision, railroad and canal companies owing debts to contractors, laborers and work- men are prohibited from making any assignment so as to defeat, postpone or delay such creditors, without their written assent first had and obtained.™ In Massachusetts an assignment is invalid, as respects attaching creditors, until one or more of the creditors of the assignor has as- sented to it, even where it is made for the benefit of all the credit- ors, without preferences, and contains no stipulation that the 1 Duval v. Raisin, 7 Mo. 449. And see Major v. Hill, 13 id. 247; Gale v. Men- sing, 20 id. 461; Hulse v. Marshall, 9 Mo. App. 148. 2Kalkman v. McElderry, 16 Md. 56. 3 Hempstead v. Johnson, 18 Ark. 123. But where the assignment is on the condition that the assignor shall be released, assent will not be presumed. McCain v. Pickens, 32 Ark. 339. 4 Hyde v. Olds, 12 Ohio St. 591. 5Green v. Banks, 24 Tex. 508. See Thomas v. Chapman, 62 id. 193; Windham v. Patty, id. 490, This section of the act which requires that creditors shall make known their consent in writing does not make consent of any other char- acter invalid. Sanborn v. Norton, 59 id. 308. 6See ante, p. 333, n. 3. 7 Sadlier v. Fallon, 4 R. I. 490. See Daniels v. Willard, 16 Pick. 36; Smith v. Millett, 11 R. I. 528. 8 Leitensdorfer v. Webb, 1 N. Mex. 34. 5 Robbins v. Magee, 76 Ind. 381; Paul v. Logansport Nat. Bank, 16 id, 199; Eden v. Everson, 65 id. 113. 10 United States v. Bank of the United States, 8 Rob. (La.) 262. See 1 Am. Lead. Cas. 95; Klapp’s Assignees v. Shirk, 18 Pa. St. 589. 1 Resolution of January 21, 1843; Laws of 1843, p. 867; Dunl. L., p. 886, ch. 572 [884, ed. 1853]; Purd. Dig. (ed. 1873), p. 90, pl. 1; Purd. Dig. (1883), p. 119, §5. § 259.] THE ENGLISH RULE. 339 creditors should release their demands, or take upon themselves any onerous condition; and the assent of creditors will not be pre- sumed.! This rule appears to have been altered by the act of 1836,? since repealed.? Mr. Justice Wells, in a late case, observes: “ Inde- pendently of those laws (act of 1836), it has always been held that voluntary assignments by a debtor in trust for the payment of his ‘debts, and without other adequate consideration, are invalid as against attachments, except so far as assented to by the creditors for whose benefit they were made. If assented to by creditors, ‘such assignments are good at common law, and will protect the property or funds from attachment to the extent of the amount ‘due to creditors thus assenting, unless by the conditions of the as- signment it is made to take effect only upon the assent of all or a prescribed number of creditors.” The assent of creditors will not be presumed on the ground that it is apparently for their interest, but must be shown by some form of adoption or affirmative acquiescence. Where the deed fixes a time for creditors to assent, the courts of Massachusetts have been strict in treating the time thus fixed as of the essence of the contract, and in refusing creditors the privilege of acceding to or executing the deed after such time has elapsed.5 § 259. The English Rule.— In England it has been settled that the assent, or at least the privity, of creditors to an assignment in trust for their benefit is essential to render it operative in their behalf. In the case of Smith v. Keating,’ in the exchequer cham- 1 Russell v. Woodward, 10 Pick. 408; Pierce v. O’Brien, 129 Mass. 314; Swan v. Crafts, 124 id. 453; Widgery v. Haskell, 5 id. 144, 154; Stevens v. Bell, 6 id. 339, 842; Ingraham v. Geyer, 13 id. 146; Marston v. Coburn, 17 id. 454; Faulk- ner v. Hyman, 6 N. W. Rep. 846. See the opinion of Morton, J., in Fall River Iron Works Co. v. Croade, 15 Pick. 11, 15, 16; and in Everett v. Walcott, id. 94, ‘97. And see the opinion of Shaw, C. J., in Burlock v. Taylor, 16 id, 335, 339. 2Stats. of 1836, ch. 238. The reason of this rule is explained to have been the want of a court of equity to enforce the trust in behalf of the creditors, and .a doubt, or at least a difficulty, as to a remedy at law. Nelson, J., in Cunning- ham v. Freeborn, 11 Wend. 240, 248, 249; Parsons, C. J., in Widgery v. Haskell, 5 Mass, 154, and in Stevens v. Bell, 6 id. 342, This difficulty was removed by the statute of 1836, which gave the creditors a remedy in equity against the trustee. Stat. of 1836, ch. 288,§7. See Dewey, J., in Shattuck v. Freeman, 1 Metce. 10, 13. 3Nat. Mech, & Trad. Bank v. Eagle Sugar Refinery, 109 Mass. 38. 4May v. Wannemacher, 111 Mass. 202; Pierce v. O’Brien, 129 id. 314; Jones v. Tilton, 139 id. 418. 5 National Union Bank v. Copeland, 141 Mass. 257; First National Bank v. Smith, 133 id. 26. 66 M., Gr. & Scott, 136. 340 ASSENT OF CREDITORS. [cH. xx. ber, it was held that where a debtor conveys property in trust for creditors, to whom the conveyance is not communicated, and the creditors are not in any manner privy. to it, the conveyance oper- ates not as an assignment, but only as a power to the trustee, which is revocable by the debtor. The court say it is the same as if the debtor had given money to an agent to pay his creditors, to whom no communication had been made.' This was substantially affirming the principles of the decisions in Wallwyn v. Coutts,’ and Garrard v. Lord Lauderdale,’ which have been so frequently cited and commented upon in our own courts.t Indeed, there isa class of cases which establish the necessity of the creditors being actual parties to the deed in order to render it anything more than a mere revocable deed of agency.’ In Smith v. Keating, already cited, the court (Parker, B.) speak with doubt as to the sufficiency of a mere privity on the part of the creditors as distinguished from actual assent. But in the later case of Sigers v. Evans’ the point. seems to have been conceded. And in the same case the general doctrine that a conveyance to trustees operates as a mere power,. revocable by the debtor, until communicated to or assented to by the creditors, was held not to apply to cases where the trustee himself takes a beneficial interest under the deed. In point of fact the prevailing practice seems to have hitherto been for the creditors to give a positive assent to the conveyance.é § 260. Assent Provided for.—Where the assignment is drawn with reference to the creditors becoming actual parties to it, as. where it is in tripartite form, there must be an express assent on the part of the creditors, or some of them, in the mode prescribed ; that is, by becoming parties to the deed, in order to render the in- 1The court rely on the case of Acton v. Woodgate, 2 Myl. & K. 492, and. adopt the doctrine of Sir John Leach as there laid down. 23 Merivale, 707, 33 Simon, 1. 4 By McCoun, V. C., in Cunningham v. Freeborn, 1 Edw. Ch. 263; by Nelson, J., in the same case on appeal (11 Wend. 249, 250); and at greater length by Ruffin, C. J., in Ingram v. Kirkpatrick, 6 Ired. Eq. 462. In the last case the doctrine of Wallwyn v. Coutts is shown to have been inconsistent with earlier decisions in the English courts. See the remarks of Nelson, J., in the late case of United States v. Hoyt, 1 Blatchf. C. C. 332, 334; and those of Pearson, J., in Stimpson v. Fries, 2 Jones’ Eq. 156. Mr. Justice Walker, in Gibson v. Rees, 50 Ill, 388, 5 See ante, pp. 127, 128. 66M., Gr. & Scott, 158, 782 Eng. L. & Eq. 139. And see Acton v. Woodgate, 2 Myl. & K. 492; Paige v. Broom, 4 Russ, 6. 8 This appears from the cases of Estwick v. Caillaud, 6 Term R, 420, and Ing: + liss v. Grant, id. 530, § 260.) ASSENT PROVIDED FOR. 341 strument complete and operative Where the creditors are named in the assignment as parties, and they are required to exe- cute it before they can take under its provisions, they must signify their assent in that mode, otherwise they cannot take under the instrument.’ So, where the assignment itself is upon the express condition that a majority of the creditors shall sanction it before it can take effect, such assent is necessary, and unless it be shown ‘the assignment will be set aside.* So, where there are conditions in an assignment, as, for instance, that the creditors shall release their debts, the presumption of as- ‘sent does not arise because it involves a question of discretion upon which different minds may draw different conclusions.‘ So where ‘the assignment contains clauses restricting the rights of creditors or limiting the liability of the assignee.® Where an assignment is made with preferences to certain cred- tors, and the preferences are given unconditionally, their assent will be presumed.’ So where the preferred creditors are to be paid an full. 1See the opinion of Parker, C. J., in Hastings v. Baldwin, 17 Mass. 552, 556; *Camp v. Mayer, 47 Ga, 414. In May v. Wannemacher, 111 Mass. 202, Mr. Jus- tice Wells said: ‘‘In cases of assignment by tripartite instrument, it is generally necessary that creditors should execute the instrument in order to give it full -effect, because such is the intent with which it is made. But when this is not required by the form of the instrument of assignment, it is only necessary that creditors should give such assent to its provisions as will recognize and affirm the acceptance and possession of the property by the assignee as made and held for their benefit and in their behalf, in accordance with the terms of the assign- ment,” citing Russell v. Woodward, 10 Pick. 408; Everett v. Wolcott, 15 Pick. ‘94, And see Gale v. Mensing, 20 Mo. 461. And see ante, p, 155. 22 Story’s Eq. Jur., § 1086a; Garrard v. Lord Lauderdale, 3 Sim. 1, cited id. But see ante, p. 127. 3Lawrence v. Davis, 3 McLean, 177. See the opinion of McCoun, V. C., in ‘Cunningham v. Freeborn, 1 Edw. Ch. 262. 4Story, J., in Halsey v. Whitney, 4 Mason, 206, 215, Swearingen v. Slicer, 5 Mo. 241; Wakeman v. Grover, 4 Paige, 23. 5 ** No assent can be presumed when the assignment requires that the creditors shall give to the debtor a credit for the balance that remains due after the pro- -ceeds are distributed (Todd v. Bucknam, 11 Me. 41; Elmes v. Sutherland, 7 Ala. 262), or where the majority of the creditors are to have the power to fix the time for the sale of the property (Shearer v. Loftin, 26 Ala. 703), or where the assignee ‘is disqualified (Spinney v. Portsmouth Co., 25 N. H. 9), or where the liability of ithe assignee is limited to actual receipts or wilful defaults (Brown v. Warren, 43 id. 430; Spinney v. Portsmouth Co., 25 id. 9), or where the assignees are not to ‘be responsible for the neglect of each other (Spinney v. Portsmouth Co., 25 id. ‘9,’ Bump on Fraud. Conyv., p. 341. 6 Wheeler v. Sumner, 4 Mason, 183; Ward v. Lewis, 4 Pick. 518; Brown v. Lyon, 17 Ala. 659. 7New England Bank v. Lewis, 8 Pick. 113, Deforest v. Bacon, 2 Conn. 633; ‘North v. Turner, 9 8. & R. 244; Copeland v. Weld, 8 Greenl, 411; Reinhard v, iBank of Kentucky, 6 B. Mon. 252. 342 ASSENT OF CREDITORS. [cH. xx. § 261. Assent to Assignments Directly to Creditors.— Where- the assignment is directly to the creditors, their assent is always. required to give it validity, on the ground that it requires the agreement of two parties to make a contract. In making an as- signment of property, as in every other case of contract, the assent of at least two persons is necessary to its validity. A debtor can- not change his relations to his creditors by a voluntary assignment of his property to them. If, therefore, he makes an assignment and his creditors do not accept it, there is no change of property,. and legal redress is open to the creditors as before the attempted. assignment.? § 262. Assent, How and When Given.— The assent of the cred-- itors may be given, either by becoming parties to and signing the- instrument of assignment where it requires such signature,’ or by signing an acceptance appended to it,* or by verbally assenting to- it in terms,’ or by actually receiving the benefit of it,’ or by claim- ing such benefit,’ or by taking legal measures to obtain such ben-. efit.2 Where signature is required it is not essential to the validity of the assignment that the creditors should sign at the time of execution by the other parties. It is sufficient, except against. 1 Nicoll v. Mumford, 4 Johns. Ch. 422, 529; Cunningham v. Freeborn, 11 Wend.. 240, 248, 249; Jones v. Dougherty, 10 Ga. 273; Lawrence v. Davis, 3 McLean, 177; 2 Kent’s Com. [533], 692, note. 2McLean, J., in Lawrence v. Davis, 3 McLean, 177. 3 See ante, p. 127. 4See Bank of Bellows Falls v. Deming, 17 Vt. 366. 5 Wiley v. Collins, 11 Me. 193; Brooks v. Marbury, 11 Wheat, 78 Mere in- quiry on the part of a creditor to ascertain whether it would be profitable for him to accept an assignment as valid is not equivalent to inducing others to act upon it. Hubbard v. McNaughton, 43 Mich. 220. 6 Brooks v. Marbury, uwbi supra; Brown v. Minturn, 2 Gall. 557, In Scott v. Edes, 3 Minn. 387, the court said: ‘‘ That the acceptance of dividends under the- assignment is an assent to and confirmation of such assignment by the creditor has been uniformly held. A judgment lien creditor who accepts a dividend with other creditors under an assignment thereby affirms the deed, and cannot after- wards enforce his judgment against property embraced in the deed of assign- ment.” Moule v. Buchanan, 11 Gill & J. 314; Lanahan v. Latrobe, 7 Md. 268. See Haskins v. Olcott, 18 Ohio St. 211; Frierson v. Branch, 30 Ark. 453; Chafee v. Fourth Nat. Bank, 71 Me. 514. 7Garland, J., in United States v. Bank of the United States, 8 Rob. (La.) 262, 412; May v. Wannemacher, 111 Mass. 202; Pierce v. O’Brien, 129 id. 314. 8See United States v. Hoyt, 1 Blatchf. C. C, 882; Zaring v. Cox, 78 Ky. (1 Rod.) 527. When a creditor proves his claim he is conclusively presumed to have- assented to the assignment. Gathercole v. Bedel, 65 N. H. 211; 18 Atl. Rep.. 319. So where he voluntarily submits the question of title in the assignee of the: assigned property to a tribunal having supervisory control over sych contro-- versies. Sawyer v. McAdie, 70 Mich. 286; 38 N. W. Rep. 292. In the absence- of fraud a creditor who files his claim in the manner prescribed by law thereby waives all objections to the regularity of the assignment and the title of the as- signee to the assets, Littlejohn v, Turner, 73 Wis. 113; 40 N. W. Rep, 621. § 262.) HOW AND WHEN GIVEN. 348 intervening attaching creditors, if this is done afterwards, and within the time limited for that purpose by statute or by the as- signment itself. Where a specific time is prescribed for the cred- itors to come in and assent to the assignment as parties thereto or otherwise, they must comply strictly with the condition or they will be excluded from the benefit of the trust; unless, indeed, by reason of absence from the country or some other cause, any cred- itor has not, within the time prescribed, had any knowledge of the existence of the assignment.® And a creditor may lawfully qualify his assent by limiting his signature to a part of his demands and excepting the others from its operation.*’ In Alabama it has been held that a deed of assign- ment which devotes the property unconditionally to the payment of debts of the preferred creditors is complete and executed, as to them, immediately upon its delivery, notwithstanding it requires the rest of the grantor’s creditors to execute it within six months, as a condition to their participation in the residue.® In a case in Massachusetts, where a debtor, before executing a bipartite deed of assignment in trust, called on one of his creditors to prevent his being surprised that he was about assigning his prop- erty, proposed the making of such assignment and showed him a sketch of the mode in which the proceeds of the property were to be appropriated; and this sketch, so far as it regarded the cred- itor, was in substance made part of the deed, it was held that as against an attaching creditor this was not a sufficient assent to the assignment, although the other creditor was preferred therein.* In the same state, in the case of Nutter v. King,’ it was held that under an assignment for the benefit of such of the assignor’s cred- itors as should “verbally or in writing assent” thereto, language or conduct which reasonably interpreted shows assent is sufficient to give validity to the instrument. Ina case in Arkansas, where a proposition was made by a debtor to his creditors to secure their debts by a deed of trust on time, with specified provisions; and the creditors assented, provided the provisions of the deed were satisfactorily arranged; and they required an early answer, and no answer was given, but a deed of trust was executed three months 1 Halsey v. Whitney, 4 Mason, 206, 215; Wheeler v. Sumner, id. 183; Ward v. Lawson, 6 Pick. 358, 2 Phoenix Bank v. Sullivan, 9 Pick, 410, 3 Phoenix Bank v. Sullivan, 9 Pick. 410; De Caters v. Le Ray De Chaumont, 2 Paige, 490; Raworth v. Parker, 2 K. & J. 163; Nicholson v. Tutin, 2id. 18 See Broadbent v. Thornton, 4 De G. & S, 65. 4 Deering v. Cox, 6 Me. 404, 5 Brown v. Lyon, 17 Ala. 659. 6 Fall River Iron Works Company v. Croade, 15 Pick. 11. 7152 Mass, 355; 25 N. E. Rep, 617. 344 ASSENT OF CREDITORS. (oH. xx. afterwards, with provisions in it materially different from those proposed, it was held that the creditors were not bound to accept the deed.! § 263. Assent of How Many Creditors.— Where the assent of creditors is required by law, or by the form of the assignment itself (as where it is drawn with reference to being executed by them), it is not necessary that a// should assent, in order to make the instrument valid and operative, unless there is some provision in the deed, or some settled collateral agreement, that it shall be void unless all assent.2 Thus, in Massachusetts, in the case of Hastings v. Baldwin,’ the execution of the assignment by a single creditor, and he also being the assignee, was held sufficient to ren- der the deed complete and operative. The rule, indeed, in that state, prior to the statute of 1836, and since its repeal, was and is that the creditors must assent in sufficient numbers and value to cover the property assigned, otherwise the consideration might be deemed inadequate and void as to the non-assenting creditors, though good as to those assenting.* In Alabama it has been de- clared, as the general doctrine on this point, that where a debtor seeks to postpone the payment of his debts by conveying property in trust to secure or pay them, ad/ the creditors must assent to the deed to give it validity.* But where the deed is beneficial to them, and does not delay them in the collection of their debts, the assent of a creditor will be sufficient to uphold the assignment for his benefit, though other creditors refuse to participate in the deed.* In Nevada ‘all the creditors need not assent if the amount of the debts exceeds the value of the property. The assent of those representing debts equal to the value of the property assigned is a 1 Rapelye v. Cummins, 11 Ark. 689. 2Story, J., in Halsey v. Whitney, 4 Mason, 215, 231. Where an agreement was made whereby a debtor was to convey property to a trustee for the benefit of creditors named in a schedule contained therein, the same to be signed by all the creditors in order to be binding, it was held that if one of said creditors refused to sign, the purchase of his claim by another of said creditors and the signing of the agreement by him would be equally effective. Towne v. Rublee, 51 Vt. 62. Non-assenting creditors, not present when the deed was executed, are in no way bound by the agreement of the assenting creditors to the release of a portion of their debts in an assignment made by the debtor for their benefit, Seale v. Vaiden, 10 Fed. Rep. 831; s. c., 4 Woods’ C. C, 659. 317 Mass. 556, 4 Woodward, J., in Adams v. Blodgett, 2 Woodb. & Minot, 237; Russell v. Woodward, 10 Pick. 408; Morton, J., in Fall River Iron Works Co. v. Croade, 15 id. 11, 15, 16; and in Everett v. Walcott, id. 94, 97; May v. Wannemacher, 111 Mass, 202. 5 Rankin v. Loder, 21 Ala. 380, 390. 5 Maulden v. Armistead, 14 Ala. 702, And see Shearer v. Loftin, 26 id. 703: 7Sadler v. Immel, 15 Nev. 265, 8§ 264-266.] MISCELLANEOUS. 345 valid consideration, and gives full legal effect to an assignment; and if their debts are of less amount than the property, they con- stitute a good consideration pro tanto, and give the assignees a right to retain property to the amount of such debts. § 264. Assent by Attorney.— The assent of creditors to a deed ‘of trust made Wy their debtor for their benefit may be given by the attorney holding their claims; and it will be presumed that where one undertakes to act as attorney, and does so act, he is duly authorized.'| And if the act be not within the scope of his author- ity, it may be inferred that they sanctioned what was thus for their benefit.2 But if an attorney, on behalf of his client, but without his authority, executes an assignment, it will bind the former but not the latter.’ It is otherwise if the client has given an authority.’ § 265. Assent by Partners.— If one of several partners who are creditors sign and seal an assignment in the name of the firm with a single seal, it is good, and binds all the partners who are present or assent to the execution. If none but the executing partner as- sent, it is still valid to release the debt and bind in this respect the rights of the firm.’ : § 266. Limitation of Time to Assent.— The assent to an assign- ment requiring a release cannot be given after the time limited by the assignor has expired, provided the creditor has had seasonable notice of the assignment, or provided proper means have been taken to give the notice. Being thus precluded from any partici- pation in the fund, the creditor’s only claim is upon the surplus re- served to the debtor, if any should remain after satisfying the debts 1 Hatch v. Smith, 5 Mass. 53. 2Vernon v. Morton, 8 Dana, 247. 3 Hatch v. Smith, 5 Mass. 42, 51; Parrot v. Wells, 2 Vern, 127; Johnson v. Ogilby, 3 P. Wms. 277. 4Hatch v. Smith, ubi supra; Johnson v. Ogilby, ubi supra. 5Story, J., in Halsey v. Whitney, 4 Mason, 206, 232. See Pierson v. Hooker, 3 Johns. 68; Mackay v. Bloodgood, 9 id. 285; Bulkley v. Dayton, 14 id. 387; Bruen v. Marquand, 17 id. 53; McBride v. Hagan, 1 Wend. 326; Salmon v. Davis, 4 Binn. 875; Emerson v. Knower, 8 Pick. 63; Ball v. Dunsterville, 4 Term R. 318. 6 Phenix Bank v. Sullivan, 9 Pick. 410, See Raworth v. Parker, 2 K. & J. 163; Dews v. Olwill, 3 Baxter (Tenn.), 482. Where an assignment provided that creditors should release within a specified time, and that the shares of those who did not release should be paid back to the assignor, it was held that the assignee could not be garnished for the share of a creditor who did not accept the terms of the assignment before the service of the writ on the assignee. Smith v, Mil- lett, 11 R. I. 528, 346 ASSENT OF CREDITORS. [cH. xx. of the creditors who accept their proportion of the trust fund upon the terms proposed.! § 267. Presumption of Assent from Lapse of Time.— The ac- ceptance of the trust by the trustees of a debtor, and the acqui- escence of the creditors for more than twenty years, has been held to afford presumptive evidence in favor of their assent,’ at least where the question of assent is not made a subject of direct in- quiry by the pleadings in an action brought in their behalf.’ § 268. Assent to Void Assignment.— The assent of creditors will sometimes have the effect of giving validity to a void assignment. Thus ina case in Vermont it has been held that an assignment which is void or inoperative under the act of 1843, declaring cer-. tain general assignments void, will, if assented to by the creditors, become operative and binding upon them. The court (Redfield, C. J.), in giving their opinion in this case, say: “It is obvious, if all the creditors assent, the defect is cured. . . . And if the assent of all makes it binding, it is difficult to see why the assent of any less number must not have the same effect as tothem. And this making it binding upon these creditors it is binding upon the other creditors, if it be such a disposition of the effects as the cred- itor has a right to make.”*® But in Indiana it has been held that the assent of part of the creditors to an assignment of personal property which is fraudulent as between the debtor and the as- signees, the creditors having an opportunity to observe the sus- picious nature of the transaction, does not purge the contract of 1De Caters v. Le Ray De Chaumont, 2 Paige, 490, But acceptance may be waived by the grantor. Bank v.Partee, 99 U. S. 325. 2 Burke’s Estate, 11 Par. Sel. Cas, (Pa.) 470. When the assignment provided for the distribution of the property among such creditors as should execute it be- fore a specified day, held, that where the parties assumed to act under the instru- ment, although it was not actually executed by the creditors, the creditors might maintain an action, after the expiration of fifteen years, to have the trust en- forced. Nicholson v. Tutin, 2 K. & J. 18. But where the creditors for whose benefit an assignment was made remained inactive for eight years thereafter, and the trust was then revoked by an arrangement between the debtor and grantor and the trustee, and such creditors continued to remain inactive for nearly thirteen years after the revocation, it was held that such prolonged in- action would overcome all presumption of assent to the terms of the assignment on the part of the creditors, and the revocation of the trust will be sustained so- as to preclude the creditors or their assignees from afterwards asserting any claim under the trust. Gibson v. Rees, 50 Ill. 383. ’Brashear v. West, 7 Pet. 608. And see Major v. Hill, 18 Mo, 247. 4Merrill v. Englesby, 28 Vt. 150. 5 Merrill v. Englesby, 28 Vt. 157. See, also, White v. Banks, 21 Ala, 705; Geisse v. Beall, 3 Wis. 307. § 268.] ASSENT TO VOID ASSIGNMENT. 347 fraud even as to them, and the fraud pervades and vitiates the whole assignment.'! And in a case in the circuit court for the dis- trict of Rhode Island, where a fraudulent assignment had been as- sented to by certain creditors after attachments by other creditors, it was held that such assent could not purge the fraud nor render the deed valid as against the attachments; and that the assignment being actually, and not merely constructively fraudulent, it was wholly void, and could not be allowed to stand as a security to a third person who had assented to it, with notice of the fraud or of such facts as were sufficient to put him on inquiry and enable him to learn the existence of the fraud.? A fraudulent assignment for the benefit of creditors is not so absolutely void that a creditor’s right to complain of it may not be lost by waiver or acquiescence; he cannot attack it until he has in some way acquired a legal standing, and he may let it alone if he chooses to do so.* Where creditors have assented to an assignment by knowingly receiving payments of dividends under it, they cannot then repu- diate it and attach the property assigned. And this is true where creditors elect to affirm a fraudulent assignment made under a misunderstanding of the law.‘ An exception, however, exists where an assignment is declared void by the law of the place where it is made. If it is absolutely void by such law, no assent or ratification: of creditors can make it valid; but if it is only void at the election of such creditors as choose to avoid it, and they assent to it or ratify it by accepting dividends under it, then as to such assenting or ratifying creditors the assignment will be sustained.° Assent of creditors to a void assignment must be actually given, however, and will not be presumed. In the case last cited Mr. Jus- tice Curtis declared himself not prepared to hold that the assent. of creditors to a void deed is to be presumed, because the whole 1Caldwell v. Williams, 1 Ind. 405, In Eden v. Everson, 65 id. 1138, it was held that an assignment was not binding upon an execution creditor, even though atter it was made he had verbally assented thereto; no property passes until the deed has been filed and recorded as required by the statute. 2Stewart v. Spencer, 1 Curt. 167. The learned judge cites Boyd v. Dunlop, 1 Johns. Ch, 482; Harris v. Sumner, 2 Pick. 129; Halsey v. Whitney, 4 Mason,. 218. 3 Blake v. Hubbard, 45 Mich. 1; 7 N. W. Rep. 204. 4Levy v. James, 49 Hun, 161; 1 N. Y. S. Rep. 604. 5 Chafee v. Fourth Nat. Bank, 71 Me. 514. In this case the assignment was. valid by the law of the place where made, and not absolutely void by the law of Maine. Non-resident creditors were there bound by it. Resident creditors might there avoid it. But if instead of electing to do so they assented and accepted payment thereby secured to them, then their right to treat the assignment as void was held to be extinguished. Similarly in Greene v. Sprague Mfg. Co., 52 Conn. 330; Thompson v. Fry, 51 Hun, 296; 4 N. Y. S. Rep. 166: Sickman v. Abernathy, 14 Colo. 174; 23 Pac. Rep. 447; Loomis v. Griffin, 78 Iowa, 487; 43 N. W. Rep. 290. 348 ASSENT OF CREDITORS. (cH. xx, foundation for the presumption fails.!| The law cannot deem such a deed beneficial to the third party. Upon the assumption that the deed is valid upon its face and is rendered void only by ex- traneous facts, the assent of creditors is still not to be presumed, because “the presumption of assent is not founded on the face of the instrument, but in the nature and circumstances of the entire case.”? Nor will such an assent be presumed to the prejudice of the just rights of third persons; a legal fiction is not to be per- mitted so to operate. Jn jfictione juris semper equitas existit. A creditor is not precluded by taking under the assignment from shoWing fraud and collusion as to such debts secured by the as- signment as may stand in his way or prejudice him by being paid.? A consent of creditors without full knowledge of all the mate- rial facts is not binding upon them so as to prevent them from bringing an action to set aside the assignment for fraud.‘ 11 Curt. 167. ?The learned judge quotes Hosmer, C, J., in Camp v. Camp, 5 Conn. 309. 3 Mackintosh v. Corner, 82 Md. 598; Reiff v. Eshleman, 52 id. 582, 4 Hairgrove v. Mil!‘pgton, 8 Kan. 780, CHAPTER XXI. TIME WHEN THE ASSIGNMENT TAKES EFFECT, § 269. General Rule. 270. Rule in Different States, § 269. General Rule.— The assignment having been completed by the formal acts which have just been considered is in a state to be immediately acted under by the assignee in execution of the trustee created by it. An assignment to a trustee for creditors, where it is delivered by the assignor into the hands of the assignee, and is at once ac- cepted by the latter, becomes immediately operative and takes full effect as a transfer of the property.! But where an interval elapses between actual delivery to the assignee and his accept- ance, the assignment will be held to take effect, as against credit- ors, only from the time of acceptance. Thus, where the deed was placed in the hands of the assignee, who hesitated to accept for six hours, and then claimed the property, but before he concluded to accept the property was levied upon by virtue of executions against the assignor, it was held that the judgment creditors had obtained a lien upon the goods and were entitled to have their debts satisfied, in preference to the debts of the creditors provided for by the assignment.’ Where the assignee or trustee is not present, and an interval necessarily elapses between the time of delivery of the instrument and its actual receipt, the deed will be held to take effect as a transfer of the property, as against creditors, from the time of the first delivery by the assignor or grantor, subject to being defeated by the dissent or refusal of the trustee; and the assent of the latter may be presumed in the first instance, for the purpose of giving operation to the deed.2 So where the assignment was in the form 1 Read v. Robinson, 6 Watts & Serg. 329, 332; Wilson v. Pearson, 20 Ill. 81; Myer v. Fales’ Sons & Co., 12 Ill. App. 351; Bell, J., in Seal v. Duffy, 4 Barr, 274, 276, 277; Klapp’s Assignees v. Shirk, 13 Pa. St. 589; American & Co. v. Frank, 62 Iowa, 204. See Brooks v. Marbury, 11 Wheat. 78, cited by Curtis, J., in Stewart v. Spencer, 1 Curt. 157, 166. The deed of assignment takes effect from its delivery, and not before. Walker v. Newlin, 22 Kan. 106; Thatcher v. Franklin, 87 id. 64. See ante, p. 301, n. 2 Crosby v. Hillyer, 24 Wend. 280. See ante, ch. XVIII. 3 Skipwith’s Ex’r v. Cunningham, 8 Leigh, 271; Wilt v. Franklin, 1 Binn. 502; 350 TIME WHEN ASSIGNMENT TAKES EFFECT. [cH. XXI. of a letter assigning personal property to an absent creditor for the indemnity of himself, or of himself and others, and sent by mail, it was held, in South Carolina, to take effect from its date. § 270. Rule in Different States In New York? an assign- ment takes effect from the time of its delivery, and all statutory requirements subsequent to the delivery are directory merely, and an omission to obey any of them does not avoid the assignment. Where assignments are required to be recorded, as in Virginia, North Carolina and Mississippi, they take effect from the time of their delivery to the clerk for that purpose? In a case in Maine, where a general assignment of property was made, and a week afterwards an agreement was indorsed thereon, with consent of all those concerned, according to the original in- tention, giving priority toa large debt due to the United States, the assignment was held to take effect from the first date, unaf- fected by any intervening events.‘ In the same state the statute of 1836, chapter 240, concerning assignments, was held to protect property assigned, from attachment, from the time the assignment was made, and before notice given, if notice were afterwards given according to the requirements of the statute.» And where an as- signment under that statute included bank stock, and notice was given to the bank, it was held that the property did not pass until the entry on the books of the bank required by the statute of 1838, chapter 325, was made, and that an intervening attachment made at the suit of the bank was valid against the assignment.® An assignment of all the assignor’s choses in action, property and effects passes a present interest in them, although it contains a clause to the effect that an inventory of the property is to be made out by the assignor, and annexed to, and taken as part of, the assignment; and the assignee may compel a discovery and sur- render of the property.” McKinney v. Rhoads, 5 Watts, 348; Read v. Robinson, 6 Watts & Serg. 829. And see Moore v. Collins, 3 Dev. 126; Ward v. Lewis, 4 Pick. 518; Merrils v. Swift, 18 Conn. 257; Greene v. Mowry, 2 Bailey (S. C.), 1683; West v. Tupper, 1 id. 193; 1 Am. Lead. Cas. 96. See Johnson v. Sharp, 31 Ohio St. 611, given ante, p. 302, n. 4. 1 Dargan v. Richardson, Cheves’ L. 197; Shubar v. Winding, id. 218, 2? Warren v. Jaffray, 96 N. Y. 248; McBlain v. Speelman, 35 Hun, 263. 31 Tucker’s Com. [269], 261. See Burgin v. Burgin, 1 Ired. L. 453; Hutchin- son’s Code (Miss.), 606, § 5; Henderson v. Downing, 24 Miss, 114. Until actual delivery an assignment is inoperative. Kingston v. Koch, 57 Hun, 12; 10 N. Y. 8. Rep. 363; McIlhargy v. Chambers, 61 id. 882; 4N. Y. 9. Rep. 698, 4 Fox v. Adams, 5 Greenl. 245, 5 Fiske v. Carr, 20 Me. 301. 6 Id, 7 Keyes v. Brush, 2 Paige, 311. fe plete $270.] RULE IN DIFFERENT STATES. 351 In Alabama an assignment devoting the assigned property un- conditionally to the payment of the debts of the preferred cred- itors is complete and executed as to them immediately upon its delivery, notwithstanding it requires the rest of the grantor’s creditors to execute within six months as a condition to their par- ticipation in the residue." In Arkansas,’ where a statute requires the assignee to file an inventory and give a bond, it is held that these requisites are con- ditions subsequent and not precedent to the vesting of title in the assignee; that title vests in him upon the execution and delivery of the deed, so as to defeat an execution. In Pennsylvania it was held under the statute that the moment an assignment for the benefit of creditors is placed by the as- signor or any one interested in the office of the recorder of deeds, the beneficial interest of the creditors is completely vested.® {Brown v. Lyon, 17 Ala. 659. But where the balance was to be distributed among non-preferred creditors, provided they would release the debtor, it was held that such an assignment would not prevail against a levy of an attachment made before the assignee took possession of the property levied on, Hughes v. Ellison, 5 Mo. 463. 2 Clayton v. Johnson, 36 Ark. 406. 3 Bank v. Holmes, 85 Pa. St. 231, CHAPTER XXII. OPERATION OF AN ASSIGNMENT. § 271. Effect in General. 272. Effect on Corporation. 273, Effect on Partnership. § 271. Effect in General.— It has already been seen that an as- signment in trust for the benefit of creditors, when once accepted by the assignee, operates as a conveyance and not as a mere power,! and cannot be revoked by the assignor,? or defeated by the renun- ciation of the assignee. A deed conveying property in trust ab- solutely for the benefit of creditors, if bona fide, is valid as a con- veyance in consequence of the presumed assent of the creditors, and is not a mere power subject to be defeated by the levy of an. execution at the instance of one of the creditors named in it. It operates to divest the debtor of his entire estate and interest in the property assigned so that he cannot convey or incumber it by mortgage as against the creditors, and he retains nothing except the equitable and incidental right to discharge the trusts by pay- ment of the debts before sale, and thus entitle himself to a recon- veyance of the whole estate, or to claim a reconveyance of the residue remaining unsold after the debts are discharged, or pay- ment of the residue of the proceeds of the sales. It operates to 1 Dwight v. Overton, 35 Tex. 390. 2 Hall v. Denison, 17 Vt. 310; Ingram v. Kirkpatrick, 6 Ired. Eq. 462; Sevier: v. McWhorter, 27 Miss. 442. As to revocation, see post, ch. XXVII, 3Seal v. Duffy, 4 Barr, 274, As to amendments to assignments, see ante, ch, XVII. As to renunciation, see ante, p. 313, 4Kinnard v. Thompson, 12 Ala. 417, 5 Briggs v. Palmer, 20 Barb. 392; Johnson, J., id. 405; Pettit v. Johnson, 15- Ark. 55. And see Klapp’s Assignees v. Shirk, 13 Pa. St. 589; Weide v. Porter, 22 Minn, 423. The grantor in a deed of trust to secure the payment of debts has. no such interest in the property (while the deed in full force) as is the subject of execution at law, or of attachment or garnishment. The whole title to the prop- erty is in the trustee. Cornish v. Dews, 18 Ark. 172; Pettit v. Johnson, 15 id. 55; Biscoe v. Royston, 18 id. 509; Schlueter v. Raymond, 7 Neb. 281; Case v. Inger-- soll, 7 Kan. 367; Harrison v. Farmers’ Bank, 7 W. Va. 424; Smith v. Miller, 11 R. I. 528; People ex rel. Short v. Bacon, 99 N. Y. 275; Donohue v. Ladd, 31 Minn, 244. Thus, it is held that if a debtor who has previously conveyed to trustees for the benefit of creditors afterward conveys to one of the trustees the same land, such trustee would take subject to the assignment and the creditors would not be prejudiced thereby. Hatchers vy. Winters, 71 Mo. 80. Money due: ca § 271.] EFFECT IN GENERAL 353 create at once the relation of trustee and cestuc que trust between the assignee and the creditors,! and gives the latter the right to enforce its provisions, even though it be made without their knowl- edge or privity.” It operates also as a quitclaim of the assignor’s interest in the property conveyed in the same plight and condition as he himself held it, and will not defeat pre-existing liens, nor can the trustees be regarded as purchasers, nor the cestuis gue trust as creditors within the registry acts.’ But it will not operate to de- feat the right of creditors to set aside a previous fraudulent sale and transfer of his property by the debtor, whether it be for the benefit of preferred creditors or of all of the creditors equally.‘ The insolvency and assignment by one party to a contract does not operate as a rescission and discharge the other party from his obligation. the assignor who is a defendant in attachment cannot be reached after assign- ment by garnishment at the suit of an individual creditor. Dehner v. Helmbacher Mills, 7 Ill. App. (Bradw.) 47. To reach the grantor’s interest, it seems that the proper course for the judgment creditor to pursue would be to file a bill against the grantor, trustee and cestui que trust, praying an account upon the balance due upon the trust debts, and a decree that the trust be closed and the property subjected first to the discharge of such balance and the excess to the satisfaction of the com- plainant’s debt. Cornish v. Dews, supra. After an assignment the assignor ceases to have any legal title to the property assigned, and his equitable interest is confined to such residuum of the estate as may remain after all the debts di- rected to be paid have been satisfied. He remains liable as before for all his un- paid debts and subject to legal process. Butler v. Thompson, 4 Abb. N. C. 290. And such debts may be afterwards reduced to judgments. Detroit Stove Works v. Osmun, 74 Mich. 7; 41 N. W. Rep. 845; following Parsons v. Clark, 59 Mich. 418; 56 N. W. Rep. 656. In Delaware, etc. Co. v. Scranton, 34 N. J. Eq. 429, where the owner of the equity of redemption in mortgaged land had assigned, it was held that he retained such an interest that he might apply to set aside a sale of the lands under foreclosure notwithstanding the assignment. An assignment whereby a debtor conveys all his property for the benefit of creditors amounts to a complete cession or surrender of his property to his creditors. It operates to vest in the assignee all legal title to the property, but the beneficial interest is in the cestui que trust for the creditors, Until the debts are paid and the trust fully performed, the assignor has no right, legal or equitable, upon which to base a contract in the assigned property. Monteith v. Hogg, 17 Oreg. 270; 20 Pac. “Rep. 827. See Wilhelm v. Byles, 60 Mich. 561; 27 N. W. Rep. 118. 1 Hail v. Denison, 17 Vt. 310; Ingram v. Kirkpatrick, 6 Ired. Eq. 462, 21d. 3 Walker v. Miller, 11 Ala. 1067. Where the lien of an execution has attached, or the writ in replevin has issued, the debtor’s assignment cannot defeat the plaintiff's right of recovery. Marsh v. Vawter, 71 Ind. 22; Collier v. Bickley, 33 Ohio St. 528. See Miller v. O’Bannon, 4 Lea (Tenn.), 898; Bedford v. Penney, 65 Mich. 667; 32 N. W. Rep. 888. So where the lien of the fi. fa. was lost by an abandonment of the levy, the rights of an intervening assignee attached and there could be no valid levy under the alias fi. fa. upon the assigned property. Missimer v. Ebersole, 87 Pa. St. 109; Shaeffer’s Appeal, 101 Pa. St. 45. 4 Brownell v. Curtis, 10 Paige, 210; Browning v. Hart, 6 Barb. S, C. 91; Leach v. Kelsey, 7 id. 466, 5 New England Iron Co, v. Gilbert Elevated R. Co., 91 N. Y. 153, 23 154 OPERATION OF AN ASSIGNMENT. [on. XXII, In Pennsylvania, by the effect of the act of June 14, 1836, an assignment duly recorded is said to stand upon the footing of a transfer by law, because, as the act gives the creditors a right to have the trust that is expressed in the deed executed for their ben- efit by the court, the whole trust becomes vested in them in equity, under the immediate administration of the court; and therefore an assignment recorded is, in effect, a transfer to the creditors by the act of law.! An assignment does not operate as an acknowledgment or prom- ise, which is evidence of a new or continuing contract whereby a case is taken out of the statute of limitations.’ Where a debtor deposited money in a bank for the payment of a creditor without the knowledge or assent of the latter, and sub- sequently on the same day made an assignment, it was held that the assignment operated as a revocation of the debtor’s intention of paying the particular creditor, being inconsistent with such in- tention? In cases free from fraud, assignments usually operate according to their precise tenor and purport, and to the intention of the as- signors in making them.‘ But a different or contrary operation is sometimes given to them by statute. Thus in some states, where preferences to creditors in general assignments are prohibited, they are declared to operate and inure to the equal benefit of all the creditors, although preferences have been expressly given by them. § 272. Effect on Corporation.— It seems to have been formerly doubted whether a general assignment by a corporation of all its property did not operate as a dissolution of the corporation and an extinguishment of its corporate existence. This view was taken by Mr. Justice Story.’ But the better opinion now seems to be 11 Smith’s Lead. Cas. (Am. ed. 1852), '70, 71; id. (ed. 1855), 75. 2Niblack v. Goodman, 67 Ind, 174; Parsons v. Clark, 59 Mich. 414; 26 N. W. Rep. 656. 3 Simonton v. First Nat. Bank, 24 Minn. 216. See Coots v. McConnell, 39 Mich. 742, *See Hollins v. Mayer, 3 Md. Ch. Dec. 348; Myer’s Appeal; 78 Pa. St. 452. 5 Dissenting, in Beaston v. The Farmers’ Bank of Delaware, 12 Pet. 188. The learned judge’s remarks are in these words: ‘‘ But I must say that, independent of some special and positive law or provision in its charter to such an effect, I do exceedingly doubt if any corporation, at least without the express assent of all the corporators, can rightfully dispose of all its property by such a general assign- ment, so as to render itself in capable in future of performing any of its corpo- rate functions, That would be to say that a majority of a corporation had a right to extinguish the corporation by its own will and at its own pleasure, I doubt that right, at least unless under very special circumstances.” It will be seen on a former page (pp. 104, 121) that the power of a single partner to make a general assignment of the partnership property has been objected to on the 2 § 272.) EFFECT ON CORPORATION. 355, that such an assignment does not operate per se as a dissolution or surrender of its franchises;! nor does it operate as a transfer of these franchises to the grantee,’ the power of alienation not ex- tending to that subject.’ In a case in New York it was held that although a corporation can make a voluntary assignment, it can- not transfer to the assignee the power of its officers; that the as- signment transfers the assets merely, not the franchise; and that the assignee does not, by accepting the assignment, become the corporation, nor acquire the powers which the statute confers upon the corporate body and its officers.‘ It was further held that the corporation is not dissolved by the act of assignment, but that the. corporation and its officers remain, with all the powers with which the statute has clothed them, the same after the assignment as be- fore. In Pennsylvania it is provided by the statute relating to assignments by banks in certain cases,’ that the corporate powers of the bank shall, after the making of the assignment, cease and determine, except so far as may be necessary for the following purposes, to wit: 1. For the purpose of suing and being sued, and for continuing all suits and proceedings at law or in equity pend- ing for or against the bank. 2. For the purpose of making such assurances, conveyances and transfers, and doing all such acts, matters and things as may be necessary or expedient to make the said assignments or the trusts thereof effectual. 38. For the pur- pose of citing the trustees to account and compelling them to ex- ecute the trusts. 4. For the choosing of directors for the purpose of receiving and distributing among the stockholders of the bank such surplus as shall remain after discharging all the debts of the bank. It has been held in Arkansas that a general assignment by similar ground of its producing a dissolution of the partnership. But this view was expressly combated by Chief Justice Marshall in Anderson v. Tompkins, 1 Brock. 461. 1Town v. Bank of River Raisin, 2 Doug. (Mich.) 530; Parsons v. Powder Works, 48 N. H. 66; Germantown Pass. R. Co. v. Fitler, 60 Pa. St. 125; Angell & A. or Corp., p. 808. 2De Ruyter v. St. Peter’s Church, 3 N. Y. 238; Hurlbut v. Carter, 21 Barb, 221. See Germantown Pass. R. Co. v. Fitler, 60 Pa. St. 125; Ohio Life Ins, Co. v. Mer- chants’ Ins, Co., 11 Humph. (Tenn.) 1. 3It is sometimes the practice to reserve to the corporation, by the terms of the assignment, the franchises, rights and powers necessary to their corporate ex- istence. This was done in the assignment mentioned in Bowen v. Lease, 5 Hill, 221, 222. 4Hurlbut v. Carter, 21 Barb. 221, 224. 5 Ibid. 6 Act of April 16, 1850, § 27; Purdon’s Dig. (11th ed., Brightley), p. 176. The powers and duties of the officers of an insolvent bank cease when it makes an as- signment; thereafter it may buy up outstanding claims against it if they do so fairly and honestly. Craig’s Appeal, 92 Pa. St. 396. See, also, under this stat- ate, Shryock v. Bashore, 82 Pa. St. 159; Ahl v. Rhoads, 84 id. 319, 356 OPERATION OF AN ASSIGNMENT. (oH. xxi a bank, though in itself valid, was a good cause of forfeiture of its: charter.! § 273. Effect on Partnership.— An assignment by an insolv- ent firm of all its assets for creditors necessarily works a dissolu- tion of the partnership where no provision is made to continue the business. So an assignment by one partner of all his interest in the firm property to the other partner or partners works a disso- lution of the firm;* but where, after an assignment, the partners. all join in some act in the course of their usual business, as the ex- ecution of a note in the firm name, it has been held that the assign- ment suspended but did not dissolve the copartnership.t One- partner cannot, after the making of a general assignment by the firm, prejudice firm creditors by accepting a deed and thereby in-. creasing the liabilities of the firm’ 1 The State v. The Real Estate Bank, 5 Pike, 595; cited with approval by John- son, J., in Hurlbut v. Carter, 21 Barb. 224. ?McKelvy v. Blair, Am. L. T., vol. VI, p. 65; Brown v. Agnew, 6 W. & S. 238;. Gordon v. Freeman, 11 Ill, 14; Parsons on Part. 400; Greenwood v. Marvin, 111 N. Y. 423; 19 N. E. Rep. 228, * Horton’s Appeal, 13 Pa, St. 617. See ante, p. 89, n. 2; Parsons on Part. 400. 4 Williston v. Camp, 9 Mont. 88; 22 Pac. Rep. 501. 5 Payne v. Smith, 28 Hun, 104. CHAPTER XXIIL. THE LEX LOCI IN ITS APPLICATION TO ASSIGNMENTS, §§ 274, Systems of Laws Applied to Foreign Assignments, 275, The General Rule. 276. Transfers Under Bankrupt and Insolvent Laws, 277. Real Estate. 278. The Lex Fori Governs the Remedy. 279, Where the Assignment is Repugnant to the Laws or Policy of the Forum, 280. Where the Assignment is Repugnant to the Laws or Policy of the Forum— Continued, 281. Effect of an Actual Change of Possession, 282. Transfers of Choses in Action. 283, The Domicile of the Parties. 284, Assignments with Preferences, § 274, Systems of Laws Applied to Foreign Assignments.— It frequently happens that among the property intended to be con- ‘veyed by an assignment for the benefit of creditors is comprised property in other states, or debts due from citizens of other states, cand it becomes an important subject of inquiry how far the as- ‘signment will operate to transfer such property or protect it from ithe local remedies of creditors. Three different systems of laws may be applied to the determi- nation of questions which thus arise, namely, the law of the place where the litigation is had, the law of the place where the property as situated, and the law of the place where the assignment is made, which are designated in the books, respectively, as the lew ford, lex ret site and lex loci contractus. § 275. The General Rule.— With regard to all contracts of which the subject-matter is personal property, it may be laid down :as a broad general proposition, subject, however, to numerous quali- fications, that their validity is to be tested by the law of the place where the contract is made. If valid there they will be every- where sustained, and foreign tribunals, on principles of international and interstate comity, will, in determining their force and suffi- ciency, regard them in the light of the law where they were made.! 1 Thus, in The Baltimore & Ohio R. R. v. Glenn, 28 Md. 287, a very carefully argued and adjudged case, an assignment executed by a Virginia corporation in ithe state of Virginia, but containing reservations which would render it invalid 358 THE LEX LOCI. (cH. XxIIL On this principle a voluntary assignment in one state, valid by the laws of that state, would operate to convey personal property (not already subject to liens) in every state where it might be found.! In Caskie v. Webster? it was expressly held by the circuit. court of the United States for the third circuit that a general voluntary assignment valid’ by the laws of one of the United States, though assumed to be void if it had been made in another, will carry “property in that other against an attachment creditor there. And in the Pennsylvania case of Law v. Mills? it was decided that the validity of a voluntary assignment of personal property in: trust for creditors depends on the law of the place where it is made, and that if made in New York and valid by the laws of that state it will pass the property in Pennsylvania described in it. So also in Kelstadt v. Reilly* it was held that a voluntary as- under the laws of the state of Maryland, was sustained by the courts of the lat- ter state. Mr. Justice Stewart, in delivering the opinion of the supreme court, said: ‘‘ The deed in question having been made in the state of Virginia, and by a corporation created by the laws of that state, its validity must depend upon those laws. It isa general principle, admitting of few exceptions, that in con- struing contracts made in a foreign country the courts are governed by the lex loci as to the essence of the contract; that is the rights acquired and the obli- gations created by it;” citing De Sobry v. De Laistre, 2 Har. & J. 191; Washer v. Everhart, 3 Gill & J. 244; Hall v. Mullen, 6 Har. & J. 198. And see Hanford v. Paine, 32 Vt. 442; Guillander v. Howell, 6 Am. Law Reg. 522, note, where the cases are reviewed, See, also, Moore v. Willett, 85 Barb, 663; King v. Glass, 73 Towa, 205; 84 N. W. Rep. 820; post, p. 865. See Munson v. Frazer, 73 Ind. 1773 34 N. W. Rep. 804. 1Story’s Confl. L., § 428a. The general principle is that an owner has the dis- posing power over property. which is recognized by all civilized and especially by all commercial nations, to transfer his property for a good and valuable con- sideration; and the general disposition of all friendly governments is to give effect to such contracts when not opposed by some great consideration of public policy, or manifestly injurious to their own citizens. A fortiori is this true of the several states of the American Union, which, though foreign for some pur- poses, are united for many others. Shaw, C. J., in Means v. Hapgood, 19 Pick. 105, 107. This general rule is also recognized in Campbell v. Colorado Coal Co., 7 West Coast Rep. 32. 22 Wall. Jr. 181. 318 Pa. St. 185. In Pennsylvania, under the act of May 8, 1855 (P. L. 415), the property of a foreign assignor situated in this state is subject to foreign at- tachment at the suit of a resident creditor having no notice of the assignment thereof, unless the latter has been recorded in this state. But where at the time of the assignment both the creditor and the assignor are residents of the foreign state where it is made, the creditor may not come into this siave and seize prop- erty of the assignor in a suit in foreign attachment. Smith’s Appeal, 117 Pa. St. 80; 11 Atl. Rep. 394. See Steele v. Goodwin, 113 Pa. St. 288; 6 Atl. Rep. 49, 455 How. Pr. 873. See, also, Moore v. Willett, 85 Barb. 663, and the well known case of Kelly v. Crapo, 45 N. Y. 86, which on the point now under consideration is fully in harmony with the text. See post, p. 363, n. 2. In Schuler v. Israel, 27 Fed. Rep. 851, a voluntary assignment made in Texas was held to be valid in’ Missouri, as it did not conflict with the rights of Missouri creditors. In Wood- ward v. Brooks, 18 Ill. App. 150, a Pennsylvania assignment was held to be valid 3 275.) THE GENERAL RULE. 359 sigament made in Ohio under the law of that state, but not an insolvent law, of personal property in New York, gave to the as- signee a title superior to that of a subsequent attaching creditor of the property in New York. So in Kentucky,! Missouri? and South Carolina.’ Mr. Chief Justice Green, in Frazier v. Fredericks,‘ remarks: “The general principle is fully and unequivocally settled that per- sonal property is transferable according to the law of the country where the owner is domiciled. A transfer of personal property, therefore, good by the law of the owner’s domicile or by the law of the place where it is made, is valid wherever the property may be situated.” § in Illinois as against an attaching creditor from Pennsylvania who had notice of the assignment. See, also, In re Paige, 31 Minn. 136, where a Wisconsin assign- ment was held to be valid by the Minnesota courts, though under the Minnesota statute applicable to Minnesota assignments it would not have been valid, be- cause the assignee did not reside in Minnesota. Cook v. Van Horn, 81 Wis. 291; 50 N. W. Rep. 893: Eddy v. Winchester, 60 N. H. 63. In Michigan, where after a general assignment for the benefit of its creditors by a Michigan corporation a non-resident creditor, with knowledge of such an assignment, attaches property of the debtor in another state and afterwards files its claim for allowance under the assignment, the value of said attached property should be ascertained and applied in reduction of the claimant’s demand. Fay v. Jenks, 78 Mich, 304; 44 N. W. Rep. 378. 1Coflin v. Kelling, 83 Ky. 649. 2 Askew v. La. Cygne Bank, 83 Mo. 366. 3 Ex parte Dickinson, 29 8. C. 460; 7S. E. Rep. 593; post, p. 370. 424N. J. L. 166. See Varnum v. Camp, 1 Green, 329. 5 The general rule is that the operation of a contract and the rights of the par- ties, so far as they depend on the construction and validity of the agreement, or on questions of sufficiency of performance, are governed by the laws of the place where the contract was made, if those laws are properly shown, rather than by the law of the place where it is put in suit. Boughton v. Bradley, 86 Ala. 689; Maguire v. Pingree, 30 Me. 508; Carnegie v. Morrison, 2 Metc. 381; Loan Co. v. Turner, 18 Conn. 249; Watson v. Brewster, 1 Pa. St. 381; Watson v. Orr, 3 Dev. L. (N. C.) 161; Martin v. Martin, 9 Miss. 176; Bulger v. Roche, 11 Pick. 36, 38; Blanchard v. Russell, 13 Mass. 14; Jones v. Jones, 18 Ala. 248; Young v. Harris, 14 B. Mon. (Ky.) 556; De Sobry v. De Laistre, 2 Har. & J. (Md.) 191; Pit- kin v. Thompson, 13 Pick. 64; Thompson v. Ketchum, 8 Johns, 189; Sherrill v. Hopkins, 1 Conn. 103; Pomeroy v. Ainsworth, 22 Barb. 118, In Livermore v. Jenckes, 21 How. 126, where an assignment was made by a resident of Rhode Island to assignees residing in the same state, exacting releases which would invalidate the assignment under the law of New York, and certain of the as- signed property situated in the state of New York was taken into possession by the assignees, converted into money and the proceeds removed to Rhode Island, in an action subsequently brought by a judgment creditor in the circuit court for the southern district of New York, to set aside the assignment as void, it was held that the assignment was to be tested by the laws of Rhode Island, and was valid, and that the judgment creditors had never acquired any lien upon the assigned property so as to subject it to their demands. In the arguments of counsel in this case will be found full and valuable references to and discussions of the cases, It seems that an assignment of a ship at sea, whether voluntary or 360 THE LEX LOCI. [cH. XXIII. The general principle is not universally true, but is subject to several exceptions. The necessary intercourse of mankind requires, to use the language of Chancellor Kent, that the acts of parties, valid where made, shall be recognized in other countries, provided involuntary, made in the state where she is registered and where her owners reside, has the same effect as it would have if the ship were actually in a port of that state, so that a creditor in another state cannot subsequently attach her on her arrival in a port of his own state. Crapo v. Kelly, 16 Wall. 610; rev’g 45 N. Y. 86; Moore v. Willett, 35 Barb. 663; Southern Bank v. Wood, 14 La, Ann. 554, On April 22, 1874, George G. Smith made and recorded in Maryland, ac- cording to law there, a general assignment for the benefit of creditors, and at the time had an interest in a trust estate created by a New Jersey will, the trustees of which were in Pennsylvania, and it was assumed that the legal situs of the trust property was in Pennsylvania. In October, 1874, said George G. Smith assigned all his interest in said trust estate to his mother, Martha Smith, to whom he was largely indebted; she knew of his prior general assignment; in February, 1875, upon a bill in chancery filed by said Martha Smith in New Jersey, the entire trust fund passed into her hands; in February, 1878, the as- signees of George G. Smith filed a bill in Pennsylvania, where Martha was res- ident, praying that she be required to pay over to them the share of George in said trust fund: it was objected on her behalf that George was indebted to her at the time of the general assignment in a sum greater than his share in the said trust fund in her hands; that she had presented her claim as a creditor in the Maryland courts for her distributive share of his assigned estate, and it had been held to be barred by the lapse of three years; that, therefore, the effect of the general assignment of George, made in Maryland, was to withdraw his prop- erty in Pennsylvania, where the statutory limitation was six years, from seizure for debts existing there, and it was contended, therefore, that it would be unjust to compel her to relinquish the fund in her hands in order to its removal into into Maryland, where her clear rights might thus be defeated by the Maryland statute of limitations. The court held that as Martha had actual notice of the general assignment the subsequent assignment to her did not avail, and as to the operation of the Maryland assignment in removing funds out of Pennsylvania, the court said: ‘‘In the distribution of the estate of decedents whose domicile was in a foreign state, it is conceded that the rights of domestic claimants must be protected here; they must not be put to the expense or danger of following the home fund into a foreign jurisdiction; the absence or presence of domestic claimants upon the fund determines the action of the court, under the comity of nations; it is not a question of jurisdiction in such a case, but merely one of ju- dicial discretion. The same rule has been observed in the distribution of a fund arising from the transfer of property made under coercion of the law in any form, as an assignment in involuntary bankruptcy or of a fund in the hands of a receiver. In all such cases, the transfer being in invitum, by process abroad, it will be regarded only so far as it is not inconsistent with the rights and claims of our own citizens. But in the case of a voluntary assignment for creditors no such rule has ever been recognized in this state; on the contrary, as shown by numerous decisions, and by the provisions of the act of 1855, a widely different policy has been pursued. If the owner of personal goods or estate in Pennsyl- vania may, at the place of his domicile in a foreign state, bona fide and for valu- able consideration dispose of the same, receiving and placing the consideration within his own control, and this he may undoubtedly do, he may certainly with like effect convey his estate to the benefit of his creditors here and elsewhere. As stated by Chief Justice Gibson in Lowry v. Hall, 2 W. & S. 181: ‘‘The volun- tary transfer of a chattel by the debtor, if not forbidden in other respects by the § 27€.] TRANSFERS UNDER BANKRUPT LAWS. 361 they be not contrary to good morals nor répugnant to the policy and positive institutions of the state.) In the case of Wieder v. Maddox? the court held in substance that the effect allowed to voluntary assignments in foreign states as not dependent upon the discretion of the courts of those states. ‘Their validity is based upon the common-law right of an insolvent debtor to make an assignment of all his property subject to the payment of his debts for the benefit of his creditors. In determining what is the lex loct contractus applicable to a given case it is to be observed that the place where an assignment is executed is the place where it is delivered to and accepted by the assignee so as to vest title in him;* in other words, the law of the domicile of the assignor is not always the law of the place of ‘contract. §276. Transfers Under Bankrupt and Insolvent Laws.— In con- sidering the qualifications of and exceptions to this general rule of Jaw it may be primarily observed that there is a clear and well- defined distinction, supported by the weight of American authority, between involuntary transfers of property, such as work by opera- tion of law under foreign bankrupt assignments and insolvent laws, and a voluntary conveyance. An assignment by law has no legal operation out of the state in which the act was passed, while a voluntary assignment, it being by the owner, is a personal right of the proprietor to dispose of his effects for honest purposes. Jaw at the place of the situs, is to be as much regarded there or elsewhere as it would be at the place of the domicile.” Smith’s Appeal, 104 Pa. St. 381. See Juilliard v. May, 130 Ill. 87; 22 N. E. Rep. 477. 12 Kent’s Com. 455. .266 Tex. 372; 18. W. Rep. 168. 3 Where an assignment of personal property situated in New York was made by residents of Virginia, carrying on business in New York, and was signed and acknowledged by the assignors in Virginia, but delivered to and accepted by the assignee in New York, it was held that the assignment must be deemed to have been executed in New York and its validity determined by New York laws. ‘Grady v. Bowe, 11 Daly, 259. Delivery is a part of the execution, and an assign- ment does not take effect until it is accepted by the assignee. Warner v. Jaffray, 96 N. Y. 248, 252. See Smedley v. Smith, 15 Daly, 421. 4 Walters v. Whitlock, 9 Fla. 86; Hutcheson v. Peshine, 16 N. J. Eq. 167; Lessees of McCullough’s Heirs v. Roderick, 2 Ohio, 380; Rogers v. Allen, 3 Ohio, 488; Osborn v. Adams, 18 Pick. 247: Kelly v. Crapo, 45 N. Y. 86; Holmes v. Remsen, 20 Johns, 229; Abraham v. Plestoro, 3 Wend. 538; Hoyt v. Thompson, 5N. Y. 320; Willets v. Waite, 25 N. Y. 577; Zipcey v. Thompson, 1 Gray, 248; Clarke v. Booth, 17 How. (U. 8.) 877; Harrison v. Sterry, 5 Cranch, 302; Blake v. Williams, 6 Pick. 8083; Lanfear v. Sumner, 17 Mass. 110; Dalton v. Currier, 40 N. H. 237; Saunders v. Williams, 5 N. H. 218; Ogden v. Saunders, 12 Wheat. 215; Miller v. Kernaghan, 56 Ga. 115. See Boston Iron Co. v. Boston Locomotive Works, 51 Me. 585; Felch v. Bugbee, 48 id. 9; Mather v. Nesbit, 13 Fed. Rep. 872; Smith’s Appeal, 104 Pa. St. 881; Weider v. Maddox, 66 Tex. 372; 18S. W. 362 THE LEX LOCI. [CH. XXII. So it has been decided in New York that an assignee, appointed by the English court of bankruptcy in involuntary proceedings, ac- quires no title to property of the bankrupt within that state ; and that this was the rule whether the question arose between the bankrupt and the assignee, or between the assignee and the bank- rupt’s creditors residing in New York." This decision has, however, been reversed by the court of appeals on the ground that the contest is not between the foreign assignee and creditors of the bankrupt in New York, but between the as- signee and the bankrupt, and that the latter, having gone to Eng- land and submitted to the jurisdiction of its bankruptcy court, is bound by its adjudication, and that in such a case comity requires the title of the foreign assignee, acquired under the foreign bank- ruptcy law, to be respected. A unanimous court, speaking by Earl, J., declares that “ the fol- lowing rules are to be thoroughly recognized and established in this state: (1) The statutes of foreign states can in no case have any force or effect in this state ex proprio vigore, and hence the statutory title of foreign assignees in bankruptcy can have no rec- ognition here solely by virtue of the foreign statute. (2) But the comity of nations, which Judge Denio, in Peterson v. Chemical Bank, 32 N. Y. 21, said is a part of the common law, allows a certain effect here to titles derived under, and powers created by, the laws of other countries, and from such comity the titles of for- eign statutory assignees are recognized and enforced here, when they can be without injustice to our own citizens, and without prej- udice to the rights of creditors pursuing their remedies here under our statutes; provided, also, that such titles are not in conflict with the laws or the public policy of our state. (8) Such foreign assignees can appear, and, subject to the conditions above men- tioned, maintain suits in our courts against debtors of the bank- rupt whom they represent, and against cthers who have interfered with or withheld the property of the bankrupt.” A general assignment under the insolvent laws of one state can Rep. 168; Goodsell v. Benson, 13 R. I. 246. Soin the case of Pinckney v. Lana- han, 62 Md. 447, it was held thata state may pass an insolvent law discharging the person of the debtor and his future acquisitions of property from the pay- ment of his debts, so far as it concerns contracts between citizens of the state, made within the state, after the enactment of such laws. Such laws, however, do not apply to contracts between citizens of one state and citizens of another state. A non-resident creditor by accepting the benefit of an offer by the in- solvent debtor of a composition with his creditors, under the statute laws of the state of Massachusetts, is bound by a discharge in insolvency granted to the debtor. See Murray v. Roberts, 150 Mass. 353; 23 N. E. Rep. 208; 15 Am. St. Rep. 209. ‘ 1In re Assignment of Haynes, etc., 21 N. Y. W. Dig. 461; reversed, In the Matter of Accounting of Waite. 99 N. Y. 438. § 276.) TRANSFERS UNDER. BANKRUPT LAWS. 363 pass no title to real estate situated in another state;! nor will the title acquired under such foreign insolvent proceedings prevail against the rights of attaching creditors under the laws of the ead where the property is actually situated? The reason of this rule seems to be, that inasmuch as the con- veyance is not voluntary, and is without consideration, it is void as against the grantor, except by force of the insolvent law of the state where it is made; and to give force to such a law would be to permit a foreign tribunal and a foreign law to regulate the trust, the action of the trustee, and the disposition of the trust property in another state.’ “We can no more take notice of a trust created under a foreign government,” said the supreme court of Massachu- setts,* “than we can of a will not proved and recorded in this com- monwealth.” Mr. Justice Story said: “ Assignees in bankruptcy, or in insolv- ency, are in the same situation as the bankrupt himself in regard to foreign debts. They take subject to every equity belonging to foreign creditors and subject to the remedies provided by the laws. of the foreign country where the debt is due.”*® Accordingly it was held in the case of Rhawn v. Pearce,’ that neither the law of another state or territory, nor the adjudication of the courts thereof, by which trustees’ are appointed to take the property and effects of an insolvent debtor and distribute the proceeds, can have any extraterritorial effect. They are strictly local and affect nothing more than they can reach. And it is old doctrine “that a court of equity has much greater consideration for an assignment actually made by contract than for an assignment by mere operation of law.”7 It has been decided in the District of Columbia that where trust- 1 Hutcheson v. Peshine, 16 N. J. Eq. 167. But see Green v. Gross, cited under § 277, post, p. 364, n. 5. 2 Kelly v. Crapo, 45 N. Y. 86; reversed on another point in 16 Wall. 610. Fol- lowing Kelly v. Crapo, 16 Wall. 610, it is held in Maryland that an adjudication in insolvency in that state is binding on non-resident creditors who go there to- prosecute the insolvent there (Pinckney v. Lanahan, 62 Md. 447); and funds in the hands of such insolvent assignees cannot be attached by such non-resident creditors (Torrens v. Hammond, 4 Hughes C, C. 596). But in the case of Bedell v. Scruton, 54 Vt. 493, it was held in Vermont that a discharge granted by astate court in insolvency is no ‘bar to the claim of a non-resident creditor who does. not take part in the insolvency proceedings, or submit himself in any way to the jurisdiction of the insolvency tribunal; nor is the rule affected by the place where the contract is made or to be performed, or the forum in which it is sought. to be enforced. 3 Hutcheson v. Peshine, supra. 4Osborn v. Adams, 18 Pick. 248, 5 Story on Conflict of Laws, sec. 412. 6110 Ill. 8350; 51 Am. Rep. 691. See Heyer v. Alexander, 108 Ill. 385, 71 P. Wms, 460. 364 THE LEX LOCI. fou. xxmi. ees were appointed by deed in Virginia for the benefit of creditors, and then by a decree in chancery another trustee was substituted, that the latter could sue in the District as trustee under said trust, and not as an officer of the Virginia court of chancery, and that for such purpose no conveyance from the original trustee was nec- essary.) It was decided in Massachusetts, in May, 1886,’ that while the claims of creditors in another state might not be compelled to yield to those of an assignee in insolvency appointed in Massachu- setts, as to property situated in such other state, yet that the claims of Massachusetts creditors must so yield, and they would be restrained in Massachusetts from prosecuting to judgment their actions against the insolvent debtor in such other state, though such actions were begun before the proceedings in insolvency. In the Iowa case of King v. Glass’ it is held that a foreign as- signment for the benefit of creditors is not invalid in this state on the ground that under the laws of the state where made, creditors who fail to prove their claims receive nothing, since the same is true under the statutes of this state. § 277. Real Estate.— The general rule of comity above stated does not extend to real estate. The title and disposition of real estate are exclusively subject to the laws of the country where it is situated, which alone can prescribe the mode by which a title to it can pass. A deed or mortgage of real estate can only take ef- fect in virtue of the law of the state where the land is situated.* This is a principle of general law governing bankrupt as well as 1Glenn v. Busey, McAr. & M, 454. 2Cunningham v. Butler, 142 Mass. 47, 375 Iowa, 205; 84 N. W. Rep. 820. 4 Wilde, J., in Osborn v. Adams, 18 Pick. 245, 247; citing McCormick v. Sulli- van, 10 Wheat. 203. See Story’s Confl. of Laws, ch. 10. > Dundas v. Bowler, 3 McLean, 399. It is provided by statute in Nebraska that a deed of land in that state made in another state must beexecuted accord- ing to the laws of the latter. Neb. Comp. Stat., ch. 78, § 4; Green v. Gross, 12 Neb. 117. But this is no exception to the rule stated in the text; it is the Ne- braska statute which governs instead of the common law. A debtor in Alabama executed a conveyance to a creditor there by which he mortgaged certain real property in Alabama and Mississippi; a bill was filed by other creditors to have this mortgage declared to be a general assignment for benefit of creditors; the bill was demurred to inter alia, on the ground that, as to Mississippi land, the court was without jurisdiction to declare the conveyance thereof a general assignment; the demurrer was overruled, but on appeal it was held that, as the law of Mississippi, and not that of Alabama, must determine the nature of the estate and interest passing by the mortgage in and to the Mississippi land, the demurrer should have been sustained as to the part of the bill affecting such Jand, Danner v. Brewer, 69 Ala. 191. § 277.] REAL ESTATE. 365 voluntary assignments.' In Maryland it has been held that a deed made by a debtor in Delaware to trustees for the benefit of his. creditors, in conformity with the laws of that state, but not exe- cuted, acknowledged and recorded according to the laws of Mary- land, will not operate to transfer real estate in the latter state.? It was held, however, that such a deed, if it embraced the rights and credits of the debtor, would transfer to the trustees for the ben- efit of his creditors the balance of the purchase-money of such real estate, where the debtor had previously to its execution contracted to sell the estate to a third person, received part of the purchase- money and given a bond to convey the legal title upon payment of the whole. And in Massachusetts, in a case where an insolvent. debtor in Connecticut assigned all his property, including certain lands in Massachusetts, in trust for the benefit of his creditors pro rata, under the provisions of a statute of that state, none of the creditors being parties to the assignment, and at the same time conveyed such land to the trustee by a deed which referred to the assignment as to the purposes of the conveyance, and which was: duly executed and recorded according to the law of Massachu- setts, it was held that the statutory assignment in Connecticut was void in regard to land in Massachusetts; and that the second deed, being ancillary to the statutory assignment, was without consider- ation and void as against creditors in Massachusetts who attached the land after such deed had been recorded.t So where land situ- ated in Iowa, where preferences are not allowed, was conveyed by general assignment for the benefit of creditors, executed in the District of Columbia, where preferences in such assignments are not prohibited, it was held that the conveyance was repugnant to. the laws of Iowa and invalid, and could not operate even as an as- signment in favor of all creditors in proportion to their respective claims.® And where the parties to an assignment for the benefit of cred- 1 Story’s Confl. of Laws, § 423a; 2 Kent’s Com. [408], 498, note; McCullough’s Heirs v. Roderick, 2 Ohio, 234; Rogers v. Allen, 3 id. 488. 2 Houston v. Nowland, 7 Gill & J. 480. And in a subsequent case in the same state, an assignment executed under the laws of the state of Kentucky was held sufficient to pass the title to personal property in the state of Maryland, though the instrument was not recorded according to the laws of that state. Wilson v. Carson, 12 Md. 54, citing Houston v. Nowland, 7 Gill & J. 480; Black v. Zach- arie, 3 How. 483, and referring to Ingram v. Geyer, 13 Mass. 146, contra. 3 Houston v. Nowland, supra. Though the sufficiency of a deed to carry title to real property in another state depends upon the laws of that state, yet this consideration does not affect the validity of the deed elsewhere, or the validity of the action of the assignee in accepting it. Greene v. Sprague Mfg. Co., 52 Conn. 330. 4 Osborn v. Adams, 18 Pick. 245. 5 Loving v. Pairo, 10 Iowa, 282. See, also, McGoon v. Scales, 9 Wall. 23. 366 THE LEX LOCI. [cH. xxHTI. itors all lived in the state of New York, and the assignment was valid there but invalid in Iowa, a New York creditor who was the surety on the assignee’s bond and who filed his claim with the as- signee was not thereby estopped from denying the invalidity of the assignment as to real estate in Iowa.! So a conveyance to assignees of land in Illinois by a voluntary assignment, executed in Rhode Island, was held to be invalid un- der the laws of Illinois, because the assignment of land was not made for the purpose of dividing its proceeds among the creditors, and must, therefore, in some degree hinder and delay creditors in the collection of their debts.’ But in a case in New York, where a debtor residing in Maryland had assigned certain lands in New York to a trustee residing in that state, the court of chancery of New York lent its aid to en- force the execution of the trust, though at the suit of creditors residing in Maryland, there being no provision in the assignment repugnant to the laws of New York.’ In a later case in New York, however, it was held that an assignment executed by debtors re- siding in this state for the benefit of their creditors, although it relates to and embraces real and personal property in other states, may, if our law deems it fraudulent, be declared void by the courts of this state. Though a deed of assignment be void in the state where it is made, if it is effectual to pass title to land in another state, it may be sustained by the courts of the latter state as against an attach- ing creditor from a third state.® But the rule above stated does not apply to assignments of in- struments conveying interests in real estate, such as mortgages, and such assignments are governed by the law of the place where they are made. It may be observed before leaving this topic that a voluntary assignment of real property is not inoperative and void in one 1 Moore v. Church, 70 Iowa, 208; 30 N. W. Rep. 855; 59 Am. Rep. 439. In the case of Tompkins v. Adams, 41 Kan. 38; 20 Pac. Rep. 530, an insolvent debtor, resident of the state of Illinois, made a general assignment for the benefit of his creditors. The assignment included real estate owned by the insolvent in this state. The assignor with the approval of the county court of the county in the state of Illinois in which the assignment was made sold the land in Kan- sas. Held, that \Xe purchasers got no title, the land not having been sold in ac- cordance with the provisions of the act to regulate voluntary assignments in this state, nor by the order or judgment of any court of the state. See Palmer v. Mason, 42 Mich. 146. 2 Gardner v. Commercial Nat. Bank, 95 Ill. 298. 3 Slatter v. Carroll, 2 Sandf. 573. 4 D'Ivernois v. Leavitt, 23 Barb. 68, 64, 80, 5 First Nat. Bank v. Hughes, 10 Mo. App. 7. 6 Dundas v. Bowler, 3 McLean, 399. §§ 275, 279.] THE LEX FORI. 367 state where such property is situate merely because it was made in another state, nor is it necessarily repugnant to the laws of the former state because not conformable to them, for the reason that the laws of a state as to voluntary assignments having no extra- territorial effect may have no application whatever to foreign as- signments. It was upon such considerations that a voluntary as- signment made in Rhode Island of real estate situate in Maine was sustained in the latter state as against an attaching creditor from New York who had assented to it.! § 278. The Lex Fori Governs the Remedy.— As to all ques- tions touching the remedy to be allowed on a contract, and the proper course of enforcing it, these are to be determined by the law of the place where suit is brought.’ § 279. Where the Assignment is Repugnant to the Laws or Policy of the Forum.— The municipal laws of a country or state have in strictness no force beyond its territorial limits, and where such laws and contracts made under them are admitted in other states it is only on a principle of comty, which is alway subject to the exception that no state will enforce a contract which is against its well-settled policy or direct legislation. Voluntary assignments by debtors have frequently been subjected by the courts to the operation of this exception, and the mere circumstance of their being valid by the laws of the state in which they were made has — not been held sufficient to give them validity and effect in other states;? and, on the other hand, their invalidity in the state in which they were made has not prevented them from being upheld in other states.’ 1 Chafee v. Fourth Nat. Bank, 71 Me. 514. See, also, Ockerman v. Cross, 54 N. Y. 29, where an assignment made in Canada, though not conformable to the jaws of New York regulating voluntary assignments, was yet sustained as to personal property in New York, and against a New York creditor, because it was held that the New York statute which was relied upon had no application whatever to foreign assignments. 2 Gibson, C. J., in Speed v. May, 17 Pa. St. 95; Bennett, J., in Jones v. Taylor, 30 Vt. 48; Harrison v. Sterry, 5 Cranch, 289; Railroad Co. v. Barron, 83 II, 365. Upon conflicting decisions the ruling of the court of the state is preferred in which the insolvent resided and the greater interest situated. Randolph v. Quidnick Co., 135 U. S. 457; 10S. Ct. Rep. 655. See the following cases, in sev- eral of which the questions arose on contracts other than assignments: Smith v. Atwood, 3 McLean, 545; Jones v. Jones, 18 Ala. 248; Dundas v. Bowler, 3 McLean, 396; Cox v. Adams, 2 Ga. 158; Brent v. Shouse, 15 La. Ann. 110; De Sobry v. De Laistre, 2 Har. & J. (Md.) 191; Dakin v. Pomeroy, 9 Gill (Md.), 1; Pitkin v, Thompson, 138 Pick. 64; Smith v. Spinola, 2 Johns, 198; Andrews v. Herriot, 4 Cow. 508 and note; Gulick v. Lodor, 18 N. J. L. 68; McKissick v, McKissick, 6 Humph. 75. 3Parker, C. J., in Blake v. Williams, 6 Pick. 286; Porter J., in Olivier v. Townes, 2 Mart. N. S. (La.) 93. ‘4 Firat Nat. Bank v. Hughes, 10 Mo. App. 7. 368 THE LEX LOCI. (cm. xxmm Thus, in Massachusetts, in a case where a debtor residing 1m. Pennsylvania made an assignment of all his effects in trust for such of his creditors as should within four months release all their demands against him, the surplus to be distributed pro rata among his other creditors, and the remainder, if any, to be paid over to the assignor, it was held to be void as against acreditor in Massachusetts, who, after such assignment and after notice thereof to a debtor there, summoned such debtor as the trustee of the insolvent, such assignment not being valid according to the laws of Massachusetts." And in a later case in the same state, where an assignment was. executed in Rhode Island, and the assignor and assignees, by whom alone the deed was executed, were citizens of that state, and sub- sequent to the execution of the assignment a citizen of Massachu- setts who was indebted to the assignor was summoned as his trustee in Massachusetts at the suit of a creditor, a citizen of Massachusetts, and it appeared that such a debt was not wanted to satisfy the debts due to the assignees, it was held that the as- signment was invalid as against such attachment, whatever might. be the effect of such assignment by the law of Rhode Island.?, And the rule in Massachusetts is that an assignment of property situated there, made in another state by a citizen thereof for the benefit of his. creditors, with provisions contrary to the policy of the laws of that. state, is ineffectual as against an attachment there by acitizen.? So it +was decided in Massachusetts that an assignment executed in New York by a debtor domiciled there and valid there, but invalid in Massachusetts because not executed or assented to by creditors, would not be upheld in Massachusetts as against attaching credit- ors of the assignor constituting a partnership, some of whom were domiciled in New York, some in another state, and others in Mas- sachusetts, where the firm had its principal place of business.‘ So, also, a New York assignee, on petition of the assignor’s creditors, was dismissed by a court in Pennsylvania as to property there be- cause he was irresponsible and did not file an inventory and bond there as required by the law of Pennsylvania, the court remarking that their “assignment law cannot be evaded by merely crossing the state line and undertaking to execute an assignment.” So in Ex parte Dickinson § (1888), where the facts were substantially as. l Ingraham v, Geyer, 13 Mass, 146, See the remarks on this case by Grier, J., in Caskie v. Webster, 2 Wall. Jr. 131. The doctrine of this case was applied and followed in Fox v. Adams, 2 Green]. 245, ?¥Fall River Iron Works Company v. Croade, 15 Pick. 1, 3 Boyd v. Rockford Mills, 7 Gray, 406; Pierce v. O’Brien, 129 Mass, 314; May v. Wannemacher, 111 Mass. 202; Taylor v. Columbian Ins. Co., 14 Allen, 853. 4 Faulkner v. Hyman, 142 Mass. 53. 5 Weiskettle’s Appeal, 103 Pa. St. 522. 6298. C. 460; 75. E. Rep. 593, See Wagner v. Jaffray, 96 N. Y. 248; 45 am. § 279.] WHERE ASSIGNMENT IS REPUGNANT TO LAWS. 369 follows: The statute of South Carolina declares that any assign- ment by an insolvent debtor for the benefit of his creditors in which any preference is given shall be void. The New York stat- ute reguires such an assignment to give preference to employees. A citizen of New York made an assignment in accordance with the New York law. The South Carolina court held that the pref- erence therein contained rendered the assignment void in this state. | McIver, J., delivering the opinion of the court, in commenting upon the case of Herver v. Rhode Island Locomotive Works,! said : “The real point decided was that a transfer of personal property located in one state by the owner in the state of his domicile, valid according to the laws of that state but in violation of the laws of the state where the property was actually located, could not be recog- nized by the courts of the latter state, and that is the extent to which we go. And in the Illinois case of Woodward v. Brooks? it was held that a voluntary foreign assignment, valid in the state where made, is enforced in this state as a matter of comity, but our courts will not enforce it to the prejudice of our citizens who have de- mands against the assignor. It is contrary to the policy of our laws to allow the property or funds of a non-resident debtor to be with- drawn from this state before creditors residing here have been paid, and thus compel them to seek redress in a foreign jurisdiction. And a foreign assignment, valid where it is made, will not be enforced by the courts of this state as against attaching creditors, whether foreign or domestic, if contrary to the policy of our laws. It would seem that where a debtor resident in one state makes a vol- untary assignment of property in another, whether real or personal, in accordance with the laws of the latter state and to an assignee there resident, the principle of interstate comity ought to be lib- erally applied. But an assignment made in Pennsylvania was held to be invalid in New York because not recorded within thirty days as required by the Pennsylvania statute, and this decision was made in a case where the creditors attacking the assignment would have been estopped from doing so if they could have been presumed to know the Pennsylvania law.‘ Rep. 616; Moore v. Church, 70 Iowa, 208; 30 N. W. Rep. 855; 59 Am. Rep, 439; Pearce v. O’Brien, 129 Mass, 314; 37 Am. Rep. 360. 193 U. S. 664. 4128 Til. 227; 20 N. E. Rep. 685; 16 Am. St. Rep. 104. See Railroad Co. v. Packet Co., 108 Ill. 317; May v. First Nat. Bank, 122 id, 551; 13 N. E. Rep. 806. . 3 Johnson v. Sharp, 31 Ohio St. 611. An assignment of property in New York by a citizen of that state to a citizen of Massachusetts then in New York, and a delivery of the goods, will be sustained against an attachment of the proceeds in the hands of the trustee. Goddard v. Winthrop, 8 Gray, 180. And see Mar- tin v. Potter, 11 Gray, 87; Benedict v. Parmenter, 13 id. 88. 4Stedman v. Davis, 93 N. Y. 32; reversing 11 N. Y. W. Dig. 86. 24 370 THE LEX LOCI. [cH. XXIII. § 280. Where the Assignment is Repugnant to the Laws or Policy of the Forum — Continued.— The courts have, in some in- stances, sustained and applied the law of the place where the per- sonal property is situated in favor of attaching creditors as against the title of the assignee acquired under an assignment executed and valid under the laws of the forum. Thus, in the New York case of Guillander v. Howell,! where an assignment giving prefer. ences was made in New York to a resident of that state, and cer- tain personal property embraced in the assignment situated in the state of New Jersey was, subsequent to the assignment, seized un- der attachment by a resident of the latter state, and an action was subsequently brought against the attaching creditor in New York to recover for a conversion of the property, effect was given to the New Jersey law, under which an assignment with preferences is invalid, and the title of the attaching creditor was sustained. The case of Green vy. Van Buskirk,’ which went through all the courts, ig an important and instructive case. The facts were as follows: On the 3d day of November, 1857, Bates, who lived in Troy, New York, and owned certain iron safes in Chicago, Illinois, in order to secure an existing indebtedness to Van Buskirk and others, executed and delivered (in the state of New York) to them a chattel mortgage on the safes. Two days after this, Green, also a creditor of Bates, sued out of the proper court of Illinois a writ of attachment, caused it to be levied on these safes, got judgment in the attachment suit, and had the safes sold in satisfaction of his debt. At the time of the levy of this attachment the mortgage had not been recorded in Illinois, nor had the attaching creditor notice of its existence. The mortgagees subsequently sued Green in New York for taking and converting the safes. He defended the taking and conversion under the Illinois attachment proceed- ings, but judgment was nevertheless rendered against him in the lower courts, which was affirmed on appeal to the court of appeals, but reversed in the supreme court of the United States. The de- cisions in the state courts*® were placed upon the ground that, all the parties to the transaction being residents of the state of New York, the transfer was to be governed by the law of the owner’s domicile, and that therefore Bates, at the time of the attachment, had no property in the safes upon which the writ could operate, and no title could be acquired under it. The supreme court of the United States affirmed its jurisdiction ‘ 16 Am. Law Reg. 522, and note; s. o., 85 N. Y. 657, 238 How. Pr. 52. 3'Van Buskirk v. Warren, 34 Barb. 547; 13 Abb. Pr. 145; affirmed, 2 Keyes, 119; 4 Abb. Ct. App. Dec. 457; and see reporter’s note, p. 461, *Green v. Van Buskirk, 6 Wall. 307, Nelson and Swayne, JJ., dissenting. § 280.] WHERE ASSIGNMENT IS REPUGNANT TO LAWS. 371 to entertain an appeal under the constitutional provision that ful faith and credit shall be given in each state to the public acts, rec ords and judicial proceedings of every other state,! and, consider ing the questions upon their merits,? decided that the law of the ‘state of Illinois having been shown to be such that no title to the personal property passed under the mortgage, guoad creditors, by reason of want of delivery of the property,’ and that the lien of the attachment proceedings was therefore valid, the full faith anda credit required by the constitution to be given to the judicial pro- ceedings of other states required the New York court to respect the title of the attachment creditor in Illinois. Speaking of the ground on which the decision in the state court was placed, Mr. Justice Davis makes use of the following observations: “ The theory of the case is that the voluntary transfer of personal property is to be governed everywhere by the law of the owner’s domicile, and this theory proceeds on the fiction of law that the domicile of the owner draws to it the personal estate which he owns, wher- ever it may happen to be located. But this fiction is by no means of universal application, and as Judge Story says, ‘ yields whenever it is necessary for the purposes of justice that the actual sctus of the thing should be examined.’”* He adds: “ We do not propose to discuss the question how far the transfer of personal property lawful in the owner’s domicile will be respected in the courts of the country where the property is located and a different rule of transfer prevails. It is a vexed question, on which learned courts have differed; but after all, there is no absolute right to have such transfer respected, and it is only on a principle of comity that it is ever allowed; and this principle of comity always yields when the laws and policy of the state where the property is located have prescribed a different rule of transfer from that of the state where the owner lives.” ® In another New York case adjudged by the court of appeals in June, 1884,§ the debtor, a resident of New York, made and de- livered an assignment there on March 1, 1881, at which time he owned personal property in two counties in Pennsylvania, and the assignment was recorded in those counties on the 19th of the same month. On March 1, 1881, after delivery of the assign- 1Const., sec. I, art. IV. 238 How. Pr. 52; 7 Wall. 139. 3The policy of the law of INinois will not permit the owner of personal prop- erty to sell it and still continue in possession. Davenport v. Thornton, 2 Ill. 296; Strawn v. Jones, 16 Ill. 117; Martin v. Dryden, 6 Ill. 187; Robertson v. Burnell, 10 Il. 282. : 4Green v. Van Buskirk, 38 How. Pr. 59;'7 Wall. 189, 5Green v. Van Buskirk, 38 How. Pr. 60. 6 Warner v. Jaffray, 96 N. Y. 248, 372 THE LEX LOCI. [CH. XXIII. ment, but without notice of it, creditors of the assignor, resident. in New York, issued an attachment in Pennsylvania and levied on the property there. In an action brought in New York to restrain them from further proceedings under the attachment, it was held that as they had acquired valid liens under the Pennsylvania stat- ute on the property there prior to the recording of the assign- ment there, those liens were saved from the operation of the assignment; that the laws of New York did not follow them into. Pennsylvania, and that they had the same right to enforce pay- ment of their claims out of the Pennsylvania property as a cred- itor there residing had. § 281. Effect of an Actual Change of Possession.— Where there has been an actual transfer of possession the transfer will be upheld everywhere. The change of possession necessary to render the transaction complete and perfect against creditors has, how- ever, in several cases been held to be that required by the law of the forum. Thus, in Vermont, where the assignment was made in New York between residents of that state, covering a stock of goods in Vermont of which the assignees took actual possession, the title of the assignee was upheld against an attaching creditor ;! but in a later case, where the facts were similar except that the change of possession, while such as might satisfy the law of New York, was not sufficient under the law of Vermont, the assignee’s. title to the property was not regarded as complete.’ In Atherton Co. v. Ives, where the property of the assignor in Kentucky was in actual possession of the assignee under a New York assignment, the assignment was attacked by attaching cred- itors in Kentucky because of its preference of certain creditors, but the Kentucky court held that such a preference was not repugnant to any statute or the settled policy of that state, and that therefore the title and possession of the New York assignee must be sus- tained.’ In Ockerman v. Cross‘ the assignment was valid under the laws. of Canada, where it was executed, but was not “ prepared, acknowl- edged or recorded” in conformity with the provisions of the New York statute. The possession of the property in New York was. 1 Hanford v. Paine, 32 Vt. 442. 2 Rice v. Courtis, 32 Vt. 460. And see Mead v. Dayton, 28 Conn, 33; Koster v. Merritt, 32 Conn. 246, 320 Fed. Rep. 894. 454.N. Y. 29. This case is distinguished by the learned judge in his opinion from Guillander v. Howell, 35 N. Y. 657. See. also, Howard National Bank v. King, 10 Abb. N. C. 346, where, in a contest between attaching creditors and an assignee in actual possession under a New Jersey assignment, the latter was. sustained. § 282.] TRANSFERS OF CHOSES IN ACTIONS. 373 ees transferred to the assignee. The commissioners of appeal (Lott, C. J.) were unanimously of the opinion that the details of the act were only intended to apply to assignments by a debtor or debtors residing i in this state. The assignment in other respects was not repugnant to the laws of New York. The last case was relied upon in a recent Maine case,! where a Rhode Island debtor assigned real estate in Maine by an absolute conveyance. A creditor who had acknowledged the assignee’s title was held to be estopped from attacking it on the ground that the formalities prescribed by the Maine ‘statute had not been observed. In Philson v. Barnes? the property attached was claimed by an assignee under an assignment executed in Maryland, but not re- corded in compliance with the laws of Pennsylvania. The title of the attaching creditor was sustained. And in a case in California, where an assignment had been made in Canton, China, by citizens of the United “States residing and doing business there, and was made complete by the delivery of the property to the assignees, it was held that though the assignment was not recognized by the law of California, it was sufficient to pass the property and entitle the assignees to be protected in their possession.* § 282. Transfers of Choses in Action. — With regard to choses in action it has been said that they can have no sééus other than that of the creditor. The prevailing rule in reference to this spe- cies of property appears to be that the validity of the transfer will in every instance be governed by the law of the place of contract.‘ In the case of Guillander v. Howell,’ Mr. Justice Peckham said: “A chose in action cannot surely be said to have any actual situs in the place where the debtor resides. As a general principle, it is payable at the residence of the creditor if not expressed other- wise, and a tender to be good must be made to the creditor. There would seem, therefore, to be no sound basis for the debtor’s state to legislate exclusively as to the legality of a transfer of that debt made by a foreign creditor. In such case, as in all others where the property transferred does not actually lie within the jurisdic- tion of another government, a sale or a contract valid where made is valid everywhere.” 1Chafee v. Fourth Nat. Bank, 71 Me, 514, 250 Pa. St. 230. 3 Forbes v. Scannell, 13 Cal. 241. The lew loci of the assignment in this case was held to be the particular law applicable to Americans residing in China and not the general law prevailing in the Chinese Empire. Id. 139. 4See Mowry v. Crocker, 6 Wis. 326; Smith v. Chicago & N. W. R. R. Co., 28 Wis. 267; Noble v. Smith, 6 R. I. 446; Speed v, May, 17 Pa. St. 92. 535 N.Y. 657. 374 — THE LEX LOCI. [cH. XXUIT- One Locke, of New Jersey, had money in a bank in New York city; in anticipation of an assignment he drew the money and turned it over to one Field, who deposited it to his own credit as. the representative of the future assignee. Locke executed the as- signment and the money was turned over to the assignee. It was. held that the assignee took a good and valid title under the assign- ment and could not be disturbed therein nor in the possession of the proceeds by attaching creditors of New York.’ In the case of Caskie v. Webster,? in the circuit court of the United States for the third circuit, a citizen of Virginia had made an assignment, valid by the laws of that state, of all of his prop- erty to another citizen of that state, for the benefit of such of his: creditors as should assent to certain terms set forth in it, and which were not allowed by the laws of Pennsylvania. Several creditors, chiefly of Virginia, assented. One item of the property assigned was a debt due by a resident of Pennsylvania; and be- fore the assignee could get the money from this debtor, a Penn- sylvania creditor, who had refused his assent, attached it for a debt which was due to him. Assuming such an assignment to be void if it had been made in Pennsylvania — which, however, the court thought it was not — one question in the case was whether this debt passed to the general assignee in Virginia, or was held by the attaching creditor in Pennsylvania. For the creditor, In- graham v. Geyer was cited as deciding the exact point. But the court (Grier, J.) said: “A debt is a mere incorporeal right. It has no setws, and follows the person of the creditor. A voluntary assignment of it by the creditor, which is valid by the law of his domicile, whether such assignment be called legal or equitable, will operate as a transfer of the debt which should be regarded in all places.” The learned judge went on to say: “In America, bankrupt or involuntary assignments by operation of law have not been considered as subject to this rule. But I know of no other established exception to the general rule that a transfer of personal property, valid by the law of the owner’s domicile, is valid every- where.” After observing that such decisions as Ingraham v. Geyer are not binding as authority beyond the states in which they were made, the court concludes as follows: “Sitting here as a court of the United States, we do not think that the different states of this Union are to be regarded, as a general thing, in the relation of states foreign to each other. Especially ought they not to be so regarded in regard to questions relating to the commerce of the 1Howard Nat, Bank v. King, 10 Abb. N. C. 846; following Guillander v. Howell, supra. 22 Wall. Jr. 181, oo8 Fie § 283.] THE DOMICILE OF THE PARTIES. ‘815 country, which is co-extensive with our whole land, and belongs not to the states but to the Union.” __ It is held also, in Ohio, that the principle of comity between states will enable the assignee of a chose in action, due in Ohio and assigned by a New York creditor, to collect the same in Ohio, notwithstanding the preferences in voluntary assignments allowed by the laws of New York, on the ground that in such cases the law of the creditor’s (assignor’s) domicile is controlling.! The same principle of comity has been observed by the Missouri courts in giving effect to a Kansas assignment of choses in action so as to defeat a subsequent attaching creditor in Missouri? § 283. The Domicile of the Parties.— Another general consid- eration governing the application of the rule giving effect to as- signments as between different states is the residence or domicile of the parties affected by their operation. The important qualifi- cation of the rule of comity which has just been noticed is limited in its terms to citizens of the state where the provisions of the as- signment are sought to be enforced. As against citizens of other states, and especially as against citizens of the state where the as- signment was made, the rule appears to hold without qualification that an assignment valid by the laws of the state in which it was ‘made is valid everywhere. The reason of this rule has been said to be “that the courts of a country will only violate that principle of comity which requires that sales valid where made shall be held valid everywhere, in favor of their own citizens, and in order to protect their rights, and that no such violation could be justified in favor of one who is seeking to go contrary to the laws of his own domicile.” In the case of Bentley v. Whittemore,’ in the New Jersey court of errors, where an assignment containing preferences, made in the state of New York between parties none of whom were residents 1FPuller v. Steiglitz, 27 Ohio St. 355. But see Paine v. Lester, 44 Conn. 196, which, in so far as its opinion goes, is a departure from the main current of au- thority, but the opinion seems to have been obiter. 2In Askew v. La Cygne Bank, 83 Mo. 366, the court defined the legal proposi- tion it had to decide as follows: ‘‘ Does a voluntary assignment for the benefit of all the creditors of the assignor, made in Kansas, of the debt due from a citizen of Missouri to the assignor, a resident of Kansas, pass the debt to the assignee so as to defeat a subsequent attaching creditor of the assignor in Missouri whose attachment is issued, and the debtor of the assignor garnished, after the assign- ment?” The court, after remarking that the laws of Kansas governing such assignments were substantially the same as those of Missouri, decided the propo- sition in the affirmative. And the same rule has been applied in Missouri to an Ulinois assignment which transferred a chose in action. Zuppann v. Bauer, 17 Mo. App. 678. 319 N. J. Eq. 462; reversing s. c., 18 N. J. Eq. 366, 376 THE LEX LOCI. [ou. xx1II. of New Jersey, was attacked by a non-resident judgment creditor on the ground that the assignment was invalid under the New Jer- sey statute prohibiting preferences, Mr. Chief Justice Beasley, after showing that the conveyance as to its ceremonious parts was in compliance with the laws of New Jersey, and that the assignment could therefore be avoided only on the ground that it was in dis- cordance with the policy of the laws of that state, proceeded as fol- lows: “I can imagine nothing that can be set up to invalidate it except the idea that the distribution of the assignment to which the conveyance is ancillary militates with the provisions of our statute upon that subject. Now, it is certainly not to be denied that if this incompatibility exists, the conveyance on the principle just admitted is completely inefficacious. But I have satisfied my own mind that there is no such inharmony as is supposed between the statute of this state and the regulation of this deed as they are now drawn in question. It is true that this assignment has cre- ated preferences which are forbidden by our laws, and that there- fore the deed accompanying it could not be set up against creditors resident in this state. But this does not touch the point of inquiry, which is, whether the laws of this government prohibit preferences between non-resident creditors under an assignment legal by the laws of the debtor’s domicile? Have we any statute inconsistent with such a disposition of the debtor’s property among foreign creditors? If we have, this conveyance, as I think, is certainly void; but if we have none such, then just as certainly it must be valid.” Then citing the case of Moore v. Bonnell,! he proceeds to show that such is not the effect of the New Jersey statute, and he adds: “ The true rule of law and public policy is this: that a vol- untary assignment made abroad, inconsistent in substantial respects with our statute, should not be put into execution here, to the detriment of our citizens, but that for all other purposes, if valid by the Zee loci, it should be carried fully into effect.” Thus, in Massachusetts, in a case where a citizen of Rhode Island, by a bipartite deed of assignment to which his creditors were not parties, conveyed all his property in trust to an assignee for their benefit, it was held that such assignment was valid in Massachu- setts, as against a citizen of Rhode Island who had attached a por- tion of the property in Massachusetts; it being valid against attach- ing creditors by the laws of Rhode Island? The same rule was laid down in another case, decided shortly after, between parties standing in the same relation.* In another case in the same state, 131 N. J. 1.90. 2 Whipple v. Thayer, 16 Pick. 25. 3 Daniels v, Willard, 16 Pick. 36. _ § 283.] THE DOMICILE OF THE PARTIES. 377 an assignment made in New York, and valid there, was held valia against a subsequent attachment by a citizen of New York of prop- erty in Massachusetts, although such assignment would have been invalid in Massachusetts against dissenting creditors.! So in the case of Bohlen v. Cleveland,? in the circuit court of the United States for Massachusetts, where goods on consignment at Boston were, on the failure of the owners, assigned for the benefit of cred itors, and, before notice of the assignment could be reasonably given to the consignees, another creditor of the debtors attached them by a trustee process in Boston, the debtor and the creditors being citizens of Pennsylvania, it was held that the assignment would overreach the trustee process. So in Louisiana it has been held that an assignment of personal property in trust for the pay- ment of particular creditors, by preference, made in another state, under whose laws it was valid, between parties all of whom resided in that state, the property having been delivered to the assignees by the effect of the notice of the assignment previously served on garnishees, would protest the property, though subsequently found in Louisiana, from attachment in the latter state at the suit of a creditor who resided in the state in which the assignment was made and whose debt was contracted and payable there.’ So in Connecticut, where a debt due from an incorporated company in that state to a citizen of Ohio was assigned by him in Ohio, with other property, to another citizen of Ohio, in trust for his credit- ors, but the assignment was not lodged for record in the office of any court of probate in Connecticut (as required of assignments made in that state), it was held that such assignment, being valid by the laws of Ohio, was valid also in Connecticut against the sub- sequent attachment of a creditor residing in Pennsylvania.* So in New Hampshire, where a general assignment of property for the benefit of creditors was made by a citizen of Massachusetts in con- formity with the laws of that state, it was held to operate to trans- fer a debt due from a citizen of New Hampshire, as against credit- ors of the assignor, who were citizens of a foreign government and who attempted to appropriate a debt in New Hampshire to the payment of their demand by means of the trustee process.® 1 Burloch v. Taylor, 16 Pick. 335. 25 Mason, 174. Richardson v. Leavitt, 1 La, Ann. 430, 4 Atwood v. Protection Insurance Co., 14 Conn, 555. 5 Sanderson v. Bradford, 10 N. H. 260. The same principle was applied in the case of Thurston v. Rosenfield, 42 Mo. 474. See Brown v. Knox, 6 Mo. 302. The general rule was applied in Chaffee v. Fourth Nat. Bank, 71 Me. 514; First Nat. Bank v. Hughes, 10 Mo. App. 7; Pierce v. Crompton, R. I. Index O, 18. But in Paine v. Lester, 44 Conn, 196, 204, the court would abolish all distinction between citizens of Connecticut and citizens of sister states. 373 THE LEX LOCI. [cH. XXIIt. In the late Massachusetts case of Faulkner v. Hyman? it was held that an assignment of property executed in another state by a debtor domiciled there, for the benefit of his creditors, which is valid by the law of that state but invalid by the law of this com- monwealth, because not executed or assented to by the creditors, will not be upheld by this commonwealth as against attaching creditors of the assignor constituting a partnership, although some of such creditors are domiciled in the state where the assignment was executed and where the firm has a place of business and some in another state, others being domiciled and the firm having its usual place of business here. In the case of Richardson v. Rogers? the court decided that an assignment for the benefit of creditors executed in another state, but with express reference to Michigan, and intended to have its first operation in Michigan, is to be treated, in passing upon its validity, as if originally executed in Michigan. § 284. Assignments with Preferences.— We may now consider the principles stated in their application to assignments giving preferences. In regard to voluntary assignments with preferences it is laid down by Mr. Justice Story * that they must, as to their validity and operation, be governed by the lew loc? contractus. It they are valid there (that is at the place where the contract or assignment is made), full operation will ordinarily be given to them in every other country where the matter may come into liti- gation and discussion. But it is,as the same author remarks,‘ a very different question whether they shall be permitte:| to operate upon property locally situated in another country, whether mov- able or immovable, by whose laws such a conveyance would be treated as a fraud upon the unpreferred creditors. There appears, however, to be no uniform settled rule on this point in the United States. In a case in Louisiana an assignment made in Pennsylva- nia and giving preferences, though not in conformity, in this re- spect, with the laws of Louisiana, was sustained by the court, who, after a protracted and elaborate discussion, laid down the rule that. an assignment of property to trustees for the benefit of the cred- itors of the assignor, legal and valid by the laws of the state in which it was made, and accompanied by delivery,° will be respected 1142 Mass. 58; 6 N. E. Rep. 846. 245 Mich. 591; 8 N. W. Rep. 526, 3 Story’s Confl. of Laws (ed. 1852), § 423. 4Id., citing Andrews v. His Creditors, 11 La, 476, 477. 5It will be seen that delivery is here stipulated for as an essential requisite to the operation of the assignment. This was following the principle of Oliver v. Townes, 2 Mart. N. S. (La.) 93, and the court supposed the case of Ingraham v. § 284.] ASSIGNMENTS WITH PREFERENCES. 379 in that state; and that such contracts must be governed by the law of the place where they were executed.! So in the case of Dundas v. Bowler,’ in the circuit court of the United States for Ohio, where an assignment made in Pennsylvania, and giving pref- erences as then allowed in that state, included a mortgage of land in Ohio, where, by statute, assignments with preferences were de- clared to inure to the benefit of all the creditors, it was held to operate according to its terms, unaffected by the Ohio statute. And in Connecticut it has been decided that a common-law assign- ment made by a debtor in another state, good by the laws of that state, will convey to the assignee debts due the assignor from per- sons residing in this state who are notified of the assignment, al- though it prefer creditors and would not have been valid if made in this state. So in Pennsylvania it is held that a resident of a foreign state cannot, by foreign attachment in this state, obtain a preference over a citizen of another foreign state in an assignment or sequestration for the benefit of creditors. The only exception is in favor of citizens of this state.‘ But in Delaware it has been de- cided that an assignment with preferences made in another state where it was valid would not be sustained against a subsequent attachment by a citizen of Delaware of effects of the insolvent found in that state.® And in a case in Massachusetts an assign- ment of property in Massachusetts made in New York by insolvent citizens of that state, and giving preferences to certain creditors. also citizens of New York, was held to be ineffectual as against a. subsequent attachment made in Massachusetts by a citizen of that. state.6 In deciding this case it was remarked by the court (Thomas, J.) that “the law of New York, proprio vigore, cannot. Gseyer, 13 Mass. 146, to turn on the same point. See, also, Fuller v. Steiglitz, 27 Ohio St, 355. 1 United States v. Bank of the United States, 8 Rob. (La.) 262, cited and relied on in Forbes v. Scannell, 13 Cal. 242. 23 McLean, 397, 3 Egbert v. Baker, 58 Conn. 319; 20 Atl. Rep. 466. 4 Long v. Girdwood, 150 Pa, St. 413; 24 Atl. Rep. 711. 5 Maberry v. Shisler, 1 Harr. (Del.) 349. 6 Zipcey v. Thompson, 1 Gray, 248. See, also, Guillander v. Howell, 35 N. Y.. 657, where a New York assignment with preferences was held inoperative in New Jersey as against a subsequent attaching creditor resident there. In Train v.. Kendall, 137 Mass. 366, an assignment with preferences, made in New York by a debtor there and assented to by creditors holding claims exceeding in amount the value of the property assigned, was held to be valid as against a subsequent attaching creditor in Massachusetts. It was said by the court that under the public statutes of Massachusetts such preferences were ‘‘ only voidable by an assignee in insolvency,” and as the debtor could not be adjudged insolvent in Massachusetts, no assignee in insolvency could take proceedings to avoid the New York assignment. This case is followed in Michigan in Butler v. Wendell, 28 N. W. Rep. 460. 380 THE LEX LOCI. [ou. xxi. obtain here. It derives its effect only from the rule of comity, and that rule refuses to give force to laws of other states which di- rectly conflict with the policy of our own.” And again: “ No comity can require us to give effect to an assignment made in an- other state, which is not only against our well-settled policy but against our direct legislation, and the effect of which would be to give a preference to citizens of other states over those of our own.” ! In the case of Brown v. Smart? it was held that an insolvent law of the state providing that any conveyance of property within the state made by a citizen of the state, being insolvent, within four months before the commencement of proceedings of insolvency, that contained preferences should be void, and should be a cause for adjudging him insolvent and appointing an assignee to take and distribute his property, does not, as applied to a case in which the preferred creditors are citizens of other states, impair any right of the debtor under the constitution of the United States, and such an adjudication, though made without notice to such credit- ors, and declaring void the conveyance made for their benefit, can- not, upon its affirmance by a higher court of the state, be reviewed by this court on a writ of error sued out by the debtor only. As the laws of New Jersey prohibit assignments with prefer- ences, it is there held that such an assignment, made in New York, gives the assignee no title to either real or personal property of the assignor in New Jersey.’ And so in Minnesota it is held that the insolvent laws of that state are effectual as to non-residents of the state, so far as to con- trol the disposition of property in that state.‘ 1 Zipcey v. Thotapson, 1 Gray, 245. In the Georgia cases of Stricker v. Tink- ham, 35 Ga. 177, and Mason v. Stricker, 37 Ga. 262, where the assignment, exe- cuted in Tennessee, covered property in Georgia, and contained preferences which were allowed under the laws of Tennessee but not under the laws of Georgia as they then stood, the courts of Georgia refused to enforce the contract. In the Missouri case of Kitchen v. Reinsky, 42 Mo. 427, which was an assign- ment executed in New York between citizens of that state, in an action between the assignee and an attaching creditor, Fagg, J., observed: ‘It is admitted that as to the parties to the assignment the rule would hold without qualification, that if it is valid by the laws of the state of New York it is to be regarded here.” But the court held the assignment invalid under the New York law. See Bryan v. Brisbin, 26 Mo. 423. But in the case of Thurston v. Rosenfield, 42 Mo, 474, where the attaching creditor was a resident of the state where the assignment was made, the court refused to disturb the assignment to the prejudice of the interest of creditors residing in Missouri. 2145 U.S. 454. ° 3 Easton Nat. Bank v. Halshizer, 24 N. Y. W. Dig. 266. 4 Macdonald v. First Nat. Bank, 47 Minn. 67; 49 N. W. Rep. 395, CHAPTER XXIV. CONSTRUCTION OF ASSIGNMENTS. § 285. General Rule. 286. Description of Property — What Passes by the eee NEEDY 287. Designation of Debts to be Paid. 288. Stipulation for Release of Assignor. 289. Authority to Assignee. 290. Liability of Trustee. 291. Effect of Release Subsequent to the Assignment. 292. Construction of Particular Words, § 285. General Rule.— After an assignment has gone into oper- ation, courts are frequently called upon to construe it, either as a whole or in one or more of its clauses or provisions; it being well established that it is the province of the court to pronounce upon the legal effect of a provision in an assignment, and that the sub- mission of such a question to the jury is error.! Thus, they may be called upon to determine the general character of the instru- ment, as whether it is to be regarded as an assignment or a mort- gage;? or to pronounce upon its general effect as tending to hin- der, delay or defraud dreditors; or upon the tendency of some particular trust or provision to the same result; or, finally, to inter- pret some clause or words, or even a single word, where the ob- ject is not to impeach the validity of the instrument, but to aid its operation according to its proper meaning. The present chapter will be devoted to the subject of construction, so far as it falls under the last of these heads.® The general rule applied by the courts in the construction of as- signments is that well-known one expressed by the maxim, ut res magis valeat quam pereat: the instrument in question shall rather be made available than suffered to fail. Such a construction will 1Sheldon v. Dodge, 4 Den, 217; Cunningham v. Freeborn, 3 Paige, 557; Good- rich v. Downs, 6 Hill, 488, 2See ante, p. 13. 2?The construction of assignments, so far as it tends to invalidate them, has been already incidentally noticed in the course of this work, and will be further considered under the head of ‘Fraudulent and Void Assignments,” post, chap- ter XXV. 4Cowen, J., in Darling v. Rogers, 22 Wend. 483, 488. The learned judge in this case referred to that provision of the New York Revised Statutes which declares that in the construction of every instrument creating or conveying, or authorizing the creation or conveyance of, any estate or interests in lands, it shall 382 CONSTRUCTION OF ASSIGNMENTS. [cH. XXIV. be given to the assignment as will carry into effect the intention of the parties! The deed is to be construed by the res geste; and thus courts are permitted to look to the circumstance and motives which led to its execution and the objects to be accomplished.’ Where it is ambiguous in its terms and admits of two construc- tions, that interpretation should be given to it which will render it legal and operative rather than that which will render it illegal and void. Under the maxim above cited the courts have upheld assignments void in part (as containing a trust prohibited by stat- ute), if otherwise valid; the maxim being held to apply as well where what is void is declared so by statute as where it is so at common law, unless the prohibitory enactment declares that the deed by which the thing is done shall be void.* be the duty of courts of justice to carry into effect the intent of the parties so far as such intent can be collected from the whole instrument and is consistent with the rules of law. 1 Rev. Stat. [748], 740 (2d ed.), § 2; 3 B.S, (Vth ed.), p. 2205; R. S. (8th ed.), p. 2461, § 2. 1Coverdale v. Wilder, 17 Pick. 181; Emigrant Industrial Savings Bank v. Roche, 93 N. Y. 874; Coffin v. Douglas, 61 Tex. 406. 2 Bellamy v. Bellamy’s Adm’r, 6 Fla, 62. 3 Sutherland, J., in Grover v. Wakeman, 11 Wend. 187, 192. In Brigham v. Tillinghast, 15 Barb. 618, it was said of assignments giving preferences, that so long as they are tolerated they should receive the same reasonable and fair con- struction which every agreement inter partes receives from courts of justice. Allen, J., id. 620; Baum v. Pearce, 67 Miss. 700; 7 8S. Rep. 548; Mattison v. Judd, 59 id. 99; Lincoln v. Field, 54 Ark, 47; 168. W. Rep. 288; Crook v. Rind- skoff, 105 N. Y. 476; 12 N. E. Rep. 174. Assignments are to be construed by the general rules for the construction of written instruments, to wit: that a con- struction will be preferred which will uphold rather than one which will de- stroy them, and that in construing a particular clause the whole contract may be considered. Bagley v. Bowe, 105 N. Y. 171; 11 N. E. Rep. 386; 59 Am. Rep. 488. See Mayo v. Sneed, 78 Ky. 634; post, p. 384,n.4. In Bank of Mobile v. Dunn, 67 Ala, 881, it was said assignments for the benefit of creditors are subject to the same rules of construction which are applied to other contracts or conveyances and the circumstances surrounding the parties when the assignment was exe- cuted, the motives to its execution and the objects to be accomplished should, if there is a want of clearness in its terms, leaving the intention doubtful or uncer- tain, be regarded in construing them. 4 Darling v. Rogers, 22 Wend. 488. In the case of Brigham v. Jones, 48 Kan. 162; 30 Pac. Rep. 118, it was held that where the general form and nature of the in- strument executed by an insolvent debtor to a trustee for the benefit of creditors is that of a general assignment, it should be so regarded, and a provision therein directing the trustee to distribute the estate in a manner inconsistent with the statute relating to general assignments will not avoid the conveyance, but should be treated as a nullity by the assignee, and the estate distributed by him as the statute prescribes. Statutes affecting the common-law right of assignment are to be strictly construed. Pond v. Sweetser, 85 Ind. 144. Inthe case of Cun- ningham v. Norton, 126 U.S. 77; 88. Ct. Rep. 804, it was held that whether a defect or irregularity in an assignment for creditors under state statutes will in- validate the whole instrument or only the particular provision will depend on whether the general policy of the statute is to restrain or favor such assign- ments. See Schoolher v, Hutchins, 66 Tex. 324; 1 S. W. Rep. 266. On the § 286.] DESORIPTION OF PROPERTY. 383 The portions or clauses of an assignment which must frequently become the subject of judicial construction or interpretation are those containing a description of the property assigned and a des- ignation of the debts to be paid; those containing stipulations for a release of the debtor; and those conferring particular powers on the assignee. § 286. Description of Property — What Passes by the Assign- ment.— Under this head ' the following cases of construction have been decided: A. & B., partners in trade, conveyed to C. “all their, the said A. & B.’s, real and personal estate, whatsoever and wheresoever, and all their estate, right, title and interest in the same,” etc., in trust to sell and dispose of the same, and to collect the debts due to them, “for the firm aforesaid,” and out of the proceeds of the sale and the money collected to pay the debts of the partnership. The deeds recited the inability of the firm to pay their debts, but no mention was made of separate debts; throughout the deed the names of the partners were mentioned together; and if a surplus remained after satisfying their creditors, it was directed to be “returned, reconverted and assigned to the said A. & B., their executors, administrators and assigns.” At the date of the deed the partnership did not hold any real property ; but A. was the owner of real estate in his separate capacity. It was held that the separate real estate of A. passed by the assign- ment.? In a case* in Connecticut an assignment was made by two part- ners of “all our real and personal estate and claims and choses in action of every kind whatsoever and wheresoever situated, except property by law exempt from execution.” This was held to carry individual as well as partnership property. On the other hand, separate assignments by the several members of a copartnership of all their property to the same assignee carry their firm property.‘ Where an assignment for the benefit of creditors recited that question of the construction and effect of the state statutes regulating assign- ments for creditors the decisions of the highest court of the state are controlling in the federal courts. Union Bank of Chicago v. K. C. Bank, 136 U. S. 228; 10 S. Ct. Rep. 1013. 1See, also, ch. VI. 2 Wharton v. Fisher, 28. & R. 178. 3Von Wettberg v. Carson, 44 Conn. 287; Coggill v. Botsford, 29 id. 445. Simi- larly in Texas. Coffin v. Douglass, 61 Tex. 406. And in a case in Kansas, an as- signment executed by partners was held to be general, and to include separate as well as firm property, though where the names of the assignors occur in the deed they are immediately followed by ‘‘copartners” or ‘‘ partners,” these words being regarded as mere descriptio persone. Williams v. Hadley, 21 Kan, 350. See, also, Malcolm v. Hodges, 8 Md. 418. 4 Boughton v. Crosby, 47 Conn. 577; Stiness v. Pierce, 18 R. I. 452, 384 CONSTRUCTION OF ASSIGNMENTS. [cH. XXIV. the assignor was willing to assign “all his goods, chattels and effects,” and then proceeded to grant, transfer, etc., “the follow- ing named goods and chattels, viz.:” enumerating certain articles. of household furniture, agricultural implements, cattle, “bonds and notes,” “and other articles of furniture, goods and chattels, and effects, which I now own or possess, excepting only thereout so much as is allowed by the insolvent laws to insolvent debtors ;” habendum, in trust, to sell the same at public or private sale, and to apply the money arising therefrom to the payment of certain debts, it was held that the terms were broad enough to pass choses: in action to the trustee, and therefore that such trustee had the right to control an execution which had issued on a judgment ob- tained for a debt due to the assignor.' Real and personal estate was devised to A. in trust, to pay the rents, profits and income to B. during his life, and after the death of B. to convey the same estate to C., his heirs, executors, admin- istrators and assigns, for his own sole and proper use, without the- control of any person whomsoever, “and without being subject or liable to his debts, contracts or engagements.” During the life- time of B., C. marie an assignment of all his estate and effects to assignees for the benefit of creditors. It was held that his interest. under the will passed to the assignees. A voluntary assignment was made to trustees of “the lands. and tenements, estate, real and personal and mixed, of what nat- ure and kind soever, and wheresoever the same may be, merchan- dise, vessels, goods, moneys and effects, and debts due, owing or coming due, or belonging” to the assignor. It was held that the assignment would not pass a claim against the United States for wrongfully preventing the assignor, owner of the lands in Florida, from cutting and removing the timber therefrom.’ But it has also been held that a clause in an assignment convey- ing “all that they (the assignors) have in satisfaction of their debts. and all debts due” to them included a demand pending in court against certain railroad companies for damages to a foundry and to an incorporeal hereditament appurtenant thereto.‘ In a case in Michigan’ the assignment was of “all his (the debt- or’s) estate and effects, real and personal, of every nature and kind whatsoever.” This was held a sufficient description to pass title to the assignee as against the assignor and wrong-doers, 1 Dowdel! v. Hamm, 2 Watts, 61. “Stuckert v. Harvey, 1 Miles, 247, 3 Sibbald’s Estate, 18 Pa, St. 249. 4 Mayo v. Sneed, 78 Ky. (1 Rodm.) 634, 5 Burrows v. Keays, 37 Mich. 480. (This was an action of trover by the as- signee under a foreign insolvent law against the assignor.) § 286.] DESORIPTION OF PROPERTY. 885 The words “all the goods, chattels and effects, and property of every kind, personal and mixed,” do not include real estate.! In a case in Maine, under the statute of 1836 concerning assign- ments, an assignment was made in general terms, sufficiently broad to embrace all the property of the debtors, of whatever name or nature (except such as was exempt from attachment), “as will appear by the schedule under oath, and hereunto annexed, which is intended to give only a general description of the prop- erty assigned, subject to such further enlargement or diminution in value as a particular and minute survey of the property shall justify.” Such schedule was annexed. The assignors made oath that the assignment embraced all their property except such as the law exempted from attachment, as appeared by the certificate thereof by a magistrate. It was held that the assignment passed all the property of the assignors which was required by the statute.’ In a case in New York, where a devisee of real estate, to whom also a personal estate had been bequeathed, charged with the pay- ment of debts, assigned “all his share and claim in and to the per- sonal estate of the testator, and in and to all moneys which then were or might thereafter come into the hands of the executors, arising from any property or estate of the testator;” and the executors had, previously to such assignment, sold a portion of the real estate devised, under a surrogate’s order, for the payment of debts, by reason of a deficiency of personal estate; and, subse- quently to the assignment, other assets were discovered and re- ceived by the executors, it was held that the equitable right of such devisee to be indemnified for the sale of his real estate out of assets and moneys subsequently discovered and received by the executors passed to the assignee, although not specially mentioned in the assignment, and although it did not appear that the assignor knew of the fund in question.? In a case in Florida, where an assignment, after specifying cer- tain slaves by name, and also enumerating other personal property of the debtor, contained a general cleise conveying “all his per- sonal effects of every name, nature and description,” etc., it was held to embrace things ejusdem generis with those which had been mentioned before, and to convey, for the purposes of the trust, any other slaves which then belonged to the grantor, and not be- fore specified by name, and especially where the res geste favors that construction; but not to pass real estate or equity of redemp- 4 Rhoads v. Blatt, 84 Pa. St. 31. See Price v. Haynes, 37 Mich. 487; Seifreid v. People’s Bank, 2 Tenn. Ch. (Cooper), 17. 2 Pike v. Bacon, 21 Me. 280. 3 Couch v. Delaplaine, 2 N. Y. 397. 25 386 CONSTRUCTION OF ASSIGNMENTS. [cH. XXIV. tion in land.!' In the same case it was held that where an assign- ment conveyed “all the future cotton crops made on said planta- tion,” an estate was conveyed commensurate with the trust; and although it did not pass the equity of redemption in the land, yet it was a fiduciary license, lease or conveyance thereof, and of all that was necessary to the management of the plantation and ap- propriation of the crops, for the objects and purposes of the trust.’ It is a recognized rule of construction that where a general clause in a conveyance is followed by special words in accord therewith, the grant will be limited to the special matter. There- fore by a conveyance of “all of our property of every description, the same being embraced in a schedule herewith annexed,” only the property in the schedule will pass.’ But this rule is subordinate to the paramount and more general rule which requires that all instruments shall be so construed as to give effect to the intention of the parties. An assignment which conveys all the real, personal and mixed property of the debtor, and purports to give a schedule thereof, followed by the clause “and any and all other property not exempt from execution which by oversight may have been omitted in the foregoing list,” was held in Kentucky to pass to the assignee the income of prop- erty held in trust for the benefit of the debtor, although it is not mentioned in the schedule.® In the case of Loomis v. Griffin® the deed of assignment con- veyed “all and singular, each and every article and thing owned by me in the nature of chattel property, not exempt from sale on execution, and each and every right and credit owned, held and belonging to me in my own right and not exempt from execution.” The court held that the assignment was not invalid on the ground that it did not in terms refer to real estate, especially where it is not shown that the assignor had any such property; but that, until the contrary is shown, it must be preswmed that it was de- signed to include the property subject to execution which the assignor then owned. In England, under an assignment to creditors by a debtor of all his stock in trade, book and other debts, goods, securities, chat- tels and effects whatsoever, except the wearing apparel of him- 1 Bellamy v. Bellamy’s Adm’r, 6 Fla, 62, 2 Tbid. 3 Belding v. Frankland, 8 Lea (Tenn.), 67. See ante, p. 142, n. 4. 4 Emigrant Industrial Savings Bank v. Roche, 93 N. Y. 374, 5 Knefler v. Shreve, 78 Ky. (1 Rodm.) 297, And in Union Nat. Bank v. Bank of Commerce, 94 Ill. 271, a deed was held to include, properly construed, all the individual creditors, though the names of some of them were not in a schedule subsequently filed. 678 Iowa, 482; 48 N. W. Rep. 296. § 287.) DESIGNATION OF DEBTS TO BE PAID. 387 self and his family, it was held that a contingent interest in the residuary estate of a testator (to which the debtor was entitled in the event of his sister dying without a child) passed.! § 287. Designation of Debts to be Paid.— Where an assign- ‘ment was made to three persons, the debts due to the assignees, or either of them, to be first paid, it was held in Maine that a debt due to a firm of which one of the assignees was a member was within the provision for a preference.? But an assignment to two persons to secure their liabilities for the assignor does not secure their several liabilities? In New York, where one of the trusts in an assignment was to pay to L., one of the assignees, such ‘sums of money as should from time to time be due to him from the assignors, and all such sums of money as he then was or should thereafter become liable to pay, or should pay on account of the assignors, as indorser or otherwise, it was held by the court of chancery that the moneys here referred to, which L. might thereafter pay or become liable to pay on account of the assignors, were only meant to include such as he might pay or become liable to pay by reason of indorsements or other contingent responsibili- ties which he had already made or incurred on their account. In Pennsylvania, where an assignment was made of all the assignor’s estate and effects in trust, among other things, “to pay and dis- charge all the debts that were by him (the assignor) then due, or were owing or growing due, to such of his creditors as should (within a certain time) execute a release,” etc., it was held that a bank by which a note drawn by A. for the accommodation of the assignor was discounted was entitled to the benefit of this provis- ion in the assignment.’ In another case in the same state, under an assignment made for the payment (among others) of “all accommo- ‘dation notes subscribed or indorsed for the assignors so as to exon- erate the makers or indorsers of the said notes from their liability therefor,” it was held: 1st. That a d¢// drawn on the assignors for their accommodation in favor of and indorsed by the drawer, and accepted and negotiated by the assignors, was within the prefer- ence given by this clause. 2d. That the holders of such accommo- dation notes were entitled to be paid only what remained after deducting the balance due to the assignors from the subscribers or indorsers on other accounts.6 And in a leading case in the same 1 Ivison v. Gaissiot, 27 Eng. Law & Eq. 483, 2 Wilson v. Hanson, 12 Me. 58. 3 Yelverton v. Sheldon, 2 Sandf. Ch. 481. 4 Barnum v. Hempstead, 7 Paige, 568, 570, 571. ‘5 Bank of Pennsylvania v. McCalmont, 4 Rawle, 307. * Da Costa v. Guieu, 7S. & R. 462, 388 CONSTRUCTION OF ASSIGNMENTS. [ow. xxv. state, where the Bank of the United States had made an assign- ment of assets exceeding $12,000,000 to pay depositors and hold-. ers of notes of the former and of the bank then existing, “ being notes of the ordinary kind, payable on demand, and commonly used in circulation,” and also to “sundry persons, holders of notes of the said bank commonly called post-notes,” with certain excep- tions, and the assignment further provided that the bank had “ re-- solved and agreed to provide an adequate security for the payment of the said deposits and of the said notes and of the said post-. notes,” except, etc., “and of the interest to accrue upon them,” etc., it was held that the post-notes meant in the said assignment. and designed to be secured by it were such notes payable at a future day as were designed as a part of the circulating medium, and that the assignment did not include notes or obligations of the bank under seal payable at a future day in London, each one being for £1,000 with interest, which were issued for a loan of money to: the bank and which were not designed to be a part of the circula- tion of the bank.! In another case in the same state, where a deed had been made in trust to pay debts and afterwards to pay certain other sums to divers donees, the clauses directing such payments. being numbered successively, but no other indication appearing that such donees were to be paid in their order, it was held that,. in case of deficiency, they were to be paid pro rata. And in the same case it was further held that a trust to pay “all debts due by A. B.” did not authorize the trustee to pay promissory notes sub- sequently given by A. B. without consideration and as voluntary gifts.* In Alabama it has been held that a deed of trust providing that the trustees shall pay all debts described in the deed for which the: complainant was liable, or liable in any other manner, and after- wards providing for creditors generally, did not authorize the- trustee to pay the complainant as a preferred creditor any other debts than those paid by him as surety. But in a case in Tennes- see, where a deed of trust purported to convey property “as a se- curity for all the debts for which the cestuc que trust therein. named had become liable,” it was held that it was not to be con- strued as merely for the indemnity of the said cestud que trust alone, but that every other creditor having an interest under the same had aright to compel the trustee to appropriate the pro- ceeds of the property to the satisfaction of his debt, even in the event of the discharge of the cestui que trust named from all liabil- 1 Hogeg’s Appeal, 22 Pa. St. 479, 2 Greenfield’s Estate, 24 Pa. St. 282, 3 Ibid. 4 Gilchrist v. Gilmer, 9 Ala, 985. § 287] DESIGNATION OF DEBTS TO BE PAID. 389 ity; and that in such case it was the duty of the trustee to protect the property and hold it subject to the trusts declared! In a case in Alabama the debtor assigned all his individual property for the benefit of his individual creditors, who were to be paid in full, and ‘directed the surplus to be applied equally to the payment of the debt due several mercantile partnerships of which he was a mem- ber. It was held that a debt, due by another dissolved partner- ship not especially named, of which the assignor was a member, and whose debts on its dissolution he assumed and promised to pay, was an individual debt within the terms of the assignment.’ In a case in Massachusetts where, in a schedule of preferred de- mands annexed to an assignment, a debt was designated as “8. & T.’s drafts (accepted by the debtors), for which they hold a mort- gage of B. W.,” etc., it was held that the trust was not personal to 8. & T., but that the holders of the draft to whom it had been in- dorsed before the making of the indenture were entitled to the benefit of the trust.2 So, in New York, where an assignment con- tained a clause directing the assignee to pay, in the first class of debts, every sum of money owing by the assignors, whether then ‘dune or to become due and payable thereafter, for which D. & F. were indorsers or sureties, etc., it was held that, under this provis- jon of assignment, persons who had accepted and paid drafts drawn upon them by the assignors, on the credit of property con- signed to the drawees, to be sold on commission, and which drafts had been indorsed by D. & F., were not entitled to be paid the amount of such drafts out of the assigned funds as preferred cred- itors of the assignors.! It was also held that the acceptors of the drafts were to be considered the principal debtors, and the drawers only the sureties; and that, consequently, the assignors were not debtors, and did not owe the sums of money secured by the drafts, within the meaning of the provision in the assignment.? So where the assignor, as a part of the class of his preferred debts under tue assignment, directed his assignees to pay to H. J., his agent in New York, and to several other persons named therein, the amount of all such notes, checks or drafts as they, or any of them, had made, indorsed or accepted for his accommodation, it was held that the owners of the several notes and drafts which had been indorsed or accepted for the accommodation of the as- 1 Jones v. Hamlet, 2 Sneed, 256. 2 Bank of Mobile v. Dunn, 67 Ala, 381. 3 Ward v. Lewis, 4 Pick. 518. See Heilner v. Imbrie, 6 Serg. & R. 401. Fora case where the assent of creditors was construed to operate as payment of their claims, see Dickinson v. Metacomet Nat. Bank, 180 Mass. 182, 4 Doolittle v. Southworth, 3 Barb. 8. C. 79. 5 Ibid, 390 CONSTRUCTION OF ASSIGNMENTS. [CH. XXIV. signor by H. J. previous to the execution of the assignment, and which notes and drafts he was legally liable to pay to the holders: thereof, by reason of such indorsements or acceptances, were enti- tled to be placed in the class of preferred creditors in the distri. bution of the assigned fund, as H. J. would himself have been, placed there if he had actually paid and taken up such notes and. drafts with his own funds.! . The following important cases of construction have occurred in Pennsylvania. In Heilner v. Imbrie? the facts were these: A. & B.. by deed conveyed all their estate in trust to pay “1st, the follow- ing named persons [naming them] the following sums, etc., for money lent,” etc. “2d, to pay and satisfy the following named persons the following sums of money, being for notes lent and in- dorsements, to wit: O. & Co., 2,053 dollars; to D. & E., 6,490 dol- lars.” Provided that no one of the debts before mentioned shall have any preference, but the same shall be paid ratably according to their respective amounts,” etc. And “provided that no one of the creditors preferred and named as aforesaid on whose paper the said assignors should be and remain indorsers should receive their proportions until they should have taken up the said notes,. or otherwise freed them from their responsibility as indorsers.” Prior to the assignment, A. & B. had drawn four notes, amounting together to $2,053, which became due after the assignment, and were indorsed by C. & Co. for the accommodation of A. & B., and: were given to D. & E. for goods sold by the latter to A. & B. On the day of the date of the assignment D. & E. executed a release to the assignors; and at the execution of the assignment the as- signors were not indebted to C. & Co., who, on the contrary, were indebted to the assignors. It was held that the preference was. not given to C. & Co. personally, but to the four notes indorsed by them; and that D. & E., in whose hands they were, might re- cover the amount due on them in an action brought in the name of C. & Co. for their use. In Hacker v. Perkins * the facts were these: An assignment was. made by P. 8. & Co. of all their estate and effects, in trust for the payment of creditors by classes, the provision for the second class being in these words: “2d, to pay and satisfy all and every sum and sums of money borrowed by the said firm from individuals or firms, and for which either the bond or promissory note of P. 8. & Co. has been given, and fully to indemnify and save harmiess all and every individual and firm of and from all loss for or by reason of 1Pratt v. Adams, 7 Paige, 615. 26 Serg. & R. 401. 35 Whart. 95. § 287] DESIGNATION OF DEBTS TO BE PAID. 39t any promissory note, draft or bill of exchange, drawn, indorsed and accepted, or signed by him or them, for the accommodation of the said parties of the first part.” The plaintiffs had about a year be- fore the assignment sold goods to P. S. & Co. for which the notes of the latter were taken. When these notes became due P. S. & Co. were in difficulties, and the plaintiffs agreed to renew the notes upon the payment of part. The original notes and many of those given in renewal were deposited by the plaintiffs in the bank, and some of both kinds were discounted at the bank for the plaintiffs, and some had been transmitted by the plaintiffs to their corre- spondents for the price of whose goods, sold by the plaintiffs to P.S8. & Co., they had been taken. The method pursued by the parties was this: When a note became due, P. 8. & Co. took a new note for the amount they wished renewed, adding interest, to the counting-house of the plaintiff, and received from them their check or money for the amount of the new note; P. 8S. & Co. then drew the amount of the plaintiff’s check out of bank and applied that money towards the taking up of the old notes, they (P. S. & Co.) paying the difference between the notes and the interest with their own funds. The notes were thus reduced and renewed from time to time. It was held that the plaintiffs were not entitled, in re- spect to these notes, to come in as creditors of the second class. In Coverdale v. Wilder! (a Massachusetts case) the facts were these: An indenture by which a debtor made a general assign- ment of his property in trust for the benefit of his creditors pro- vided that the assignees should first satisfy and pay unto any deputy-sheriff all claims or incumbrances he might have upon any of the property assigned by virtue of any attachment thereof upon any legal precept. A deputy-sheriff who had made such an at- tachment became a party to the indenture, but the action was not. discontinued. The assignor died and a commission of insolvency was issued upon his estate, and so the attachment was dissolved. The attaching creditor summoned in the administrator and re- covered judgment. Upon a bill in equity brought by the attach- ing creditor and the attaching officer against the assignees, it was held that the execution of the assignment by the officer inured to the benefit of the attaching creditor; that the intent of the assign- ment was that the debt due to such creditor should be paid and not merely that his lien should be removed; that his continuing his action in court was not a waiver of his right under the assign- ment, and that he was entitled to recover the amount of his orig- inal claim with so much of the costs as had accrued before the execution of the assignment. 117 Pick. 178. 392 CONSTRUCTION OF ASSIGNMENTS. [cH. XXIV. In Colgin v. Redman! (an Alabama case), a deed of trust con- tained the following provisions, viz.: “They [the trustees] shall pay and satisfy the following debts of the party of the first part in the following order, to wit: first class,” etc. [naming them]. “The above demands compose the first class of preferred creditors, being principally indorsers, securities, and those who advanced money to the said party of the first part; and all are to be first satistied and discharged in full. The second class comprises the following claims,” etc. [naming them], “which shall be paid ratably and proportion- ately after the entire discharge of the debts in the first class enu- merated.” It was held that the word “order” referred to the division of the debts into classes and not to the relative position of the debts specified in the first class; and that the funds, being insufficient to satisfy all the debts of the first class, must be divided ratably among those who assented to the deed within the time therein specified. In the case of Murrill v. Neill,? in the supreme court of the United States, the facts were as follows: A merchant who owed debts upon his own private account, and was also a partner in the two commercial houses which owed debts upon partnership account, executed a deed of trust containing the following provisions, viz. : It recited a relinquishment of dower by his wife in property previ- ously sold and in the property then conveyed, and also a debt due to the daughter of the grantor, which was still unpaid; and then. proceeded to declare that he was indebted to divers other persons residing in different parts of the United States, the names of whom he was then unable to specify particularly; and that the trustee should remit from time to time to A. N. of the first moneys aris- ing from sales until he should have remitted the sum of $15,000, to be paid by the said N. to the creditors of the grantor, whose demands should then have been ascertained; and if such demands should exceed the sum of $15,000, then to be divided among such creditors part passu; and out of the further remittances there was to be paid the sum of $12,000 to his wife as a compensation for her relinquishment of dower, and next the debt due to his daughter ; and after that the moneys arising from further sales were to be applied to the payment of all the creditors of the grantor whose demands should then have been ascertained. In case of a surplus it was to revert to the grantor. The construction of this deed was held to be that the grantor intended to provide for his private creditors only out of this fund, leaving the partnership creditors to be paid out of the partnership funds. 120 Ala, 651. 28 How. 414. § 288.] STIPULA “ION FOR RELEASE OF ASSIGNOR. 393 In the New York case of the Bank of Silver Creek v. Talcott,! an assignment of individual and partnership property, made by per- sons indebted both individually and as copartners, after appropri- ating the individual property and providing that the proceeds of the partnership property should be first applied to the payment of a certain class of creditors, proceeded to direct the assignee as fol- lows, viz.: That by and with the residue and remainder of the net proceeds and avails of the assigned property, if any there should be, the assignees should pay and discharge all copartnership debts and demands of the assignors for which the assignees and A. T. were severally and jointly liable as drawer, indorser, guarantor or otherwise; and in case A. T. H. (one of the assignees) should be compelled to pay the whole or any part of two drafts for $3,000 each, drawn by E. B. H. on B. H.B. and indorsed by the said A. T. H. at the request and in part for the accommodation of the assignors, then that the assignees should pay to the said A. T. H. the amount that he might be compelled to pay on the said drafts. It was held by the supreme court that this provision did not vitiate the assignment as showing an intent to hinder, delay or defraud creditors, or as directing the payment of debts not owing by the assignors and not contracted on their account. It was held fur- ther that until there was some evidence to show to the contrary it must be presumed that the assignors were bound to indemnify A. T. H. and save him harmless from his indorsement; that, in effect, they alleged this in the assignment, and the onus was upon the party charging the fraud to disprove the statement. And it was further held that if the direction to the assignees to pay such amount as A. T. H. should be compelled to pay was to be construed as contemplating a defense by A. T. H. and consequent delay, and that the assignees must necessarily wait the termination of pro- ceedings against A. T. H:, or until the statute of limitations should attach, the delay was not of that character condemned by the statute. § 288. Stipulation for Release of Assignor.— Where an assign- ment was made in favor of such creditors as should “ within sixty days from the date of the instrument” execute a release, it was held that the day of the date was excluded.? But where the time given for executing a release expired on Sunday it was held that that day was included, so that a creditor executing a release on the succeeding Monday was out of time. Where the maker of a note which was indorsed made a general 1 22 Barb, 550. 2 Pearpoint v. Graham, 4 Wash. C. C, 282, 3 Ibid. 394 CONSTRUCTION OF ASSIGNMENTS. [cH. XXIV. assignment of his property in trust to pay his debts, which was. executed by the holder and by the indorser of the note, and which contained a general release of all claims against the assignor, “ pro- vided that nothing contained in the assignment should be construed to impair or affect any lien or pledge thereto created or obtained as security for a debt or claim due from the assignor,” it was held in Massachusetts that the security by the indorsement was a “lien or pledge,” within the meaning of the proviso, and that the release of the maker did not discharge the indorser, he having agreed to. the release by becoming a party to the assignment.’ Where an assignment was made in trust to pay creditors of the first class their debts, creditors of the second class their debts, the payment to be ratably made in proportion to their respective de- mands, and creditors of the third class on the same terms with those of the second, provided that no creditor should be entitled to receive a dividend unless he executed a release in thirty days, it was held in Pennsylvania that a creditor of the first class was bound to execute a release before he could receive his debt. In the same state it has been held that a general release under an as- signment of all the releasor’s demands must be construed [to in- clude] a release of a mortgage debt, especially where the only debts due from the assignor to the releasor are a mortgage debt and are preferred by the assignment; and so, although the assignor afterwards takes the benefit of an insolvent law and returns the mortgage as due.’ The following cases of construction in Pennsylvania are refer- able to this head: In Cheever v. Imlay‘ the facts were these: An assignment was made by a debtor to trustees, 1, for the payment of certain specified debts, if there should be sufficient to pay the whole of them, but if not, then in just and equal proportions; 2, for the payment of all the other just debts of the assignor (with certain exceptions) in full, if the moneys be sufficient, if not, then in just and equal proportions; and after paying the said debts of the second class, then, 8, to pay certain other debts, and if any surplus should remain, then to pay the same to the assignor; pro- vided that before the payment of any of the said debts in any of the said classes, the respective creditors should release within a certain period. It was held that a creditor of the second class who did not release within the required period was not entitled to 1Gloucester Bank v. Worcester, 10 Pick. 628; Ludwig v. Iglehart, 43 Md. 39; Bruen v. Marquand, 17 Johns, 58; Dickinson v. Metacomet Nat. Bank, 130 Mass. 132, 2'Wilson v. Kneppley, 10 Serg. & R. 439, 3 Matlack’s Appeal, 7 W. & S. 79. 4178. & RK. 510. § 289.] AUTHORITY TO ASSIGNEE. 395 a dividend, although he executed a release before the assignees had declared or paid a dividend, and a surplus remained after paying the first class of creditors. In Sheepshanks v. Cohen! the facts were as follows: An assign- ment was made by A. B. of all the effects belonging to the firm of Y. & B. or to B. B. & Co., or to B. B. in his individual capacity, in trust to pay such creditors of Y. & B. and B. B. & Co. as should execute a release of their claims against the said firm of Y. & B. and against the said B. B. & Co. within a certain time. The plaint- iff, who appeared as a creditor of B. B. & Co., executed a release of all claims against B. B. & Co., without mentioning the firm of Y. & B. The court held the release to be insufficient. In Beckwith v. Brown? (a Rhode Island case), the assignment provided, by its first three clauses, for the payment of certain pre- ferred debts, and, by its fourth clause, for the payment of those not preferred; and concluded with a proviso that the creditors should execute a full discharge of their claims to the assignor as a con- dition of taking under the assignment, and that in case any cred- itor should neglect to execute such discharge his dividend should result to the assignor. It was held that the provision for the re- turn of the dividends of the non-releasing creditors applied to all the classes, and that therefore, where one of the preferred debts had been paid without a release by the creditor, a releasing cred- itor of a subsequent class was not entitled to have such sum re- turned and applied to the payment of his debt. In a case in New York where an assignment provided that, should there not be sufficient to pay the debts in full, the assignees might compromise as to the same, and require discharges on payment of a dividend, it was held that this did not compel the creditors to release the whole of their demands before they could take a divi- dend. § 289. Authority to Assignee.— An authority given to assignees, in an assignment, “to manage and improve” the assigned prop- erty is not to be construed, in the absence of anything else in the instrument favoring such a construction, as empowering the as- signees to retain the assigned property for the purpose of erecting buildings and making alterations and repairs upon the real estate, and thus to hinder, delay and prevent creditors from collecting their just debts.‘ So where an assignment provides that the as- signee, after paying certain creditors therein named and preferred, 1148, & R. 35. 22R, 1, 311. 3 Jewett v. Woodward, 1 Edw. Ch. 195, 4 Hitchcock v. Cadmus, 2 Barb. 8. C, 381. 396 CONSTRUCTION OF ASSIGNMENTS. [cH. XXIV. “shall pay any other debts of said firm as fast as money sufficient shall come into his hands to pay the same, at his discretion,” it was held to be fraudulent and void as against unpreferred creditors of the assignor not assenting thereto, because of the attempt to con- fer upon the assignee a discretion as to the payment of such cred- itors which the assignor could not legally retain to himself or transfer to the assignee.! A provision in a trust deed that the trustee “may sell” whenever she had opportunity to do so did not vest in her absolute discretion; her duty was to offer the property for sale within a reasonable time after the debts were paid and use all reasonable diligence to obtain the best price.’ Where an assignment empowered the assignee to sell in such manner as he might consider expedient and most for the interest of all parties, it was held that this authorized him to sell on a credit.2 Soin the case of Hutchinson v. Lord‘ it was held that a provision in a general assignment for the benefit of creditors that the assignee “shall, with all convenient diligence, sell and dispose of the property at public or private sale as he may deem most ben- eficial to the interests of the creditors and convert the same into money,” does not authorize the assignee to sell on credit and does invalidate the assignment. The court held in the case of Muller v. Norton ® that a provision in an assignment for the benefit of creditors, that the assignee shall at once take possession of all the assigned property and “convert the same into cash” as soon as, and upon the best terms, possible, can hardly be construed into a discretionary authority to sell on credit. But where the direction to the assignee was to sell the assigned property “in such manner as he shall deem best and most for the interest of the parties con- cerned, and convert the same into money,” it was held that this did not authorize a sale on credit.’ And where the assignee was directed to sell in such manner and at such reasonable times as should seem proper to him, it was held that this did not authorize him to sell at retail and on credit, nor to send to agents to sell on commission.’ In a case in New York, before the vice-chancellor of the first circuit, the facts were these: N. G. C. owed the Manhattan Com- pany, and on the 15th December, 1835, gave them his bond and a 1 Polkinghorne v. Martinez, 65 Miss. 272; 3S. Rep. 742. 2Kintner v. Jones, 122 Ind. 148; 23 N. E. Rep. 701. 3 Neally v. Ambrose, 21 Pick. 185, 41 Wis. 294; 9 Am. Dec. 881; Keep v. Sanderson, 2 Wis, 42; 9 Am. Dee. 404, distinguished. See Lord v. Devendorf, 54 Wis, 491; 11 N. W. Rep. 903; 41 Am. Rep. 58. 2133 U. S. 501; 105. C. Rep. 147, 6Clark v. Fuller, 21 Barb. 128. + Meacham v. Sternes, 9 Paige, 398, §$§ 290, 291.] MISCELLANEOUS. 397 mortgage on real estate. On the 12th March, 1341, they fore- closed, sold and bought in; and there was a deficiency for which (under a transcript of their decree) they issued a fi. fa., which was. returned nulla bona. On the 9th October, 1838, the said N. G. C. had made a deed of trust embracing the mortgaged premises upon trust for the trustee to sell subject to mortgages or free from in- cumbrances, and paying thein off out of purchase-money, and in the meantime collect rents; and after payment of taxes and other ordinary charges upon trust to pay, first, the Greenwich Bank a. specified sum and afterwards certain other creditors. The trustee collected and held rents; and the Manhattan Company now filed their bill, claiming them to make up the balance due them under the foreclosure. It was held (on a general demurrer interposed) that the rents which the trustee received were not a trust fund to keep down interest, and that they belonged to the Greenwich Bank and should be paid in part of their debt.! § 290. Liability of Trustee.— A provision in a deed of assign- ment that the trustee shall be liable only for his own defaults and not for the acts of his agents must, on its face, be understood to. import that he shall not be liable for the acts of such agents as are necessary to enable him to execute the trust, selected in good faith, with a due regard to their fitness and with a proper super- vision exercised over them.’ Buta strict rule of construction must. be applied as against such limitations of liability, and the con- struction must be consistent with the objects and purposes of the trust.’ § 291. Effect of Release Subsequent to the Assignment.— The following case was decided in the New York court of appeals: The maker of a note made an assignment to one of the holders for the benefit of his creditors in which the indorser was named and preferred as a creditor to the amount of the note, and the holders were named and preferred as creditors on another account, but were nowhere set down as creditors in respect to the note. The holders, in conjunction with other creditors, afterwards executed to the maker an instrument referring to the assignment, and agree- ing in consideration thereof and of one dollar to discharge the maker from all claims and demands existing in their favor respectively against him over and above what they might realize under the as- 1 Manhattan Company v. Greenwich Bank, 4 Edw. Ch. 315. 2 Ashurst v. Martin, 9 Port. 566. And see Litchfield v. White, 3 Sandf. S. C 545; Tuttle v. Gilmore, 36 N. J. Eq. 617. 3Text cited and approved in Wynne v. Simmons Hardware Co., 67 Tex. 40 18, W. Rep. 568, 398 CONSTRUOTION OF ASSIGNMENTS. [cH. XXIV. signment on his agreeing at the same time to pay the balance of their debts in seven years; and the maker at the same time gave to the holders his written promise to pay such balance in seven years. It was held by the court (three judges dissenting) that the claim of the holders to recover the note of the maker was not dis- charged or suspended, the instrument being regarded as only ap- plicable to their other demands against the maker; and it was therefore further held that their right to recover against the in- dorser was not affected by such instrument.' § 292. Construction of Particular Words.— The word “ goods” is nomen generalissimum,; and when construed in the abstract the term will embrace all the personal estate of a testator, as bonds, notes, money, plate, furniture, etc. And the effect of the words “goods and chattels” is the same in a deed of assignment for the benefit of creditors unless there is something in the instrument indicative of an intention to restrict the general import of the words.? The word “claim” has been defined — “a challenge by a man of the property ownership of a thing which is wrongfully detained from him.” Hence, the right to recover against the plaintiff in a replevin suit the value of the property which has been delivered to him on the writ of replevin, together with damages for its seiz- ure, is a clatm against such plaintiff, and will pass under a general assignment made of all dues “and claims” by the defendant in such suit.3 The words “ personal and mixed,” as we have seen before, limit the assignment to personal estate. The words “in trust,” in their ordinary sense, are descriptive of a fiduciary estate.® 1Coddington v. Davis, 1 N. Y. 186. 2 Dowdel v. Hamm, 2 Watts, 68, Rogers, J. 3 Jackson v. Losee, 4 Sandf. Ch. 381. As to the construction of the word “terms,” in the clause empowering the assignee to sell the assigned property, see Hutchinson v. Lord, 1 Wis. 286, Crawford, J.; id. 318-316, * 4Rhoads v. Blatt, 84 Pa. St. 81. See ante, p. 885, n. 1. 5 King v. Mitchell, 8 Pet. 326. § 298. 294, 295, 296, 297. 298, 299. 300. 301. 302. 308. 304, 305. 306, 307. 308. 309. 310. 311. 312, 313, 314, 315. 316, 317. 318, 319. 320. 321. 822, 8238. CHAPTER XXvV. FRAUDULENT AND VOID ASSIGNMENTS, Relation of the Terms ‘‘ Fraudulent” and ‘‘ Void.” Good Faith — Fraud. The Statute of 13 Elizabeth, Chapter 5. Re-enactments of the Statute of Elizabeth. The Words “ Hinder,” ‘“‘ Delay” and ‘“‘ Defraud.” Hindrance and Delay of Creditors. Hindrance and Delay of Creditors — Review of Cases, Hindrance and Delay of Creditors — Review of Cases — Continued. Hindrance and Delay of Creditors — Rule of Construction. Hindrance and Delay of Creditors — The American Decisions, The Statute of Elizabeth Contemplates Only Actual Intent. The American Statutes. Meaning of ‘‘ Delay” and ‘‘ Hindrance.” Intent to Defeat Execution and Prevent Sacrifice of Property, Fraud and Fraudulent Intent. Fraudulent Intent, How Ascertained. Fraud in Law and in Fact, Fraud, How Established. Fraud May be Presumed, When. Fraud, How Established — Division of Subject. Fraud on the Face of the Deed. Fraud, from Matter Extrinsic. Fraud, from Both Sources, Indicia or Badges of Fraud. The Statute of Henry VII., Chapter 4, and its Re-enactments. The Statutes of 13 Elizabeth and 3 Henry VII. — Compared. The Statute of 3 Henry VII., Chapter. 4, and its Re-enactments — New York Cases. How Assignments Are Considered — Their Character Not Affected by Sub- sequent Events. Extent to Which Assignment May be Avoided. Extent to Which Assignments May be Avoided — As to Property Extent to Which Assignments May be Avoided — As to Parties. § 293. Relation of the Terms “ Fraudulent ”’ and “ Void.””— The terms fraudulent and void are constantly associated in the law of assignments as descriptive of the qualities of assignments in certain cases; and this use of the terms is justified by the actual relation of the qualities themselves which they express — which is ordinarily that of cause and effect. In the great majority of cases assignments become void or are avoided on the ground of fraud; but they may be avoided on other grounds also. An assignment may be void without being positively fraudulent, as where it faiis 400 FRAUDULENT AND VOID ASSIGNMENTS. [oH. xxv. to comply with some merely formal statutory requisition. On the other hand, an assignment may be fraudulent without being weces- sarily actually void. A fraudulent assignment, though always. voidable by creditors, may become operative, as where it is accepted and confirmed by their acts.! And the term “void,” even in its. most peremptory forms of application (as in statutes declaring the effect of assignments in certain cases), is constantly construed to. mean nothing more than “ voidable.” ? § 294. Good Faith — Fraud.— The great and indispensable req- uisite in all voluntary assignments by debtors is good faith; the great and fatal objection —fraud, or the intent to defraud credit- ors. It is not enough that an assignment be for valuable consid- eration; it must be bona fide also.t But we have already seen that. in all assignments for the payment of debts, a consideration is, in our law, usually implied from the nature and object of the transfer itself. This leaves the bona fides of the transaction in great prom- inence and importance. By the term “good faith,” as commonly understood in our law, and in the civil law from which it bas been derived,’ is meant sin- cerity or honesty of purpose, as distinguished from what was. termed in the language of the old law of England, “covin,” “col- 1A deed of assignment fraudulent on its face as to creditors is capable of con- firmation by them; and after the deed has been executed and the assenting creditors have been paid from the effects assigned, the transaction as tothem will not be disturbed. White v. Banks, 21 Ala. 705. And see Merrill v. Englesby,. 28 Vt. 150; Geisse v. Beall, 3 Wis. 367; Hone v. Henriques, 13 Wend. 240; Bod- ley v. Goodrich, 7 How. 277. 2 Merrill v. Englesby, ubi supra; Edwards v. Mitchell, 1 Gray, 239, 242; Bige-- low v. Baldwin, id. 245, 247; Peninsular Stove Works v. Sacket, 74 Wis. 526; 43 N. W. Rep. 491; Fisher v. Shelver, 53 Wis, 498; 10 N. W. Rep. 681; Desch v. Nette, 81 Tex. 265; 16S. W. Rep. 1013; Bush v. Roberts, 111 N. Y. 278; 18 N. E. Rep. 737; Thus v. Davidson, 90 Ala. 359; 7S. Rep. 812; Prewit v. Wilson, 103- U. S. 22; Stephens v. Regenstein, 89 Ala. 561; 8 S. Rep. 68; Bull v. Bray, 89: Cal. 286; — Pac. Rep. 878; Park v. Snyder, 78 Ga. 571; 3S. E. Rep. 557; Ex parte- Chaplin, 26 Ch. D. 319; Godfrey v. Poole, 13 Ap. Cas. 497; Spencer v. Slater, 4 D. B. D. 1; Rouse v. Bowers, 111 N. C. 360; Peeler v. Peeler, 109 id. 628; 14S. E. Rep. 59; Barbour v. Conn. Mut. Life Ins. Co., 61 Conn. 240; 23 Atl. Rep. 157. 3 McIntyre v. Benson, 20 Il. 500. ‘Lord Mansfield in Cadogan v. Kennett, Cowp. 434; 1 Story’s Eq. Jur., § 353; Marshall, C. J., in United States v. Hooe, 3 Cranch, 73; Wilde, J., in Johnson v. Whitewell, 7 Pick. 71, 74; United States v. Bank of the United States, 8 Rob. (La.) 262; Glenn v. Randall, 2 Md. Ch. Dec. 220; Grover v. Grover, 3 id. 29; Glenn v. McNeal, id. 349; Wright v. Linn, 16 Tex. 34; Wheeler, J., id. 42; Knower v. Central Nat. Bank, 124 N, Y. 552; 27 N. E. Rep. 247, 5In New York it is expressly declared by statute that no conveyance shall be adjudged fraudulent against creditors solely on the ground that it was not founded on a valuable consideration. 3R. S. (7th ed.), p. 2329, §4; 4B. S. (8th ed.), p. 2593, § 4. 6 See Brissonius De Verb. Signif. voce. bona fides, bona fide. § 295.] THE STATUTE OF 13TH ELIZABETH. 401 lusion” and “guile,” or fraud in the natural or popular sense — that is, contrivance, artifice or actual dishonesty on the part of a debtor, involving conduct partaking so far of a criminal character as to admit of being made the subject of punishment. That the term, as thus defined, expresses, from an early period in English law, the quality specially required in conveyances affecting credit- ors, appears from statutes and decisions which will be referred to , in the course of the present chapter. Lord Mansfield, in a leading case,! drew a clear distinction between a bona jide transaction and “a trick or contrivance to defeat creditors;” and in an important statute against fraudulent conveyances, to be presently commented on, it was expressly declared that if a conveyance by a debtor was upon good consideration and bona fide, the statute had no applica- tion to it? _ But according to the views now extensively entertained in the United States, as illustrated by numerous decisions in our courts, the term “good faith” hardly expressed the precise nature of the quality required in these transfers by debtors. Many assignments admitted to be made without any actual dishonesty of intent as against creditors have yet been set aside on the ground of fraud, that is, of legal fraud, as being contrary to what is known as “ the policy of the law.”* And to such an extent has this been carried, that clauses introduced into assignments by the draftsmen, with- out any communication with the assignor, and merely with a view to greater supposed precision of expression and more entire con- formity with long-established precedents, have been made the sole grounds of decisions declaring the instruments containing them fraudulent and void as against creditors. § 295. The Statute of 13th Elizabeth, Chapter 5.— The rules by which the courts are now generally governed in pronouncing upon the character of assignments as being fraudulent and void against creditors are founded upon certain statutes, called statutes “against fraudulent conveyances,” ‘ being re-enactments in various forms of the celebrated English statute of 13th Elizabeth, chapter 5.5 Allusion has already been made to this statute at the commence- ment of this work. The present chapter will be devoted in part to a critical examination of its most important provisions, and the ! Cadogan v. Kennett, Cowp. 482, 434, 2See post, p. 403. 3 See the opinion of Randall, J., in Ex parte Breneman, Crabbe, 456, 463, 4 Sometimes called statutes ‘‘ against fraudulent intents in alienation,” and stat- utes “against alienations with intent to defraud.” 5 Made perpetual by statute, 29 Eliz., ch. 5. 26 402 FRAUDULENT AND VOID ASSIGNMENTS. [CH. XXV. construction which has been given to them and to their re-enact- ments in the United States. The entire statute, with the exception of its purely obsolete por- tions, is in the following words: “For the avoiding and abolishing of feigned, covinous and fraud- ulent feoffments, gifts, grants, alienations, conveyances, bonds, suits, judgments and executions, as well of lands and tenements as of goods and chattels, more commonly used and practiced in these days than hath been seen or heard of heretofore; which feoff- ments, gifts, grants, alienations, conveyances, bonds, suits, judg- ments and executions, have been and are devised and contrived of malice, fraud, covin, collusion or guile, to the end, purpose and INTENT TO DELAY, HINDER OR DEFRAUD CREDITORS and others of their just and lawful actions, suits, debts, accounts, damages, pen- alties, forfeitures, heriots, mortuaries and reliefs; not only to the let or hindrance of the due course and execution of law and justice, but also to the overthrow of all true and plain dealing, bargaining and chevisance between man and man, without the which no com- monwealth or civil society can be maintained or continued: “9. Be it therefore declared, ordained and enacted by the au- thority of this present parliament, That all and every feoffment, gift, grant, alienation, bargain and conveyance of lands, tenements, hereditaments, goods and chattels, or any of them, or any lease, rent, common or other profit or charge out of the same lands, tenements, hereditaments, goods and chattels, or of any of them, by writing or otherwise; and all and every bond, suit, judgment and execu- tion, at any time had or made sithence the beginning of the queen’s majesty’s reign that now is, or at any time hereafter to be had or made, to be for any INTENT or purpose before declared or expressed, shall be from henceforth deemed and taken (only as against that person or persons, his or their heirs, successors, executors, admin- istrators and assigns, and every of them, whose actions, suits, debts, accounts, damages, penalties, forfeitures, heriots, mortuaries and reliefs, by such guileful, covinous or fraudulent devices and practices as is aforesaid are, shall or might be in any wise dis- turbed, hindered, delayed or defrauded) to be clearly and utterly void, frustrate and of none effect; any pretense, color, feigned consideration, expressing of use, or any other matter or thing to the contrary notwithstanding. “3, And be it further enacted by the authority aforesaid,! That all and every the parties to such feigned, covinous or fraudulent feoffment, gift, grant, alienation, bargain, conveyance, bonds, suits, 1 This section is given for the purpose of showing the penal character of the statute remarked upon post in this chapter. -g 296.] RE-ENACTMENTS OF THE STATUTE OF ELIZABETH. 403 judgments, executions and other things before expressed, and being privy and knowing of the same or any of them, which at any time after the 10th of June next coming shall, wittingly and willingly, put in ure, avow, maintain, justify or defend the same, or any of them, as true, simple, and done, had, or made bona fide, and upon good, firm consideration; or shall alien or assign any lands, tene- ments, goods, leases or other things before mentioned, to him or them conveyed as is aforesaid, or any part thereof, shall incur the penalty and forfeiture of one year’s value of the said lands, tene- ments and hereditaments, leases, rents, commons or other profits -of or out of the same; and the whole value of the said goods and chattels; and also so much money as is or shall be contained in any ‘such covinous and feigned bond; the one moiety whereof to be to the queen’s majesty, her heirs and successors, and the other moiety to the party or parties grieved by such feigned and fraudulent feoff- ment, gift, grant, alienation, bargain, conveyance, bonds, suits, judgments, executions, leases, rents, commons, profits, charges, and other things aforesaid, to be recovered in any of the queen’s courts of record, by action of debt, bill, plaint or information, wherein no essoin, protection or wager of law shall be admitted for the defendant or defendants; and also, being thereof lawfully convicted, shall suffer imprisonment for one half year, without bail or mainprize. “6, Provided also, and be it enacted by the authority aforesaid, ‘That this act, or anything therein contained, shall not extend to any estate or interest in lands, tenements, hereditaments, leases, rents, commons, profits, goods or chattels, had, made, conveyed or assured, or hereafter to be had, made, conveyed or assured, which estate or interest is or shall be upon good consideration, and bona jide lawfully conveyed or assured to any person or persons, or bodies politic or corporate, not having at the time of such convey- ance or assurance to them made, any manner of notice or knowl- edge of such covin, fraud or collusion as is aforesaid, anything be- fore mentioned to the contrary hereof notwithstanding.” § 296. Re-enactments of the Statute of Elizabeth.— This statute, as observed by Mr. Justice Story,' has been universally adopted in American law as the basis of our jurisprudence on the same subject.2 In some of the states it has been incorporated into UStory’s Eq. Jur., § 253, See 4 Kent’s Com. [462, 468], 510. 2 Alabama: Civil Code, 1886, § 1735. Arizona: R. S. 1887, § 30, Arkansas: Mansf’s Dig. 1884, ch. 68. California: Hittell’s C. & S. 1876, $§ 8439, 8442; Civil Code, §§ 3489, 3442. Colorado: Mills’ Ann, Stats. 1891, § 2030. Connecticut: Gen. Stats. 1888, § 2528. Georgia: Code i882, § 1952, 2, Idaho: R. S. 1887, $6519. Illinois: R. 8S, 1889, p. 740, ch. 59, § 4. Indiana: R. S. 1888, § 2156. 404 FEAUDULENT AND VOID ASSIGNMENTS. [cH. Xxv. the code of statute law without change and is still referred to as “the statute of Elizabeth.” In others it has been re-enacted almost in terms, the purely obsolete portions alone being omitted. In others, on the contrary, its characteristic language has been en- tirely dispensed with and its provisions condensed into a few sen- tences. § 297. The Words “ Hinder,” “‘ Delay” and “ Defraud.”’— The statute of 18 Elizabeth, chapter 5, has always been considered by. high authority as declaratory of the common law,! the antipathy of which against fraud has already been noticed ;? its object being to give that law greater efficiency by placing additional obstacles in the way of dishonest and fraudulent debtors.’ It will be seen that the terms of the statute embrace acts done with an “intent to hinder and delay” as well as to “defraud creditors.” These, indeed, may be considered its emphatic words, having been, more than any others, the subject of judicial construction and application, and they have been carefully retained in nearly all the American stat- utes. They have become, in short, the familiar test words by which Iowa: McClain’s Ann. Code 1888, § 5440. Kansas: R. S. 1889, § 2232. Ken- tucky: G. S. 1887, ch. 44, § 1. Maine: R. S. 1883, tit. XI, ch. 126, § 3, p. 915. Michigan: Howell’s Stats. 1882, § 6203. Minnesota: R. S. 1878, p. 544. Missis- sippi: Ann. Code 1892, § 4226. Missouri: R. 8S. 1889, § 5170. Montana: Comp. Stats. 1888, § 202. Nebraska: C. S, 1891, p. 491. Nevada: G. S. 1885, § 2638, New Jersey: R. S. 1877, p. 446. New York: B.S. (8th ed.), Pt. 2, ch. 7, tit. 8, § 1, p. 2592, North Carolina: Code 1883, § 1545. North Dakota: Comp. Laws 1887, § 4656. Ohio: 1 BR, S. 1889, § 6544. Oregon: G. L. 1874, p. 528. Pennsyl- vania: Purd. Dig. 1888, p. 1722, §§ 1-2. Rhode Island: P. S. 1882, ch. 178, § 1. South Carolina: G. 8. 1881, § 1661. South Dakota: Comp. Laws of Dakota, § 4656. Tennessee: M. & V. Code 1884, § 2424. Texas: Sayles’ C. S. 1888, § 2838, art. 2465. Utah: 2 C. L. 1888, § 2888. Virginia: Code 1887, § 2458. West Vir- ginia: Code 1891, p. 649. Wisconsin: 8S. & B. C. & S. 1889, § 2320. 1 Lord Coke, as Mr. Roberts observes, has in three different places remarked upon the force of the word ‘* declare,” with which the enacting part of the Eng- lish statute is introduced, as implying a legislative recognition of the common law. Twine’s Case, 3 Co. 820; Co. Litt. 76a, 290b; Roberts on Fraud. Con. 8, 9. See Kent’s Com. [515], 665. ? Lord Mansfield in Cadogan v. Kennett, Cowp. 484, said: ‘‘The principles and rules of the common law as now universally known and understood are so strong against fraud in every shape that the common law would have attained every end proposed by the statutes 13 Eliz., ch. 5, and 27 Eliz., ch. 4. 8 Mr. Roberts has the following remarks on this subject: ‘‘The genius of the common law, it is true, opposes itself to every species of fraud, so that nothing can have legal validity which has apparent fraud in its composition; but as the common law is tender of presuming Le from circumstances, and expects that it be manifest or plainly inferable, statutes have been framed of preventive efficacy whose object it has been to embarrass deceitful contrivances by requir- ag, as the characteristics of honesty and truth, certain badges or distinctions hich it is impossible or difficult for fraud to assume.” Rob, Fraud. Conv. 11, | See Bump on Fraud. Conv., pp. 66, 67. § 298.] HINDRANCE AND DELAY OF OREDITORS. 405 the validity of voluntary assignments is now every day tried in our courts. The fact that the three words “delay,” “hinder” and “ de- fraud” have been in so many instances retained without the least change, while the language of other clauses in immediate connec- tion with them has been condensed to the utmost degree,’ shows that each of these words was supposed to have a peculiar and ap- propriate meaning which could not be dispensed with, and that ‘delaying and hindering” creditors was not considered altogether synonymous with “defrauding” them. In their actual applica- tion, they are frequently taken together (that is, defraud is used in connection with the other words), but quite as often separately, affording two grounds on which assignments are constantly as- sailed in the courts — on that of hindrance and delay and on that of fraud. These seem, indeed, to present two general points of view in which the provisions of the statute may be considered; and it is accordingly proposed in what follows to examine, first, the nature of the delay and hindrance, or of the intent to delay and hinder, contemplated by the statute, and on account of which it declares conveyances by debtors void; and then to consider the nature of fraud, or the intent to defraud, against which its pro- visions seem to be more distinctly directed. § 298. Hindrance and Delay of Creditors.—In the case of Meux v. Howell? in the court of king’s bench (which was the case of a judgment confessed by a debtor for the benefit of all his creditors and which was assailed through the medium of a gui tam action as covinous and fraudulent), Lord Ellenborough, in deliver- ing his opinion sustaining the judgment, remarked as follows: “It is not every feoffment, judgment, etc., which will have the effect of delaying or hindering the creditors of their debts, etc., that is therefore fraudulent within the statute; for such is the effect pro tanto of every assignmeut that can be made by one who has cred- itors. Every assignment of a man’s property, however good and honest the consideration, must diminish the fund out of which satisfaction is to be made to his creditors. But the feoffment, judgment, etc., must be devised of madtice, fraud, or the like, to bring it within the statute.” “The act of parliament,” his lord- ship further observed, “was meant to prevent deeds, etc., fraudu- lent in their concoction, and not merely such as in their effect might delay or hinder other creditors.” In the case of Pickstock v. ! Thus, in the New York statute, all the words descriptive of the character of the conveyance are omitted; the words ‘‘devised and contrived” reduced to ‘“‘made;” the words ‘‘end, purpose and intent” abridged to “intent,” and the like. 4 B.S. (8th ed.), p. 2592, § 1. 24 East, 1, 13. 406 FRAUDULENT AND VOID ASSIGNMENTS. [cH. XXv.. Lyster,! even the actual intent to defeat a particular creditor of his execution was not considered of itself sufficient to bring the: case within the statute, the assignment being for the benefit of all the creditors. The views of Lord Ellenborough appear to be fully borne out by the words of the English statute, the very verbiage of which fur-. nishes an important aid to its construction. The conveyances. etc.. which it declares void and seeks to abolish are designated as. “feioned, covinous and fraudulent,” such as were “ devised and con-. trived of malice, fraud, covin, collusion or guile; to the end, pur-. pose and intent to delay, hinder or defraud.” The words “ malice,. fraud, covin, collusion or guile” are among the most important ones in the whole statute, their very redundancy evincing a desire: on the part of the legislators to express, beyond the possibility of misconstruction, the quality of the intent which it was their object to declare unlawful. That the practices at which it was aimed in- volved a high degree of moral fraud or actual dishonesty,’ calling’ not only for repression but absolute punishment, appears from the- third section, by which the parties to such conveyances and trans- actions are made to incur the penalty and forfeiture of one year’s. value of the lands, tenements, etc., and the whole value of the goods and chattels so conveyed; and the whole amount of any bond given contrary to the statute; and also the penalty of one-half year’s imprisonment, “without bail or mainprize.”*® Hence it was. 13M. & S. 371; and this case was followed in Reed v. McIntyre, 98 U. S. 507. 2 This may be gathered from various parts of the statute. Thus, the preamble (which in this case is of unusual importance) describes the practices in question as tending not only to the hindrance of the due course of justice, but ‘‘to the- overthrow of all true and plain dealing between man and man.” In the second section they are described as ‘‘ guileful, covinous and fraudulent devices and practices,” founded upon “ pretense, color, feigned consideration,” etc. In the: third section the designation of ‘‘feigned, covinous and fraudulent” is again applied to the feoffments, conveyances, etc., which are prohibited; and they are- contrasted with such as are ‘‘true, simple, bona fide, and upon good, firm con- sideration.” The bonds prohibited are also described as “‘covinous and feigned.” The language of the kindred statute of 27 Elizabeth, chapter 4, which also was. directed in terms against frauduient and covinous conveyances, though in behalf of u different class of persons, is even more explicit in describing the character- of these conveyances. They were such as were “ meant and intended ” by the parties who made them “ to be fraudulent and covinous of purpose and intent to deceive” purchasers; ‘‘or else by the secret intent of parties to be to their: own proper use and at their free disposition ; colored, nevertheless, by a feigned. countenance and show of words and sentences, as though the same were made: bona fide for good causes and upon just and lawful considerations.” 3 By the Maine statute the parties are punishable by fine not exceeding one- thousand dollars, and imprisonment less than one year. R.S, (ed. 1857), p. 691, ch, 126, § 2; ed. 1871, p. 858, ch. 126, § 3; R. S, (1888), ch. 70, § 55. And see the- Pennsylvania act of March 31, 1860, Purdon’s Dig. (Brightley, 11th ed.), p. 351,. §§ 188, 215, 443. § 299.] HINDRANCE AND DELAY OF CREDITORS. 407 well observed by Mr. Justice Grose, in Meux v. Howell, that the statute in its whole frame was calculated to prevent certain frauds and to punish those who were guilty of them. It was in fact a penal statute of a very stringent character, and the case just cited was itself (as already observed) a gu tam action to recover the penalty given by it. This explains the very strong expression of the learned judge last named, in the course of delivering his opinion: “Tt makes one shudder to think that persons who appear, like the defendants, to have acted most honestly, should have been in any hazard of being subjected to punishment for having endeavored to procure an equal distribution of their debtor’s effects amongst all his creditors.” } § 299. Hindrance and Delay of Creditors — Review of Cases.— The views of Lord Ellenborough, in Meux v. Howell, have received the sanction of several of our own courts. In New York they were expressly recognized and applied by the supreme court in the case of Wilder v. Winne,? the facts of which were similar; the court holding that if a judgment be valid in its concoction, that is, bona fide and upon sufficient consideration, though execution be taken out and enforced with a view to delay and hinder creditors, and it have that effect, yet it is not fraudulent within the statute; and that the plaintiff was not therefore liable to the penalty imposed by it; and on error to the court of errors the decision was affirmed.? In Louisiana, in the case of The United States v. The Bank of the United States,‘ it was observed by Mr. Justice Garland, almost in the words of Lord Ellenborough, that “it is not every conveyance that has the effect of delaying or hindering creditors that is in it- self fraudulent. In some degree it is the effect of every assignment of a debtor’s property for the benefit of creditors to produce hin- drance and delay.” The learned judge then referred to the case of Sexton v. Wheaton,’ in which the supreme court of the United States quote the words of the English statute, for the purpose of determining what conveyances were to be considered as falling within its provisions. In Mississippi, in the case of Farmers’ Bank v. Douglas,’ it was said: “Almost every mortgage and deed of 14 Hast, 15, The penal character of the New York statute was also dwelt upon by the court of appeals (Gardiner, J.), in Nicholson v. Leavitt, 6 N. Y. 510, 516; and by the supreme court, Roosevelt, J., in Curtis v. Leavitt, 17 Barb. 309, 317. 26 Cow, 284. 3 Wilder v. Fondey (or Winne), 4 Wend. 100. These decisions were under the statute as it stood before the revision, being almost a literal transcript of the English statute, including the provision imposing the penalty of forfeiture upon the parties to the conveyance, judgment, etc. 48 Rob. (La,) 402. 58 Wheat. 229. 611 Sm. & M. 469, 539. 408 FRAUDULENT AND VOID ASSIGNMENTS. [oH. XXvV. trust tends in some degree to hinder and delay those creditors who are not provided for; but it does not thence follow that they are of necessity fraudulent.” And in Ingraham v. Griggs,! in the same state, it was observed: “A deed may delay creditors and not be void, where such delay is not its principal object.” In North Caro- lina, in the case of Hafner v. Irwin,’ the language of the statute was critically examined and very ably applied by Gaston, J., from whose opinion the following is an extract: “Every conveyance of property by an insolvent or embarrassed man, to the exclusive sat- isfaction of the claims of some of his creditors, has necessarily a tendency to defeat or hinder his other creditors in the collection of their demands. But if the sole purpose of such a conveyance be the discharge of an honest debt, it does not fall under the operation of the statute of fraudulent conveyances. It is not embraced within its words, which apply only to such as are contrived of malice, fraud, collusion or covin, to the end, purpose and intent to delay, hinder and defraud creditors.” And in the same state,in the case of Woodruff v. Bowles,’ it was held that an assignment made with in- tent to hinder and delay or defraud creditors is fraudulent, though neither the trustee nor the cestuz que trust had any knowledge of the corrupt intent. In Virginia, in the case of Dance v. Seaman,‘ it was held by the court (Allen, P.): “The fact that creditors may be delayed or hindered is not of itself sufficient to vacate such a deed, if there is absence of fraudulent intent. Every conveyance to trustees interposes obstacles in the way of the legal remedies of the creditors, and may to that extent be said to hinder and delay them.” The same distinction between the result and the object of an assignment was made in the Florida case of Bellamy v. Bella- my’s Adm’r.’ In Michigan, in the case of Hollister v. Loud,’ the language and object of the statute were commented on by Wing, P. J., from whose opinion the following are extracts: “It must be shown, then, by the complainant that the parties to the deed en- tered into it as a device for the purpose of hindering, delaying or defrauding the creditors of the grantors; that it was not intended ' by the parties to it, and especially the assignors, to carry its pro- visions into effect bona fide, but that it was intended as a means to keep the property from the creditors, or this creditor, in an espe- 113 Sm. & M. 22. 21 Ired. L. 490. Approved in Moore v. Hinnant, 89 N. C. 455; Savage v. Knight, 92 id, 498, 5104 N. C, 197; 10S. E. Rep. 482. See Savage v. Knight, 92 N. ©, 493; 53 Am. Rep. 423, 411 Gratt. 778, 782. 56 Fla. 62, 102. 62 Mich. 209. § 299.] HINDRANCE AND DELAY OF CREDITORS. 409 cial manner, and from motives of malice or guile; or that the deed of assignment contains provisions or trusts which are prohibited by law, on account of which it is to be deemed fraudulent and void.' If the effect of a conveyance be to hinder, delay or ob- struct creditors, it is not therefore void. . . . To render it fraudulent it must be done with the intent to hinder, delay or de- fraud; but if made with no such intent, but with honest motives, and with the higher or nobler intent and purpose of paying all equally, or of providing for those who are the most meritorious, it will be sustained. . . . The object of the statute was not to prevent such conveyances as might operate to hinder or delay creditors, but only such assignments as were in their znception and entention fraudulent and void. It is the fraudulent intention, the wnala mens, with which the conveyance is made that constitutes the fraud against which the denunciations of the statute are di- rected.” ? In Indiana, in the case of Church v. Drummond,? the court (Stuart, J.) say: “Every assignment operates more or less to delay creditors. If mere delay of creditors were conclusive on the question of fraud, every assignment would be fraudulent.” In a case in Illinois‘ it is said that “the placing of property in the hands of assignees for any other purpose than to distribute it or its proceeds among creditors must necessarily have the effect to in some degree hinder and delay creditors in the collection of their debts.” The assignment is valid only when it is made for the benefit of creditors by devoting the property fairly to the pay- ment of debts, and not with a view to the debtor’s own advantage. In Ohio, in the case of Hoffman v. Mackall, the language and object of the statute were commented on by Bartley, J., from whose opinion the following is an extract: “The effect of almost every assignment, even where creditors are to be paid pari passu, is in one sense to hinder and delay them in the collection of their debts, by withdrawing the property from the reach of any legal process to which they may wish to resort. This statute is to be construed according to its reasonable intent and object. And as- signments, although designed manifestly to deprive particular creditors of speedy remedies at law, and thus hinder and delay them in the collection of their debts, or to deprive some of that full satisfaction of their debts which by their superior diligence in prosecuting their suits they would otherwise certainly have ob- tained, are upheld as valid and effectual. Although in one sense 12 Mich. 313. 22 Mich. 316, 37 Ind. 17. 4Gardner v. Commercial National Bank, 95 Il. 298, 55 Ohio St. 124, 13%, 134. 410 FRAUDULENT AND VOID ASSIGNMENTS. [cH. XXv. there is a manifest intent to hinder and delay one or more credit- ors in such assignment, yet there is no intent to cheat or defraud them; and, by a reasonable construction, such hindrance and delay only as would operate as a fraud, and are designed as a fraud, come within the operation of the statute. When a man finds himself in failing circumstances, and unable to pay all his debts, he can do no act more just and equitable than to surrender and assign his prop- erty in trust for the benefit of all his creditors. In such situation all the law can reasonably demand is a faithful application of all his property to the payment of all his debts; and when this object is accomplished by an assignment or deed of trust for the benefit of all his creditors, the hindrance and delay which may operate to the prejudice of particular creditors is simply an unavoidable inci- dent to a just and lawful act. And such mere incident to such laudable act cannot be held to vitiate the transaction as fraudulent until the maxim that equality is equity, in the distribution of the property of an insolvent, shall have been repudiated, and the highest act of justice which can be done by a debtor, in contemplation of in- solvency, shall be deemed an act of dishonesty. If authority be necessary to sustain so plain a proposition reference is made to Meux v. Howell, 4 East, 1; Wilder v. Winne, 6 Cow. 284, and 4 Wend. 100.” In New York it was held by the court of appeals, in Nicholson v. Leavitt ! (Gardiner, J.), that where the delay to cred- itors necessarily veswits from a fair exercise of the debtor’s right to make an assignment with preferences, it is not prohibited by any statute. And where one, in making an assignment, intends only such delay and hindrance to his creditors as would follow as an in- cident to the assignment, such intent does not make the assign- ment fraudulent.’ § 800. Hindrance and Delay of Creditors — Review of Cases — Continued.— In the case of Nicholson v. Leavitt,’ in the superior court of the city of New York, the construction of the words of the statute now under consideration was examined at great length by Duer, J., who delivered the opinion of the court. The follow- ing extracts from this opinion seem to claim a place under the present head: “It is not true that where there is no evidence of a fraudulent intent, every assignment by an insolvent must be held to be void if the necessary effect of its provisions, or of any of them, 16N. Y, 510, 516. The court in this case cite and approve Meux v. Howell and Wilder v. Winne. See, also, Bank of Silver Creek v. Talcott, 22 Barb. 550. 2 Hazel v. Bank, 95 Mo. 60; 8S. W. Rep. 178; 6 Am. St. Rep, 22. See Arnold v. Hagerman, 45 N. J. Eq. 186; 17 Atl. Rep. 93. 34 Sand. S, C, 252, 284, The judgment in this case was reversed in the court of appeals, 6 N. Y. 510. § 300.] HINDRANCE AND DELAY OF CREDITORS. 411 is to hinder and delay the creditors in the sense in which the words were understood by the counsel; for to assert this as the true con- struction of the statute is to affirm that no valid assignment by an insolvent of all his property in trust for his creditors has ever been made, or, so long as the statute shall remain in force, can be made. The necessary effect of every such general assignment, even where the creditors are to be paid pari passu, is to hinder and de- lay them in the collection of their debts, by withdrawing the prop- erty from the reach of any legal process to which they might wish to resort. Not only is such its necessary effect, but the actual in- tent of the debtor is to place the property beyond the immediate power and action of his creditors, by preventing them from ob- taining any judgment by which it may be bound, or from issuing any execution or attachment under which it may be sold. He means to hinder the creditors from collecting their debts out of his property by any proceedings against himself as their debtor, and to delay them from receiving any portion of their debts until they shall become entitled to a dividend under the assignment; and the intent thus to hinder and delay them is not only to be plainly de- duced from the nature of the trust, but not unfrequently is con- Jessed in its terms. In fact it was upon this very ground — the apparent and certain intent to hinder and delay the creditors — that originally the validity of a general assignment, although for the benefit of all the creditors without distinction, was not only seriously doubted but seriously contested.” The learned judge then refers to the case of Pickstock v. Lyster, already cited, and that of Braddock v. Watson,! as having established the validity 13 Price, 6. Of these decisions it is, however, said: ‘‘It seems impossible to- deny that they are a plain violation of the statute of frauds, if we look merely to the words of the statute, and understand them in their literal extent.” To. show this the learned judge quotes the words of the present New York statute (remarking that those of the English statute and of the former acts of our legis- lature upon the subject, are substantially the same), that ‘‘every assignment made with the intent to hinder, delay or defraud creditors, etc., shall be void,” dwells on the apparent departure from them involved in the doctrine now es- tablished (that although the intent to deprive all or particular creditors of their lawful suits, and hinder or delay them in the recovery of their just demands, is. confessed or proved, still the assignment, if by its terms all the property which it embraces must be applied ratably or otherwise to the payment of all the debts, must be sustained), and then offers the following explanation of this seeming departure: that although in these cases the intent to hinder and delay the cred- itors is manifest, it is just as certain that there was 10 intent to cheat or defraud them; and the reasonable construction of the statute is that it is only such a hindrance or delay as was intended to operate, or, if permitted, could operate as a fraud upon the creditors, that was meant to be prohibited. With deference to the opinion thus expressed, it may be observed that however applicable the ex- planation given may be to the present New York statute, and however necessary to reconcile with its language the decisions under it, it seems hardly called for 412 FRAUDULENT AND VOID ASSIGNMENTS. [cH. xxv. of such assignments, notwithstanding the objections made against them. In the late case of Bank of Commerce v. Payne 'it was held that the intent with which a deed of assignment for the benefit of cred- itors is made, and not the actual tendency or effect of the deed, determines the question whether or not it is fraudulent and void. Therefore, if it be a trick or contrivance for the debtor’s own ad- vantage, an equal and honest distribution of his estate among his creditors being a secondary and subordinate consideration or part of a plan or scheme previously concocted in pursuance of which creditors are intended to be or have been deceived into false secu- rity, overreached and defrauded, then the deed should be held void. § 301. Hindrance and Delay of Creditors — Rule of Construc- tion.— From the views expressed in the foregoing cases? the rule of construction seems deducible, that in order to bring an assign- in regard to the English cases remarked upon; nor do those cases, considered in the light of Meux v. Howell, and compared with the words of the English stat- ute, appear to involve any violation of that statute. A marked distinction be- tween the New York statute and those from which it was condensed by the legislature is the entire absence of all the language so laboriously inserted in the earlier laws, and which served to define for the courts the quality of the intent contemplated. More will be said on this subject on another page. 186 Ky. 446; 8S. W. Rep. 856, Citing German Ins, Bank v. Nunes, Good, 334; Emerson v. Senter, 118 U. 8. 3; 68. Ct. Rep. 981. 2The rule as laid down in the text has been ratified and confirmed by several later decisions. In State v. Benoist, 37 Mo. 500, it was said (Holmes, J.): «« An intent to defraud as well as to hinder and delay must appear in order to make it (the assignment) void.” See, also, Gates v. Lebaume, 19 Mo. 17; Potter v. McDowell, 31 Mo. 62. But the words of the Missouri statute are ‘‘ hinder, delay or defraud.” And it was held in Crow v. Beardsley, 68 Mo. 435, that either intent was sufficient to avoid the assignment. Hence an instruction to the jury that they should find for the defendant unless the conveyance was made to hinder, delay and defraud creditors was erroneous. The rule of State v. Benoist seems to prevail also in Illinois. Myers v. Kinzie, 26 Ill. 30. So in the case of Bailey v. Mills, 27 Tex. 484, it was said: ‘‘It is not a sound objec- tion to an assignment that it operates to hinder and delay creditors, for this is the usual and almost invariable consequence of an assignment.” The same opin- ion was expressed in Carlton v. Baldwin, 22 Tex. 724. Soin True v, Congdon, 44N. H. 48. ‘*Butif such assignment was made bona fide and with no such fraudulent intent, it would be entirely immaterial what its effect might be. The effect of all assignments at common law or under our state statute may be and perhaps generally is to delay and hinder creditors somewhat in the collection of their debts. And this effect might follow from an assignment made legally and bona fide as often as in any other case, but such effect can have no tendency to make the assignment void as against creditors.” In Hefner v. Metcalf, 1 Head, 578, the court say: ‘‘The words ‘ hinder and delay’ are to be taken in their legal or technical and not in their literal sense, or no deed could stand when creditors were not provided for.” And see Shackelford, J., in Rindskoff v. Guggenheim, 3 Cold. (Tenn.) 284, And see Christopher v. Covington, 2 B, Mon. 857; Morgan v. Bogue, 7 Neb. 429. § 301.] : “ HINDRANCE AND DELAY OF OREDITORS. ment by a debtor within the statute of Sraudulent conveyances (at least in its original and unabridged form and with reference to its professed title) on the ground of an intent to hinder and delay, there must be an intent to delay and hinder actually entertained by the debtor; and not only an actual intent but a covinous or JSraudulent one. But there is a class of cases which have estab- lished a very different rule of construction, constituting in some states the present law of the land. These remain to be next con- sidered. It was said by Lord Mansfield in Cadogan v. Bennett? that the statutes of Elizabeth “cannot receive too liberal a construction or be too much extended in suppression of fraud;” and this idea seems to have been very fully acted on by the courts since that decision, especially in applying the words of the statute now under consideration.? Mr. Roberts has remarked upon this action of the courts in the earlier cases, which he describes to have been exerted by a process of “legal artificial presumption,” founded in a great degree on views of general expediency or public policy which he 12 Cowp. 482. 2It may appear strange that the statute of Elizabeth should have been so lib- erally construed by the courts in aid of the equitable remedies of creditors when they are both, in their terms, penal statutes of a very stringent kind; and in that view calling, according to the well-known rule, for a strict construction. It will be seen, however, that both statutes partake of a double quality, being partly remedial and partly penal; and it is in view of this double quality that they have been held to admit of the application of two opposite principles of construction. Sir William Blackstone has alluded to the apparent inconsist- ency involved in this proposition in the following passage of his Commentaries: “Statutes against frauds are to be liberally and beneficially expounded. This may seem a contradiction to the last rule (that penal statutes must be construed strictly), most statutes against frauds being in their consequences penal. But this difference,” he proceeds to explain, ‘‘ is here to be taken: where the statute acts upon the offender and inflicts a penalty, as the pillory or a fine, it is then to be taken strictly; but where the statute acts upon the offense by setting aside the fraudulent transaction, here it is to be construed liberally.” The learned commentator then refers, in illustration of the last proposition, to this very stat- ute of 13 Eliz., ch. 5, which, under the words ‘‘ to defraud creditors and others,” was held to extend to a gift made to defraud the queen of a forfeiture. 1 BI. Com. 88, 89. Mr. Sergeant Stephen, in his New Commentaries, also speaks of statutes ‘‘of a mixed kind which contain both remedial and penal provisions, the former of which will be construed with more indulgence than the latter.” 1 Steph. Com, 78; Platt v. Sheriffs of London, Plowd. 36; Bones v. Booth, W. Black. 1226. Mr. Roberts observes under this head: ‘‘ The principle of expound- ing beneficially and equitably all statutes against fraud is agreeable to those strong maxims of resistance to all shapes of covin and deceit manifested by our legal and equitable jurisdictions. Notwithstanding these laws are greatly penal, the rule still holds of giving them an extended and liberal exposition. In his enim que sunt favorabilia anime, quamvis sunt damnosa rebus, fiat aliquando extensio statuti.” Rob. Fraud. Conv. 542, 543; Wimbish v. Talbois, Plowd, 39; 1 Co. 181; Fermor’s Case, 3 Co. 78; Fitzherbert’s Case, 5 Co. 80. 414 FRAUDULENT AND VOID ASSIGNMENTS. [cH. XXV. approves. “ Where experience,” he observes, “has pointed out a successful engine of fraud, the very use of that engine is made, in some cases, to supersede inquiry into intention, by being itself turned into a strong presumptive indication of fraudulent design.” ! § 302, Hindrance and Delay of Creditors — The American Decisions.— Very similar views seem, especially of late, to have influenced the courts in some of our own states in their action on the subject of voluntary assignments by debtors, which, from their repeated use as instruments of fraudulent alienation, have come to be judged rather in the light of their general tendency as detri- mental to the interests of creditors than of any really fraudulent or dishonest design established against the debtor in any particu- lar case. Hence assignments have been repeatedly adjudged to be void on the ground of the mere “intent to hinder and delay,” as distinct (otherwise than by judicial implication) from the “in- tent to defraud.” Thus in Alabama a conveyance with intention to hinder or delay creditors in the collection of their debts has been held void as against them, although on valuable considera- tion. So in the case of Vernon v. Morton,’ the court of appeals of Kentucky say: “If the intention in executing the deed be to hinder and delay creditors, it will vitiate the whole deed, though it be made upon a good consideration, or for the just and equitable pur- pose of securing an equal distribution of the effects among all the 1Rob. Fraud. Conv. 32. ‘The hardship of such presumptions,” he further ob- serves ‘(if any there be), is outweighed by their utility; nor ought we to forget the difference between stated presumptions by statute,* which are express and cautionary rules of conduct, and the presumptions of unwritten law, of which the heads of the learned are the only repositories. If a rule of construction with respect to our transactions with each other is for the public good, it is only nec- essary that it be clear and ostensible; and no man can reasonably complain of a restriction upon his individual which benefits him in his social capacity, if the terms of that restriction be intelligible, general and certain.” Id. 82, 83. The same ground of public policy is taken by Coulter, J., in the case of Mitchell v. Stiles, 13 Pa. St. 306, 309. And see Foote v. Cobb, 18 Ala. 585. 2 Bowman v. Draughan, 3 Stew. 243; Pulliam v. Newburry, 41 Ala. 168; citing Terrell v. Green, 11 id. 207, 213; Tatum v. Hunter, 14 id. 557; Corprew v. Arthur, 15 id. 525; Huggins v. Perrine, 30 id. 396; Reves v. Walthal, 38 id. 329. 38 Dana, 247, 263. This case is cited and its doctrine approved by the vice- chancellor of the first circuit in Van Nest-v. Yoe, 1 Sandf. Ch. 4. But the opin- ion in Vernon v. Morton, above quoted, is qualified in some degree by what immediately follows the extract given in the text: ‘‘But to defeat the deed the fraudulent intent must be proved; it is not enough that it may be suspected ; and if a good consideration and an object apparently just appear in a conveyance, a chancellor should not imply a bad motive upon slight grounds.” * Lord Mansfield in 2 Burr. 1072, states the distinction between presumptions grounded on evi- dence, and presumptions of law, which are not to be contradicted. The statutory presumption ot dee in the text (Mr. Roberts’ text] #eems to be a third sort, depending upon an artificial rule of construction. § 302.] HINDRANCE AND DELAY OF OREDITORS. 415 creditors.”' And in the case of Nicholson v. Leavitt? the court of appeals of New York adopt the view that an intent to defraud is emplied in the intent to hinder and delay; the court observing, in answer to the argument that an intent to hinder and delay cred- itors, there being no intent to defraud them, will not make an as- signment illegal, and that a positive intent to defraud must exist, that “a positive intent to defraud always does exist where the in- 12R. 8. 187; 3 B.S. (7th ed.), p. 2329, § 4; Livermore v. Northrup, 44 N. Y. 107; Kavanagh v. Beckwith, 44 Barb. 192; Rose v. Meldrum, 11 N. Y. Weekly Dig. 354; Hauselt v. Vilmar, 76 N. Y. 680; affirming 2 Abb, N. C. 222. A sim- ilar provision has been enacted in other states. 2 A distinction has been taken between these terms, and the statute provision held to apply exclusively to the latter. See post, § 309. 3 Assignments by debtors for the benefit of,creditors are, in a peculiar sense, the objects of chancery jurisdiction. Jones v. Dougherty, 10 Ga. 273, 411 Wend. 240, 251. 5 But in Baldwin v, Peet, 22 Tex. 708, it was said: ‘‘ A court of equity, having the right to find the facts from the evidence, might well infer from those estab- lished and patent facts the additional and important facts of fraudulent intent, and having thus found it, declare the legal consequences by setting aside the deed as void, just the same as though the fraudulent intent were confessed in the peti- tion. This power of a court of equity of finding one material fact which is not ad- mitted by inference and deduction from those that are admitted does not pertain § 309.] FRAUD IN LAW AND IN FACT, 423 Hence, it is comparatively seldom, and usually not in the most important cases, that juries are called on to pass upon the question of fraudulent intent as a question appertaining to their peculiar functions. And even within this limited sphere of application, the courts have given to the statute a construction which tends to nar- row it still further, by holding that in cases where the question has actually been submitted to a jury, as belonging to them to de- termine, if the verdict found by them be not warranted by the facts and law of the case, the court will set it aside! And in Goodrich v. Downs? it was decided by the supreme court that though the question whether an assignment is void on the ground of its having been made with éntent to defraud creditors is for the jury, yet where the assignment shows on its face a fact which is per se evidence of fraud —as that it was made in trust for the use of the assignor, either in whole or in part —the court is bound to pronounce the transaction void, without submitting the question to the jury. In Illinois* it seems that the question whether an assignment was made to hinder, delay and defraud creditors is one of fact for the jury, or the court sitting as a jury, to determine. § 309. Fraud in Law and in Fact.— This brings us to consider more particularly the nature of fraud with reference to the two leading divisions so often mentioned in the booxs,— fraud in law, and fraud in fact. “Fraud,” said Mr. Justice Buller in Estwick v. Caillaud,” * “is sometimes a question of law, sometimes a question of fact, and sometimes a mixed question of law and fact. If we are to decide on the face of the deed itself, that is a question of fraud in point of law.” Perhaps it would be more accurate to say that fraud is never purely a question of law, nor exclusively a ques- tion of fact;® though it may frequently partake more largely of the one quality than of the other. In the state of New York there have been conflicting opinions in regard to which of the two divisions just mentioned the question of fraud properly belonged; and in some of them the propriety to our courts in causes involving principles of equity any more than those involv- ing questions of law as contradistinguished from equity. 1Vance v. Phillips, 6 Hill, 433. See Cunningham v. Freeborn, 11 Wend. 240. 26 Hill, 488. 3 Nimmo v. Kuykendall, 85 Ill. 476. 45 Term R. 420. 5 Foster v. Woodfin, 11 Ired. L. 339. The question of fraudulent intent is for the jury, Savage v. Knight, 92 N. C. 493; Means v. Montgomery, 23 Fed. Rep. 421, See Wiesenfeld v. Stevens, 15 8S. C. 554; Cohen v. Plousky, 60 Hun, 103; 14.N. Y. Sup. Rep. 234; Barr v. Boyler, 96 Pa. St. 31; Grimes v. Farrington, 19 Neb. 44; 26 N. W. Rep. 618. 424 FRAUDULENT AND VOID ASSIGNMENTS. [oH. XXvV. and even the existence of the distinction itself has been denied. In the earlier cases in the supreme court the inclination was to bring the question within the province of the court by declaring it to be, in many instances, a question of law. “Fraud,” it was said by Kent, C. J., in Sturtevant v. Ballard, “is a question of law; and especially where there is no dispute about the fact. Jt 7s the judg- ment of law on facts and intents, as has been frequently observed by judges of the greatest eminence.” The same opinion was re- peated by Woodworth, J., in Jackson v. Mather.? But in Seward v. Jackson,’ in the court of errors, very different views: were held. “Strictly speaking,” it was said, “there is no such thing as fraud in law; fraud or no fraud is, and ever must be, a fact; the evidence of it may be so strong as to be conclusive, but still it is evidence, and as such must be submitted toa jury. No court can draw it against the finding of a jury.” It was the delivery of the opinions in this case, and in the previous one of Verplanck v. Sterry,‘ which, as recently stated by a learned judge, himself one of the revisers of the statutes,’ led to the enactment of the provision already men- tioned, making the question of fraudulent intent in all cases a ques- tion of fact. That those cases were considered to have abolished the distinction between fraud in law and fraud in fact appears from the emphatic language used by the supreme court in Jackson v. Timmerman.’ “There is,” said the court (Sutherland, J.), “no such thing as fraud in law, as distinguished from fraud in fact. What was formerly considered as fraud in law, or conclusive evi- dence of fraud, and to be so pronounced by the court, is now but prima facie evidence to be submitted to and passed upon by the jury.” But another and different exposition of the statute was afterwards given by the chancellor, in Cunningham v. Freeborn; a distinction being drawn between fraud and fraudulent intent. “The Revised Statutes,” it was said, “have not made the fraud atself a question of fact; neither, indeed, was it possible for the legislature to do so. For when a party has intentionally executed an assignment or conveyance of his property which must hinder and defraud his creditors of their just demands, the question whether the conveyance is fraudulent or not necessarily becomes a question of daw, and not of fact. The object of the statute was to reach a particular class of cases, where the conveyance would not 19 Johns, 342, 27 Cow. 801, 304. 38 Cow. 406, 485. See Jackson v, Peek, 4 Wend. 300. 412 Johns. 536. 5 Duer, J., in Nicholson v. Leavitt, 4 Sandf. 8. C, 287. 67 Wend, 436, 488, 73 Paige, 557, 564. And see remarks of Nelson, J., 8. 0., 11 Wend. 240, 251. § 309.] FRAUD IN LAW AND IN FAOT, 425 necessarily have the effect to defraud creditors or others of their rights, and where the question of fraud must of course depend upon the ¢ntent with which the conveyance was executed. In all such cases the question of fraudulent intent is declared to be a question of fact and not of law.” Similar views were held by the supreme court in Goodrich v. Downs,! already cited. And in the case of Dunham v. Waterman? Mr. Justice Selden, referring to the opinion of the court of errors in Cunningham v. Freeborn, remarked: “It follows from the reasoning of Mr. Jus- tice Nelson, which I regard as unanswerable, that whenever an assignment contains provisions which are calculated per se to hin- der, delay or defraud creditors, although the fraud must be passed upon as a question of fact, it nevertheless becomes the duty of the court to set aside the finding in opposition to the plain inference to be drawn from the face of the instruments. A party must in all cases be held to have intended that which is the necessary con- sequence of his acts.” 4 It has been thought that the later cases in this state revive the doctrine of constructive fraud, which the provision of the Revised Statutes before quoted is said to have been expressly intended to abolish; and taking the term in the sense usually given to it by writers of authority, it would appear that such has been the actual result. “By constructive frauds,” observes Mr. Justice Story, “are meant such acts or contracts as, although not originating in any actual evil design or contrivance to perpetuate a positive fraud or injury upon other persons, are yet by their cendency to deceive or mislead other persons, or to violate private or public confidence, or to impair or injure the public interests, deemed equally repre- hensible with positive fraud, and therefore are prohibited by law, as within the same reason and mischief as acts and contracts done malo animo.”*® In another passage the learned commentator re- marks as follows: ‘ Another class of constructive frauds upon the rights, interests or duties of third persons embraces all those agreements and other acts of parties which operate, directly or virtu- 16 Hill, 488. And see Webb v. Daggett, 2 Barb. 8. C. 9. 217 N.Y. 9. 311 Wend. 240, 251. : 4See remarks of Ingraham, J., in Wakeman v. Dalley, 44 Barb. 508. Mr. Justice Atwater (Gere v. Murray, 6 Minn. 805), referring to the New York cases, makes the following observations: ‘‘ We gather as a result of their investigations (the New York courts) that the question of fraudulent intent is a mixed question of law and fact,— that is, that the existence of a certain intent is a question of fact for the jury (when not disclosed by the papers), and for the court to de- clare whether such intent be fraudulent or otherwise.” 5 Duer, J., in Nicholson v. Leavitt, 4 Sandf. 5. C. 287. 61 Story’s Eq. Jur., § 258. 426 FRAUDULENT AND VOID ASSIGNMENTS. [cH. XxXv. ally, to delay, defraud or deceive creditors. Of course we do not here speak of cases of express and intentional fraud upon creditors, but of such as virtually and indirectly operate the same mischief, by abusing their confidence, misleading their judgment, or secretly undermining their interest. It is difficult in many cases of this sort to separate the ingredients which belong to positive and intentional fraud from those of a mere constructive nature, which the law pro- nounces fraudulent upon principles of public policy. Indeed they are often found mixed up in the same transaction,” etc. It will be seen that it is upon these very grounds of tendency and operation and legal policy, as distinguished from actual evil design or intentional fraud, that assignments have been declared void in several of the cases which have already been reviewed or referred to.’ 11 Story’s Eq. Jur., § 349. ‘A constructive fraud,” says a learned judge, speak- ing of the doctrine as abolished, ‘‘ was necessarily a question of law. It was a fraud that the judges, in construing the provisions of a conveyance or assign- ment, presumed to exist, not only without evidence that it was intended by the parties, but even in cases where no such intention could have existed, as where a voluntary conveyance by a solvent grantor was held to be fraudulent against subsequent creditors or purchasers.” Duer, J., in Nicholson v. Leavitt, 4 Sandf. 8. C. 287. 2In Florida, where the distinction between fraud in law and fraud in fact is established, it is held to be the duty of a judge to instruct the jury that their con- clusions from facts must be regulated by the character and import given to those facts by necessary legal implication. Some acts are proof of fraudulent intent, and it is the duty of the court so to instruct the jury. Gibson v. Love, 4 Fla. 217. See, also, the observations of Pearson, J., in Jessup v. Johnson, 3 Jones’ Law, 335; Marks v. Bradley, 69 Miss. 1. In California, where the question of fraudu- lent intent is in all cases a question of fact, it is nevertheless held that wherever the law declares that certain indicia are conclusive evidence of fraud, a verdict against such conclusive evidence should in all cases be set aside. On the other hand, where the evidence of fraudulent intent is declared by the law to be only presumptive, the jury have the power, upon considering the whole case, to find against such presumption. Billings v. Billings, 2 Cal. 109, 118, 114. And see the observations of Pratt, J., in Pierson v. Manning, 2 Mich, 445, 455, 456. See Henry v. Root, 38 id. 373. In Missouri the rule is thus laid down by Mr. Justice Scott (Johnson v. McAllister’s Assignee, 30 Mo. 327): ‘‘ We have never adopted in this state the course of decisions in New York under the statute concerning fraudu- lent conveyances. Our courts do not hear extrinsic evidence in relation to the validity of a conveyance, and then on such evidence, as a matter of law, pro- nounce the conveyance void. When a conveyance on its face is fraudulent and void the court will declare it so. But when it appears to be fair, and its validity depends on extrinsic evidence, that evidence is submitted so a jury, who will de- termine as a matter of fact whether it is fraudulent or not.” In New Mexico it is held that under the common-law procedure it is the duty of the court to deter- mine whether an assignment is fraudulent in law or not; and an assignment fraudulent in law, though not fraudulent in fact, is ground for an attachment. Leitensdorfer v. Webb, 1 New Mex. 34. In Iowa it was held that where a member of a partnership, which was largely indebted, made a voluntary conveyance of all his individual property, but without any purpose to defraud the firm credit- ors, such conveyance would be constructively fraudulent and liable to be avoided. Barhydt v. Perry, 57 Iowa, 416; 10 N. W. Rep. 820. § 310.] FRAUD, HOW ESTABLISHED, 427 The intent of the grantor which will avoid a voluntary assign- ment need not be actual, corrupt intent. The law imputes a fraudu- lent intent if the thing done is unlawful, and naturally results in hindering, delaying and defrauding creditors. And this rule ap- plies where the matter or act that is unlawful is shown by intrinsic evidence, as where it appears on the face of the deed.! : § 310. Fraud, How Established.—It is a settled rule of law that fraud is never to be presumed,’ but must always be proved ;? that is, it is not to be presumed in the absence of evidence.!| The presumption of law is always against bad faith. So in equity fraud is not to be presumed. The burden of fraud rests upon the party making the charge, and it must be clearly established.’ Hence the rule of practice in equity that where an assignment is not fraudulent on its face,a mere change in a bill that it was made 1 Abbott v. Treat, 78 Me. 121; 3 Atl. Rep. 44. 2Sutherland, J., in Grover v. Wakeman, 11 Wend. 187, 192; Hempstead v. Johnson, 18 Ark, 123; Thornton v. Hook, 36 Cal. 223; Foster v. Brown, 65 Ind. 234; Bumpon Fraud. Convey., p. 559, and cases cited; Roberts on Fraud. Convey. 528; Olson v. Scott, 1 Colo. App. 94; Weatherly v. Straus, 73 Cal. 283; 28 Pac. Rep. 1045. 3 Vernon v. Morton, 8 Dana, 247; Grover v. Grover, 3 Md. Ch. Dec. 29; Straus v. Rose, 59 Md. 525; Parkhurst v. McGraw, 24 Miss. 184; Henckley v. Hendrick- son, 5 McLean, 170; Wilson v. Lott, 5 Fla. 305; 1 Story’s Eq. Jur., § 190; Blow v. Gage, 44 Ill. 208; Bartlett v. Blake, 37 Me. 124; Belk v. Massey, 11 Rich. 614; Waddingham v. Loker, 44 Mo. 132; Roberts v. Guernsey, 3 Grant (Pa.), 237; Schleicher v. Walker, 28 Fla. 680; 10 S. Rep. 33. 4 Kellogg v. Slauson, 13 Barb. 56, 58. See Brigham v. Tillinghast, id. 618, It is sometimes said that fraud must be proved, and is never to be presumed, This proposition can be admitted only in a qualified and very limited sense. Allega- tions of fraud are seldom, almost never, sustained by that direct and plenary proof which excludes all presumption. Black, C. J., in Kaine v. Weigley, 22 Pa. St. 179; Reed v. Noxon, 48 Il]. 323. 5 Brown v. Bartee, 10 Sm. & M. 268-274: Garland, J., in United States v. Bank of the United States, 8 Rob. (La.) 403. In Palmer v. Mason, 42 Mich. 146, it is said: ‘‘ A transfer for the benefit of creditors, or by way of security, will not be adjudged fraudulent as a conclusion of law drawn from the frame of the instrument, unless that construction is a necessary result in view of its peculiar shape and scope.” 6 Bogert v. Haight, 9 Paige, 297; Walworth, C., id. 302; Parkhurst v. McGraw, 24 Miss. 134; Hollister v. Loud, 2 Mich. 309, 324, 325; 1 Story’s Eq. Jur., § 190. But see Rob. Fraud, Conv. 828. 7Dunham v. Gates, 2 Barb. Ch. 196; Washington v. Ryan, 5 Baxter (Tenn.), 622; Dodd v. Hills, 21 Kan. 707; McPike v. Atwell, 34 1d. 142; Buck v. Sher- man, 2 Doug. (Mich.) 176; Hollister v. Loud, ubi supra; Blow v. Gage, 44 Ill. 208; Nye v. Van Husen, 6 Mich, 329; Olney v. Tanner, 10 Fed. Rep. 101; affirmed, 18 id. 636; s.c., 21 Blatch. 540; Brahmstadt v. McWhirter, 9 Neb. 6; Horbach v. Hill, 112 U. S. 144: 5S. Ct. Rep. 81; Paul v. Baugh, 85 Va. 955; 98. E. Rep. 329; First Nat. Bank v. Kennedy, 91 Ala. 470; 8S. Rep. 652; Mobile Bank v. McDonnell, 89 id. 484; 8 S. Rep. 187; Jackson v. Harby, 70 Tex. 410; 8 S. W. Rep. 71. 428 FRAUDULENT AND VOID ASSIGNMENTS. [cH. Xxv. to defraud creditors, as the complainant is informed and believes, not verified by the oath of any person having personal knowledge of the alleged fraud, is not sufficient to entitle the plaintiff to an injunction against the assignees.’ In construing the provisions of a general assignment the same rules are to be applied as in the case of other conveyances. There is the same presumption in favor of good faith with respect to them as in the case of ordinary contracts and conveyances. They will be supported rather than be declared void, and therefore, where the language of the assignment can be abundantly satisfied by a construction which will support the instrument, such con- struction should be given. In the case of Waggoner v. Smith® it was laid down as a rule that the test as to whether or not a conveyance is fraudulent or void as to a creditor is: Does it hinder him in enforcing his debt? Does it deprive him of a right which would be legally effective if the conveyance or devise had not been resorted to? § 311. Fraud May be Presumed, When.— Though fraud cannot be presumed in the absence of evidence, it may always be pre- sumed; thatis, inferred from circumstances shown inevidence. And it is by this indirect or presumptive method that it is in fact usually made out and proved — what is called direct or positive proof of fraud being rarely attainable. Hence it is well settled that fraud or fraudulent intent may be proved by circumstances. In regard 1 Bogart v. Haight, 9 Paige, 297; Munzeheimer v. Mayer, 66 How. Pr. 484; Mayeski v. Creditors, 40 La, Ann. 94; 48. Rep. 9. Only the assignor himself can testify as to whether or not the assignment was made in good faith. The hus- band of the insolvent consignor cannot testify as to whether the assignment was executed in good faith, although he has acted as agent of his wife in the man- agement of her property. Talcott v. Hess, 31 Hun, 282. ? Townsend v. Stearns, 32 N. Y. 209; Benedict v. Huntington, id. 219; Sher- man v. Elder, 24 id. 881; Grover v. Wakeman, 11 Wend. 187; Shultz v. Hoag- land, 85 N. Y. 464; Coyne v. Weaver, 84 id. 386, and cases cited. 313 Lea (81 Tenn.), 560, 4 Kaine v. Weigley, 22 Pa. St. 179. See Bump on Fraud. Conv., p. 560. ® Henckley v. Hendrickson, 5 McLean, 170; Anderson v, Tydings, 3 Md. Ch. Dec, 167; Pine v. Rikert, 21 Barb. 469; Parkhurst v. McGraw, 24 Miss. 134; Wright v. Linn, 16 Tex. 42: McDaniel v. Baca, 2 Cal. 326. The court of equity may presume fraud and declare the assignment purporting to be for the benefit of creditors fraudulent from the character and conduct of the assignee appointed by the debtor. But an assignment for the benefit of creditors is usually so benefi- cent in its operation that it should clearly appear that it will not serve a good purpose, but will merely operate to hinder and delay creditors, before it should be set aside. White v. Davis, 48 N. J. Eq. 22; 21 Atl. Rep. 18%. In Brinks v. Heise, 84 Pa. St. 246, it was held that where it is alleged that an assignment was made to defraud creditors, it is competent to prove any fact tending to show the relation and conduct of the parties thereto. The alleged fraud must be estab- lished either by direct proof or by facts to warrant a presumption of its exist- ' ” § 311.] FRAUD MAY BE PRESUMED, WHEN. 429 to the character or strength of the evidence in such cases, it is a further rule that fraud will not be presumed from slight circum- stances or circumstances of an equivocal tendency,! or circum- stances of mere suspicion, leading to no certain results. But circumstances affording a strong presumption will be deemed suffi- cient evidence.’ It has been said that the proof should be so clear and conclusive as to leave no rational doubt upon the mind. Fraud will not be presamed where the facts out of which it is supposed to.arise may well consist with honesty and pure inten- tion. In a late case in New York it was held that, where an assign- ment is attacked for fraud, the fraud must be proved and not pre- sumed; that while it can seldom be directly proved, and usually is a deduction from other facts which naturally and logically indi- cate its existence, yet such facts must be of a character to warrant the inference. “Tt is not enough that they are ambiguous and just as consistent with innocence as with guilt. That would substitute suspicion as the equivalent of proof. They must not be, when taken together and aggregated, when interlinked and put in proper relation to each other, consistent with an honest intent. If they are the proof of fraud is wanting.” ence, and the fact that an assignment was made for the purpose of hindering and defrauding creditors avoids it as against contesting creditors. 1 Wing, P. J., in Hollister v. Loud, 9 Mich. 309, 324, 325, and cases cited ibid. ?Fisher, J., in Parkhurst v. McGraw, 24 Miss. 134, 187; 1 Story’s Eq. Jur, § 190. ’ Fisher, J., in Parkhurst v. McGraw, ubi supra; McDaniel v. Baca, 2 Cal. 326. 4Wing, P. J., in Hollister v. Loud, ubi supra; citing Buck v. Sherman, 2 Doug. (Mich.) 176, But in Watkins v. Wallace, 19 Mich. 57, where the judge charged the jury that ‘‘fraud will not be presumed from slight circumstances,— the proof must be clear and conclusive,” it was held that this language was likely to lead the jury to suppose that they must disregard all balancing of evi- dence and require a case absolutely free from doubt, and was therefore objec- tionable. See Bump on Fraud. Conv., p. 560 e¢ seq. 5 Chilton, J., in Smith v. Mobile Bank, 21 Ala. 126, 135; Work v. Ellis, 50 Barb, 512. It is said by Mr. Justice Story that neither courts of equity nor courts of law insist upon positive and express proof of fraud, ‘‘ but each deduces them from circumstances affording strong presumptions. But courts of equity will act npon circumstances, as presumptions of fraud, where courts of law would not deem them satisfactory proofs. In other words, courts of equity will grant relief upon the ground of fraud established by presumptive evidence, which evidence courts of law would not always deem sufficient proof to justify a verdict at law.” 1 Story’s Eq. Jur., § 190. A voluntary conveyance, although the grantor is em- barrassed at the time of its execution, is not fraudulent per se as to subsequent creditors. Frank v. Cruthers, 108 Mo. 569. ®Shultz v. Hoagland, 85 N. Y. 464. See Bagley v. Bowe, 50 N. Y. Super. Ct. 100. ‘430 FRAUDULENT AND VOID ASSIGNMENTS. (cH. xxv. § 312. Fraud, How Established — Division of Subject.— The grounds upon which fraud is established against assignments must be considered under a twofold division: first, with reference to their origin, as appearing on the face of the deed of assignment itself, or by matter extrinsic, or from both in conjunction : and secondly, with reference to their quality, as constituting, per se, evidence of fraud, or as only tending to establish such a conclusion and admitting of explanation. The first of these divisions Js sus- ceptible (as just indicated) of a threefold subdivision, which has been very fully and clearly stated by a learned judge in an impor- tant case,' in the following terms: A conveyance made by an in- solvent debtor may be fraudulent onits face, containing provisions which the law deems necessarily, and under all circumstances, fraudulent in their operation; or it may be void as against credit- ors, solely by reason of matter dehors the deed, from a want of con- sideration or of good faith; or it may have the effect to defeat or delay creditors by reason of some provision in the deed, operat- ing in connection with particular states of fact shown to exist out of the deed, though the same provision in a deed, not connected with such other extraneous facts, would not hinder or delay cred- itors and so would not render the deed invalid.” § 313. Fraud on the Face of the Deed.— Assignments are con- stantly declared void as being fraudulent on their face, where they contain provisions in direct conflict with some established rule or requisite of law, the most important instances of which are the fol- lowing: where they are made in trust for the use of the assignor,_ in whole or in part;* where they contain some provision for his benefit or the benefit of his family, at the expense of the credit- ors;* as by stipulating for a gross‘ or annual sum;® or reserving a surplus of moneys or property to the assignor, after providing for only a portion of the creditors;*® or stipulating for the posses- 1Curtis, J., in Stewart v. Spencer, 1 Curt. 157, 159. To declare a conveyance fraudulent per se, the vice must be apparent on the face of the instrument. Hill v. Agnew, 12 Fed. Rep. 230. ? Mackie v. Cairns, 5 Cow. 547; Goodrich v. Downs, 6 Hill, 488; Leitch v. Hol- lister, 4.N. Y. 211; Swift v. Hart, 835 Hun, 128; Means v. Montgomery, 28 Fed. Rep. 421; Ziegler v. Maddox, 26 Md. 575; Bigelow v. Stringer, 40 Mo. 195, where the cases are collected; Richardson v. Marqueze, 59 Miss. 80. See Gardner v. Conimercial Nat. Bank, 18 R. I. 155. 3 Gazzam v. Poyntz, 4 Ala. 374; Vietor v. Henlein, 34 Hun, 562; Henderson v. Downing, 24 Miss. 106, See Holmes v. Marshall, 78 N. C. 262; Moore v. Hinnant, 89 id. 455; Gardner v. Commercial Nat: Bank, 95 Ill. 298, 4 Harris v. Sumner, 2 Pick. 129. 5 Mackie v. Cairns, 5 Cow. 547. 6 Goodrich v. Downs, 6 Hill, 488; Barney v. Griffin, 2 N. Y. 865, § 313.) FRAUD ON THE FACE OF THE DEED. 431 sion of the property assigned;! or imposing coercive terms upon creditors ;? or reserving a power of interfering with and control- ling the application of the assigned property or its proceeds, as by declaring new preferences,’ or reserving a power of revocation in any form; * or reciting that the assets are far greater than the lia- bilities, and clothing the assignee with great discretionary power ;° or power to the assignee to compromise with creditors; ¢ or finally, where they contain any provision expressly intended to hinder, delay or defraud creditors, of which sufficient has already been said. The insertion of a provision to pay individual debts out of part- nership property in an assignment of the partnership effects of an insolvent firm is conclusive evidence of a fraudulent intent on the part of the assignor.’ Where the fraud thus appears on the face of the deed, the courts usually assume to pass upon it without the intervention of a jury, it being of that character already described as fraud in law. When the court can see that a deed is fraudulent on its face, it has been said there is nothing for a jury to pass upon. If the law im- putes to the grantor a design in making the deed, no evidence of intention can change the presumption; if the law declares such deeds to be void, it is no matter how the question of fraud in fact may stand. Where it is apparent from the deed itself that the 1 Brooks v. Wimer, 20 Mo. 508; Stanley v. Bunce, 27 Mo. 269; Read v. Pelle- tier, 28 id. 173; Billingsley’s Adm’r v. Bunce, 28 id. 547; Commercial Bank v. Brewer, 71 Ala. 574. See Cheatham v. Hawkins, 76 N. C. 335; Joseph v. Levi, 58 Miss. 848; Harman v. Hoskins, 56 id. 142. 2Grover v. Wakeman, 11 Wend. 187; Marsh v. Bennett, 5 McLean, 117. 3 Sheldon v. Dodge, 4 Denio, 217; Gazzam v. Poyntz, 4 Ala. 374; Price v. Pit- zer, 44 Md, 521. 4Cannon v. Peebles, 4 Ired. L. 204; Riggs v. Murray, 2 Johns, Ch. 565; Reich- enbach v. Winkhaus, 67 How. Pr. 512. 5 First Nat. Bank v. Hughes, 10 Mo. App. 7. See Bagley v. Bowe, 50 N. Y. Super. Ct. 100. 6 McConnell v. Sherwood, 19 Hun, 519. But see 18 Hun, 282. 7 Wilson v. Robertson, 21 N. Y. 587; Vietor v. Henlein, 34 Hun, 502; Schiele v. Healy, 61 How. Pr. 78; Platt v. Hunter, 11.N. Y. Weekly Dig. 300. See Crook v. Rindskopf, 34 Hun, 457; Friend v. Michaelis, 15 Abb. N. C, 354, But on the other hand a partner may appropriate his individual property to the pay- ment of the firm debts; and where the firm has made a general assignment for the benefit of its creditors, a conveyance by one of its members of his individual property to the assignee, to be disposed of and applied in accordance with the term of the assignment to the payment of the partnership debts, is not per se fraudulent or unlawful and void. Royer Wheel Co. v. Fielding, 101 N. Y. 504. 8Green v. Trieber, 3 Md. 11; Inloes v. Am. Ex. Bank, 11 id. 173; Rosenburg v. Moore, 11 id. 376; Malcolm v. Hodges, 8 id. 418; Schuman v. Peddicord, 50 id. 560; Farrow v. Hayes, 51 id. 498; Jones v. Syer, 52 id. 211; Bigelow v. Stringer, 40 Mo. 195; State v. Benoist, 37 id. 500. In Hubbard v. McNaughton, 48 Mich. 220, it is said: ‘‘ The fraudulent character of an assignment cannot depend upor the opinions of the assignors that what they do is not fraudulent. If they 432 FRAUDULENT AND VOID ASSIGNMENTS. [cH. XXv. object and intent of its execution was to hinder, delay and defraud creditors, the court has but the one duty to perform — that is, to declare it null and void.!. So where it appears on the face of the assignment that it was not absolute and unconditional, and that it contains by legal implication a resulting trust, the legal construc- tion of the instrument is for the court and not the jury. The law when applied to the case settles the question of its validity at once, and nothing remains to be submitted to the jury.’ . Moreover, an assignment which is void or fraudulent on its face cannot be cured by the operation of the assignment laws.’ The process employed in these adjudications upon the face of the deed is one of inference or presumption;? but it is of the strict kind called “legal or artificial presumption,’*® founded for the most part on views of general expediency or policy. Without al- lowing any inquiry into the actual intent of the debtor, the law makes the deed itself as evidence, and from that alone infers the intent; it presumes such intent to have been fraudulent; it “im- putes” to the debtor an unlawful design in making the deed; it “construes ” the terms of the deed into “badges of fraud,” and condemns it accordingly. This presumption is sometimes founded on a single provision in the deed, occasionally on a very few words,’ but more commonly on various provisions taken together.’ withhold from the assignment what should be put into it, and if they make gifts or excessive liens on property which should not be incumbered or given away, it is a fraud, and their belief that it isnot will not save it from the conse- quences of fraud.” 1 Dargin, C. J., in Johnson v. Thweatt, 18 Ala. 741, 744. The New York cases hold that where an assignment on its face shows that it must necessarily have the effect of defrauding the creditors of the assignor, it is conclusive evidence of fraudulent intent, and it is void. Kavanagh v. Beckwith, 44 Barb. 92. See Shelden v. Dodge, 4 Den. 217; Goodrich v. Downs, 6 Hill, 488; Wakeman v. Dalley, 44 Barb. 498, 503; affirmed, 51 N. Y. 27; Griffin v. Marquardt, 21 N. Y. 121; Cunningham v. Freeborn, 11 Wend. 240; Sturtevant v. Ballard, 9 Johns. 337; Forbes v. Waller, 25 N. Y. 480; Stafford v. Merrill, 62 Hun, 144; 16 N. Y. Sup. Rep. 467. ? Pratt J., in Pierson v. Manning, 2 Mich. 445, 456. And see the observations of Chilton, C. J., in Shackelford v. P. & M. Bank of Mobile, 22 Ala. 238, 248; and of Pearson, J., in Jessup v. Johnston, 3 Jones’ Law, 385, 338; Billings v. Billings, 2 Cal. 107; Jenness v. Doe, 9 Ind. 461; Kavanagh v. Beckwith, 44 Barb. 192; Henry v. Root, 38 Mich. 373. 3 Keevil v. Donaldson, 20 Kan. 165. 4 Jessup v. Johnson, ubi supra. 5 Roberts on Fraud, Conv., p. 32; Bump on Fraud. Conv., p. 70. 6 Green v. Trieber, 3 Md. 11; Mitchell v. Stiles, 13 Pa. St. 806, 309; Pierson v. Manning, 2 Mich. 445, 456; Oliver Lee & Co, Bank v. Talcott, 19 N. Y. 146. 7In Nicholson v. Leavitt, 6 N. Y. 510, the decision declaring the assignment void was founded upon the three words — “or upon credit.” In Bingham v. Tillinghast, 13 N. Y. 215, a similar decision was founded on the three words — ‘‘or available means.” § In giving a legal construction to the assignment ‘‘it becomes necessary for §§ 314, 315.] MISCELLANEOUS. 433 § 314. Fraud, from Matter Extrinsic.— Again, fraud, when not apparent on the face of the deed, may be shown by evidence of extrinsic circumstances, such as bad faith, or collusion between the parties, etc. Thus in the case of First Nat. Bank of Bath v. War- ner,' in an action brought to set aside an assignment as fraudulent, it was held that it is competent to prove the nature and character of the business transactions of the assignor down to the time of the assignment; the use made of the avails of his property imme- * diately preceding the assignment; negotiations had with his cred- itors relative to the payment or the securing of the payment of their claims; representations made by the assignor to induce his creditors not to press the collection of their claims, and as to his solvency; the amount of his indebtedness and the nature of his assets. The question in such cases is one of fact for the jury; and the fraud is inferred from the circumstances proved in the ordi- nary mode of presumption from facts. It is a fraud to intentionally withhold from a general assign- ment property which ought to have been included in it.? § 315. Fraud, from Both Sources.— Finally, fraud may be es- tablished from the terms of the assignment in connection with evi- the court to examine every part and provision contained in it, and to apply thereto the law of the case.” Pratt, J., in Pierson v. Manning, 2 Mich. 456. The following remarks of Dargan, C. J., in Johnson v. Thweaitt, 18 Ala. 741, 747, may be inserted here: ‘‘I do not intend to lay down any fixed rule and say that a particular provision or feature in a deed shall in all cases be deemed conclusive evidence of fraud, where the deed is not a general assignment for the benefit of creditors, but is intended asasecurity for particular debts, or to protect particular individuals. All I intend to say is this: that if from the whole deed the intent to defraud, hinder and delay the creditors of the grantor is manifest, if the mind can come by a course of reasonable argument to no other conclusion, the courtis bound to pronounce the deed fraudulent and void.” 155 Hun, 120; 8N. Y.S. Rep. 765. See Kennedy v. Wood, 52 Hun, 46; 4 N. Y.8. Rep. 758. It is competent to go behind the language of the writing and show that the real purpose of its execution is to delay and defraud creditors in viola- tion of the statute of frauds. Tyler v. Tyler, 126 Ill. 525; 21 N. E. Rep. 616; 9 Atm. St. Rep. 642, Thus in Farrington v. Sexton, 48 Mich. 454, it was held that fraud is fairly inferable from the fact that the goods were inventoried at $55,011.68 and were appraised at $27,272.77, while the goods on hand five weeks. before inventoried $95,000; it may also be inferred from a showing that the assets of a certain company belonged to the assigning firm and had been disposed of by collusion. And in Davis v, Harrington, 65 Hun, 109; 8 N. Y. 8. Rep. 218, it was held that the fact that the debtor, immediately previous to the making of a general assignment, buys a large quantity of diamonds which he pledges for money borrowed to various persons at much less their value, and that he trans- fers a large quantity of his stock in trade in payment of a fictitious debt, is to. be taken into consideration in determining the question as to whether the assign- ment is fraudulent or not. ; 2Hubbard v. McNaughton, 43 Mich. 220; Parsell v. Patterson, 47 id. 505; Schultz v. Hoagland, 85 N. Y. 464; Bagley v. Bowe, 50 N. Y. Superior Ct. 100; 28 434 FRAUDULENT AND VOID ASSIGNMENTS. [CH. KXV. dence of extrinsic facts. “It is often a question of intrinsic diffi- culty to determine from the terms of the deed itself whether it is conclusively fraudulent or whether its provisions, though some- what suspicious, may not be consistent with good faith. If the provisions of the deed be of the latter character, and the court cannot clearly see by an examination of it the intent to defraud creditors, it may submit the question of intent to the jury, who will take into consideration not only such suspicious provisions, but also the evidence that may be offered to explain them, as well as that to fix the fraudulent intent on the deed.”? “ Where the presumption of fraud as arising upon the face of the deed cannot be conclusively drawn from the dubious nature of the provision on which it is attempted to predicate it, it becomes a disputable presumption, one capable of being explained and repelled by proof. In such case the deed should not be declared void upon its face and excluded from the jury, but it may be read to them; and it is for them, under the direction of the court, to determine, upon the effect of the whole proof, whether a fraudulent intent did in fact exist. § 316. Indicia or Badges of Fraud.— The expression “badges of fraud” is sometimes used to distinguish the lighter grounds on which fraud may be established from such as are apparent on the face of the assignment and necessarily involve its invalidity. But it is also used in a larger sense, as including all the grounds on which assignments may be adjudged fraudulent.® The distinctive character of these “badges” (or “marks,” as they are otherwise Iselin v. Henlein, 16 Abb. N. C. 73; Probst v. Welden, 46 Ark. 405; Kleine v. Nie, 88 Ky. 542; Cooper v. Davidson, 86 Ala. 367; 5S, Rep. 650. 1 The case of Stewart v. Spencer, 1 Curt. 157, 159, was decided upon evidence of this character. The intent with which a grantor executes a deed must be gathered from the deed itself and from his acts and surrounding circumstances, Zimmer v. Miller, 64 Md. 296; 1 Atl. Rep. 858. 2 Dargan, C. J., in Johnson v. Thweatt, 18 Ala. 741, 744. 3Chilton, C. J., in Shackelford v. P. & M. Bank of Mobile, 22 Ala. 238, 248. And where the court charged the jury thus: “It is for the jury to determine from the facts and circumstances developed by the testimony in this case, as well as from the general character, terms and provisions of the deed of assign- ment itself, whether the intention of the parties was fair and bona fide at the time of making the same, or whether it was fraudulent.” Considering the char- acter of the deed and the facts in proof, the charge was said to have presented ‘the true issue to the jury. Green v. Banks, 24 Tex. 508; Bonner v. Hodges, 111 N. C. 66. 4See Bump on Fraud. Conv., ch. 4, ‘‘ Badges of Fraud;” Cunningham v, Freeborn, 11 Wend. 240; Williams v. Jones, 2 Ala. 314. * 5Garland, J., in United States v. Bank of the United States, 8 Rob. (La.) 403; Coulter J., in Mitchell v. Stiles, 18 Pa. St. 306, 309. § 317.) THE STATUTE OF 3 HENRY VII. 435 termed), in their more limited import, is that they may always be explained, and their effect may be thus avoided.! They may appear on the face of the assignment itself or from extrinsic evidence. The assignment is said “to wear” them? where it contains provisions tending to produce an impression of fraud against the debtor, or to excite suspicion of a fraudulent de- sign. The insertion of unusual clauses,’ and the absence of the or- dinary and proper appendages of the instrument, such as schedules,! belong to this class. Among the more common badges of fraud of an extrinsic character are: The appointment of objectionable persons as assignees;® the assignment of more property than is sufficient to pay the debts,® and the retention of possession of the property after it has been assigned.’ The secrecy of the trans- fer,® and its being made on the eve of judgments,’ also fall under this division, as well as the power to sell on credit, and transfers made out of the usual and ordinary course of business." These badges, marks or indicia of fraud are distinguished as Light or strong, according to their weight in producing an impression unfavorable to the validity of the assignment. In most instances they are made up of several circumstances, which are taken and weighed together in judging of their effect, and it is their con- nection and united tendency which usually gives them force. A _circumstance which, of itself, would be of trifling importance, ac- quires strength as a badge of fraud from its combination with others. §317. The Statute of 3 Henry VII., Chapter 4, and its Re-enact- ments.— In addition to the statute of 13 Elizabeth, chapter 5, and its re-enactments in the United States, which have just been consid- 1Cunningham v. Freeborn, 11 Wend. 240; Jackson v. Harby, 70 Tex. 410; 8 §. W. Rep. 71. 2Coulter, J., in Mitchell v. Stiles, 13 Pa. St. 306, 309. 3 Twyne’s Case, 3 Co. 80; Benne v. Schencko, 100 Mo. 250; 13 S. W. Rep. 82; Peters S. & H. Co. v. Schollkoff, 71 Tex. 419; 9S. W. Rep. 386; Webb v. Ing- ham, 29 W. Va. 389; 1S. E. Rep. 816; Seals v. Robinson, 75 Ala. 363; Hick- man’s Ex’r v. Trout, 83 Va. 478; 3S. E. Rep. 181. 4 Wilt v. Franklin, 1 Binn. 502. See ante, pp. 150, 155. 5 See ante, pp. 93, 94. 6 See ante, p. 102. - 7See ante, p. 316, and post, ch. XXX. 8 Twyne’s Case, 3 Co. 80; Hafner v. Irwin, 1 Ired. L. 490. 9 Williams v. Jones, 2 Ala. 314. This is not now usually regarded as an im- portant circumstance against an assignment. See ante, p. 420. 10 Kicks v. Copeland, 53 Tex. 581; Kellogg v. Muller, 68 Tex. 182; 4S. W. Rep. 361, : 1! Bernheim v. Christal, 76 Cal. 567; 18 Pac. Rep. 683; Snell v. Harrison, 104 Mo, 158; 16 S. W. Rep. 152; Robinson v. Frankell, 85 Tenn, 475; 3S. W. Rep. 652, 436 FRAUDULENT AND VOID ASSIGNMENTS. (cH. xxv. ered, there is another class of statute provisions by which the courts are governed in pronouncing upon the character of assign- ments as being fraudulent and void against creditors. These may be termed, by way of distinction, “statutes against conveyances in trust for the use of the person making them.” Most of these are re- enactments of the English statute of 3 Henry VIL., chapter 4, passed A. D. 1487, by which, after reciting that “ oftentimes deeds of gift of goods and chattels have been made with intent to defraud credit- ors of their duties, and that the person or persons that maketh the said deed of gift goeth to sanctuary or other places privileged and occupieth and liveth with the said goods and chattels, their credit- ors being unpaid,” it was enacted. “That all deeds of gift of goods and chattels, made or to be made, of trust to the use of that person or persons that made the same deed of gift, be void and of none effect.” ? It will be further seen that although the preamble of the Eng- lish statute contains the expression, “intent to defraud,” which is so prominent in the statute of 13 Elizabeth, yet the enacting part is absolute and unqualified, declaring the conveyances void what- ever the intent may have been. The enactments in the United States, which are without any preamble or recital, are equally broad and absolute in their terms. : The principle of this provision of the statute of 8 Henry VII. was the same with that of the subsequent statute of 27 Henry VIIL., chapter 10 (usually known as “the statute of uses” ), the doc- trine established being the very equitable one, that where a debtor created a trust in personal property for his own exclusive use or benefit, he was to be deemed and treated as the owner, and the property might be taken by his creditors for the payment of their debts in the same manner as if the conveyance had not been made. The conveyance, in other words, was a fraud upon creditors and therefore void. The construction given to the statute of Henry VII. has also always been the same with that given to the statute of uses, namely, that a simple and merely formal trust of personal property, unaccompanied by any power whatever on the part of the trustee, except to hold the title for the grantor, was void; and 12 Statutes at Large, 370. The principle of this provision may be traced to an earlier period. By the statute of 50 Edw. III., chapter 6, after a recital similar to that of 3 Henry VII, but applying to tenements as well as chattels, it was or- dained ‘‘ that if it be found that such gifts be so made by collusion, that the said creditors shall have execution of the said tenements and chattels as if such gifts had not been made.” 1 Statutes at Large, 332; Crabb’s Hist. Eng. Law, 274; Angell on Assignments, 3, This statute extended only to the case of persons who eluded execution by flying to privileged places, but it seems that when they re- . mained exposed to execution such sale or assignment was not fraudulent within " the statute. Ibid.; Dyer, 295, a, b; Co. Litt. 76 a. § 318] STATUTES OF 13 ELIZABETH, ETO. 437 the whole legal title, or what was the same thing, the legal posses- sion, was in the grantor cestui que trust. § 318. The Statutes of 13 Elizabeth and 3 Henry VII. Com- pared.— On comparing the provisions of these two statutes — of 13 Elizabeth and 3 Henry VIJ.—and their re-enactments in the United States, it will be found that while the former deals with the zntents of grantors, and admits of every reference to extrinsic facts which can show the character of such intents, the latter raises the question for the courts, in every case, on the face of the deed, unembarrassed by any considerations of intent and free from all reference to extrinsic facts,' and has been well said to “furnish a simple, unvarying rule of decision.”? The questions thus raised, being purely questions of law, fall within the exclusive province of the court to determine, the fraud sought to be established belong- ing, in every case, to the division already described as fraud in law, or fraud per se? On a further comparison of these two statutes and their re-enact- ments, particularly as they form a part of the statute law of the state of New York, another distinction becomes apparent, namely : that while the provisions of the “statute against fraudulent con- veyances” are found constantly referred to and relied on by the courts throughout the long series of adjudications upon assign- ments to be found in the reports, those of the “statute against conveyances in trust for the use of the grantor” have been referred to and followed in comparatively a very few cases. Indeed, it was said in the case of Curtis v. Leavitt ‘ that prior to the case of Good- 1Comstock, J., in Curtis v. Leavitt, 15 N. Y. 119, 120. 21d, 119, 3If a conveyance, on the face of it, appears to be for the use of the person making it, the court will, as a matter of law, declare it void as against creditors, just as it would declare a bond conditioned to do any unlawful act. Robinson v. Robards, 15 Mo. 459. It was said by a learned judge, in delivering his opin- ion in an important case, that ‘‘the statute of personal uses,” as it was termed, ‘‘is not, in any proper sense, a statute against frauds, although fraudulent prac- tices may have led to its enactment,” and that ‘‘the simple inquiry is whether the property belongs to the debtor, not upon a theory of fraud and against the terms of the conveyance, but upon a theory of equitable title reserved to himself by the very conveyance which transfers the legal and nominal title to another.” Comstock, J., in Curtis v. Leavitt, 15 N. Y. 122. But, with deference, it may be observed that the expression “intent to defraud” in the preamble of the statute of Henry VII. sufficiently indicates the character of the original provision, while the titles given to most of the modern re-enactments declare them to be provis- ions against fraud in so many words. The New York act of 1787, in which the provision was first embodied, is entitled ‘‘ An act for the prevention of frauds,” and in the Revised Statutes the same provision, as amended, is placed under the head of ‘‘ Fraudulent conveyances and contracts relative to goods, chattels and things in action.” 415 N. Y. 117, Comstock, J.; Id. 147, Brown, J. 438 FRAUDULENT AND VOID ASSIGNMENTS. [CH. XXV. rich v. Downs, of which more will be said presently, the last-named statute had not been referred to in this state in more than a single case! The reason of this omission will perhaps appear in the sequel. In the case of Goodrich v. Downs,? however (which was decided by the supreme court in 1844), the statute against conveyances of personal property in trust for the use of the grantor was prom- inently referred to, and in fact distinctly relied upon, as decisive authority for declaring an assignment by a debtor in failing cir- cumstances void; the court (Bronson, J.) holding that where an assignment shows on its face that it was made in trust for the use of the assignor, either in whole or in part, it is vord in law, and the court is bound to declare it so without submitting the question to the jury. It was further held that a provision in an assignment for the return to the assignor of any surplus proceeds of the property assigned after paying certain of the assignor’s creditors, without providing for the rest, was a trust for the use of the assignor, and that it made no difference that the trust so de- clared was, or would be, in point of fact, of no benefit to the as- signor; as where it could be shown that the property assigned would not sell for enough to pay the creditors provided for.’ Although this may have been the first case in this state in which the statute in question was expressly relied on as a principal ground of the decision, the doctrine advanced is in accordance with the views expressed in previous cases cited by the court,‘ and has been sustained in later decisions.® From all these cases it will appear that the language of this statute against conveyances in trust for the use of the grantor, like that of the statute against fraudulent conveyances, has been very liberally construed by the courts. The statute of 3 Henry VII., chapter 4, as may be gathered from its preamble, seems to have been directed against those palpably fraudulent descriptions of transfer by which a debtor, intending to defraud his creditors, placed his property entirely beyond their reach by conveying it in trust for his own exclusive use. But the decisions in question have extended the modern enactments to cases of transfer pro- fessedly, and indeed actually, for the benefit of creditors, and so far unobjectionable or commendable, but containing a trust in favor of 1 Mackie v. Cairns, 5 Cow. 380. A similar omission of reference to this statute in the English cases was noticed by Comstock, J., ubi supra. 26 Hill, 438. 5 This case, so far as it may be understood to have turned upon the statute, has been overruled. See Curtis v. Leavitt, and referred to in the text on page 439. See Comstock, J., in Collomb v. Caldwell, 16 N. Y. 485. ‘Mackie v, Cairns, 5 Cow. 547; Grover v. Wakeman, 11 Wend. 187. 5 Barney v. Griffin, 2 N. Y. 865; Leitch v. Hollister, 4 id. 211. § 319.] THE STATUTE OF 3 HENRY VII. 439 the assignor, or a reservation to him on a certain contingency, even although such trust or reservation turns out to be of no real benefit to the assignor, the transfer proving to be entirely for the benefit of creditors. § 319. The Statute of 3 Henry VII., Chapter 4, and its Re- enactments — New York Cases.—In the very important case of Curtis v. Leavitt, in the court of appeals of the state of New York, an effort was made to extend the construction of this statute still further. In this case a trust and banking company? having be- come greatly embarrassed in its affairs, and being in danger of in- solvency, had adopted the plan of issuing bonds, first for a million, and then for half a million of dollars, which were intended to be sold in England in order to raise money for the use of the com- pany. To secure the payment of these bonds the company exe- cuted two deeds of trust, by which it assigned to trustees a large amount of bonds and mortgages. By the terms of the deeds the trustees covenanted to hold the assigned property in trust for the company until default should be made in the payment of the trust bonds, and after such default to hoid it in trust for the bondhold- ers. After payment of all the bonds and the expenses of the trusts, the deed provided that the trustees should hold the assigned property in trust for the company, and should transfer and dispose of the same as the company should direct. Among other grounds upon which these deeds were assailed, they were claimed to be void as to creditors on account of the trusts or reservations just. mentioned; and the statute against conveyances in trust for the use of the grantor, as expounded and applied in Goodrich v. Downs, was prominently relied on. But the court held that the statute applied only to conveyances, etc., wholly or primarily for the use of the grantor,’ and not to conveyances for other and active pur- poses, where the reservations are incidental and partial only; and the case of Goodrich v. Downs, so far as it maintains the contrary, was overruled. The court attached great importance to the fact 115 N. Y. 9. See 17 Barb. 309. 2The North American Trust and Banking Company, organized under the gen- eral banking act of the state with a capital of two millions of dollars, 3The language of Comstock, J., is: ‘‘This statute, then, only avoids convey- ances, etc., which are wholly to the use of the grantor.” 15 N, Y. 123. 4Comstock, J., 15 N. Y. 114-124; Brown, J., id., 147-149. The court under-. stood the case of Goodrich v. Downs as declaring the following principles: ‘‘ First. That every conveyance of personal estate, for whatever object, if it contains any reservation of use or benefit to the grantor, is within the statute against convey- ances in trust for the use of the person making the same. Second. Being thus void in part, the whole is void. Third. The intent of the party making the con- veyance, however meritorious, has nothing to do with the question.” Comstock, J.,15N. Y. 115. The court were of opinion that these propositions, if not indi- 440 FRAUDULENT AND VOID ASSIGNMENTS. (cH. XXV. that throughout the numerous cases which had arisen in this state prior to the last-mentioned case, involving the validity of instruments conveying a debtor’s property in trust, with some use or advantage reserved to himself (and in most of which the instruments were set aside), and throughout the many able opinions which had been pro- nounced, the statute relied on had been mentioned only once.! The court further held that if the statute could be considered appli- cable to transfers made for other objects, but containing a resid- uary interest or partial use for the debtor, it avoided only so much of the grant as was not sustained by the valid purposes for which it was made, and that it did not avoid the entire instrument which contained the invalid use.? § 320. How Assignments Are Considered —Their Character Not Affected by Subsequent Events.— In determining whether an assignment is or is not fraudulent as against creditors, the question is said to be, not whether fraud may be committed by the assignee, viduaily unsound, were certainly so in their aggregate result and influence upon instruments of the class to which they were applied in the case cited. 15 N. Y. 116, 1Comstock, J., 15 N. Y. 117; Brown, J., id. 147. 2 Comstock, J., 15 N. Y. 123, 124. This case is understood as overruling Good- rich v. Downs, supra. See Collomb v. Caldwell, 16 N. Y. 484. In the case of Rome Exch. Bank v. Eames, 4 Abb. Ct. App. Dec. 83, 95, which was a case of conveyance in trust to pay debts, and then in trust for the support of the grantor, Mr. Justice Wright summarized the construction of this provision in the follow- ing words: First, the conveyance was of both real and personal estate, and the former is not within or condemned by the statute. The trust as to the real estate. which constituted the bulk of the transfer, was unquestionably valid. Second, the statute only avoids conveyances, etc., of personal estate which are wholly to the use of the grantor. Third, if it were held to apply to transfers made for other objects, but containing a residuary interest or partial use for the debtor, the whole grant would not be void, but only so much of it as is not sus- tained by the valid purpose for which it was made. The meaning of this stat- ute (sometimes called the statute of personal uses) was fully considered in Curtis v. Leavitt, 15 N. Y. 9. It was there held that it applies only to conveyances, etc., wholly or primarily for the use of the grantor, and not to instruments for other or active purposes, where the reservations are incidental and partial only; that if it can be applied to instruments executed for real and active purposes, such as to secure debts or procure money on loans, it avoids only so much of the grant as is not sustained by the valid purpose for which it is made. It does not avoid the entire instrument which contains the invalid use. And see remarks of Robert- son, J., in Powers v. Graydon, 10 Bosw. 646; and remarks of the same learned judge in Scott v. Guthrie, 10 Bosw. 420; s.c., 25 How. Pr. 512. In Wilson v. Robertson, 21 N. Y¥. 587, where partnership property was assigned to pay certain creditors of one of the partners jointly with the partnership creditors, the court seems to place the right to object wholly upon the statutory provision. In Spies v. Boyd, 1 E. D. Smith, 445, 448, Mr. Justice Daly seems to have entertained a different view of the proper construction of this provision. This was previous to the decision in Barney v. Griffin, 15 N. Y. 9. And see McLean v. Britton, 19 Barb, 450. § 320.] HOW ASSIGNMENTS ARE CONSIDERED. 441 but whether the provisions of the instrument are such that, when carried out according to their apparent and reasonable intent, they will be fraudulent in their operation.! Another rule is that the character of the assignment will not be affected by subsequent events; and if valid in its creation, no sub- sequent fraudulent or illegal acts of the parties can invalidate it2 An assignment cannot be defeated by proof that the assignees abused their trust, misappropriated the property, or acted however dishonestly in its disposal.’ This is on the principle that where a conveyance is not fraudulent at the time of the making of it, it shall never be said to be fraudulent for any matter ex post facto! But the immediate conduct of the assignee in taking or professing to take possession, and the acts and declarations of the parties at or 1Ward v. Tingley, 4 Sandf. Ch. 476; Brigham v. Tillinghast, 15 Barb. 618; Bank of Silver Creek v. Talcott, 22 id. 552; Forbes v. Scannell, 13 Cal. 242. ?Browning v. Hart, 6 Barb. S. C. 91; Klapp’s Assignees v. Shirk, 13 Pa. St. 589; Wilson v. Berg, 88 id. 167; Shattuck v. Freeman, 1 Metc. 10. See Mc- Guire v. Faber, 25 Pa. St. 436; Governor v. Campbell, 17 Ala. 566; Gates v. Labeaume, 19 Mo. 17; Goodwin v. Kerr, 80 id. 276; Sullivan v. Smith, 15 Neb. 476; Pierce v. Jackson, 2 R. I. 35; Emerson v. Senter, 118 U.S. 1. In Hardman v. Bowen, 39 N. Y. 200, it is said: ‘If the assignment was valid in creation, having been honestly and properly executed and delivered, no subsequent illegal acts either of omission or commission can in any manner invalidate it.” But itis said in Shultz v. Hoagland, 85 N. Y. 464, that this rule must be taken as not in- tended to deny that such subsequent acts may reflect light back upon the orig- inal intent and help us to ascertain that correctly. In Talcott v. Rosenthal, 22 Hun, 573, it is held that a preferential assignment cannot be treated as a fraudu- lent disposition of the debtor’s property merely because shortly before its execu- tion he purchased goods upon a credit which had not expired at the time of the assignment, for which goods he had no reasonable hope of being able to pay. The fact that after the execution of an assignment the assignor, in pursuance of a prior contract, gave to one of his creditors an order upon one of his debtors which was paid did not invalidate the assignment. First Nat. Bank of Dubuque v. Baker, 68 Wis. 442; 32 N. W. Rep. 523. But evidence that one of the partners had disposed of property, the title to which was in his name but which belonged to the firm, subsequent to the assignment, was competent upon the ques- tion whether or not the assignment was fraudulent, Pool v. Ellison, 54 Hun, 108; Blain v. Pool, 138 N. Y. 571, distinguished. 3Cuyler v. McCartney, 40 N. Y. 221; Meeker v. Saunders, 6 Iowa, 61; Savery v. Spaulding, 8 Iowa, 239; Beck v. Parker, 65 Pa. St. 262; Guerin v. Hunt, 6 Minn. 375; Hotop v. Durant, 6 Abb. Pr. 371, note; Hempstead v. Johnston, 18 Ark. 123; Mathews v. Poultney, 33 Barb. 127; Cox v. Platt, 32 Barb. 126; Eicks v. Copeland, 53 Tex. 581; Piggott v. Schram, 64 id. 447. See Leeds v. Commonwealth, 83 Pa. St. 453. In Olney v. Tanner, 10 Fed. Rep. 101, it is held that where an assignment is complete and perfect in itself and not fraudulent in its inception, it is not invalidated by the subsequent remissness or inefficiency of the assignee. 4Shep. Touch, 67, cited Beck v. Parker, 65 Pa. St. 262. The validity of an as- signment cannot be made to depend on the assignee’s subsequent testimony as to whether he would have taken it or not if he had known that the assignor had conveyed a tract of land the day before he made the assignment. Coots v. Chamberlain, 89 Mich, 565. 442 FRAUDULENT AND VOID ASSIGNMENTS. [CH. XXV. about the time of the transfer, are admissible as part of the res geste! And where the evidence shows that the assignor and as- signee are combined in a conspiracy to defraud creditors, the acts and declarations of either conspirator, while carrying the common intent into execution and in furtherance thereof, become admissible.” But the declarations of the assignor or his acts subsequent to the conveyance are mere hearsay and do not bind the grantee in the absence of such proof of conspiracy.? But this rule is said to be subject to the exception that the acts and declarations of the grantor while he remains in possession of the assigned property are competent evidence against the grantee, for they are then a part of the res gesta.* An assignment if good when made cannot be affected by an act of the legislature afterward passed on the ground that it was then known to the assignor that such act was about being passed.’ Nor will a previous fraud always invalidate an assignment or render it liable to be set aside as fraudulent. On the other hand 1Cuyler v. McCartney, 40 N. Y. 221; Smith v. Mitchell, 12 Mich. 180; Flan- igan v. Lampman, 12 id. 58; Bates v. Ableman, 13 Wis. 644. See Covert v. Rogers, 88 Mich. 363. 2Cuyler v. McCartney, 40 N. Y. 221; Aaronson v. Deutsch, 24 Fed. Rep. 465. In Main v. Lynch, 54 Md. 658, evidence had been given to show the assignee’s knowledge of the assignor’s fraudulent purposes and of participation in fraudu- lent acts before the assignment. It was held that his acts afterwards were ad- missible in evidence on the question of fraud; that if the jury found there was a conspiracy, then the acts of the assignee were the acts of the assignor. 3 Howard v. Snelling, 32 Ga. 195; Bullis v. Montgomery, 50 N. Y. 352: Flagler v. Schoeffel, 40 Hun, 178; Coyne v. Weaver, 84 id. 386; Aaronson v. Deutsch, 24 Fed. Rep. 465; Dunkee v. Chambers, 57 Mo. 575; Norton v. Kearney, 10 Wis. 443; Bates v. Ableman, 13 id. 644; Savery v. Spaulding, 8 Iowa, 239; Frankel v. Coots, 41 Mich. 75. And see Wykoff v. Carr, 8 Mich. 44; Hargrove v. Millington, 8 Kan. 180; Baldwin v. Buckland, 11 Mich. 389. 4Bump on Fraud. Conv., p. 549. See Adams v. Davidson, 10 N. Y. 309; Jel- lenik v. May, 41 Hun, 386. See this case commented on in Cuyler v. McCartney, 40 N. Y. 221. In an action by the assignee against the sheriff it was held that, if the assignor was permitted to retain possession of the property assigned, his statements made in the assignee’s absence were admissible. Frankel v. Coots, 41 Mich. 75. The rule is now held to be established in New York that the declara- tions of the assignor are not competent evidence on the issue as to the validity of the assignment, when it arises between the creditors who stand by the assign- ment as valid, and those who attack it on the ground that it was made to cheat and defraud creditors, Flagler v. Wheeler, 40 Hun, 125. 5 Dana v. Bank of the United States, 5 W. & S. 223. 6 Reinhard v. Bank of Kentucky, 6 B. Mon. 252; Cooke v. Smith, 3 Sandf. Ch. 332, In Wilson v. Berg, 88 Pa. St. 167, itis said: ‘‘If prior to the assignment the assignor had fraudulently conveyed or concealed any of his property, such acts would not impair the validity of a general assignment subsequently made. If the conveyed or concealed property can be recovered by the assignee it should be for the benefit of the creditors. If he cannot recover it, then any creditor may § 321.] EXTENT TO WHICH ASSIGNMENTS MAY BE AVOIDED. 443 an assignment, if fraudulent and void when executed and deliv- ered, will not be rendered operative and valid by any subsequent act of the assignor.! § 321. Extent to Which Assignments May he Avoided.-— “It is a general, though not a universal, rule,” observes Chancellor Tucker, “that a deed cannot, even in equity, be good in part and void in part; and that if void because fraudulent as to any part of it, it is void in the whole. There is no question that if a deed be fraudulent in fact it is absolutely void 7m toto, and it is not per- mitted to stand as a security for what is really due, or for any pur- pose of reimbursement or indemnity. For deeds made of purpose to defraud creditors or purchasers are, by the law itself, declared void; they are therefore void at law as well as in equity, and it is not in the nature of a deed to be, at daw, good as to part and void asto the residue. But where the deed is only constructively fraudu- lent it is otherwise.” ? The principle that where an assignment is fraudulent as to any of its provisions it is void én toto as against creditors who are en- titled by law to take advantage of the fraud has received the sanc- tion of the courts in several important cases,’ and has been said to be too’ well established to need any reference to authorities to support it.t For in the case of Peters v. Bain® it was held, as re- spects fraud in law as distinguished from fraud in fact in a convey- ance, if that which is invalid can be separated from that which is valid without defeating the general intent, the maxim “void in part void zm toto” does not apply, but the instrument may be sus- tained notwithstanding the invalidity of a particular provision. pursue it in like manner as if the general assignment had not been made.” See Loos v. Wilkinson, 110 N. Y. 195; Batten v. Smith, 62 Wis. 92; 22 N. W. Rep. 342; Batten v. Richards, 70 Wis. 272; 85 N. W. Rep. 542; Kreider’s Estate, 135 Pa, St. 578; 19 Atl. Rep. 1078, 1 Averill v. Loucks, 6 Barb. 8. C. 470; Bridges v. Woods, 16 Md. 101; Solinsky v. Iincoln Sav. Bank, 85 Tenn. 368; Brooks v. Wilson, 125 N. Y. 256; 26 N. E. Rep. 258; Baldwin v. Short, 125 N. Y. 558; 26 N. E. Rep. 928. See ch. XVII. 22 Tucker’s Com. [443], 482. 3 Pierson v. Manning, 2 Mich. 446, 460; Caldwell v. Williams, 1 Ind. 405, 411; Burke v. Murphy, 27 Miss. 167; Redfield, C. J., in Mussey v. Noyes, 26 Vt. 462, 472; 1 Am. Lead. Cas. 78, 74, citing Mackie v. Cairns, 5 Cow. 549, 580; Goodrich v. Downs, 6 Hill, 488, 440; Fiedler v. Day, 2 Sandf. S. C. 594, 597; Harris v. Sumner, 2 Pick. 129, 187; McClung v. Lecky, 3 Penr. & W. 83, 94; Irwin v. Keen, 3 Wheat. 347, 355; Halsey v. Whitney, 4 Mason, 207, 230; Ticknor v. Wis- wall, 9 Ala. 305, 811; Kissam v. Edmonston, 1 Ired. Eq. 180, 184; Hafner v. Irwin, 1 Ired. L, 490, 498; Savage v. Knight, 92 N. ©. 493; Vernon v. Upson, 60 Wis. 318; State ex rel. Robertson, 102 Mo. 410; 14S, W. Rep. 985. 4Pratt, J., in Pierson v. Manning, 2 Mich. 460; Perkins, J., in Caldwell v. Williams, 1 Ind. 411; Redfield, C. J., in Mussey v. Noyes, 26 Vt. 472. 5133 U. 8. 671; 10S. C. Rep. 354. 444 FRAUDULENT AND VOID ASSIGNMENTS. [CH. XXv. In New York it was held by the chancellor, in Wakeman v. Grover,! that an assignment which is void in part on the ground of being against the provisions of a statute is void én toto, and no interest passes thereby to the assignee as against the creditors who did not assent to it.2. And in the later cases of Rogers v. De For- est? and Barnum v. Hempstead,‘ it was-decided that whenever the legal effect of any provision of the assignment is to defraud the creditors of the assignor, the whole assignment is void. And that where an assignment in trust to sell for-the benefit of creditors is coupled with other express trusts not authorized by law, the con- veyance is inoperative and will not transfer the title in the assigned property to the trustees. In Goodridge v. Downs‘ it was held by the supreme court that if any part of an assignment be contrary to the statute for the protection of creditors against fraudulent transfers the whole is void, and that one illegal trust will vitiate all the rest. But in Darling v. Rogers*® the chancellor’s decision in Rogers v. De Forest was reversed, without dissent, by the court of errors, and a very important qualification of the general rule was es- tablished. It was held that an assignment may be void or invalid in 14 Paige, 28, 24, 87 (citing Hyslop v. Clarke, 14 Johns, 458; Austin v. Bell, 20 id. 442); affirmed on appeal, Grover v. Wakeman, 11 Wend. 187. And in Crook v. Rindskopf, 34 Hun, 457, it is held that, if the deed contains a fraudulent di- rection, any creditor, even though the fraudulent direction itself may not directly prejudice him, is entitled to relief under the statute. Redfield, C. J., in Mussey v. Noyes, 26 Vt. 462, 472, refers to Wakeman v. Grover, and also to Ames v. Blunt, 5 Paige, 18, and Platt v. Adams, 7 id. 615, as directly in point to show that assignments, where in some points they contravene the express provisions of a statute, must be regarded as wholly void. 2Mr. Justice Scates, in Howell v. Edgar, 4 IIl. 417, 419, in commenting upon this distinction, observes: ‘‘‘The statute,’ says Lord Herbert, ‘is like a tyrant; when he comes he makes all void; but the common law is like a nursing father, aud makes void only that part where the fault is and preserves the rest. 1 Mod. 35. But the common law doth divide according to common reason, and having made that void which is against law lets the rest stand as itis.’ 14 Hen. VIII, fol. 15; Hob, 14; 9 Pet. 679. On the other hand, in Tennor’s Case, Coke, 76, it is said: ‘The common law doth so abhor fraud and covin all that acts, as well judicial as others, and which of themselves are just and lawful, yet, being mixed with fraud and deceit, are in judgment of law wrongful and unlawful.’ Montagu, C. J., lays down the same doctrine very strongly. ‘Covin,’ says he ‘may be where the title is good, and the title shall not give benefit to him that has it by reason of the covin, for the mixture of the good and evil together makes the whole bad; the truth is obscured by falsehood and the virtue drowned in the vice.’ Plowd. 54. The court in the case of Hyslop v. Clark, 14 Johns. 464, seems to think that the better opinion is that at the common law a deed fraud- ulent in part is altogether void. I think the better reason is found in the former opinion in making void only so much as is contrary to law.” 37 Paige, 272, 47 Paige, 568, 56 Hill, 438. 622 Wend. 483, § 821.] EXTENT TO WHICH ASSIGNMENTS MAY BE AVOIDED. 445 part, and yet be valid and operative in its general effect, even when what is void or inoperative is declared so by statute, unless the statute declares the whole deed to be void.' Accordingly, it was decided that an assignment in trust to sell or mortgage real estate was valid as to the trust to se/d though void as to the trust to mortgage. The ground taken, on a critical examination of the statute, was that as the trust to sell would: be confessedly valid if it stood alone, it could not be defeated or destroyed by the mere addition of the unauthorized trust to mortgage.2 The opinion of Senator Verplanck in this case contains some valuable illustrations on the point in question, which are here subjoined: “There can never be any difficulty in applying this construction of the statute, where the two trusts are wholly separate, though in the same in- strument; as where part of the land is conveyed to one purpose, that being a valid one, and part to another and an invalid one; or where the whole is assigned first for a valid trust, and, that failing, to some void purpose. But when the purposes are in the alterna- tive, or when they are mixed and complicated together, the separa- tion of the good and the bad may not be obvious, and sometimes not possible. When the void part is so complicated with a trust otherwise valid as to form an essential part of the intent and ob- ject of the person creating it, it may vitiate the whole, because the trust may be in fact single, though composed of several parts, one of which is void. Thus, in a trust to ‘ receive and pay over rents,’ the object is mainly the paying over to the beneficiary, and if that is prohibited by law the whole subsidiary trust fails. But as to other separate or alternative dispositions, the doctrine established as to devises affords a safe and accurate rule. This is, in substance, that when a will is good in part and bad in part, the part other- wise valid is void if it works such a distribution of the estate as, from the whole testament taken together, was evidently never the design of the testator. Otherwise when the good part is so far independent that it would have stood had the testator been aware of the invalidity of the rest.2 . . . Nor is this confined to de- vises; the prevailing doctrine of equity (and in many cases of our common and statute law also) is that, when good and bad provis- ions are mixed in a deed, the good shall be saved so far as consist- 1Opinion of Cowen, J., 22 Wend. 490. Soin Alabama it has been held that a deed may be void in part, not only at the common law, but by statute, and stand good for the residue. Anderson v. Hooks, 9 Ala. 704, 2 Opinions of Cowen, J., 22 Wend. 487, 490; and of Verplanck. &., id. 493, 494. 8 The learned senator here refers to the case of Coster v. Lorillard (14 Wend. 265), in the court of errors, and Hawley v. James (5 Paige, 818), in the court of chancery. See also the cases of Salmon v. Stuyvesant, 16 Wend. 321; Root v. Stuyvesant, 18 id. 267; Parks v. Parks, 9 Paige, 106, 117. 446 FRAUDULENT AND VOID ASSIGNMENTS. [cH. Xxv. ent with probable intent.”! Similar views were taken by the court in the case of Curtis v. Leavitt,? already referred to. In this case the rule of “void in part void im toto” was particularly con- sidered, and its application to the case in question explicitly dis- claimed. The court say: “There is no such general principle as the maxim would seem to indicate. On the contrary, the general rule is that, if the good be mixed with the bad, it shall nevertheless stand, provided a separation can be made. The exceptions are: First, where a statute, by its express terms, declares the whole deed or contract void on account of some provision which is un- lawful; and second, where there is some all-pervading vice, such as fraud, for example, which is condemned by the common law, and avoids all parts of the transaction because all are alike affected.’ The rule that an assignment cannot be void in part and valid in part is subject to the following further exceptions. § 322. Extent to Which Assignments May be Avoided — As to Property.— An assignment of different kinds of property in trust may be valid in respect to some portions of the property, and in- valid as to others. Thus, it may be valid as to personal property though held void as to real.‘ An assignment may be valid as to certain debts though invalid as to others. Thus, in Virginia, a deed of trust executed in part to secure fraudulent debts, but in part to secure a bona fide debt, the bona fide creditor having no notice of the dishonest purpose on the part of the grantor, was held to be a valid security for the bona fide® So, in North Carolina, it has been held that although one of 1 Darling v. Rogers, 22 Wend. 494, 495. 215 N. Y.9. A distinction appears to be taken in the New York cases between conveyances rendered void by fraud and trusts which are prohibited as being liable to abuse or contrary to public policy. Thus, as we have seen (ante, p. 440, note 2), it has been held that under the ‘‘ statute of personal uses,” only so much of the trusts that is obnoxious to the statute fails; and the cases cited in the text lay down a similar principle as to an invalid trust to mortgage coupled with a valid trust to sell. 3 Comstock, J., id. 96, 8%. See, also, id. 128, 124. The learned judge cites Doe v. Pitcher, 6 Taunt. 363; Collins v. Blantern, 2 Wils. 348; Pigott’s Cases, 11 Coke, 27; Darling v. Rogers, 22 Wend. 488; Patterson v. Jenks, 2 Pet. 235; Nor- ton v. Simmes, Hob. 12 ¢; Mackie v. Cairns, 5 Cow. 564, per Sutherland, J. ; Nichols v. McEwen, 17 N. Y. 22; Jessup v. Hulse, 21 N. Y. 168; Campbell v. Woodworth, 24 N. Y. 304. ‘‘ The court cannot undertake to unravel the meshes of fraud, or to sustain an instrument concocted in fraud, although some of the provisions may be meritorious or harmless,” Dunkin, C., in Henderson v. Had- don, 12 Rich, Eq. 407. ‘ Rogers v. De Forest, 7 Paige, 272; Forbes v. Scannell, 13 Cal. 242, See Rome ae v. Eames, 4 Abb. Ct. App. Dec. 83. Or vice versa. Hoops v. Knell, 31 . 550. : i: Billups v. Sears, 5 Gratt. 31; Market Nat. Bank v. Hofheimer, 28 Fed. Rep. 13, § 322.| EXTENT TO WHICH ASSIGNMENTS MAY BE AVOIDED. 447 the debts inserted in a deed of trust to secure several creditors be fraudulent, yet the legal title passes to the trustee, and his sale to a third person is valid.!’ And in Alabama, where a deed of trust to secure a debt really and Jona fide due provides that after it is satisfied a simulated debt, professedly owing to another person, shall be paid from the proceeds of the same property, the deed is not void as to the real creditor, if he did not participate in the frand of the grantor.’ In Tennessee * an intentional fraud by the maker of a trust deed as to a portion of the debts provided for, but not participated in by the other beneficiaries whose deeds are valid, avoids the deed only as to so much as is embraced by the fraudulent purpose of the maker, and concurred in by the beneficiaries whose debts are false and fictitious. Such a deed is good as to the claims of other bene- ficiaries. But in a case in New York it was held that an assignment, if fraudulent in respect of a principal preferred debt, is void in éoto, although another preferred debt, and the unpreferred debts pro- vided for, be all due in good faith.* An assignment may be void as to certain partzes and valid as to others.’ Thus, it may be void as to creditors on the ground of not being recorded and at the same time valid as against a subsequent voluntary assignee.’ So, in case of an assignment directly to cred- itors, it may be void as to one assignee and valid as to another. Thus, where a debtor assigns property to two persons by one in- strument, “to hold to them respectively in the proportions which the debts due to them respectively bear to each other,” and the assignment is fraudulent and void as to one of the assignees, it is nevertheless valid as to the other, if innocent of the fraud.’ So an assignment, though voidable against such creditors as think proper to disaffirm it, is valid in favor of such as choose to affirm 1 Harris v. De Graffenreid, 11 Ired. L. 89. 2 Anderson v. Hooks, 9 Ala. 704. 3 Troustine v. Lask, 4 Baxter, 162. 4 Fiedler v. Day, 2 Sandf. S. C. 594. See ante, p. 112, n. 2. But it is held in Maryland that the fact that some of the preferred debts are fraudulent does not avoid the assignment. It is still good as to bona fide debts. A creditor taking under the assignment is not precluded from showing fraud and collusion as to debts which stand in his way or prejudice him by being paid. Mackintosh v. Corner, 33 Md. 598. See Reiff v. Eshleman, 52 id. 582. 5 As to who may vacate assignment, see post, ch. XLIV. 6Seal v. Duffy, 4 Pa. St. 274. 7 Prince v. Shepard, 9 Pick. 176. So in Ohio, an assignment which might be void under the statute relating to bank commissioners was held not to be void as to creditors unless the commissioners vacate it. Rossman v. McFarland, 9 Ohio St, 369. 448 FRAUDULENT AND VOID ASSIGNMENTS. [oH. xxv. it and to insist upon their rights as against the assignee.’ An as- signment confessedly fraudulent is good as to creditors who assent to it. § 323. Extent to Which Assignments May be Avoided — As to Parties.— Finally an assignment, though void as against cred- itors, is always valid as between the immediate parties.? This qualification is implied in the words of the statutes of fraudulent conveyances themselves, the conveyance being declared void “ only as against those persons who are delayed, hindered or defrauded ” byit.4 The assignor is estopped by his own deed,’ and the assignee, as to those creditors who choose to insist upon their rights against him, is estopped from denying the validity of the assignment, ex- cept so far as it has been impeached or disaffirmed by other cred- itors; and he must account for the assigned property accordingly, although he has surrendered up the assignment and taken a new one upon different trusts.® The execution of a deed good inter partes, which is subsequently 1 Ames v. Blunt, 5 Paige, 18; Mills v. Argall, 6 id. 577; Bradford v. Tappan, 11. Pick. 76. 2Hone v. Henriques, 18 Wend. 240; Bodley v. Goodrich, 7 How. 277. See Geisse v. Beall, 3 Wis. 867; White v. Banks, 21 Ala. 705. A creditor’s right to complain of a fraudulent assignment may be lost by waiver or acquiescence, and he may let it alone if he chooses. Blake v. Hubbard, 45 Mich. 1. 3 Ames v. Blunt, 5 Paige, 13; Mills v. Argall, 6 id. 577; Jackson v, Cadwell, 1 Cow, 622; Smith v. Howard, 20 How. Pr. 121; Bradford v. Tappan, 11 Pick. 76; Norris v. Norris’ Adm’r, 9 Dana, 318; Dearman v. Radcliffe, 5 Ala. 192; Van Winkle v. McKee, 7 Mo. 435; Bigelow v. Baldwin, 1 Gray, 245; Whitney v. Freeland, 26 Miss. 481; Bellamy v. Bellamy’s Adm’r, 6 Fla. 62; Epperson v. Young, 8 Tex. 135. It is valid, also, as against the representatives and heirs of the parties. Ibid.; Cushwa v. Cushwa, 5 Md. 44. See Laney v. Laney, 2 Ind. 642; George v. Williamson, 26 Mo. 190. See Bump on Fraud. Conv., p. 443. The conveyance, though void as to creditors, is good against the grantor and. his representatives, Storm v. Davenport, 1 Sandf, Ch. 185; Mackie v. Cairns, 5 Cow. 547; Morrison v. Brand, 5 Daly, 40; Ogden v. Prentice, 33 Barb. 160; Waterbury v. Westervelt, 9 N. Y. 605; Osborne v. Moss, 7 Johns. 161; Jackson v. Cadwell, 1 Cow. 622. Equity will give no relief to the fraudulent grantor against the grantee by directing an accounting and reconveyance. Sweet v. Tinslar, 52 Barb. 271; Stewart v. Ackley, id. 283. In Rumery v. McCulloch, 54 Wis. 565, an as- signment, inoperative as against creditors from a defect in the justification of the sureties on the assignee’s bond, was held valid, as between the parties thereto, to pass the property to the assignee. Saunders v. Lee, 101 N. C. 3; Bell v. Wil- son, 52 Ark. 171; Ruckman v. Ruckman, 32.N. J. Eq. 259; Schlenck v. Hart, 32 id. 774. 4See the statute, ante, p. 437. 5Dearman v. Radcliffe, 5 Ala, 192; Schuman v. Peddicord, 50 Md. 570, See Richardson v. Rogers, 45 Mich. 591. 6 Mills v. Argall, 6 Paige, 577. See Bellamy v. Bellamy’s Adm’r, 6 Fla, 62. § 323.] EXTENT TO WHIOH ASSIGNMENTS MAY BE AVOIDED. 449 impeached by creditors, does not disable the grantor from making a second valid deed of the same property to the same grantees.! 1First Nat. Bank v. Hughes, 10 Mo. App. 7; Rumery v. McCulloch, 54 Wis. 565. In acase in Rhode Island it was held that, earlier assignments being good as against all persons except dissenting creditors, later assignments could only affect property acquired after the earlier assignment, or thereafter becoming at- tachable or accruing to the assignors as surplus, Gardner v, Commercial Nat. Bank, 13 R. I. 155, - 29 CHAPTER XXVI. ASSIGNMENTS CONSIDERED IN CONNECTION WITH OTHER TRANS- FERS BY THE ASSIGNOR. § 324, Assignments in Connection with Mortgages. 825. Assignments in Connection with Judgments. 826. Assignments in Connection with Other Transfers. 827. Assignments in Connection with Subsequent Instruments, 328, Assignments in Connection with Other Assignments, 829, Assignments in Connection with Releases. An important point of view in which assignments may be con- sidered is their connection with other transfers made by the debtor of previous, subsequent or contemporary date, and the extent to which they are affected by or themselves affect such transfers. § 324. Assignments in Connection with Mortgages.— An as- signment will sometimes be rendered void by its connection with mortgages executed by the assignor to certain creditors and giving them preferences to others. Thus, in Massachusetts, where an in- solvent debtor, while the statute of 1836 was in force, gave instruc- tions at the same time for drawing a mortgage of a part of his property to secure the payment of certain creditors in full anda general assignment of all his property, subject to the mortgage, in trust, to be distributed ratably among all his creditors who should become parties to the assignment pursuant to the statute, and the mortgagees were also the trustees under the assignment, and the mortgage was executed by the debtors and accepted by one of the mortgagees before the execution of the assignment, but the assign- ment was executed before the mortgage was accepted by the other mortgagees, and the assignment contained an express release of the demands of the creditors by whom it should be signed, it was held that the mortgage and assignment were to be construed to- gether as one instrument, and as the mortgage gave a preference to certain creditors, the mortgage and the assignment both were void as against attaching creditors.' But where, on the same day and nearly at the same time with making an assignment under the statute, debtors gave certain mortgages to certain creditors by which preferences were given to such creditors, it was held that 1 Perry v. Holden, 22 Pick. 269. See Kellogg v. Root, 23 Fed. Rep. 525 (Mich.); Brown v. Guthrie, 39 Hun, 29. : a § 324.) ASSIGNMENTS IN OONNECTION WITH MORTGAGES. 451 the fact that a debtor had thus given preferences by anterior acts, though it might subject him to disabilities, did not render the assignment void, whatever effect it might have upon the se- curity thus given, if the creditor knew of the debtor’s intention.! The distinction taken in this last case was that the mortgages were distinct acts, not constituting one transaction with the assignment as in the previous case, there being no privity and no communica- tion between the mortgagees and the assignee, and it not appear- ing that the mortgagees knew of the intent of the debtors to make an assignment.? In a later case in the same state there were mort- gages executed in connection with an assignment under the fol- lowing circumstances: A debtor, on being called upon by A., one of his creditors, to give security, promised to do so by a mortgage of his personal property. He thereupon directed his attorney to prepare: 1. A mortgage of his personal property to secure B., an- other of his creditors. 2. A mortgage of the same property, sub- ject to the first mortgage, to secure A. 3. A general assignment of all his property to B. under the statute of 1836, chapter 238, sub- ject to the two mortgages. The mortgages and assignment were all executed and delivered on the same evening in the order in which they were directed to be prepared, A. not knowing of the mortgage to B. till he received the mortgage to himself, and hav- ing no knowledge of the assignment until after it was executed and delivered, and never afterwards assenting thereto. The mort- gage to B. having been adjudged void because it was part of the assignment and in contravention of the statute, it was held that A’s mortgage was not part of the assignment; that it was valid by the common law, and that he was entitled to hold the mort- gaged property against the attaching creditors of the mortgagor, in the same manner and to the same extent as if the mortgage to B. had not been made.* The same general doctrine has been established in New Hamp- shire and Connecticut. Thus, in the former state, a mortgage exe- cuted by a debtor on the same day on which he made an assignment does not necessarily render the assignment invalid. It is, however, a circumstance to excite suspicion; and if it was part of the same transaction, and resorted to in order to secure a preference to the mortgagee, it will defeat the assignment.‘ So, in Connecticut, where a debtor in failing circumstances and with a view to his in- solvency mortgaged his estate to three of his creditors to secure them for indorsements made by them severally for him, and after- 1 Fairbanks v. Haynes, 23 Pick. 323. 2Shaw, C. J., 23 Pick. 325. 3 Housatonic Bank v. Martin, 1 Mete. 294. 4 Rundlett v. Dole, 10 N. H. 458. . ee 0 452 at OTHER TRANSFERS.. [cH. XXvVI. wards on the same day made a general assignment of his property, including the mortgaged premises, to two of said creditors in trust for all his creditors, under the statute of 1828, chapter 3, it was held that the mortgage and assignment not executed at the same time, though on the-same day, not between the same parties, and diverse in their nature and object, were not to be deemed part of the same transaction; and both instruments were accordingly held valid." In acase in Iowaa debtor made five chattel mortgages to se- cure several creditors on two succeeding days, and on the last day executed a deed of trust to secure several other creditors therein named; the instruments covered the same goods and each recited that it was subject to those preceding; the deed of trust, in addi- tion to the goods and chattels, covered certain parcels of real estate; they were filed at intervals of five minutes intervening between each, until all were filed. It was held that the transaction amounted in legal effect to a general assignment, and was void as creating preferences.? So in another case? in the same state, where a debtor conveyed a portion of his property to two creditors by mortgage without their knowledge, and at the same time conveyed the remainder toa trustee by an assignment for the benefit of his creditors, all of which was done with a view to insolvency, it was held a general assignment in which creditors were preferred, and thercfore void. But in a later case‘ in the same state, where an insolvent firm executed a deed of certain property to one of their creditors, trans- ferred certain negotiable paper and cash to another creditor, paid another creditor in full, and on the same day executed a general assignment of the remainder of their property for the benefit of remaining creditors pro rata, it vas held competent for the debtor to give preferences by these means. The court, referring to the cases above cited, distinguished them on the ground that the con- veyances were made without any knowledge on the part of the creditors, and the case is said to have been exceptional. Mr. Jus- tice Cole, in delivering the opinion of the court, makes use of the following observations: “The fact that two or more convey- ances were made at nearly the same time has no necessary influ- ence upon determining their identity of transaction. To illustrate: a debtor may execute at the same time two notes to different creditors for different debts; but their being executed at the same time has no necessary tendency to show them to be one and the same transaction.. So, also, an absolute deed may have been given 1 Bates v. Cole, 10 Conn. 280. 2 Burrows v. Lehndorf, 8 Iowa, 96, 3 Cole v. Dealham, 13 Iowa, 551. 4Lampson v. Arnold, 19 Iowa, 480. § 324.) ASSIGNMENTS IN CONNECTION WITH MORTGAGES. 453 to secure a loan, and the defeasance may be executed a year or two after, and notwithstanding the difference of time of execution they are taken and treated as one transaction and parts, of the same transfer. They are so treated because they. are between the same parties and relate to the same subject-matter, and are based upon the same consideration.”! So where one executed, chattel ‘mort- gages upon all his property to three of his creditors, and after- wards, on the same day, made an assignment for the benefit of, his creditors subject to the chattel mortgages, but’ it appears from thé evidence that at the time he made the mortgages he did not con- template making an assignment, the assignment cannot be held to be void as including the mortgages and thus’ preferring creditors.? In the same case it was held that a mortgage made in good faith by an insolvent debtor covering all his property to secure a bona fide debt, although executed in contemplation of an assignment which follows on a succeeding day, is not carried into and made a part of the assignment, but will stand as a valid and enforceable lien, even where the mortgagor has knowledge of the contemplated assignment. So in Michigan it has been decided that where, in anticipation of an assignment, an insolvent firm secured certain creditors by chattel mortgage on the firm property, who accepted the mortgage in payment, or security for the payment, of just and valid debts without knowledge of such intended assignment, that such mortgage was not fraudulent as a preference.’ . Ina case in Ohio‘ a debtor assigned all his personal property for "1 Citing Henshaw v. Sumner, 23 Pick. 446; Brown v. Foster, 2 Metc. 152; Bates vi Coe, 10 Conn. 280. See Lampson v. Arnold, supra, affirmed in Lyon v. MclIl- vainie, 24 Iowa, 9. In Mower v. Hanford, 6 Minn. 535, Mr. Justice Atwater said: “There is no conclusion of law from the fact that several deeds were executed on the same day with the making of the assignment, that they were all one act, or parts of the same transaction. This is a question of fact solely for the jury.” And see Lord v. Fisher, 19 Ind. 7; Wynkoop v. Shardlow, 44 Barb, 84; Holt v. Bancroft, 30 Ala, 195; Cummings v. McCullough, 5 Ala. 324, In Berry v. Cutts, 42 Me. 455, where a debtor, for the purpose of giving preference to one class of creditors over another, executed different instruments, though not of the same date, nor executed at the same time, they were deemed in law one transaction, and void under the statute as not providing for an equal distribution. 2110 Ind. 215; 11 N. E. Rep. 296. 8Sweetzer v. Higby, 63 Mich. 18; 29 N. W. Rep. 506. See Root v. Harl, 62 Mich. 420; 29 N. W. Rep. 29; Farwell v. Jones, 63 Iowa, 316; 19 N. W. Rep. 241. See, also, the late cases of Meyer v. Evans, 66 Iowa, 179; 23 N. W. Rep. 886; Flannigan v. Althouse, 56 Iowa, 513; 9 N. W. Rep. 381; Duncan v. Miller, 64 Iowa, 223; 20 N. W. Rep. 161; Doolittle v. Cook, 75 Ill. 354; Kiser v. Dannen- burg, 88 Ga. 541; 15 S. E. Rep. 17, citing the text; The John Shilleto Co. v. McConnell, 130 Ind. 41. But s'e Wyeth Hdw. Co. v. Standard Implement Co., 47 Kan, 423; 28 Pac. Rep. 171; Selleck v. Pollock, 69 Miss. 870; Banks v. Barb Wire Co., 30 Neb, 181; 46 N. W. Rep. 251. 4Keen v. Hall, 31 Ohio St. 107. 454 OTHER TRANSFERS. [cH. XxvL the benefit of creditors, and also executed to the assignee a mort- gage upon real estate for their benefit; the debtor subsequently sold part of the mortgaged property to a third person, who agreed to pay a part of the purchase-money by assuming and paying to the assignee a specified sum, which the assignee had agreed to take for a release of the mortgage lien upon the part sold; the assignee accordingly released the mortgage lien upon the record and took the purchaser’s note for the specified amount. It was held that the real consideration of the note was the release of the mortgage lien, and the fact that the debtor refused to execute his contract of sale was no good defense to an action upon the note by the assignee against the purchaser. § 325. Assignments in Connection with Judgments.— An in- valid assignment will sometimes have the effect of rendering void a judgment confessed by the debtor in connection with it. Thus, in New York, where a debtor, after executing certain assignments, and fearing that they might not prove valid on account of certain reservations in his own favor, confessed a judgment to the same trustees upon the same trusts for creditors, but without the reser- vation, which judgment was intended to be resorted to only in case the assignments should not be adjudged valid, it was held that both were void — the intention to use the judgment only in case the as-, signments should be adjudged invalid, thus infecting it with the vices of the assignments.’ But where a judgment was confessed by a debtor to a creditor to secure the debts due to him and others, and some months afterwards an assignment was executed to the same creditor in trust, to pay substantially the same debts provided for by the judgment, it was held that the judgment and assignment’ did not constitute one transaction, and the judgment was not im- paired by the abortive attempt to aid it by the assignment.2 In another case, where a debtor confessed a judgment to certain cred-. itors, on which execution was issued and levied, and afterwards, and on the same day, executed an assignment to the same cred- itors, in trust to pay themselves and others, which assignment was declared to be collateral to the judgment and levy, and intended as additional security to the judgment creditors, and was not in any 1 Mackie v. Cairns, 5 Cow. 547. See D’Ivernois v. Leavitt, 23 Barb. 63, 64; Gutman v. McNulty. 22. N. Y. Weekly Dig. 241; Hahn v. Salmon, 20 Fed. Rep. 801 (Oregon). In the case of Mitchell v. Gendell, 7 Phila. 107, where an assign- ment was made in trust for the benefit of creditors which was not recorded, and by an arrangement between the parties a sheriff’s sale was had, at which the as- signees became the purchasers, they agreeing to hold the property in trust for the purposes of the assignment, it was held that such an assignment was void, and the title of the assignees was not aided by the sheriff’s sale, 2 Lansing v. Woodworth, 1 Sandf, Ch. 43, 45, § 326.] ASSIGNMENTS IN CONNECTION WITH OTH&m TRANSFERS. 455 event to stand in conflict with, or lessen, abate or affect the execu- tion or the force and effect of the levy and the lien created thereby, it was held that the assignment was void as containing objection- able provisions, and that the judgment was likewise fraudulent and invalid. In Alabama, where a debtor who secured a debt by a deed of trust, on a defect in the deed being discovered, confessed a judg- ment to the creditor, under which the property was afterwards sold, it was held to be no fraud upon the other creditors.? In a case in New Jersey‘ a debtor executed a mortgage to three of his creditors to secure notes made to them and payable in instal- ments. He also confessed judgment to a creditor, under which his personal property was sold and bought in by one of his said three creditors, and transferred by him to the debtor’s wife upon her executing a chattel mortgage for the full amount of the pur- chase-money. The object of the mortgage as stated by the debtor was to prevent the sale of his property, so that be might, from its advance in value and the profits of his business, be able to pay off all his indebtedness. It was held that the mortgage and judg- ment were in contravention of both the statute regulating assign- ments and the statute of frauds. Where the assignor had confessed a judgment in favor of one of the assignees six days before the execution of the assignment, and there was proof tending to connect the assignee with the as- signor in the fraudulent disposition of his property, the fact that this judgment was confessed to the assignee at that juncture is a proper circumstance to go to the jury in an action in which the assignment is impeached.‘ § $26. Assignments in Connection with Other Transfers.— In Massachusetts it was held under the statute of 1836, chapter 238, that an assignment was not made void (on the ground of giving preferences) by the delivery by the debtor of certain property, such as notes and goods, to certain creditors, the day before mak- ing the assignment, or even on the same day, before executing the assignment,° although the debtor afterwards made these preferred creditors his assignees.‘ And where, simultaneously with an assignment of real and per- 1 Dunham v. Waterman, 17 N. Y. 9; rev’g 3 Duer, 166. And see D’Ivernois v. Leavitt, 23 Barb. 63. 2McBroom v. Turner, 1 Stew. 72. 8 Livermore v. McNair, 34 N. J. Eq. 478. 4 Main v. Lynch, 54 Md. 658. See Spelman v. Freedman, 130 N. Y. 421; 29 N. E, Rep. 765. 5 Brown v. Foster, 2 Metc. 152; Macomber v. Weeks, 3 id. 412. 6 Ibid. 456 ae OTHER TRANSFERS. :: fon. XXvI sonal estate by two partners for the benefit ot such creditors as should become parties, one of the assignors conveyed some real estate (a pew) to the assignees by a separate deed for the purpose of the assignment, it was held to be no objection to the assignment, although the assignors had made oath that by the assignment they had conveyed all their property, the court observing that both conveyances being made to the same parties, for the same purpose, and subject to the same trusts, it could not be material under which the pew was holden, and that the fairest way of treating them would be to consider them as one legal act, the deed being subsid- iary to the assignment.’ , But where a debtor conveyed personal property to trustees for the benefit of his wife, with authority to them to loan its value to himself, taking his note, and the note was accordingly given to the trustees, the property continuing in the debtor’s possession, and the debtor afterwards assigned the property for the benefit of creditors, making the note a preferred debt, it was held that the assignment was fraudulent as against creditors of the debtor who: became such after the note to the trustees was given.?, And where a merchant who was insolvent and had been sued sold all his stock’ to his confidential clerk, and took notes payable from three to. eighteen months, under an arrangement that the clerk should con- tinue the business with the merchant’s sister, who was to be al-. lowed to draw out an annual sum for the merchant’s benefit, and the merchant assigned the notes to an assignee for the benefit of: the latter and other preferred creditors, it was held that the sale was fraudulent and void as against creditors who had not affirmed the assignment; that the assignee was not such a bona fide pur-. chaser as would be protected in the notes or their proceeds; that the acceptance of the assignment by the assignee would not bind other creditors; and that a creditor who was such at the time of the sale might, upon recovering judgment, and the return of the execution unsatisfied, maintain a bill to set aside the conveyance, and follow the proceeds of the property sold through any number of intermediate assignees, until they were lodged in the hands of a creditor in good faith, who had received and applied them upon his debt, or of a dona jide purchaser without notice of the fraud! 1 Woodward v. Marshall, 22 Pick, 466; Morton, J., id. 474. 2¥Fiedler v. Day, 2 Sandf. 8. C, 594, : 3 Cooke v. Smith, 3Sandf. Ch. 333. In Loeschick v. Baldwin, 38 N, Y. 826, wher the debtor sold certain of his property on long credits, and a short time there- after executed a general assignment, it was sought to show that the sale on credit was made with the intention of making the assignment, and the court said that if this had been shown, the creditors would have been delayed, and the as signment would for that reason have been fraudulent and void as to the creditors 80 delayed. The question of fact, however, was found otherwise. 88 327, 328.] MISCELLANEOUS. 457 A conveyance of real estate does not invalidate an assignment made the next day, if it was a complete and independent transac- tion, done without contemplating an assignment; and it is for the jury to determine whether it was or not.! Where a debtor makes a fraudulent transfer of his whole prop- erty in order to defraud a judgment creditor, he cannot, by a mere voluntary assignment of his property and effects to a trustee for the benefit of all his creditors, prevent an assignee of the judg- ment creditor from bringing. an action in the nature of a bill in equity against the debtor and the purchaser, to subject the prop- erty fraudulently transferred, or its proceeds, to the payment of the judgment? A gift by a debtor to his wife in contemplation of the assignment, which is soon after made, is fraudulent and will avoid the assignment.$ ' § 327. Assignments in Connection with Subsequent Instru- ments.— Where a failing debtor assigned by deed ali his property in trust for certain creditors in full payment, and the surplus pro rata to such other creditors only as should give him a discharge, and delivered his books and the key of his store to the assignee, and four days afterwards executed a writing referring to said as- signment, and confirming it except as to the provision for a dis- charge, it was held that such writing was a new and valid assign- ment, and that the assignee was entitled to a reasonable time after its execution to take possession of the property.‘ § 328. Assignments in Connection with Other Assignments.— A conveyance apparently valid cannot be deemed fraudulent merely because the same grantors had previously made a conveyance of the same property, which was abandoned as fraudulent and void.’ In a case in New York, where a voidable assignment was surren- dered up to the assignor and a new one taken upon trusts which were valid, it was held that a creditor who did not claim under the first assignment, and who had not acquired a legal or equitable fien upon the trust property, or a right of preference previous to 1Coots v. Chamberlain, 39 Mich. 565. 2Leach v. Kelsey, 7 Barb. S. C. 466. In Ogden v. Peters, 15 Barb. 560, the court did not think it necessary tu decide the question ‘‘ whether a fraudulent transfer by an insolvent debtor of a part of his property would invalidate a sub- sequent assignment of the residue for the benefit of his creditors.” 8s. C., 21 N, Y. 23. _3Chambers.v. Smith, 60 Hun, 248; 14 N. Y. Sup. Rep. 234. But see Ramsey v. Hurley, 72 Tex. 194; 128. W. Rep. 56; Greene & Button Co. v, Van Vechten, 63 Wis. 16; 22 N. W. Rep. 943. © 4Ingraham v. Wheeler, 6 Conn. 227. As to the effect of subsequent instru- ments executed by the creditors, see Coddington v. Davis, 1 N. Y. 186. 5 Vernon v. Morton, 8 Dana, 247. See Morrison v. Shuster, 1 Mackey (D. C.), 190. 458 OTHER TRANSFERS. [en. xxv1. the execution of the last assignment, could not impeach the second assignment on account of any illegality in the first.’ In a case in North Carolina, where a debtor conveyed certain property in trust to day a particular debt, and the surplus after such payment to be returned to him, and at the same time ex- pressed his intention, by parol, that three other creditors should be paid out of the surplus, and that he would give orders to that effect as soon as he had had a settlement with such creditors, this was held to be no defense to a bill filed against the trustee for an ac- count by asecond trustee to whom the same property was conveyed a day afterward in trust for the payment of other creditors, the mere intention to secure the creditors having no operation until carried out by some formal and legai act on the part of the debtor; and from the power to do such an act he had cut himself off by executing the second deed? In a case in New York, where two persons who were partners assigned all their partnership property and effects to trustees to pay the creditors of the firm, giving preferences to certain classes of the creditors, and directed the surplus of the assigned property to be paid to the assignors, and one of the copartners afterwards made an assignment of all his property and effects to a trustee, to be applied in the first place to the payment of his individual cred- itors, and the residue, if any, to be applied to the payment of such of the partnership debts as were not included in the first class of debts provided for in the previous assignment, it was held that the assignment of the copartnership effects was valid as against the creditors of the firm, even if there were individual creditors of the assignors at the time of making the assignment. § 329. Assignments in Connection with Releases.— In a case in New York‘ where certain creditors had executed a conditional release on payment of fifty per cent. of their claim, and the debt- ors failed to comply with the terms of the release, and subsequently executed a general assignment by which they preferred, first, cer- tain confidential creditors; secondly, the creditors who had exe- cuted the conditional release; and thirdly, the residue of the cred- itors were to be paid,— the release was not regarded as a part of the transaction so as to make the preference conditional. 1Mills v. Argall, 6 Paige, 577. Aliter where creditors have acquired liens. See Porter v. Williams, 9 N. Y. 142; Sutherland v. Bradner, 39 Hun, 184. And see Seal v. Duffy, 4 Barr, 274; Johnston v, Whitewell, 7 Pick. 71; Gardner v. Com- mercial Nat, Bank, 13 R. I. 135; ante, p. 448. As to amending and revoking as- signments, see ante, ch. XVII, and post, ch. XXVILI. ?Paliner v. Yarborough, 1 Ired. Eq. 310. 3 Bogert v. Haight, 9 Paige, 297. ‘Spaulding v. Strong, 387 N. Y. 155; reversing s.c., 36 Barb, 310. And see Renard v. Graydon, 39 Barb. 548; Powers v. Graydon, 10 Bosw. 630, CHAPTER XXVII. REVOCATION AND CANCELLATION OF ASSIGNMENTS, § 330. American and English Rules — Distinguished, 331. Assignments Not Revocable, When. 332, Assignments Revocable, When. 333. Assignments May be Canceled, When. § 330. American and English Rules — Distinguished.— An as- signment should always be drawn with such care and deliberation as to render no act on the part of the assignor, in the way of change or correction of the instrument, necessary after execution. There have been cases, however, in which, after the execution and deliv- ery of an assignment, it has been thought advisable or actually necessary that a new and different instrument should be substi- tuted; and various modes have been adopted of disposing of the deed already executed — such as a formal revocation by the as- signor’s own act, a mere abandonment of the deed,' an arrangement between the assignor and assignee by which the latter surrenders the assignment with the view of taking a new assignment,’ or a distinct re-assignment of the property for the same purpose;* and sometimes these acts are done with the concurrence of other par- ties! Under what circumstances and to what extent such acts of revocation or cancellation of an assignment once executed and de- livered are valid so as to have the effect intended by them are important considerations which claim some attention in closing the present division of the subject.’ In England, as has been shown under a previous head, the doc- trine seems to be now established that instruments of provision for creditors, corresponding with our deeds of assignment, to which no creditor is a party or privy, are revocable at the pleasure of the assignor.6 But in the United States, where, as a general rule, the assent, of creditors, or their union as parties to the assignment, is not necessary to its validity, the prevailing doctrine is that an 1Vernon v. Morton, 8 Dana, 247. 2Mills v. Argall, 6 Paige, 577. 3 Hone v. Woolsey, 2 Edw. Ch. 289; Small v. Sproat, 3 Metc. 303. 4 As to what amounts to an annulling of an assignment, see Ward v. Lewis, 4 Pick. 520. 5In connection with the subject of this chapter, see ante, ch. XVII. 6 See ante, p. 127, note 3, p. 128; Johns v. James, 11 Eng. C, L. (Ch. D.) 746, 460 REVOCATION AND CANCELLATION OF ASSIGNMENTS. [CH. XXVII. assignment in trust for creditors, executed and delivered by the assignor and accepted by the assignee, creates at once the relation of trustee and cestui que trust between the assignee and the cred- itors, and cannot be revoked by the assignor,! or annulled by the joint act of the assignor.and assignee.? The application of this doctrine, however, appears to depend considerably upon circum- stances, such as the.time of the revocation or cancellation, the motive or purpose of the act, and the assent or dissent of creditors. § 831. Assignments Not Revocable, When.— Thus, after the rights of creditors have once actually attached,’ or after notice of the assignment to thosé provided for by it, or after notice by creditors to the assignee of their desire and intention to avail themselves of the assignment,’ or after they have taken steps to enforce the trust, as by filing a bill praying for the distribution of the fund accord- ing to the provisions of the deed,’ or after any of the trusts have 1 Hall v. Dennison, 17 Vt. 8310; Walker v. Crowder, 2 Ired. Eq. 478, 485; In- gram v. Kirkpatrick, 6 Ired. Eq. 462; Sevier v. McWhorter, 27 Miss. 442; Fur- man v. Fisher, 4 Cold. (Tenn.) 626; Brown v. Chamberlain, 9 Fla, 464; Hyde v. Olds, 12 Ohio St. 591; Sheldon v. Smith, 28 Barb, 593. But in some cases it has been held that the assignment was revocable until there was an express accept- ance on the part of the creditors. Galt v. Dibrell, 10 Yerg. (Tenn.) 626; Brevard v. Neely, 2 Sneed (Tenn.), 164; Mills v. Harris, 8 Head (Tenn.), 332; Gibson v. Chedic, 1 Nev. 497; McKinley v. Combe, 1 Mont. 105; Pitts v. Viley, 4 Bibb, 446. The assent of creditors to a fraudulent assignment will not be presumed. Ash- ley v. Robinson, 29 Ala, 112, And see cases ante, pp. 336, 337. Nor will their assent be assumed where no action has been taken under the assignment for many years. Gibson v. Rees, 50 Ill. 383, *2Golden’s Appeal, 3 E. Rep. (Pa.) 318; Golden v. Musgrove, id. 316. See Ward v. Lewis, 4 Pick. 522. The destruction of an assignment with the consent of the assignor and assignee, after acceptance by the latter, will not divest the assignee of his title and revest it in the assignor. The trust still exists, and the court will establish and execute it. Alpaugh v. Roberson, 27 N. J. Eq. 96; Metcalf v. Van Brunt, 37 Barb. 621; In re Backer, 2 Abb. N. C. 379, 3McCoun, V..C., in Hone v. Woolsey, 2 Edw. Ch, 289, 292; Whitcomb v. Fowle, 7 Abb. N. C. 295; s.c., 10 Daly, 23. Assignments may be revoked or corrected at any time before the rights of creditors have become fixed under them. First Nat. Bank v. Hughes, 10 Mo. App. 7. 4’Petrikin v. Davis, 1 Morris, 296. In the case of Goodwin v. Kerr, 80 Mo. 276, it was held that an assignment for the benefit of creditors, free from fraud in its inception, duly executed, acknowledged and recorded, is not invalidated by a subsequent agreement between the assignor and assignee to disregard it, or by subsequent fraudulent acts on their part with respect to the assigned property. See Mackellar v. Pilisbury, 48 Minn. 396; 51 N. W. Rep. 222. 5 Ward v. Lewis, ubi supra; Brevard v. Neely, 2 Sneed, 164; Brown v. Cham- berlain, 9 Fla. 464. 6 Robertson v. Sublett, 6 Humph, 313; Jones v. Dougherty, 10 Ga, 278. Where an assignment for the benefit of creditors and the acceptance of its terms.are both in writing, parol evidence is inadmissible in behalf of an accepting creditor to show that its terms have been modified in his favor. Arnold v. Bailey, 24 S.C. 494, § 332.) ASSIGNMENTS REVOCABLE, WHEN. 461 been actually executed,!' — it is too late to revoke the assignment. Especially is this the case where tho assignment was avowedly made for the particular benefit of some creditor, of which the new or substituted instrument is intended to deprive him. Thus where a debtor assigned property to K. in trust to pay the assignee and M., another creditor, giving M.’s debt the preference, and subse- quently the assignor and assignee, without knowledge or consent of M., canceled the deed, and the assignor executed another assign- ment, putting M., K. and certain other creditors on an equality, and the fund proved insufficient, it was held that the canceling of the first assignment was void as to M., and the trustees in the second were decreed to pay him in full.? § 332. Assignments Revocable, When.— But where the object and purpose of the revocation is the correction of some error, or the expurgation of some objectionable feature, so as to give the instrument its fullest legal effect, it is more favored, and whatever is consistent with the rights of creditors will be sustained. Thus where debtors made an assignment to trustees for their creditors which contained a clause constructively fraudulent, and the trustees re-assigned all the property to the assignors, who then made an- other assignment to the same trustees which was unobjectionable on its face, and a judgment creditor filed a bill some days after the second assignment was executed, the court sustained the latter assignment. 3 1 Petrikin v. Davis, ubi supra; Gibson v. Rees, 50 Ill. 883; Dwight v. Overton, 35 Tex. 890; Furman v. Fisher, 4 Cold. (Tenn.) 626; Galt v. Dibrell, 10 Yerg. (Tenn.) 146, 158; Brevard v. Neely, 2 Sneed (Tenn.), 164. A voluntary trust resting upon a meritorious consideration and perfectly created is irrevocable. Gaylord v. City of Lafayette, 115 Ind. 423; 17 N. E. Rep. 899. 2 Me-ssonier v. Kauman, 8 Johns. Ch. 3. 3 Hone v. Woolsey, 2 Edw. Ch. 289, Tie vice-chancellor in this case dwelt on the distinction between a void and a voidable deed. The assignment, he ob- served, ‘was not a nullity; it was voidable only as between the assignors and assiznees; the title passed, and a trust was created for creditors upon the trusts and conditions contained in it. None of the creditors came forward to accept the property upon those terms; and it appears to me that, before the rights of any of the creditors had actually attached as cestuis que trust under the assign- ment, and before any of them were in a situation to acquire liens by virtue of judgments and executions returned, and the filing of bills, the parties were at liberty to do any further acts by which the assigned property might be held by the assignees upon similar trusts, but divested of the objectionable features of the first instrument.” Id. 292. And see Merrill v. Englesby, 28 Vt. 150; Conk- ling v. Conrad, 6 Ohio, 611; Coukling v. Carson, 11 Ill. 503; Brahe v. Eldridge, 17 Wis. 184; Gardner v. Commercial Nat. Bank, 18 R. I. 155, A deed of trust after acceptance is irrevocable in the sense that the assignor has no power to change its terms, though it was his purpose to have made the deed differently. Where the assignor, assignee and creditors have made a mutual mistake, the deed may be corrected so as to conform to the previous agreement and under- 462 REVOCATION AND CANCELLATION OF ASSIGNMENTS. [CH. XXVI¥. § 333. Assignments May be Canceled, When.— Assignments are sometimes canceled with the consent of creditors, or at their instance. Thus in Massachusetts, where an insolvent debtor made an assignment under the statute of 1836, chapter 238, of all his property, which was insufficient to satisfy the debts of the credit- ors who had a right to become parties to the assignment; and the assignees, with the consent of all those creditors, reconveyed the property to the assignor for the purpose of enabling him to make an adjustment with them, it was held that the assignees could not be charged, in the process of foreign attachment, as the trustees of one who became a creditor of the assignor after the assignment was made.! In a case in Nevada? the debtors obtained an agreement from their creditors to extend the time of payment for six or twelve months, and made an assignment to a trustee, who was to control and manage the property for the mutual benefit of the creditors, and to pay the debts pro rata as fast as there was money coming into his hands. It was held that after the expiration of one year the creditors could bring their action at law for the purpese of ob- taining a judgment for the amount due, the same as if no agree- ment or assignment had been made. But a preferred debt paid under a general assignment which has been subsequently vacated cannot be recovered from a bona fide creditor.’ The death of a debtor who has assigned his property to trustees for the benefit of creditors does not operate as a revocation of the trust,‘ nor does the resignation of the assignee.5 standing of all the parties. The corrected deed in this case was not allowed, be- cause the case failed to show that either the assignee or any of the beneficiaries were parties to any negotiations previous to.the execution of the deed, or had any knowledge of the assignor’s purpose to secure a debt not provided for by mistake in the first deed, or ever assented that the deed should be so executed. Barker v. Harlan, 3 Lea (Tenn.), 505. 1Small v. Sproat, 3 Mete. 303, 2Empey v. Sherwood, 12 Nev. 355. 3 First Nat. Bank v. Central Nat. Bank, 53 Hun, 575; 6 N.Y. 8. Rep. 236. 4 Jones v. Dougherty, 10 Ga. 273; Dwight v. Overton, 85 Tex. 890. 5 McFerran v. Davis, 70 Ga. 661. CHAPTER XXVIII. PROCEEDINGS BY THE ASSIGNEE IN EXECUTION OF THE TRUST — GENERAL OUTLINE OF THE FROCEEDINGS AND OF THE DUTIES, POWERS AND LIABILITY OF ASSIGNEES, § 834. Proceedings by the Assignee. 385. Powers of the Assignee. 336. Liability of the Assignee. § 334. Proceedings by the Assignee.— In the preceding chapters a view has been presented of the acts of the assignor in cre- ating the trust by execution of the deed of assignment, and of the nature, operation and other incidents of the instrument itself. The next general division of the subject embraces the acts and pro- ceedings of the assignee in execution of the trust, of which an out- line will now be given. The assignee,! on receiving the assignment from the debtor, either declines or accepts the trust proposed by it. If he decline the trust (which is not probable, if a proper un- derstanding have been had by the assignor, or if the assignment have actually been executed by the assignee), a court of equity will interpose and (as has already been shown)? either appoint a new trustee or take upon itself the execution of the trust. If he accept the trust he immediately enters upon the duties of the office by giving public notice of the assignment (where such notice is necessary),? executing, in some states, a bond with sureties for the faithful performance of the trust,’ and taking possession of the property mentioned in the assignment or schedules.’ Measures are then taken for the collection of the debts assigned, and prepara- tions made for exposing the property for sale at the earliest prac- ticable period. Out of the proceeds of the sale and collections, after deducting the expenses of the trust,’ distribution is made 1 The assignee is here spoken of in the singular number, as most appropriate to the general form of expression used in the text and as comprehending the widest range of actual cases, The necessary variation, where there are several assignees, will be supplied by the reader. 2 Ante, ch. XVIII. 3See post, ch. XXIX. See post, ch. XXX. 5See post, ch. XXX. 6 See post, chs. XXXIV, XXXV, TSee post, ch. XXXVL 464 PROCEEDINGS BY ASSIGNEE. [cH. XXVIIL among the creditors entitled under the assignment, and dividends are usually paid from time to time as moneys come to the as- signee’s hands! If any surplus remain after payment of all the debts it is paid to the assignor,? and the trust is closed. by a general accounting (either of course or on the requisition of parties entitled to demand it), within the time limited by the as- signment itself or by statute, or such time as may be allowed as reasonable for the purpose.’ The duty of an assignee, as it may be generally expressed, is to proceed with as little delay as possible consistently with the interests of the creditors in converting the assets into money ‘ and applying the same in payment of the parties entitled under the assignment. In the execution of the trust he must be governed by the directions contained in the assignment itself, where they are not overruled by statute, subject to such supervision as may be exercised by the proper court, and in general he is bound to manage and employ the trust property for the benefit of the creditors with the care and diligence of a prudent owner.’ § 385. Powers of the Assignee.— As incident and essential to the performance of his duties the assignee is clothed with the necessary powers to obtain possession of the property assigned, and to collect the debts by process of law. These powers are usu- ally given in terms by the assignment itself, and sometimes they are expressly defined by statute, of which more will be said under another head.$ § 336. Liability of the Assignee.— The liability of the assignee follows as a legal consequence of his acceptance of the trust, and the duties which the assignment devolves upon him.’ It is fre- quently expressly assumed by his becoming a formal covenanting party to the instrument,’ and is further secured by bonds with sureties, which are sometimes required by statute. The assignee is personally responsible for an abuse of the trust, and if he is guilty of misconduct may be called to account, and, if necessary, removed from his office. But he is protected when he acts in good faith, even under a void assignment." 1See post, ch. XXXVIL. 2See post, ch. XX XVIII. 3 See post, ch. XXXIX. 4 Morton, J., in Woodward v. Marshall, 22 Pick, 474, 5 Litchfield v. White, 3 Sandf. 8. C. 545. See post, ch. XXXII, ®See post, ch. XXXII, TSee ante, p. 287. 8S e ante, p. 287. §See post, ch, XXXI, Wes ; 10See further, as to the liability of assignees, post, ch. KIa § 336.] LIABILITY OF THE ASSIGNEE. 465 The court of chancery, or supreme court having equity powers, is the proper tribunal before which an assignee may be called to ac- count, unless a different provision has been made by statute. In some of the states particular courts are designated as having spe- cial jurisdiction over assignees and their accounts.! More will be said of the duties, rights, powers and liabilities of assignees under the appropriate heads in the following chapters. 1§ee Appendix, I. 80 : CHAPTER XXIX. NOTICE OF THE ASSIGNMENT, § 837. Notice, When and How Given. 838. Object and Effect of Notice. 339. Effect of Omission of Notice. § 337, Notice, When and How Given.— One of the first acts of the assignee, on receiving the assignment, is to give public notice of it, stating, in substance, that the debtor has made an assignment of all his estate to the assignee for the benefit of his creditors, and requesting creditors to present their claims and debtors to account and make payment to him. In some states notice of the assignment is expressly required by statute.! And these statutes, while varying in their specific re- quirements, as a rule provide for publication in one or more local newspapers for a period of from two to six weeks, or if there be no newspaper printed in the county in which the debtor resided or had his principal place of business at the time of making the assign- ment, then to post notices at important points in such county or to give personal notice to each resident creditor and send a notice by mail to each foreign creditor. § 338. Object and Effect of Notice.— The object of giving no- tice of the assignment is to give publicity to the transaction for a twofold purpose — to apprise the creditors of the transfer and to instruct them as to their proceedings to obtain its benefit; and to inform the debtors of the assignor and persons having moneys or property belonging to him in their hands to whom they are to account and to pay and deliver the same.? A debtor on an open account, after notice of the assignment, cannot defeat the rights of the assignee by payment to the insolv- ent. In making his payment every discount or equity existing at the time of the assignment is allowed; but after notice he cannot affect the assignee by discount or equity against the assignor sub- sequently acquired.’ 1See Appendix, I. 2 Quoted with approval in Switzer v. Miller, 58 Ind. 561. 3 Tibbetts v. Weaver, 5 Strobh, 144; Morey v. Crocker, 6 Wis. 326; Gordon v. Freeman, 11 Ill. 14; Walters v. Whitlock, 9 Fla. 86. An unrecorded deed of trust will prevail against a creditor who has notice thereof before he acquires a § 339.] EFFECT OF OMISSION OF NOTICE. 467 § 339. Effect of Omission of Notice.— Notice is sometimes re- quired to be given by the terms or necessary effect of the assign- ment itself, in which case it must, of course, be complied with. But the neglect of the assignee to give the public notice required by the assignment does not divest the title to the property as- signed;! and it has been held not to be necessary that the credit- ors for whose benefit the assignment is made should have notice of it, provided they afterwards assent to the provisions made for their benefit.2 And notice of the assignment to a bank in which the debtor has funds deposited is held to be necessary only to prevent the bank from paying the deposit on the checks of the assignor or from parting with the funds of the bank on the faith of the deposit still belonging to him.* The recording of an assignment is in some states sufficient notice to creditors in the absence of fraud.‘ legal right. Forepaugh v. Appold, 17 B. Mon. (Ky.) 625 (B.). ‘‘ Notice is indis- pensable to charge the debtor with the duty of payment to the assignee, so that if without notice he paid the debt to the assignor, or it was recovered by pro- ‘cess, against him, he would be discharged from the debt.” Story’s Confl. Laws, § 396. 1See Baldwin v. Patton, 10 Watts, 60. But by statute in Maine (R. S., ed. 1871, p. 544, ch. 70, § 4), the assignment is not valid unless the notice is given as required. 2 Marbury v. Brooks, 7 Wheat. 556. 3 Beckwith v. Union Bank, 4 Sandf. 8. C. 604; affirmed on appeal, 9 N. Y. 211. 4 Farquharson v. Eichelbergen, 15 Md. 63. But the filing of an assignment in the county clerk’s office in New York is not constructive notice of the convey- ance of real estate. Simon v. Kaliske, 6 Abb. Pr. (N. S.) 225, CHAPTER XXX. TAKING POSSESSION OF THE PROPERTY ASSIGNED. $340. Possession Should be Given by Assignor. 341, Possession, How Taken. 842, How Far the Assignor May be Left in Possession. 348. How Far the Assignor May Act as Agent of the Assignee. 844, Liability of the Assignee on Taking Possession. 845, Taking Possession of Property Not in Assignor’s Hands, 346, Taking Possession of Leasehold Premises, § 340. Possession Should be Given by Assignor.— A very im- portant act on the part of the assignee, on assuming the execution of the trust, is the taking possession of the property assigned. The subject of the delivery of possession, on the part of the as- signor, so far as 1t may be necessary to give validity and operation to the assignment, has already been considered in a former chap- ter.! It will be sufficient to add that no act should be omitted by the debtor which can serve to express an absolute transfer of the possession and an entire renunciation of all control over the prop- erty, so as to give every equality of reality and good faith to the transaction. Among the acts most expressive for this purpose are the ordinary ones of delivery of the keys of the store or premises containing the goods assigned, together with all the assignor’s books of account, and all evidence of debt or title to property. § 341. Possession, How Taken.— But the necessary change of possession should not be left to the action of the assignor. The assignee must himself be active; he must take possession and not depend upon the assignor to give it. He should immediately enter on the premises where the business has been transacted, assume the management of the business itself,? take possession of the books of account,’ divest the assignor of all control of the prop- 1See ante, ch. XIX. 2 As to continuing the business, see post, ch. XXXIII. In Mackintosh v. Cor- ner, 33 Md. 598, it is held that a delay of two or three days by the assignee in taking possession will not render the property liable to attachment. 3In a case in Illinois, where a debtor, to secure to certain creditors the amount of their debt, assigned to them all his ‘‘ store books and accounts,” so far as that they might select and collect the amount of certain notes, with expense, the books. to be subjected to their order from the date of the notes and considered their property; and the debtor afterwards made a general assignment of his property, § 341.] POSSESSION, HOW TAKEN. 469 erty,' and remove the usual indications of his ownership. The mere nominal appointment of the assignor as agent and leaving him in possession has been repeatedly held insufficient.2 The prop- erty need not be taken into the manual possession of the assignee. If it comes into his actual custody and control it will be enough, although the delivery be merely symbolical or constructive. Thus a delivery of the keys of the place where the goods are stored may be sufficient to pass a valid title to the property.’ The busi- ness, if continued, should not be permitted to go on as before; the change implied by the assignment must be made apparent by out- ward unequivocal acts, such as the presence and supervision of the assignee and the keeping of the accounts under his direction. If the assignee neglect to exercise the authority with which he is clothed for this purpose, he will be superseded and a receiver ap- pointed.* In a case in New York, where goods in a store were assigned by the owner in trust for the payment of creditors, but the goods, after the assignment, stili remained in the actual possession of the assignor, and were sold by him and his former clerks and by his wife at private sale, and in the customary manner by retail, his name being still on the various signs of the store, and some of the goods were sold to pay an old debt not included in the first class of creditors, and no inventory was made of the assigned goods, nor was there any list of the creditors, and the assignee made no sales himself, nor did he give any reason for suffering the prop- erty to remain under the control and subject to the disposal of the assignor, it was held that these were most suspicious circumstances, and that the conduct of the parties to the assignment was strong to show that the whole transaction was for the purpose of defraud- ing the creditors of the assignor.’ In a case in Texas, where a including his books, to trustees for the benefit of his creditors, it was held that the first assignment did not pass to the creditors the property in the books them- selves, but only in the accounts, and in them only so far as would be sufficient to pay their debt; that they came rightfully to the hands of the trustees, and that the creditors could not maintain replevin against them for the books, at least not until after a demand of the books. Hudson v. Maze, 3 Scam. 578, 1 As to employing the assignor or agent, see post, p. 472, And see ante, p. 2238, 2 Butler v. Stoddard, 7 Paige, 163; Connah v. Sedgwick, 1 Barb. S. C. 210; Van Nest v. Yoe, 1 Sandf. Ch. 4; Currie v. Hart, 2 id. 353; Wilson v. Ferguson, 10 How. Pr. 175; Cummings v. McCullough, 5 Ala. 824; Adams v. Davidson, 10 N. Y. 309; Smith v. Leavitts, 10 Ala. 92; Moffat v. Ingham, 7 Dana, 495; Parker v. Jervis, 3 Abb. Ct. App. Dec. 449; Ball v. Loomis, 29 N. Y. 412; Miller v. Halsey, 4 Abb. Pr. (N. 8.) 28. To the formal taking possession by the assignee no stricter rule applies than in case of ordinary purchase. Sullivan v. Smith, 15 Neb. 476; 19 N. W. Rep. 620. 3 Bullis v. Montgomery, 50 N. Y. 852; Vredenburg v. White, 1 Johns. Cas, 156, 4Connah v. Sedgwick. 1 Barb. 8. C. 10. See Pine v. Rickert, 21 id. 469, 5 Pine v. Rickert, 21 Barb, 469. And in Dolson v. Kerr, 5 Hun, 643, where, at 470 TAKING POSSESSION OF PROPERTY ASSIGNED. [cH. Xxx. merchant in failing circumstances made an assignment of his stock, book accounts, etc., to a trustee for the benefit of his creditors, preferring some to others, and afterward continued to manage and control the business, on what agreement did not appear, there being no provision therefor in the assignment, it was held that the trustee was, prima facie at least, responsible for the acts of the debtor, and that both parties must be deemed to have contemplated and intended at the time of making the assignment the course of conduct in their transactions and dealings with the property con- veyed or pretended to be conveyed, which they afterwards adopted." And in a case in Indiana, where an assignment embraced the house in which the assignor lived, the furniture in it not exempt from sale or execution, the premises on which was a tannery carried on by the assignor, with other property, and no visible change took place after the assignment in the relation between the assignor and the assignees (who were young men in his employ), and the as- signor and his family continued to occupy the house and furniture as before and the assignees to board with them, and he and they still worked together in and about the tannery, these, together with other circumstances, were held to avoid the assignment.? So strong has been the determination of the courts to suppress mere nominal transfers for the purpose of evading the attacks of creditors and to compel the execution of all ostensible assignments for the benefit of creditors by actual sale and division of the assets of the debtor, that ina West Virginia case a trust deed by an in- solvent partnership making no provision for the possession of the goods conveyed in trust was held to be fraudulent on its face and void. § 342. How Far the Assignor May be Left in Possession.— What has been said as to a change of possession consequent upon a voluntary assignment is of course inapplicable in those states where such a change is not essential to the validity of the trans- fer. But even where it is held to be indispensable, it does not. the time of the execution of an assignment for the benefit of creditors, it was agreed between the assignor and assignees that they should lease all the assigned property to the wife of the assignor, which agreement was carried into effect, the assignees never taking possession of the property but leaving it with the as- signor and his wife, held, that the assignment was void as tending to hinder, delay and defraud creditors, \Wright v. Linn, 16 Tex. 34. 3 Caldwell v. Williams, 1 Ind. 405, 407. And see Smith v, Mitchell, 12 Mich. 180; Flanigan v, Lampman, id. 58; Parsell v, Patterson, 47 id. 505; Constantine v. Twelves, 29 Ala. 607. 2Shattuck v. Knight, 25 W. Va. 590. ‘See ante, p. 324, In Flanigan v. Lampman, 12 Mich. 58, Mr. Justice Christ- iancy made these observations: ‘‘ Possession of the assigned property by the ase . § 343.] ASSIGNOR AS AGENT OF ASSIGNEE. 471 imply an immediate and total exclusion of the assignor from the premises or property assigned. Thus, he may be left for a lim- ited time in possession of the house or farm which he has occupied with his family, together with the furniture, implements, etc., necessary for such occupation, provided it be under the control of the assignee, and do not delay or interfere with the due execution of the trust. Ina case in Connecticut, where the assignee under an assignment made with a view to proceedings under the statute of 1828, permitted the assignor to remain in possession of part of the property assigned; to live in the house and on the farm; to have the custody and use of the farming tools, oxen and cows thereon; and to cultivate parts of the farm, and sell some of the timber, appropriating the avails to pay for labor on the land; but these acts were all done under the constant supervision of the as- signee, and in furtherance of the objects of the assignment during the proceedings required by the statute; and it was found by a jury that there was no fraudulent design in the case,— it was held that such continued possession and acts of the assignor did not render the assignment fraudulent in law.! And in a case in Mich- igan, where the assignees allowed one of the assignors to remain on a farm which was part of the real estate assigned, during a period when houses and farms were not usually rented, until they could find a purchaser for the farm, which was advertised for sale, the assignees in the meantime taking the crops from the premises and expressing their intention to charge the assignor occupying the premises the fair rent, it was held that such fact, in the absence of any understanding that he should occupy them free of rent, could not be urged as evidence of a secret trust on behalf of the assignor,? In regard to premises used for business purposes and to busi- ness operations the rule is usually more strict; but even in these cases it is subject to the qualification noticed under the next head. § 343. How Far the Assignor May Act as Agent of the As- signee.— The object of the rule just mentioned, requiring a change signor, or his control over it after the assignment, has always been held to have a strong bearing upon the question of intent with which the assignment was made, and this species of evidence is perhaps more generally resorted to than any other to show a fraudulent intent in the execution of the instrument; and we think the whole conduct of the assignee with reference to the property after the assignment should be allowed to be shown as bearing upon the question of intent.” 1Strong v. Carrier, 17 Conn, 319. 2 Hollister v. Loud, 2 Mich. 310; Wing, P. J., id. 319. An assignment is not necessarily fraudulent and void because a small portion of the assets are with- held from the assignee. The assignee may show that the property is incum- bered to its full value. Parsell v. Patterson, 47 id. 500, 472 TAKING POSSESSION OF PROPERTY ASSIGNED. [cH. XXX. in the possession of assigned property, and in the mode of trans- acting the assignor’s business, is to exclude the assignor from all control over the property which he has formally transferred, and by this means to deprive him of the power of using it for his own benefit, and to the prejudice of the creditors. But it is not in- tended to interfere with the assignee’s acknowledged rights to employ such assistance in executing the trust as he may find necessary or beneficial, nor to deprive him of the power of avail- ing himself of the services of the assignor for the same purpose. Indeed, these services are in many cases important, and in some indispensable to the due and faithful execution of the trust;! and they are sometimes stipulated for in the terms of the assignment itself? Hence it follows that, under his general power to appoint clerks and agents, the assignee may appoint the assignor himself to assist him, for a suitable compensation, in the capacity of clerk or agent, the assignee being always held responsible for his acts, in the same manner and to the same extent as for the acts of any other agent.’ But an agency of this kind must be an actual and not a nominal one. It must be exercised in strict subordination to the assignee, whose paramount authority must not only be always acknowledged by the assignor, but made apparent by his own ac- tion. The difficulty of separating nominal agency from virtual ownership in many of these cases has led the courts to look with suspicion upon such a relation created between the assignor and assignee. But it will not be regarded as of itself evidence of an original intent to defraud creditors. 1 See the observations of the court in Vernon v. Morton, 8 Dana, 247, 252, and of Hoffman, A. V. C., in Hitchcock v. St. John, Hoff. Ch. 511, 2 Marks v. Hill, 15 Gratt. 400. ‘3 Hitchcock v. St. John, ubi supra; Nicholson vy. Leavitt, 4 Sandf. 8. C. 252, 272; 8. G, 6N. Y. 510; 10 N. Y. 591; Vernon v. Morton, wbi supra; Shattuck v. Freeman, 1 Metc. 10, 14; Clark v. Craig, 29 Mich. 398; Blow v. Gage, 44 ILL. 208; Hall v. Wheeler, 13 Ind. 871; Savery v. Spaulding, 8 Iowa, 239; Van Hook v. Walton, 28 Tex, 59; Ogden v. Peters, 21 N. Y. 23; Wilbur v. Fradenburgh, 52 Barb. 474; Pearson v. Rockhill, 4B. Mon. (Ky.) 296; Casey v. Jones, 37 N. Y. 608; Gordon v. Cannon, 18 Gratt. 387; Beamish v. Conant, 24 How. Pr. 94; Tompkins v. Wheeler, 16 Pet, 106; Fitler v. Maitland, 8 W. & S. 307; Deckhard v. Case, 5 Watts, 22; Bump on Fraud, Conv., p. 380; Bates v. Simmons, 62 Wis. 69, 4 Browning v. Hart, 6 Barb, 8. C. 91; Nicholson v. Leavitt, ubi supra. See Jackson v. Cornell, 1 Sandf. Ch. 848; Olney v Tanner, 10 Fed. Rep. 101; affirmed, 21 Blatchf. 540. The circumstance that the assignee constitutes the assignor his agent is not alone sufficient to show that the assignment was made with fraudulent intent, especially when it appears that the assignee was not familiar with the business, and that he had confidence in the assignor, who was familiar with it. Wilbur v. Fradenburgh, 52 Barb. 476, Ina case in Illinois, where a debtor in failing circumstances, and after suit brought, made a bill of sale of a stock of goods, etc., to a creditor by way of preference, and delivered them to the purchaser, who employed the trader as his agent and principal clerk, and §§ 344, 345.] MISOELLANEOUS, 473 In Connecticut the assignee is expressly empowered by statute to employ the assignor as his agent for the sale and disposal of the estate; but this is under several restrictions. Thus, it must be with the consent of the court of probate, and must be accompanied by public notice of such employment advertised for at least three successive weeks.’ It is further provided that such assignor shall, in the execution of his agency, be under the control and direction of the trustee, and the trustee shall at all times be responsible for his fidelity and for the rendering of a true account of the property and of its disposal to the court.? § 344. Liability of the Assignee on Taking Possession.— The assignee, as will be more particularly shown under another head,’ takes the property of the debtor subject to all existing equities. And where he takes possession of goods which have been delivered conditionally ona sale to the debtor, the conditions not being per- formed, he is liable in equity to the seller for the proceeds of the goods unless they have been applied under the trust without notice. § 345. Taking Possession of Property Not in Assignor’s Hands.— The assignee is entitled to the possession of the debtor’s leased to him the household furniture, it was held that, though the employ- ment of the debtor was calculated to raise suspicion, yet as the jury had given a verdict in favor of the purchaser, the court would not disturb it. Powers v. Green, 14 Ill. 886. And in a case in Pennsylvania where two brothers in failing circumstances sold the stock in trade of a coach manufactory to a third brother, in consideration of debts assumed by him for them, and he went into possession and continued the business at the same place, had the sign changed to his own name, opened a set of books and procured another book-keeper, the vendors re- maining in his employ, each of them superintending a particular department of the work at stipulated wages, it was held that there was not such a want of cor- responding change of possession under the circumstances as would authorize the court to say, as matter of Jaw, that the sale was void as against creditors. Dun- jap v. Bournonville, 26 Pa. St. 72. In Parker v. Jarvis, 3 Abb. Ct. App. Dec. 449, 453, at the time of executing the assignment the assignor delivered to the assignee the keys of the store for the purpose of giving him dominion over the property. The former clerks were discharged by the assignor and all again em- ployed by the assignee to take charge of and remain with the goods of the as- signee. They did so take charge and held the goods for the assignee. The signs were taken down, and there was no evidence that the assignor ever exercised any control over the goods. This evidence was regarded as showing a fair case of delivery and continued change of possession. 1G, S. (1888), §521; G. S. (Rev. of 1875), p. 583, tit. 18, ch. 11, §,24; G. S. (1888), § 521. But if such appointment is made without the assent of the court of pro- bate, and before an inventory is returned, it renders the assignment fraudu- lent in the law and void as against creditors. Peck v. Whiting, 21 Conn. 206, This course of publicly advertising the agency of the assignor was approved by the assistant vice-chancellor in Hitchcock v. St. John, Hoff. Ch. 511, 521. 2R. S. (Rev. of 1875), p. 383, § 24. See G. S. (1888), § 501. 3See post, ch. XL. 4Haggerty v. Palmer, 6 Johns. Ch. 487. 474 TAKING POSSESSION OF PROPERTY ASSIGNED. [cH. xxx. property wherever it may be, or in whosesoever hands. Where a vessel or cargo has been assigned while at sea, it will be sufficient if the assignee takes possession within a reasonable time after the property comes within his reach by the arrival of the vessel.’ If the vessel or goods are assigned while on the outward voyage, the assignee should as soon as possible give notice to the master; and if neither the vessel nor cargo return in specie, so that no posses- sion can be taken, he should exhibit his title to the master and claim the proceeds of the property.? It sometimes happens that property of the debtor embraced in the assignment and conveyed by it is in the hands of third per- sons claiming some lien upon it. Insuch cases the assignee should take the necessary steps for ascertaining the particulars of such property by demanding access to or inspection of it, or requiring an inventory of it; and also for ascertaining the nature and extent. of the lien by requiring a statement and proof of the claim on which it is founded.’ A demand should be made in the name and by the authority of the assignee, accompanied by notice and evidence of such author- ity. A demand by the assignor will not enable the assignee to maintain his suit for conversion. § $46. Taking Possession of Leasehold Premises.— Where a debtor, being also a lessee of premises (such as a store used for the sale of goods), makes a general assignment of all his property for the benefit of his creditors, and the assignee simply accepts the assignment, he will not be bound as assignee of the lease for the payment of rent to the landlord of the premises. The assignee has an election whether or not to take a lease of real estate held by the assignor, without affecting his right to the other property; but if he elects to accept the interest of the as- 1 Wheeler v. Sumner, 4 Mason, 183; Meeker v. Wilson, 1 Gall. 419, 428, 425. The title of a foreign assignee to a vessel assigned while at sea was sustained against a levy made by the sheriff on her arrival. Moore v. Willett, 35 Barb. 663. See Kelley v. Crapo, 45 N. Y. 86; reversed, 16 Wall. 610. See ante, p. 359, note, ? Parker, C. J., in Gardner v. Howland, 2 Pick. 599, 602; Dawes v. Cope, 4 Binn. 258; Bholen v. Cleveland, 5 Mason, 174, And see ante, p. 328. As to @ constructive taking of possession, see ante, p. 828; Griffin v. Alsop, 4 Cal. 406. 3 And see Mann v. Huston, 1 Gray, 230. See Dupuy v. Ullman, 18 Tex. 341. 4See Griffin v. Alsop, 4 Cal. 406. 5 Pratt v. Levan, 1 Miles (Pa.), 358. But where the existence of the lease was not disclosed to the assignee, who collected from sub-tenants of a small por- tion of the demised premises moneys specified in the assignment and schedules as due upon open account, which were in fact due as rent, he was not thereby made liable on the lease for rent accruing subsequent to the assignment. Den- nistown v. Hubbell, 10 Bosw. 155. But see Jones v. Housman, 10 Bosw. 168, § 346.] TAKING POSSESSION OF LEASEHOLD PREMISES. 475 signor and to enter under it he becomes so bound.! Taking posses- sion of the premises for the purpose of selling the goods assigned, and actually selling them thereon, amounts in law to such an acceptance and binds the assignee accordingly? And it is imma- terial how long the possession is retained, as when once the elec- tion is made the assignee cannot recede from it.? The case is dif- ferent where the assignee euters only for the purpose of obtaining possession of the goods.' 1 Goldthwaite, J., in Dorrance v. Jones, 27 Ala. 680, 633, citing Carter v. Ham- mett, 12 Barb. 253; Bourdilon v. Dalton, 1 Esp. Cas, 233; Copeland v. Stevens, 1B. & Ald. 592; Detwiler’s Appeal, 96 Pa. St. 828. In the case of Hovarty v. Davis, 16 Md. 312, which was very similar to Dorrance v. Jones in its facts, the court sustained the action for use and occupation, referring to and adopting the reasoning and authorities on which that case was based. The learned judge (Bistol) also referred to Tunner v. Richardson, 7 East, 886; and Gibson v. Court- hope, 1 D. & R. 201; 16 Eng. C. L. 83, In Jermain v. Pattison, 46 Barb. 9, where the assignees leased the premises for the best they could obtain, and paid to the landlord all that they received, which was accepted by him, and they sur- rendered the possession, it was held that the assignees, having fully administered and paid out according to the terms of the assignment all the moneys they had received from the assigned estate, could be charged personally only with the value of the use and occupation; and it seems in general that the liabilities of assignees are to be determined by the same rule which applies to executors. 2Goldthwaite, J., ubi supra, citing Welch v. Myers, 4 Camp. 368; Clarke v. Hume, R. & M. 207. See the New York case of Muir v. Glinsman, in the supe- rior court, January term, 1856. But in the case of Journeay v. Brackley, in the New York court of common pleas, different views were maintained by the court, and it was held that taking possession of the premises and holding them for ashort time for the purpose of selling off the stock of goods by auction, and making such sale within a reasonable time, do not constitute such acts of acceptance as to render the assignee liable on the covenants of the lease for the payment of rent. Law Rep., March, 1858, vol. 10(N. S.), p. 610. The presumption is that the possession of the assignee is the same as that of his assignor has been. Powers v, Carpenter, 15 N. Y. Weekly Dig. 155. See Weil v. McDonald, 21 id. 440. 3 Goldthwaite, J., ubi supra. 4Ibid., citing Hanson v. Stephenson, 1 B. & Ad. 8035. When the assignor remains no longer than is reasonably necessary for that purpose, without other- wise exercising his right to elect to take the term, he is not liable for the rent. Johnson v. Merritt, 10 Daly, 308. An action for use and occupation will not lie against the assignee in insolvency of a debtor, who at the time of the filing of his petition was a tenant at will of certain premises, merely upon proof that the goods of the insolvent were allowed to remain on the premises for about two months therefter, and that during said time the assignee entered with workmen who for several days were engaged in removing the goods, Wales v. Chase, 139 Mass. 538, CHAPTER XXXI. INVENTORY AND APPRAISEMENT OF THE PROPERTY—BOND BY THE ASSIGNEE. § 347. Inventory, When. 848, Inventory and Bond — Statutes and Their Construction. § 347. Inventory, When.— One of the earliest duties of an as- signee is to ascertain the extent and particulars of the assigned property. A very material guide for this purpose is in the inven- tory or schedule annexed to the assignment itself. But if there be no schedule annexed, his first business will be to make, or cause to be made, an exact inventory of the assets.! § 348. Inventory and Bond— Statutes and Their Construc- tion.— The object of the statutes requiring a bond is to provide that the trust will be carried out according to its terms, and the creditors secured against any loss by the misconduct or failure to perform the trust by the assignee. An inventory is required in order that the liability? and exact property of the assignor may be ascertained, and the whole amount of the assets marshaled for the purpose of making an equitable distribution of the proceeds thereof among the creditors. While the decisions in the states in which general assignment statutes have been enacted do not agree as to what extent their terms are mandatory and how far only directory, the true doctrine seems to be that a substantial ‘compli- ance with provisions is sufficient; and that the validity of the as- signment* and the rights of creditors‘ are not affected thereby, 1See the observations of Sandford, A. V. C., in Cram v. Mitchell, 1 Sandf. Ch, 255. ?The inventory is prima facte evidence of the amount of the assignee’s liabil- ity. Assigned Estate of Truitt, 10 Phila. 16. 3 Failure to give a bond will not invalidate the assignment. Winham v. Patty, 62 Tex. 490. Soin Minnesota it is held that the indorsement and record provided for by the statute are not essential to the validity of the assignment. Perkins v. Zarracher, 32 Minn. 71; 19 N. W. Rep. 888. And in Iowathe failure of the assignee to file an inventory as required by the statute does not render the assignment void. Price v. Parker, 11 Iowa, 144; Wooster v. Stanfield, 11 Iowa, 128; Abbott v. Chaffee, 83 Mich. 257. Same ruling in Dawson v. Crossen, 10 Oreg. 41. Be- 4 The failure of the assignee to give bond or perform any other duty imposed upon him by statute does not affect the rights of the creditors under the assign- ment. Hardcastle v. Fisher, 24 Mo. 70. § 348.] INVENTORY AND BOND. 477 but the assignee may be removed by the court having jurisdiction and another appointed in his stead.! fore filing the inventory or bond the assignee may bring an action of replevin to recover the assigned property. Price v. Parker, wbi supra. An imperfect or de- fective inventory cannot be treated as a nullity. Drain v. Mickel, 8 Iowa, 488. Under the statutes in Pennsylvania a bond with single security is not void. Mears v. Commonwealth, 8 Watts, 233. But the giving of this bond is not a condition precedent ; and a sale by the assignee without giving it is good. Dallam v. Fitler, 6 W. & S. 848, Heckman v. Messinger, 49 Pa. St. 465. If he neglects to file an inventory to give bond the remedy is to cite him before the court to show cause why he should not be dismissed. Id. The assignee is answerable though he has not given bond. Whitney’s Appeal, 22 Pa. St. 500. In Michigan it has been held that the word void means voidable in this statute, and that creditors may pro- ceed by bill in equity to compel a proper execution of the trust. Fuller v. Has- brouck, 46 Mich. 78; Pickersgill v. Riker, 50 id. 98. See, also, Coots v. Radford, 47 id. 87; Munson v. Ellis, 58 id. 381; Sibley v. Prescott Ins. Co., 23 N. E. Rep. 473. In Kentucky a deed of assignment for the benefit of creditors is not ren- dered invalid by the failure of the assignee to take the oath and execute the bond required by the statute. Bank of Commerce v. Payne, 86 Ky. 446; 8S. W. Rep. 856. See Petry v. Randolph, 85 Del. 351; 3 S. W. Rep. 420; Scheibler v. Mun- dinger, 85 Tenn. 674; 9S. W. Rep. 33. 1 Under the Ohio statute, when a judge removes an assignee and orders him to deliver to his successor the property and effects of the trust estate in his hands, and he fails to comply with the order, an action will lie upon the bond of the assignee, in favor of his successor, to recover the damages resulting from the failure to comply with such order. Phillips v. Ross, 36 Ohio St. 458. In Minne- sota the requirement as to filing a bond is imperative, and the assignee’s interest in the property ceases if he fails to file the bond within the time prescribed. Kingman v. Barton, 24 Minn. 295, And in Missouri the filing of the schedule and giving of the bond are conditions subsequent to the vesting of title in the assignee. Title vests in him on the execution and delivery of the deed. Winn v. Madden, 18 Mo. App. 261; Rendlemann v. Willard, 15 id. 875. So in New York it is held that the filing of the bond ié not requisite to the passing of title to the assignee. Bostwick v. Burnett, 74.N. Y. 317. But the schedule must be acknowledged and filed with the assignment. Franey v. Smith, 47 Hun, 119. CHAPTER XXXII. RIGHTS, DUTIES AND POWERS OF THE ASSIGNEE. § 349. How the Assignee Takes. 850. Duties and Powers of the Assignee. 851. Custody of the Property. 352. Powers in General. 853. Powers in General — Under Statute. The rights and powers with which the assignee becomes invested by the assignment and the duties to which it subjects him have already been generally noticed. In the present chapter they will be considered more particularly. § 349. How the Assignee Takes.— Under this head it may be said generally that the assignee succeeds only to the rights of the assignor,! and is affected by all the equities against him,’ and that he takes the property subject to all equities. He takes subject to 1 Luckenbach v. Brickenstein, 5 W. & 8S. 145; German Savings Institution v. Adae, 8 Fed. Rep. 106; Hodgson v. Barrett, 33 Ohio St. 63; Gardner v. The Na- tional City Bank, 89 id. 600; James v. Mechanics’ National Bank, 12 R. I. 490; Morris’ Appeal, 88 Pa. St. 368; Kepler v. Erie Dime Savings, etc. Co., 101 id. 602; Gammons v. Colman, 11 Oreg. 284; Hahn v. Salmon, 20 Fed. Rep. 801 (Oregon); Brown v. Brabb, 67 Mich. 17; 84 N. W. Rep. 403; Davis v. Chicago Dock Co., 129 Ill. 180; 21 N. E. Rep. 880; Drew v. Drum, 44 Mo. App. 25; Williamson v. Nealy, 81 Me. 447; 17 Atl. Rep. 404; Helm v. Gilroy, 20 Oreg. 517; 26 Pac. Rep. 851; Flynn v. Ledger, 48 Hun, 465; 1 N. Y. S. Rep. 235; Head v. Miller, 45 Minn. 446; 48 N. ‘W. Rep. 192. An assignee is not a purchaser for value. Bowles v. Bowles’ Ex’r, 80 Ky. 529; Peet v. Spencer, 90 Mo, 384; 25. W. Rep. 434. In Lycoming Ins. Co. v. Storrs, 97 Pa. St. 354, an action was brought by an assignee for the benefit of creditors upon a policy of insurance issued to his assignor. The defense was that the plaintiff’s assignor had failed to pay premiums in accordance with the terms of the policy after notice. It was held to be no answer for the assignee to show that be agreed with the agent of the company after the assignment that such notice should be given to him, and that this agreement was not complied with. The assignee never stood in any contract relation with the company, and it is therefore wholly immaterial what agreement he made with the agent. 2 Moody v. Litton, 2 Ired. Eq. 382; Frow v. Downman, 11 Ala. 880; Carter v. Lipsey, 70 Ga, 417. ® Leger v. Bonaffe, 2 Barb. 8S, C. 475; Addison v. Burckmyer, 4 Sandf. Ch. 498; Reed v. Sands, 37 Barb. 185; Van Heuson v. Radcliffe, 17 N. Y. 580; O’Hara v. Jones, 46 Ill, 288; Willis v. Henderson, 4 Scam. 13; Stow v. Yarwood, 20 IIl. 497; Goodwin v. Mix, 38 Ill. 115; Mellon’s Appeal, 32 Pa. St. 121; Plunkett v. Carew, 1 Hill Ch. (8S. C.) 169; Thorpe v. Dunlap, 4 Heisk. (Tenn.) 674; Warren v. Fenn, 28 Barb. 333; Maas v. Goodman, 2 Hilt. (N. Y.) 275; Arnold v. Grimes, 2 Iowa, 1; Griffin v. Marquardt, 17 N. Y. 28; Corn v. Saus, 3 Metc. (Ky.) 391; Roberts v. § 349.] HOW THE ASSIGNEE TAKES, 479 all existing liens,! charges and set-offs. Thus, he takes the property subject to the lien of a creditor which has attached by the filing of a bill before the assignment. He takes debts and choses in action subject to the right of set-off in the debtors? He takes interests of devisees in land subject to legacies charged upon them.‘ He takes buildings subject to liens for materials.» And he takes de- posits in bank subject to any lien of the bank existing at the time of the assignment. He takes real estate’ and personal property ® subject to the equitable lien of the vendor for purchase-money. Corbin, 26 Iowa, 315; Williams v. Winsor, 12 R. I. 9; Housel v. Cremer, 13 Neb. 298; Dunsmore v. Furstenfeldt, 88 Cal. 522; Standard Wagon Co. v. Nichols, 41 Hun, 261; Shaw v. Glen, 87 N. J. Eq. 32; Francisco v. Aguirre, 94 Cal. 181. Thus where the plaintiff, by mistake of fact, sent to a New York bank, to be credited to the defendant, more money than was due the latter, and the defend- ant assigned, it was held that the plaintiff could recover against the assignee, who took the assets subject to the equities existing against them in the hands of the defendant. First Nat. Bank v. Mastin Bank, 2 McCrary, 438. Hence, also, it is held that an assignee under a voluntary deed of trust, made to him pendente lite, cannot be admitted as a party. Stockett v. Goodman, 47 Md. 54. The as- signee of a fraudulent vendee is not liable for a tortious possession of the goods until a demand and refusal, the assignee being ignorant of the fraud. Goodwin v. Wertheimer, 99 N. Y. 149, 1Corning v. White, 2 Paige, 567; Haggerty v. Palmer, 6 Johns. Ch. 487; Walker v. Miller, 11 Ala. 1076; Tibbetts v. Weaver, 5 Strobh, 144; Barnes v. Fisher, 9 Mo. App. 574; Rubey v. Watson, 22 id. 428; Smith v. Spengler, 83 Mo. 408; Eames v. Mayo, 6 Ill. App. (Bradw.) 334; Morgan v. Kinney, 38 Ohio St. 610; City Bank v. Sherlock, 16 N. B. R. 62. See Hathaway v. Fall River Nat. Bank, 131 Mass. 14; Nashville Trust Co. v. Bank, 91 Tenn. 336; Union Trust Co. v. Trumbull, 137 Ill, 146; Plume & Atwood Mfg. Co. v. Caldwell, 135 id. 163; 26 N. E. Rep. 559. i 2Corning v. White, 2 Paige, 567. The lien of an execution in the hands of a constable holds good against a subsequent assignment under the general assign- ment law. Frost v. Wilson, 70 Mo. 664; Griffin v. Wallace, 66 Ind. 410. Where property has been levied on under an execution, and the owner assigns, the assignee acquires title subject to the lien of the execution, which title is good against all persons until the assignment is impeached for fraud. Mumper v. Rushmore, 79 N. Y. 119. The assignee takes a judgment subject to the attorney’s lien for costs. Schnitzler v. Andrews, 16 N. Y. Weekly Dig. 74. 3Fry v. Boyd, 3 Gratt. 78. See Ainslee v.;Boynton, 2 Barb. 8. C. 258. In Neal _ v. Lea, 64 N. C. 678, it was held that a defendant could not offset to the claim of " the plaintiff, as assignee of a note past due when assigned, by showing that the assignor was indebted to such defendant at the time of the assignment, unless such counter-claim had attached before the assignment, as by an agreement that it should be applied thereto or otherwise. Neal v. Lea, 64 N. C. 678; Connaughey v. Chambers, 64 id. 284; Haywood v. McNair, 2 D. & B. 283; Wharton v. Hop- kins, 11 Ired. 505. As to what debts can be set off, see post, § 361. 4Swoyer’s Appeal, 5 Barr, 377. 5Twelves v. Williams, 8 Whart. 485. 6 Beckwith v. Union Bank, 4 Sandf. §. C. 604; affirmed, 9 N, Y. 211, And subject to a cestui que trust’s rights whose moneys have been deposited with the as- signee’s individual bank account. Rabel v. Griffin, 12 Daly, 241. See Peak v. Ellicott, 80 Kan. 156; Harrison Nat. Bank v. Ellicott, 31 id. 173, * TCorn vy. Saus, 3 Mete, (Ky.) 891; Thorde v. Dunlap, 4 Heisk, (Tenn.) 674, 8 Warner v. Jameson, 52 Iowa, 70. 480 RIGHTS, DUTIES AND POWERS OF ASSIGNEE. (on. XXXIV. Title is vested in the assignee for the purpose merely of executing the trust in the manner directed.! Real estate in the hands of the assignee is not exempt from the payment of taxes, whether assessed thereon before or after the as- signment was made. Personal property remaining on the land thus taxed, after the assignment, is liable to distress for the non- payment of the taxes? But the assignee cannot be compelled to pay the taxes which accrued after the assignment, on land mort- gaged by the assignor prior thereto on the petition of the mort- gagees, there being no provision in the assignment authorizing such payment.? Sometimes a different rule is established by statute. Thus in Connecticut, under the act of 1853, the assigned property vests at once in the trustee, free from all attachments made within sixty days preceding the execution of the assignment, all such attach- ments being declared by the statute to be dissolved. In the case of Dey v. Dunham, in the court of chancery in New York, it was held that a general assignee in trust for creditors was to be considered as a dona jide purchaser as against a prior unre- corded mortgage, he not having had due notice of such mortgage.* But in a later case? in the same state, where a debtor had exe- cuted a chattel mortgage upon certain furniture as security for rent, but the mortgage was unrecorded, and the debtor subse- quently executed a general assignment of all his property, it was held that the assignee was not a purchaser in good faith within the meaning of the act requiring chattel mortgages to be filed, and that he could not hold the proceeds of the furniture against the assignee of the lease, In Ohio,’ where a mortgagee in possession under a chattel mort- 1Knower v. Central Nat. Bank, 124 N. Y. 552; 27 N. E. Rep. 247. See Brown v. Guthrie, 110 N. Y. 485; 18 N. E. Rep. 254. 2Wynne v. Simmons Hdw., Co., 67 Tex. 40; 1S. W. Rep. 568; Wright v. Wig- ton, 84 Pa. St. 163. See Jack v. Weinnett, 115 Ill. 105. 3 Matter of Lewis, 81 N. Y. 421. 41Gen. Stat. (Rev. of 1875), p. 393, tit. 18, ch. 11, § 12. But if the property is subsequently taken from the trustee, so that it cannot be used for the benefit of the creditors of the estate, the attachments and levies revive. But this section applies only to proceedings pending at the time of assignment, and not to such as are completed. Palmer v. Woodward, 28 Conn. 248. The title of the assignee relates back to the time of the institution of proceedings. Adams v. Lewis, 31 Conn. 501. See Boughton v. Crosby, 47 id. 577; Von Wettberg v. Carson, 44 id. 287. 52 Johns. Ch. 188; reversed on other grounds in 15 Johns, 555, 6 This was a case of deed with defeasance, the deed only being recorded. 7 Van Heusen v. Radcliff, 17 N. Y. 580, Denio, J., discussing Dey v. Dunham, supra; Haggerty v. Palmer, 6 Johns. Ch. 487; Slade v. Van Vechten, 11 Paige, 21. See Re Collins, 12 N. B. R. 879; Platt v. Stewart, 13 Blatch. 481; Barker v. Smith, 12 N. B. R. 274; Wilkins v. Davis, 15 id. 60; Sullivan v. Miller, 40 Hun, 516. $Lindemann v. Ingham, 36 Ohio St. 1; Ingham v. Lindemann, 37 id. 188. (These cases were under the act of 1859.) § 349.) HOW THE ASSIGNEE TAKES. 481 gage makes an assignment, and the assignee proceeds in the pro- bate court to administer the trust according to the statutes, the mortgagee cannot maintain an action against the assignee for con- verting the property to his own use. The mortgagor's interest, where the assignee is clothed with authority to sell the goods, is transferred to the fund arising from the sale; and this will be true though the condition in the mortgage was broken at the time of the assignment. Under the statute, the mortgagee not having possession, the mortgage is void as against creditors. The assignee takes the property under the assignment, and holds it for the ex- clusive benefit of creditors. Their rights can be as effectually as- serted through an assignee for their benefit as by judgment and execution against the property, and therefore he can sell the prop- erty covered by the mortgage, and is not confined to a sale of the equity of redemption.! But in Minnesota,’ where a mortgage of personal property was valid between the parties to it, it was held that the legal title as between them passed to the mortgagee, leaving only a right of re- demption in the mortgagor, which was all that passed to his as- signee, the latter not being a purchaser for a valuable consideration, so as to be able to avoid the fraudulent mortgage. The rule seems to be the same in Michigan.? In Rhode Island‘ a mortgage of personal property, valid as between the parties, and made in good faith, though unrecorded, and though the mortgagee did not take possession, creates a lien superior to a subsequent gen- eral assignment. In Missouri assignees have been treated as bona jide purchasers for a valuable consideration.» And the same rule appears to prevail in Virginia and West Virginia.® 1 Hanes v, Tiffany, 25 Ohio St. 546; Kilbourne v. Fay, 29 id. 264, 279; Tully v. Nash, 8 Am. L, Rec, 419. 2Mann v. Flower, 25 Minn. 500; Flower v. Cornish, id. 478; Bennett v, Ellison, 23 id. 242, 3‘Wakeman v. Barrows, 41 Mich. 363. See Putnam v. Reynolds, 44 id. 118. And similarly in Iowa (Meyer v. Evans, 66 Iowa, 179; Rumsey v. Town, 20 Fed. Rep. 558) and Texas. Keller v. Smalley, 63 Tex. 512, In Hawks v. Pritzlaff, 51 Wis, 160, it was held that the assignee could not bring an action for conversion against the chattel mortgagee of his assignor on the ground that the mortgage had not been filed, since the assignor could not do so. 4 Wilson v. Esten, 14 R. I. 621. 5Gates v. Labeaume, 19 Mo. 17%; First Nat. Bank v. Hughes, 10 Mo. App. 7; 6Evans v. Greenhow, 15 Gratt. 153; Exchange Bank v. Knox, 19 Gratt. 739;: Harrison v. Farmers’ Bank, 9 W. Va, 424. In the case of Wickham v. Martin, - 18 Gratt. 427, it was held that where an insolvent merchant purchases goods, not intending to pay for them, and after getting possession of them he conveys them and all his other estate in trust for the payment of his debts, the trustee. having no notice of the fraud, the trustee is a purchaser for value without no- tice. See Belding v. Frankland, 8 Lea (Tenn.), 67. : 31 482 RIGHTS, DUTIES AND POWERS OF ASSIGNEE. [CH. XXXII. In Michigan, in the case of Hollister v. Loud,' an assignee was held by the supreme court to be, in legal contemplation, a pur- chaser for a valuable consideration.2 But in the later case of Pier- son v. Manning, in the same court, the doctrine was denounced as “an absurdity.”4 And the prevailing rule now is that neither the assignee nor the creditors whom he represents are purchasers for a valuable consideration, without notice, as against prior equitable liens.» There must be some consideration passing at the time of the assignment, some new responsibility incurred or some rights given up, to invest an assignee with this character. Thus, in Mas- sachusetts a general assignment of a debtor’s property in trust for the payment of his debts, and containing a release of such debts by the creditors, was held not to constitute the assignees bona fide purchasers for a valuable consideration as against one having an equitable title to a portion of the property, unless it be shown that some new responsibility was incurred on the credit of the property, or that the creditors would not have become parties to the indent- ure if they had known that such portion of the property was held by the debtor in trust.’ An assignee “takes no better title and no higher rights than the Lionberger v. Broadway Savings Bank, id. 499, 509. See Wise v. Wimer, 23 id. 237; Hardcastle v. Fisher, 24 id. 70; Boeppler v. Menown, 17 Mo. App. 447. The assignee does not represent the creditors, and cannot on their behalf dispute a conveyance of the assignor, good inter partes, as being in fraud of creditors. This was true at common law, and has not been changed by the Missouri stat- ute. Heinrichs v. Woods, 7 Mo. App. 236; Haenssler v. Teichman, 9 id. 594, But it has also been held that the assignees of an insolvent banking corporation may maintain an action against a director for damages for loss to the bank occa- sioned by the fraudulent sale to the bank of its own stock by such director. The transaction was bad inter partes. Shultz v. Christman, 5 Mo. App. 338. 12 Mich. 309. 2 Wing, P. J., 2 Mich. 312, citing 2 Johns. Ch. 189; 10 Pick. 413; 2 Kent’s Com. 588; Roberts on Fraud. Conv. 434; Gorham v. Reeves, 1 Smith (Ind.), 289. 32 Mich. 445; Lent v. Flint, etc, Co., 58 id. 444, 1Pratt, J., 53 Mich. 483, 5 Haggerty v. Palmer, 6 Johns, Ch. 427; Knowles v. Lord, 4 Whart. 500; 2 Kent’s Com. [532], 689, note. See Walker v. Miller, 11 Ala. 1067; Grangers, etc. Co. v. Kamper, 73 id. 325; Maas v. Goodman, 2 Hilt. (N. Y.) 275; Griffin v. Mar- quardt, 17 N. Y. 28; Reid v. Sands, 37 Barb. 185; Willis v. Henderson, 5 Ill. 13; Warner v. Jameson, 52 Iowa, 70; Rumsey v. Town, 20 Fed. Rep. 558; Sandwich Mfg. Co. v. Wright, 22 id. 681 (Iowa); Bennett v. Ellison, 23 Minn. 242; Keller v. Smalley, 63 Tex. 512; Bridgford v. Barbour, 80 Ky. 529; Shaw v. Glen, 87 N. J. Eq. 82; Tyler v. Abergh, 3 Atl. Rep. (Md.) 904; Farrell v, Farnan, 6 East. Rep. (Md.) 579. In Person v. Oberteuffer, 59 How. Pr. 339, it was held that consign- ors of material had no lien for balance of account, under a running agreement, on property assigned by consignees and manufacturers to the defendant, in trust for the benefit of creditors. See Francklyn v. Sprague, 10 Hun, 589; Addison v. Bruckmeyer, 4 Sandf, 531. 6 Frow v. Downman, 11 Ala, 880; Clark v. Flint, 22 Pick. 231. 7Clark v. Flint, 22 Pick. 281. See Jewett v. Tucker, 139 Mass, 566, § 350.] DUTIES AND POWERS OF ASSIGNEE. 488 assignor had, and is not to be regarded as a purchaser for a valu- able consideration without notice. If the assigned estate is subject to a trust, the assignee takes subject to the rights of the equitable owner.” ! And in New York it has been held that where an execution is in the hands of the sheriff at the time of a general assignment of the property of the defendant in the execution, for the payment of his debts, the lien of the execution upon the personal property liable to seizure and sale thereon is paramount to the title of the general assignee, the latter not being a bona fide purchaser within the in- tent and meaning of the Revised Statutes, which protects the title of bona fide purchasers who have purchased between the delivery of the execution tothe sheriff and an actual levy upon the prop- erty? , § 350. Duties and Powers of Assignee.— The principal duties which devolve upon the assignee by his acceptance of the trust are those marked out by the assignment itself, namely: to take posses- sion of the property assigned, to convert it into money by the pro- cess of collection and sale, and to distribute the proceeds among the creditors entitled. The first of these duties has already been par- ticularly considered. The others will be treated of in like man- ner under distinct heads.' During the whole course of the trust the assignee is bound to look primarily to the interests of the creditors whom he, in the first instance, represents. He may confer with them for the pur- pose of obtaining their advice or assent to his proceedings.’ He may avail himself of the assistance of the assignor, but should not 1Chace v. Chapin, 130 Mass. 128, See Hathaway v. Fall River Nat. Bank, 181 id, 14. 2Slade v. Van Vechten, 11 Paige, 21. 3See ch. XXX. 4See chs. XXXV, XXXVI, XXXVIII. 5 McLellan’s Appeal, 26 Pa. St. 463; Clark v. Stanton, 24 Minn. 232. In Bul- litt v. Methodist Ep. Church, id. 108, it was held that a voluntary assignee of a limited partnership represents only the assignor and not the creditors, And it was held in the case of Hanford Oil Co. v. First Nat. Bank, 126 Ill, 584; 21 N. E. Rep. 488, that the assignee is not the representative of the creditors, but the agent of the assignor for the distribution of the property, and the assignee’s agreement with one creditor will in no way bind or conclude another creditor (see In re Lewis, 81 N. Y. 421); while the true doctrine seems to be that an- nounced in Kehoe v. Taylor, 31 Mo. 588, that the assignee is the trustee for both the debtor and the creditors, to see that the trust property isso administered as ‘to secure the creditors, as far as possible, their just claims, and then to account for the surplus. See Taylor v. Taylor, 71 Me. 582; Graves v. Long, 87 Ky. 442; 98S. W. Rep. 297, 6In the case of Mussey v. Noyes, 26 Vt. 462, 464, the assignees, immediately after taking possession of the property, had called a meeting of the creditors, at which the different modes of managing and disposing of the property were dis- 484 RIGHTS, DUTIES AND POWERS OF ASSIGNEE. [CH. AXXI. allow him to direct as to the management and disposal of the prop- erty.| He must be governed throughout by the terms and provis- ions of the deed, so far as they can be legally pursued.’ All the acts of trustees within the scope of their authority con- ferred by the deed, and within the duties imposed by law, bind the creditors, debtor and themselves; unauthorized acts do not, and thry may be required to account for the misapplication of the fund or omission of duty.’ And in New York‘ and other states® it has been expressly pro- vided by the statute that, “ Where the trusts shall be expressed in the instrument creating the estate, every sale, conveyance or other act of the trustees, in contravention of the trust, shall be absolutely void.” So where the assignees reconveyed certain of the trust property to the assignor before the payment of all the debts pro- vided for in the assignment, and the assignor executed a mortgage of the property so reconveyed for a bona fide consideration to a party without actual notice, in an action afterwards brought to set aside the mortgage and subject the property so reconveyed to the trust it was held that the assignees had no power to reconvey be- fore the execution of the trust, and could convey no title.® By accepting the trust according to its terms a creditor trustee waives all claims and liens upon the property inconsistent with the deed.?’ But it is said that the rule which prohibits a trustee from acquiring an interest adverse to his cestwi que trust does not apply to a bona jide creditor who has become trustee; and that such trustee may purchase a judgment against his cestut que trust. In cussed, and under the advice so obtained they had acted. See, also, Forbes v. Scannell, 13 Cal. 242. 1Caldwell v. Williams, 1 Ind. 405, 407. 21d.; Page v. Olcott, 28 Vt. 469; Hulse v. Marshall, 7 Mo. App. 148; Matter of Lewis, 81 N. Y. 421. The duties and obligations of the assignee are created by the deed, and they can neither be enlarged, diminished or varied by any arrange- ment between the cestuis que trust without his consent. Geisse v. Beall, 8 Wis. 867; Howell v. Moore, 127 Ill. 67; 19 N. E. Rep. 863; In re Fuller, 42 Minn. 22; 43 N. W. Rep. 486. It is the duty of the assignor to uphold his trust, not to im- peach it. Matter of Ward, 10 Daly, 66; Creveling v. Fritts, 34 N. J. Eq. 134. 3 Field v. Flanders, 40 Ill. 470. 41 BR. 8. 730, § 65; 4 R. S. (8th ed.), p. 2489, § 65, 5So in Indiana. 1 R. 8. Ind. (ed. 1870), p. 631, § 5; 2 B.S, (1888), § 26830. See Hodgson v. Macey, 8 Ind. 122; Wright v. Bundy, 11 id. 400. As to the duties. in general of the trustee, see R. S. of Ind. (1888), §$ 2979, 2980, 2997. An assign- ment under the statute should not be deemed to create any right in the assignee, or the creditors for whom he is trustee, which can exclude the equitable claims of others in their origin antedating the assignment. Davis v. Newcomb, 72 Ind. 413. 6 Briggs v. Davis, 20 N. Y. 15, 21. 7Harrison v. Mock, 10 Ala. 185, 8 Prevost v. Gratz, Peters’ C, C. 373, § 351.] CUSTODY ‘OF PROPERTY. 485 the process of collection, sale and distribution he is bound to use all reasonable dispatch.' And in general he is bound not to do any- thing which can place him ina position inconsistent with the inter- ests of the trust, or which can have a tendency to interfere with his duty in discharging it.’ § 351. Custody of Property.— An important part of the as- signee’s duties relates to the custody and management of the prop- erty before its sale and final distribution. Until a sale can be effected it is his duty to preserve and protect it so that it may be disposed of to the best advantage; and he has the necessary power and discretion for this purpose.2 Thus he may effect and continue necessary insurance,! may pay interest on mortgages which are prior liens upon the assigned property,’ and may sometimes pay off the mortgages themselves. In New Jersey the power to redeem mortgages is expressly given to assignees by statute.6 In Pennsylvania it has been held that he may elect or refuse to take a lease of real estate held by the assignors at the time of the as- signment without interfering with the right to the other property assigned.’ But he cannot improve real estate by erecting buildings or do any other act tending to delay creditors? Where the prop- erty assigned is growing crops he may employ the necessary assist- ance to harvest and secure them.’ In regard to personal property, the assignee has a similar power and discretion. If it be perishable, he is bound to resort to the proper means for its preservation until it can be advantageously disposed of. If there be no opportunity to sell, it must be taken care of till a favorable change in the market occurs.” And if it be _1Paige v. Olcott, 28 Vt. 469; Wynne v. Simmons Hdw. Co., 67 Tex. 40; 18. W. Rep. 568; Creswell v. Jones, 67 Ala. 420; Inglis v. Floyd, 33 Mo. App. 565; In re Cornell, 110 N. Y. 351; 18 N. E. Rep. 142. 2 Bellamy v. Bellamy’s Adm’r, 6 Fla, 62; Hamilton v. Wright, 1 Bell’s (Scotch) Appeal Cas, 574. See Matter of Marquand, 57 How. Pr. 477. 3 Morton, J., in Woodward v. Marshall, 22 Pick. 474, See the observations of Sandford, J., in Litchfield v. White, 3 Sandf. S, C. 545, 551. Nor can he delegate his duties under the assignment to a stranger. Small v. Ludlow, 1 Hilt. (N. Y.) 189. As to his power to convey by attorney, see post, ch. XXXV, 4 Harris, J., in Whitney v. Krows, 11 Barb. 198, 201, 202. 5Ibid. In general the assignee is not bound to pay off a mortgage or to redeem. Gough v. Clift, 81 Ind. 871, 6R. S. (ed. 1878), p. 39, § 13. 7Pratt v. Levan, 1 Miles, 358. The assignment does not impose upon the as- signee any duty to let the real estate. Detweiler’s Appeal, 96 Pa. St. 323, 8 Hitchcock v. Cadmus, 2 Barb. 8. C. 381; Hurlbut, J., id. 383, 385. 9 Harris, J., in Whitney v. Krows, 11 Barb, 202. 10 This, of course, is subject to the general rule against delaying sales, herein- after noticed. 486 RIGHTS, DUTIES AND POWERS OF ASSIGNEE. [CH. XXXII. unsalable, he may complete and prepare it for market,’ as will be more particularly shown under another head? In New Jersey, by statute, he has power to redeem conditional contracts.’ § 352. Powers in General.— The assignee is clothed with all the necessary powers to obtain possession of the property assigned and to collect debts by process of law, and in some states he may avoid a previous fraudulent assignment.* He may attack the validity of a judgment entered upon the con- fession of his assignor,’ and he may contest for the benefit of cred- itors the claims of a mortgagee under a defective mortgage to a preference in the distribution of the proceeds,’ and he may inter- vene to dissolve attachments issued against the assigned estate as the property of the assignor.’ But a general assignment by a person who is a member of a partnership gives to his assignee no control over the partnership funds or claims so as to enable him to receive or release them.® And an assignee has no power to convey the estate assigned for any other purpose than the benefit of creditors so long as the trust remains undischarged.° 1 Morton, J., in Woodward v. Marshall, 22 Pick. 474, 2 See post, ch. XX XIII. 3R. S. (ed. 1878), p. 39, § 18. 4Van Heusen v. Radcliffe, 17 N. Y. 580; Englebert v. Blanjot, 2 Whart, 240; overruling, as to this point, the case of Thompson v. Dougherty, 12S, & R. 448. And see Brownell v. Curtis, 10 Paige, 210, 211. See the New York act of April 17, 1858. The assignee may sct aside a fraudulent conveyance of the assignor. Pillsbury v. Kingon, 33 N. J. Eq. 287 (cited under the next section); Schaller v. Wright, 28 N. W. Rep. 460 (Iowa). The assignee may rightfully pay over toa person from whom the assignor had fraudulently obtained property the proceeds of sales of such property, and a bill in equity will not lie to compel him to pay such proceeds to the preferred creditors. Doyle v. Peckham, 9 R. I. 21. In Pennsylvania the assignee stands in the shoes of the assignor as to all transac- tions before the assignment. He cannot set up the fraud of his assignor in any previous transfer or judgment. He does not represent the creditors who may have superior claims, and he is not armed with their powers. But he can assert his and their right to any property of the assignor which passed by the assign- ment against any person claiming by subsequent transfer, attachment, judg- ment, execution or any other lien. Marks’ Appeal, 85 Pa. St. 231. In Thomas v. Penrich, 28 Ohio St. 55, it was held that an assignee of a firm may maintain an action to recover the amount of firm funds applied by one partner, without the consent of his copartner, in the payment of his private debt, against a person receiving such funds. Roby v. Meyer, 84 Tex. 386; 19 S. W. Rep. 557; Hill v. W. & A. R. R. Co., 86 Ga. 284; 12S, E. Rep. 685; Graff’s Estate, 146 Pa. St. 415; 23 Atl. Rep. 397. 5 Nichols v. Kribs, 10 Wis. '79, 6Sixth Ward Building Ass’n v. Wilson, 41 Md. 506, 7Ex parte Dickinson, 29 S, C, 453; 7S. E. Rep. 593. 8 Moddewell v. Keever, 8 W. & S. 63, ® Briggs v. Palmer, 20 Barb. 392, 404; Briggs v. Davis, 21 N. Y. 574; 8. ©, 20 N, Y. 15. § 853.] POWERS IN GENERAL — UNDER STATUTE. 487 As incident to his general powers, the assignee has power to ap- point and employ all necessary clerks and agents to assist him in the performance of his duties, and to allow and pay them suitable compensation for their services.' § 353. Powers in General — Under Statute.— The powers of an assignee are sometimes expressly defined by statute. Thus, in New Jersey, it is dleclared that every assignee shall have as full power and authority to dispose of all estate, real and personal, as- signed as the debtor had at the time of the assignment, and to sue for and recover in the proper name of the assignee everything be- longing or appertaining to the estate, real or personal, of the debtor, and shall have full power and authority to refer to arbi- tration, settle and compound, and to agree with any person con- cerning the same, and to redeem all mortgages and conditional contracts, and generally to act and do whatsoever the debtor might have lawfully done in the premises. In New York it has been declared by statute that an assignee or other trustee of the prop- erty and effects of an insolvent estate, corporation, association, partnership or individual may, for the benefit of creditors, disaffirm, treat as void and resist all acts done, transfers and agreements made, in fraud of the rights of any creditors, including themselves and others interested in any-estate or property held by or of right belonging to any such trustee or estate. And that every person 1 Vernon v. Morton, 8 Dana, 247. See ante, p, 268, n. 4. In a head-note to Can- non vy. Kelly, 5 Hun, 283, it is said that an assignee for the benefit of creditors has no right to employ clerks to sell a stock of goods assigned to him at retail in the usual course of business. In Massachusetts the assignee in insolvency has power to enter into some contracts for the benefit of the estate though they may in- volve disbursements. International Trust Co. v. Boardman, 149 Mass, 162; 1N. E. Rep. 239; Abbott v. Stearns, 139 Mass. 168. Ministerial acts of a trustee may be performed by an agent. Tyler v. Herring, 67 Miss. 169; 6S. Rep. 840. 2R. S., 1878, p. 39, § 13. In Van Keuren v. McLaughlin, 21 N. J. Eq. 162, where it was ascertained that a previous absolute conveyance by the assignor was in fact a mortgage, and that a certain other absolute conveyance executed by the assignor was fraudulent as against creditors, it was held that the equity of redemption in the mortgaged premises passed to the assignee, but not so as to the property conveyed in fraud of creditors. But this case has been over- ruled in Pillsbury v. Kingon, 33 N. J. Eq. 287; reversing s. c., 81 id. 619, The assignment in this case was under the statute. Previously the debtor had con- veyed away property in fraud of creditors. The latter had presented their claims for allowance, and the property was insufficient to pay them in full without re- sorting to the property fraudulently conveyed away. It was held that the as- signee has standing in court to set aside the fraudulent conveyance, and can reach the property thus conveyed away for the purpose of applying it in satis- faction of the claims of creditors. See numerous cases cited and reporter’s note. The assignee can take no exception to the validity of a chattel mortgage given by his assignor on the ground that it was not filed in the county where the mort- gagor actually resided. Shaw v, Glen, 37 N. J. Eq. 82. 3 Act of April 17, 1858, § 1; Laws of 1858, ch. 314, p, 505; 4 R. 8. (7th ed.), 488 RIGHTS, DUTIES AND POWERS OF ASSIGNEE. [CH. XXXII. who shall, in fraud of the rights of creditors and others, have re- ceived, taken or in any manner interfered with the estate, prop- erty or effects of any insolvent corporation, association, partner- ship or individual, shall be liable in the proper action to the trustees of such estate or property for the same, or the value of any prop- erty or effects so received or taken, and for all damages caused by such acts to any such trust estate.! In Maine the assignee is empowered to recover, collect and ap- ply fcr the benefit of creditors all property conveyed or trans- ferred by the assignee, previous to and in contemplation of the assignment, with the design to defeat, delay or defraud creditors, or to give a preference to one creditor over another.’ So in Iowa it is provided that any assignee shall have as full p. 2594, § 1. An equitable action by the assignee to restrain the sheriff and judg- ment creditor from taking any proceedings under a judgment obtained in another court and the execution issued thereon, and to set aside the levy thereunder, will not lie. Chittenden v. Davidson, 52 N. Y. Super. Ct. 421. 1Id.,§2. Under this act the assignee has ample power and no doubt it is his duty to attack any conveyance made in fraud of creditors, and to reach the property fraudulently disposed of or concealed. Miller v. Halsey, 4 Abb. Pr. (N. S.) 28, 838. In McMahon v. Allen (85 N. Y. 404; more fully 32 How. Pr, 313; reversing 34 Barb, 56; 12 Abb. Pr. 275), a transfer of property, real and personal, was obtained, fraudulently and inequitably, by false representations made by the transferee to the transferrer, by abuse of a fiduciary relationship. The trans- ferrer subsequently made a conveyance of all his property and causes of action to an assignee for the benefit of his creditors. The question was whether the as- signee could maintain an action to set aside the previous conveyance as having been fraudulently and inequitably obtained and by an abuse of fiduciary relation- ship. It was held that the action could be maintained. The conveyances, how- ever, were made previous to the act of 1858. The decision was placed upon the ground of imposition and fraud upon the assignor and not of fraud against cred- itors. The cases relied upon were Dickinson v. Burrill, L. R. 1 Eq. 337; Oneida Bank v. Ontario Bank, 21 N. Y. 490; Tracy v. Talmage, 14 id. 192; Waldron v. Willard, 17 id. 466. See Inre Ward, 1 Am. Insol. R. 339. In Ball v. Slafter, 26 Hun, 353 (affirmed, 98 N. Y. 622), it was held that a chattel mortgage, fraudulent as to creditors, one of whom the mortgagor had made his assignee, was void under the law of 1858 as against such assignee; and the right given by that stat- ute to invalidate a transfer of property extends only to defects based upon fraud or fraudulent intent. Matter of Collins, 12 Blatch. 548; Southard v. Benner, 72 N. Y. 424, 428. See Halsted v. Halsted, 55 id. 442, 445; Hard v. Milligan, 8 Abb. N. C. 58, 65; and § 75, ante. A judgment creditor cannot maintain an action to have achattel mortgage executed by his debtor declared fraudulent and void where the latter has executed, after the execution of the mortgage and before the recovery of the judgment, a general assignment for the benefit of creditors. The assignee or the creditors whom he represents are the only persons who have any right to question the validity of the mortgage. Childs v. Kendall, 30 Hun, 227; Spring v. Short, 90 N, Y. 588; Swift v. Hart, 35 Hun, 128, overruling Leon- ard v. Clinton, 26 Hun, 288. ?R. S. (ed. 1871), p. 545, ch. 70, § 8. An assignee may maintain a bill to re- cover property conveyed by the debtor with intent to defeat, delay or defraud creditors, however defective the description, or however inapplicable to the prop- erty the terms may be. Simpson v. Warren, 55 Me. 18, § 353.] POWERS IN GENERAL— UNDER S8TATUTE. 489 power and authority to dispose of all estate, real and personal, as- signed, as the debtor had at the time of the assignment, and to sue for and recover in the name of such assignee everything belonging or appertaining to said estate, and generally to do whatsoever the debtor might have done in the premises.! In Connecticut it has been held that under the act of 1853 a trustee in insolvency is the agent of the creditors of the insolvent as well as of the law. THe is the instrument by which, instead of by attachment, the property of the debtor is secured for their benefit, and any conveyance which would have been deemed fraud- ulent and void as against attaching creditors is equally void as against him.? , In Minnesota* the assignee represents creditors as against all transfers and conveyances of property which would be held to be fraudulent or void as to creditors, and has all the rights which such creditors would have to avoid such fraudulent conveyances and transfers. And in Michigan‘ and some other states it is provided by statute that every beneficial power and the interest of every person en- titled to compel the execution of a trust power shall pass to the assignee of the estate and effects of the person in whom such power or. interest is invested, under any general assignment of the estate and effects of such person for the benefit of creditors made pursuant to law. The powers of surviving and substituted assignees and the lia- bility of assignees in general will be considered hereafter under distinct heads. 1 Towa Code (1880), § 2127; 1 McClain’s Ann. Code (1888), § 3306, 2Gen. Stat. (Rev. of 1888), § 533. See Simpson v. Altna Ins. Co., 29 Conn. 245; Robertson v. Todd, 31 id. 555; Thomas v. Beck, 39 id. 241; Croswell v. Allis, 25 id. 301; Palmer v. Thayer, 28 id. 257; Calhoun v. Richards, 30 id. 210; Taylor v. Atwood, 47 id. 448; Shaw v. Smith, 44 id. 306; Filley v. King, 49 id, 211. 3 Stat. of Minn. (1878), p. 545; R. S. (1881), ch. 4, § 27. 4Compiled Laws (1871), p. 1837, § 4172; Howell’s Ann. Stats. (Sup, 1883 -90), ‘§ 3741. See Heineman v. Hart, 55 Mich, 64; Gott v. Hoschina, 24 N. W. Rep. 123; Root v. Potter, 26 Mich. 682; Sweetser v. Camp, 29 id. 506. The assignee does not hold as an officer of the court. Lehman v. Rosengarten, 23 Fed. Rep. 642. CHAPTER XXXIII. TO WHAT EXTENT THE ASSIGNOR’S BUSINESS MAY BE CONTINUED BY THE ASSIGNEE. § 854, When Beneficial to the Estate. 355. When Creditors Assent. § 854. When Beneficial to the Estate.— As a general rule the effect of a general assignment of a debtor’s property is to put an end to the transaction of his business as ordinarily conducted and to the ordinary operations of purchase, manufacture and sale. But this, as we have seen, is sometimes qualified by stipulations in the instrument of assignment providing for the continuation of the business for a limited time, with a view to the more beneficial exe- cution of the trust. The cases in which stipulations of this kind have been sustained were considered under a previous head.! Independently, however, of any authority contained in the as- signment the assignee may in certain cases continue the business as it has been conducted by the debtor, Thus where an assignor is conducting a manufacturing business when he makes an assign- ment and he has a large amount of material on hand for the pur- pose of being manufactured, the assignee can conduct the business in his own name, for the purpose of working up the material thus ready for manufacture, where it is manifestly for the -benefit of the estate? In the case of Woodward v. Marshall,’ in the supreme court of Massachusetts, it was observed by the court (Morton, J.) that an authority for this purpose would be implied by law as nec- essarily incident to the principal powers granted to the assignee. “Where the estates of insolvent men,” it was said, “are liable to: be transferred, and that too, generally, without much discretion in the selection of a propitious opportunity, it will necessarily happen that property of all kinds and in every stage of preparation for market will come into the hands of assignees; and unless they ex- ercise the power of preparing it for market, it will often perish or be sacrificed. Of the propriety and expediency of the measures to be adopted they must judge in the first instance. Whether they abuse their trust or not may be inquired into in a proper form of 1See ante, pp. 242 et seg. *Patten’s Estate, 2 Pars. (Pa.) Select Eq. Cas, 108; Miller v. Mulford, 31 N. J. Eq. 661. 322 Pick. 468, § 355.] WHEN OREDITORS ASSENT. 491 action.”' Where an assignee undertakes to carry on the former business of the assignor and it does not appear that such continu- ance was a benefit to the estate, he will not be allowed the ex- penses thereby incurred.” In a late case in New York’ the assets consisted of property used in a livery business and debts due the assignor; there were chattel mortgages covering the property for more than its value. The assignor carried on the business for about two months at a loss, and then sold the entire property subject to the mortgages for one dollar. It was held on the accounting of the assignee that items for re- ceipts and disbursements while he was carrying on the business were properly rejected; that he was simply authorized to convert the assets into money and distribute it among creditors, and the estate could not be charged with a loss incurred in an unauthorized use of the property; that the assignee was bound to exercise the diligence required of a paid agent or of a provident owner, and he was liable for ordinary negligence or the want of that degree of diligence which persons of ordinary prudence are accustomed to use about their own business and affairs. § 355. When Creditors Assent.— So the assignee may continue the business with the express assent or approval of the creditors. In the Vermont case of Mussey v. Noyes,‘ in which the assignment was sustained, the assignees, after taking possession of the property named in the assignment, continued to run a paper mill for the purpose of working up the paper-mill stock then on hand, and also purchased some stock which they worked which was not necessary for working off that on hand. But this was done with the assent and by the advice of the creditors who had been called together for the purpose. But the assignee cannot continue the business longer than is necessary for the special purpose of working up the material on hand. If he conducts it longer, he does it at his own risk, and may be held accountable for any loss which thereby accrues to the estate.® 122 Pick, 475. 2 Wynne v. Simmons Hardware Co., 67 Tex. 40; 1S. W. Rep. 568. 3 Matter of Dean, 86 N. Y. 398. See Matter of Rauth, 10 Daly, 52; Matter of Rice, id. 1; Matter of Orser, id. 26; Matter of Marklin, id. 122; Matter of Petchell, id, 102. . 426 Vt. 462. _ 53d. 464, A majority of the creditors cannot authorize the assignee to continue the business. Wilhelm v. Byles, 27 N. W. Rep, 847 (Mich.). 6 Patten’s Estate, 2 Pars, (Pa.) Select Eq. Cas. 108. See Doyle v. Smith, 1 Cold. (Tenn.) 25. 492 ASSIGNEE CONTINUING BUSINESS. [cH. XXXIIT. In a New York case! Robinson, J., remarks: “The idea that a general assignee for the benefit of creditors can, in the exercise of any proper discretion imposed upon him by virtue of an assign- ment, proceed to conduct and carry on the previous business of the assignor so long as he pleases to do so, or to do any act in respect thereto except such as tends to the most speedy conversion of the assigned estate into cash, is wholly untenable, and the acts of the assignee tending to any other result are (equally as if committed by the debtor) in fraud of the creditor in hindering and delaying him in the realization of what is justly due him either from his debtor or from the assigned estate.” Nor is it every case nor all matters of business that will justify an assignee in conducting it under the assignment. It can only be allowed from the necessity of the case and where it is manifestly for the benefit and advantage of the creditors and those interested in the estate. Thus where the assignee individually owned one-fourth of a steamboat and the other three-fourths belonged to the estate, and the assignee made repairs on the boat and defended suits brought against her and ran her on joint account, and she was finally lost by fire, it was held to be inconsistent with his duty for the as- signee to run the steamboat on joint account for himself and the estate. “No doubt,” said Mr. Justice Leonard in delivering the opinion of the court, “he had the right to run the steamboat, as he owned one-fourth, but he neglected his duty in not selling the interest of the estate in her for the best price that could be ob- tained before any repairs or expenditures for running expenses were made.” The court allowed the assignee three-fourths of the expense of defending the suits against the vessel, but nothing for the expense of repairs and running the vessel.’ Thus, where a stock of goods in a retail business is assigned, the assignee cannot continue the business and retail the goods as before with a view of obtaining higher prices, but must sell offat once. And even where he is allowed to retail the goods for a limited time as a more bene- ficial course to creditors than an immediate sale at auction, the sales must be uniformly for cash,° and there must be no new pur- chases with the proceeds,’ nor any act done or permitted which 1Levy’s Accounting, 1 Abb. N. C. 186. 2Patten’s Estate, 2 Pars. (Pa.) Select Eq. Cas, 108. *Duffy v. Duncan, 35 N. Y. 187; S. C., 832 Barb. 587. See Dunham v. Water- man, 17 N. Y. 9; reversing 3 Duer, 166; Watson v. Butcher, 37 Hun, 891. 4Hart v. Crane, 7 Paige, 37, 38. And see Whallon v. Scott, 10 Watts, 237; American Exchange Bank v. Inloes, 7 Md. 380. 5See Meacham v. Stearnes, 9 Paige, 398, 6 See Connah v. Sedgwick, 1 Barb. S. C. 210, § 355.] WHEN CREDITORS ASSENT. 493 can prevent the business from being at any time brought to an im- mediate close. In Minnesota it was decided in the case of Noyes v. Beaupre! that where an assignee of a stock of merchandise continued the business and made additional purchases of goods, which were added to and intermingled with the assigned property with the assent of creditors, who, after notice of the assignment and his purpose so to continue and manage the business in the execution of his trust, continued to make sales to such assignee for such purpose, and to accept dividends from him on both old and new accounts, such cred- itors, unless actually misled without fault or laches on their part, were bound by the assignment. 136 Minn. 49; 80 N. W. Rep. 126. CHAPTER XXXIV. COLLECTION OF DEBTS AND RECOVERY OF PROPERTY — ACTIONS BY THE ASSIGNEE, § 356. Actions by Assignee. 857, Actions and Defenses Against Creditors, 358, Actions Against Assignor. 859, Actions by Defrauded Vendor. 360. Costs. 861. Set-off. 362. When the Declaration of the Assignor Can be Used as Evidence Against the Assignee. 363. Parties. 364, Appeal and Writs of Error, § 356. Actions by Assignee.— Where possession of the assigned property cannot be obtained nor the debts collected without suit, the assignee has authority to commence and prosecute such suits, and to institute such other legal proceedings as he may be advised are necessary for the purpose. This he may do in his own name,! and without joining the creditors.2. Heshould proceed with prompt- ness, otherwise he may become personally liable to make good any loss occasioned by delay.*? Where property conveyed in a deed of trust was taken under execution and sold, and the purchasers re- mained in peaceable possession for five years before suit brought by the trustee or cestuz gue trust to recover it, it was held in Vir- ginia that the statute of limitations was a bar to the recovery.‘ In Pennsylvania assignees under a voluntary assignment have been held to have sufficient possession to entitle them to maintain trespass against a sheriff, who took goods from the assignor, al- though they had never taken actual possession of them.’ And an 1 Ogden v. Prentice, 33 Barb. 161. 2TIrwin v. Keen, 3 Whart. (Pa.) 347. 3 It is the duty of the trustee to use all necessary means, by action or other- wise, to realize the debts. Ifa debt is lost by his neglect of duty, where the debtor had property sufficient to pay, he is personally responsible for the loss, although he may have acted without any improper motive. Royall’s Adm’r v. McKenzie, 25 Ala. 363; McQueen v. Babcock, 41 Barb, 887. See Winn v. Crosby, 52 How. Pr. 174; Matter of Carpenter, 45 Hun, 552. The duties of assignees are, so far as they are analogous, determined by the same rules as govern executors in similar circumstances. Jermain v. Pattison, 46 Barb. 9. 4 Sheppards v. Turpin, 3 Gratt. 378. 5 Hower v. Geesaman, 17S, & R. 251. In Nebraska the assignee may main- tain an action to set aside a sale of real estate under an attachment levied after § 356.] ACTIONS BY ASSIGNEE. 495 assignee may make a contract with counsel for the recovery of as- sets assigned.! So in the same state it has been held that the assignee of a cor- poration may enforce the power of the corporation to make the calls upon the stockholders necessary to enable him to settle with creditors. Statutes embracing general powers and often conferring special powers to the assignee have been passed in several of the states.’ In New York assignees are by statute empowered to maintain actions against every person who shall, in fraud of the rights of creditors and others, have received, taken or in any manner inter- fered with the estate, property or effects of any insolvent corpo- ration, association, partnership or individual, to recover such prop- erty or its value, and damages. the execution and delivery of the assignment, where such sale would impair or defeat his title as assignee. Smith v. Jones, 18 Neb. 481. 1 McLellan’s Appeal, 26 Pa. St. 463. 2 Germantown Pass. R. R. Co. v. Fitler, 60 Pa. St. 155. But see Ohio Life Ins, & Trust Co, v. Merchants’ Ins, & Trust Co., 11 Humph. (Tenn.)1; Wright v. Mc- Cormick, 17 Ohio St. 86. See Insurance Co. v. Jones, 35 Ohio St. 351. In Craig’s Appeal, 92 Pa. St. 396, it was held that the contributory share of the stockhold- ers of an insolvent bank: is to be ascertained, apportioned and enforced either by process analogous to that prescribed for the benefit of note holders in the thirty-second and thirty-third sections of the banking act of 1850, or by bill in equity. But an auditor has no such power. The authority to estimate the value of the property of the bank and apportion the deficit among the stockholders is committed by law to the assignee. In Missouri it has been held that a bill in equity will lie in favor of the assignee to recover unpaid subscriptions to the stock of a corporation. Lionberger v. Broadway Savings Bank, 10 Mo. App. 499. 3 See Appendix, I. 4 Act of April 17, 1858, § 2; Laws of 1858, ch. 314, p. 506; 3 R. S. (7th ed.), p. 2880; 4 R. S. (8th ed.), p. 2594, § 1. The purchaser of firm goods at a sheriff’s sale, under an execution against one of two individuals composing a firm, is constituted a tenant in common of the goods with the other member, and, of course, with the trustee or assignee of the firm. But if such purchaser take all the goods away and sell them, the trustee may have assumpsit for the part of the money arising from the sale to which he is equitably entitled. Latham, Trustee, v. Simmons, 3 Jones’ L, 27. So where an assignee for the benefit of ’ creditors sued the defendant for conversion of assigned property, it was held that the defendant might show that the property was seized by virtue of an at- tachment against the assignor, and that as against creditors the assignment was void for fraud, and that the defendant acted as attorney for the creditor who caused the attachment to issue. Fallon v. McCunn, 7 Bosw. (N. Y.) 141. But an assignment cannot be attacked collaterally in an action brought by the as- signee. Ogden v. Prentice, 33 Barb. 160; Waterbury v. Westervelt, 9 N. Y. 598; Crosbie v. Leary, 6 Bosw. (N. Y.) 312; Thomas v. Talmadge, 16 Ohio St. 434; Rohrer v. Turrell, 4 Minn. 407. Where the assignees of an insolvent bank, by virtue of the provisions of the act of April 16, 1850, brought an action ‘against the maker of a note to the bank, it was held that he could not be permitted to set up asa defense that the assignment was void as being contrary to the act of 1867. Shryock v. Bashore, 82 Pa. St. 159. A person indebted to the estate can- 496 COLLECTION OF DEBTS. [ou. XXXIV. Under the Minnesota statutes an assignee, being the trustee of an express trust, is therefore the real party in interest, and can maintain an action in respect to the assigned property in his own name, without joining the persons for whose benefit it is prose- cuted, and without disclosing his representative character.’ But in Indiana it is held that in a suit by an assignee he must allege that the deed of assignment has been duly recorded, and he must file a copy of such deed as an exhibit, otherwise his com- plaint must be held bad on demurrer.’ § 857. Actions and Defenses Against Creditors.— An impor- tant class of actions by assignees are those which are imstituted for the recovery of property assigned, which has been taken under at- tachments or executions issued in behalf of creditors of the as- signor, and it is in actions of this class that questions involving the validity of assignments are constantly raised and determined. The defense of actions by creditors against assignors, where the as- signees are summoned as trustees or garnishees, belongs to the same general head.* § 358. Actions Against Assignor.— Where the assignor himself withholds a portion of the property assigned, to which he is not entitled by law, the assignee may bring an action against him to recover it.4 So, if he neglects to furnish a schedule required by the assignment, the assignee may file a bill of discovery against him and also to obtain a delivery of the books and securities, and not avail himself of a defense that the assignment is fraudulent and void as against creditors, if the assignment is sufficient to pass the title between the as- signor and assignee. Sheridan v. Mayor, 68 N. Y. 30; Allen v. Brown, 44 id. 228; Stone v. Frost, 61 id. 614; Richardson v. Mead, 27 Barb. 178. It seems that if an assignee refuses in a proper case to proceed and get in the assigned prop- erty, the creditors collectively, or one in behalf of all who may come in and join, may compel the execution of the trust in equity, or may cause the removal of the assignee and the appointment of another. Crouse v. Frothingham, 97 N. Y. 105. The assignee cannot maintain an action in equity against the sheriff and the execution creditor to restrain a sale of goods levied upon while in the hands of the assignee; in such a case his remedy at law is adequate. Drewson v. The American Surety Company, 22 N. Y. Weekly Dig. 562, 1Langdon v. Thompson, 25 Minn, 509. 2State v. Krug, 82 Ind. 58. 3 In Missouri, on the trial of an issue between the plaintiffs in attachment and the assignees summoned as garnishees, the assignment is prima facie evidence that the persons therein named as creditors are in fact such. Gates v. La- beaume, 19 Mo. 17. See, also, Hutchinson v. Lord, 1 Wis. 286; McCracken v. Milhous; 7 Ill. App. (Bradw.) 169. In Taylor v. Atwood, 47 Conn. 498, a trustee in insolvency was allowed to bring an action for a reconveyance against a cred- itor who had obtained ‘a conveyance of the debtor’s property by fraud. 4 Pike v. Bacon, 21 Me, 280, § 359.] ACTIONS BY DEFRAUDED VENDOR. 497 he will also be entitled to an injunction against the assignor re- straining him from wasting the property.! In Indiana property fraudulently withheld by the assignor or transferred may be recovered by summary proceedings on a war- rant for the arrest of the assignor or the persons to whom such fraudulent transfer is believed to have been made and all persons alleged to have been concerned in the fraud. So in Ohio an examination of the debtor may be had on applica- tion of the assignee or any creditor, and the court may, upon or after such examination, make and enforce any order, upon proper parties, which it may deem necessary to prevent any fraudulent transfer or change in the property or effects of the assignor or the allowance or payment of any unjust or fraudulent claims out of his estate.® In Iowa ‘ the assignee may maintain a suit in equity against the assignor to remove a cloud upon his title arising from a fraudu- lent conveyance, and to declare the property subject to the assign- ment. § 359. Actions by Defrauded Vendor.— Where property ob- tained by the debtor as a fraudulent vendee comes into the hands of his assignee for the benefit of creditors, the assignee stands in the place of his assignor and has no higher rights of property than he.’ In such a case it is sufficient for the defrauded vendor to give notice to the assignee of the fraud, and of his claim or election to rescind the contract, and to demand the property of him. When there is no pretense that the assignee was a party to, or cognizant of, the fraud, he is not bound to give up the goods until he has been required to do so by the vendor upon a distinct de- mand, with notice of an explicit assertion of his claim that the goods were obtained by fraud, and such demand must be made by the vendor, or by some one duly authorized by him to make it.® Where a vendor, from whom goods have been obtained by fraud, 1 Keyes v. Brush, 2 Paige, 311. 21 Stat. of Ind. (G. & H.), p. 117, § 15; R. S. (1881), § 2676; 2 R. S. (1888), § 2676. 3 Act of April 27, 1872; Sayler’s Stat., vol. 3, p. 2759, ch. 2232; 2 RB. S. (1880), § 6349; R. S. (1887), § 6849. 4Schaller v. Wright, 28 N. W. Rep. 460. 5 Bliss v. Cottle, 32 Barb. 322; Kraft v. Dalles, 7 Ohio St. 116; Kennedy v. Thorp, 51 N. Y. 174. But the rule in Virginia is to the contrary. Wickham v. Martin, 13 Gratt. 427, A vendor who has been induced by the fraudulent repre- sentations of the vendee to sell him goods may recover them from one holding them under an assignment made by such vendee for the benefit of creditors. Such an assignee is not protected as a bona fide purchaser. Rohrbough v, Leopold, 68 Tex. 254; 4S. W. Rep. 460. See Bradley Fertilizer Co. v. Fuller, 58 Vt. 315; 2 Atl. Rep. 162, 6 Bliss v. Cottle, supra, 32 498 COLLECTION OF DEBTS. [cH. XXXIV. instead of disaffirming the contract of sale, affirms it by bringing suit thereon and prosecuting it to judgment, neither he nor a re- ceiver appointed in supplemental proceedings instituted upon such judgment can set up the fraud in the sale for the purpose of de- feating an assignment of the property made by the vendee for the benefit of creditors, although the assignment was made in further- ance of the fraud with. full notice thereof on the part of the as- signee. ° The vendor had the option either to disaffirm the contract and retake the goods or sue for their wrongful conversion, not only while they were in the hands of the vendee, but in the hands of any person who received them with knowledge of the fraud. The remedies are not concurrent, and the choice between them once being made, the right to follow the other is forever gone." An action may be maintained by the assignee of a firm to re- cover partnership funds applied by one partner in payment of his private debt, without the assent of his copartners, against the per- son receiving the same.’ Assignees have the authority —although not expressly given them in the assignment — to compromise or compound such debts as cannot be wholly collected, provided they act in good faith and do what is best for the creditors under the circumstances.’ This power is frequently conferred in the assignment, and in general is unobjectionable It is expressly given by statute in some of the states. Power to direct the assignee in his administration of the estate resides only in a court of equity? § 360. Costs.— In New York it has been held that security for costs cannot be demanded of assignees under a voluntary assign- ment for the benefit of creditors, who prosecute a suit in the name of the assignors; and that such suit is not within the statute ® en- titling the defendant to security for costs, where the suit is “for or in the name of the trustees of any debtor,” the statute being considered to have been intended, not for cases of voluntary con- ventional assignments, but rather for a class of trustees created by operation of law under the various statutes concerning insolvent debtors.’ 1Kennedy v. Thorp, 51 N. Y. 174; reversing 2 Daly, 258; Morris v. Rexford, 18 N. Y. 552; Bank of Beloit v. Beale, 34 N. Y. 473, 2 Thomas v. Penrich, 28 Ohio St. 55. 3 Anon. v. Gelpcke, 5 Hun, 245. But see Matter of Ransom, 8 Daly, 89% 4See ante, § 198. 5Shipman’s Petition, 1 Abb. N. C. 406. 62 R. S. (620), 515, § 1. See Code of Civil Procedure, §§ 3268-8271, ‘ 7¥Ferris v, American Ins. Co., 22 Wend. 586, § 361.] SET-OFF. 499 It is provided in the code! that in an action prosecuted or de- fended by the trustee of an express trust costs shall be recovered as in an action by or against a person prosecuting or defending in his own right, with certain exceptions; but such costs are charge- able upon and collectible from the estate fund or person repre- sented, unless the court directs them to be paid by the party per- sonally, for mismanagement or bad faith in the prosecution or defense of the action. An assignee for the benefit of creditors is the trustee of an ex- press trust within this provision.? § 361. Set-off.— It has already been said that an assignee for the benefit of creditors takes the property of the assignor subject to all existing equities. The equities need not exist at the inception of the debt. It is sufficient if they exist prior to the assignment.‘ A claim acquired after the assignment cannot be set off against the assignee;* nor a liability existing, but not due at the time of the assig nment,® even if it becomes due before the suit was commenced.’ 1Code of Civ. Proc., § 3246, 2Cunningham v. McGregor, 12 How. Pr. 305; s.c., 5 Duer, 648: Cutler v. Reilly, 5 Robt. 637; Felt v. Dorr, 16 N. Y. Weekly Dig. 385, 3See ante, p. 478. 4 Waterman on Set-off, p. 118; Ruby v. Watson, 22 Mo. App. 428. 5 Meyer v. Davis, 22 N. Y. 489; Johnson v. Bloodgood, 1 Johns, 51; Hegeman v. Hyslop, Anth. N. P. (N. Y.) 267; Smith v. Brinckerhoff, 6 N. Y. 305; Exch. Bank v. Knox, 19 Gratt. 739, 747; Martine v. Willis, 2 E. D. Smith, 524; Brown v. Brittain, 84 N. C. 552; Farmers’ Bank v. Willis, 7 W. Va. 31. See Duncan v. Stanton, 80 Barb, 533; Fogerty v. Philadelphia Trust, etc. Co.,75 Pa, St. 125. The assignment of a non-negotiabie demand arising on contract before due de- feats a set-off by the debtor of an independent cross-demand on which no right of action had accrued at the time of the assignment. Fuller v. Steiglitz, 27 Ohio St. 355; Fera v. Wickham, 135 N. Y. 223. 6 Beckwith v. Union Bank, 9 N. Y. 211; Meyer v. Davis, 22 N. Y. 489; Lock- wood v. Beckwith, 6 Mich. 168, 175; Lane v. Bailey, 47 Barb. 395. And see Lawrence v. Bank of Republic, 3 Robt. (N. Y.) 142; Willis v. Stewart, 3 Barb. 40; Thompson v. Hooker, 4 N. Y. Leg. Obs. 17. In Meyer v. Davis, supra, where the assignors ordered certain goods to be manufactured for them, and before they were delivered became insolvent and executed an assignment, it was held that in an action brought by their assignees the claim arising upon the manufacture of goods could not be set off. In Keep v. Lord, 2 Duer, 78, where the action was by the assignee for goods sold upon credit by the assignors, and the defendants at the time of the assignment were the holders of the assignors’ note, which had not yet matured, it was held that the defendant could not set off the note. Bos- worth, J., in delivering the opinion of the court reviewed the cases extensively and stated the conclusions of the court in the following language: ‘‘The princi- ple of such a rule is that in case of distinct and independent demands owing by each of two persons to the other, an equitable right of set-off attaches, if one be- comes insolvent, the moment the demand against the insolvent becomes due and not before. That when insolvency is the only equity for enforcing a set-off con- 7 Hicks v. McGrorty, 2 Duer, 295; Martin v. Kunzmuller, 37.N, Y. 396, 500 COLLECTION OF DEBTS. [CH. XXXIV. And it has been held that a defendant cannot offset to the claim of the assignee a note due when assigned by showing that the assignor was indebted to the defendant at the time of the assignment unless such counter-claim had attached before the assignment — ¢. g., by an agreement that it should be applied thereto or otherwise. A judg- ment obtained against the assignor subsequent to the assignment cannot be set off against a claim of the assignee although the as- signment was made without notice to the judgment creditor.’ But a mortgage debt need not be due to entitle the assignees for the benefit of the creditors of the mortgagees to set off for the amount of such debt. An undue accepted draft is a proper set- off.4 And so is commercial paper, indorsed to a bank, in a suit by the assignee to recover the maker’s balance on deposit,’ but not. where such paper matures after the assignment.’ Nor cana creditor set off his demand against the value of articles. trary to the provisions of the statute, such equity gives no right to compel the in- solvent to pay before the demand against him has become due.” And upon this principle the court held that no equitable right to set off had attached at the time of the assignment, See Mass v. Goodman, 2 Hilt. (N. Y.) 275, contra. And see Morrow v. Bright, 20 Mo. 298, where the defendant sought to set off the amount paid by him after the assignment as indorser upon the assignor’s note and the claim was allowed. In Martin v. Kunzmuller, 37 N. Y. 396, the defend- ants were indebted at the time of the assignment to the assignors for goods sold, and held three promissory notes of the assignors, two of which had matured at the time of the assignment, the other being not yet due. The assignees brought. an action upon the claim for goods sold. It was held that the defendants might offset the notes which had matured at the date of the assignment, but not the other note. But when a claim in favor of the estate of the assignor is not due at the time of the assignment, but the claim against the estate is due, an equitable set off in favor of the assignor’s debtor will be allowed. Smith v. Felton, 43 N. Y. 419; Coffin v. McLean, 80 id. 560; Smith v. Fox, 48 id. 674; Lindsay v. Jackson, 2 Paige, 581; Barber v. Spencer, 11 id. 517; Ainslie v. Boynton, 2 Barb. 258; Mel v. Holbrook, 4 Edw. Ch. 588; Huse v. Ames, 104 Mo. 91; Smith v. Spengler, 83 Mo. 408. In an action by an assignee to recover for goods furnished under a executory contract, it was held that the claim for damages for goods not delivered was a good counter-claim. Patton v. Royal B. P. Co., 114 N. Y. 1; 20 N. E, Rep. 621. 1 Neal v. Lea, 64 N. C. 678; McConnaughey v. Chambers, id. 284. The North Carolina code as to set-off is similar to that of New York. See Kendall v. Rider, 35 Barb. 100. But the Minnesota statute is different. See Martin v. Pillsbury, 23 Minn. 175. It is held in Pennsylvania that in a suit by assignees on a note to. the assignor which did not fall due until after the assignment, the creditor may set off a debt due to him by the assignor at the time of the assignment. Jordan v. Sherlock, 84 Pa. St. 366. 2 Ogden v. Prentice, 33 Barb. 160. 3 Richards v. La Tourette, 119 N. Y. 54; 23 N. E. Rep, 531. 4¥Ferna v. Wickham, 61 Hun, 343; 15 N. Y. Sup. Rep. 892. 5 Farmers’ Dep. Nat. Bank v. Pennsylvania Bank, 123 Pa. St. 283; 16 Atl. Rep. 761; Nashville Trust Co. v. Bank, 91 Tenn. 236, 6Chipman v. Bank, 120 Pa, St. 86; 13 Atl. Rep. 707. See Oatman v. Bank, 77 Wis. 501; 14. N. W. Rep. 881. § 362.] DECLARATIONS OF ASSIGNOR. 501 purchased by him at the assignor’s sale! Equity will not permit a preferred creditor to diminish the fund available to unpreferred creditors, by offsetting to a debt due from him, and which is part of the assigned estate, liabilities to him not secured by the deed.? The principles applicable under the bankrupt act are referred and this common pur- 11 Phillips on Ev, (4th ed.) 314-332; Paige v. Cagwin, 7 Hill, 361; Davis, J.,in Foster v. Beals, 21 N. Y. 247, 249; Frankel v. Coots, 41 Mich. 75. See McBride v. Dorman, 6 Am. Law Reg. 736 and note; Daily’s Ex’r v. Warren, 80 Va. 512; Darbour v. Duncanson, 77 id. 76. If the assignment be fair and legal when made, the beneficiary will not be affected by subsequent declarations or letters of the debtor, though such declarations may be the subject for cross-examination of the party making them if called as a witness to support his assignment. Jack- son v. Harby, 70 Tex. 410; 8S. W. Rep. 71. 2See ante, p. 442. 3 Adams v. Davidson, 10 N. Y. 809, 818; citing Willis v. Farley, 6 C. & P. 375. But see this case criticised in Cuyler v. McCartney, 40 N. Y. 221, 235. The mere declarations of an assignor of a chose in action forming no part of any res geste are not competent to prejudice the title of his assignee, whether the assignee be one for value or merely a trustee for creditors, and whether such declaration be antecedent or subsequent to the assignment. Truax v. Slater, 86 N. Y. 630, In Flagler v. Wheeler, 40 Hun, 125, the declarations of the assignor made several days before the assignment to a person neither a creditor nora party to it, tend- ing to establish its fraudulent character, were held inadmissible. See, also, Flag- ler v. Schceffel, 40 Hun, 178, In an action by the assignee against the sheriff, it was held that if the assignor was permitted to retain possession of the property assigned, his statements made in the assignee’s absence were admissible. Frankel v. Coots, 41 Mich. 75. 4 Folger, J., in Bullis v. Montgomery, 50 N. Y. 352, 358, 359; Cuyler v. Mc-. Cartney, 40 N. Y. 221, 235; Vidvard v. Powers, 34 Hun, 221; Flagler v. Schoef- fel, 40 id. 178; Caldwell v. Williams, 1 Ind. 405, And see reporter’s note. Wynne v. Glidewell, 17 Ind. 446; Savery v. Spaulding, 8 Iowa, 280, See Hairgrove v. Millington, 8 Kan. 480. 5 Cuyler v. McCartney, 40 N. Y. 221; Newlin v. Lyon, 49 id. 661; Caldwell v. Williams, 1 Ind. 405. §§ 363, 364.] PARTIES— APPHALS AND WRITS OF ERROR. 503 pose must be established by evidence other than the declarations themselves.' § 363. Parties.— Where the action is brought by the assignee to recover trust property or to reduce it to possession the assignee may sue in his own name,? and the cestucs que trust are not neces- sary or proper parties.’ In New York it is provided by the code that the trustee of an express trust may sue without joining with him the persons for whose benefit the action is prosecuted;‘ and it has been decided that an assignee may bring an action to collect a debt due the es- tate in his own name or ia his representative capacity.» All the assignees who accept must join in bringing suit.* § 364. Appeals and Writs of Error.— A trustee in an assign- ment for the benefit of creditors is the representative of the whole fund and may appeal from a decree if aggrieved thereby.’ So also 1Cuyler v. McCartney, swpra. This section is quoted with approval in Wright v. Zeigler, 70 Ga, 501. 2 2 Ogden v. Prentice, 33 Barb. 160; Langdon v. Thompson, 25 Minn. 509. See ante, § 235. And see Walker v. Miller, 11 Ala, 1067; Johnson v. Candage, 31 Me. 28, 3In Cary v. Brown, 92 U. 8S. 171, the general rule is said to be that in suits respecting the trust property, brought either by or against the trustees, the cestuis que trust as well as the trustee are necessary parties. Story’s Eq. Pl., § 207. ‘But to this rule there are several exceptions. One of them is, that where the suit is brought by the trustee to recover the trust property, or to reduce it to possession, and in no wise affects his relation with his cestuis que trust, it is un- necessary to make the latter parties. Horsely v. Fawcett, 11 Beav. 569, was a ease of this kind. The objection taken in this case was taken there. The master of the rolls said: ‘If the object of the bill were to recover the fund with a view to its administration by the court, the parties interested must be represented. But it merely seeks to recover the trust moneys, so as to enable the trustees hereafter to distribute them agreeably to the trusts declared, It is therefore un- necessary to bring before the court the parties beneficially interested.’ Such is now the settled rule of equity pleading and practice. Adams v, Bradey et al., 6 Mich. 846; Ashton v. The Atlantic Bank, 3 Allen, 217; Boyden v. Partridge et al., 2 Gray, 191; Swift et al. v. Stebbins, 14 Stew. & P. 447; The Association, etc. v. Beekman’s Adm’r et al., 21 Barb, 555; Alexander v. Cana, 1 De Gex & Sm. Ch, 415; Potts v. The Thames Haven and Dock Co.,7 Eng. Law & Kg. 262; Story v. Livingston’s Ex’r, 13 Pet. 359.” In Meyers v. Briggs, 11 R. I. 180, a wagon belonging to E. & A. was placed by them in the hands of B. for sale. Subsequently E. & A, assigned to H. Trover was afterward brought against B. by ‘“‘E, & A., trustee for H.” It was held that the sssignment gave good title to H. and that the action was improperly brought in the name of E. & A,, trustees, 4 Code Civ. Proc., § 449. 5 Hoagland v. Trask, 48 N. Y. 686; Ogden v. Prentice, 33 Barb. 160. 6 Brinkerhoff v. Wemple, 1 Wend. 470; Thatcher v. Candee, 4 Abb. Dec. 887; Van Valkenberg v. Elmendorf, 13 Johns, 314. 7 Saunders v. Waggoner, 82 Va. 316, 504 COLLECTION OF DEBTS. [cH. XXXIV. may creditors and other parties having personal interest in the es- tate! But in Maine itis has been held that one creditor has no right of appeal from the allowance of the claim of another creditor against the estate of a debtor who makes a settlement by composi- tion proceedings in insolvency? In Indiana it was held that the action of the circuit court in refusing to allow or approve a report by the assignee is not a final judgment, nor an interlocutory order, from which an appeal will lie to the supreme court.’ And in Ohio it was held that an order, decision or decree of the probate court. in a proceeding under the statutes in relation to assignments is not appealable to the court of common pleas, unless it is of a defi- nite nature, affecting property rights; and the approval by the pro- bate court of the election of an assignee by the creditors is not an order, decision or decree. of that nature.! 1Singmaster’s Appeal, 86 Pa. St. 169. 2 Huston v. Worthly, 83 Me. 352; 22 Am, Rep, 248 3 Cravens v. Chambers, 55 Ind. 5. 4Brigel v. Starbuck, 34 Ohio St. 280. CHAPTER XXXvV. SALE OF THE ASSIGNED PROPERTY. § 365. Power of Sale. 866. Duty in Regard to Sale, 367. Time of Sale. 368. Mode of Sale, 369. Terms of Sale. 370. Notice of Sale. 371. Disability of Assignee to Purchase 372. Disability, How Removed, 3873. Conveyance by Assignee. 3874. Title of Purchaser. § 365. Power of Sale.— One of the principal objects of a volun- tary assignment of property for the benefit of creditors, and one of the most important duties of the assignee in the execution of the trust, is the sale of the property assigned, in order to convert it into money for the purpose of distribution among creditors. The property must in all cases be disposed of by sale. The as- signee is not allowed to barter or exchange it for other property,! nor can he appropriate it for his own use, although he charge himself with the cost price.” The power to sell is usually expressly given by the assignment. But it is always necessarily implied by every conveyance for the payment of debts. In some states it is formally conferred by statute. Thus in New Jersey it is declared that every assignee shall have as full power and authority to dispose of all estate, real and personal, assigned as the debtor had at the time of the assignment.t And in Pennsylvania’® provision has been made by statute to enable assignees to make sales of real estate incumbered by liens. 1Bennett, J., in Paige v. Olcott, 28 Vt. 465, 469; Geisse v. Beall, 3 Wis, 367. As to the liability of the assignee in case of a barter or exchange of the property, see post, ch. XL. : 2 Geisse v. Beall, ubi supra. 3 Williams v. Otey, 8 Humph. 563; Wood v. White, 4 M. & C, 481; Goodrich v. Proctor, 1 Gray, 567; Purdie v, Whitney, 20 Pick. 25; Gould v. Lamb, 11 Mete, 842; Perry on Trusts, pp. 147, 398; Isles v. Martin, 69 Ind. 114. 4B. S. (ed. 1878), p. 39, § 13. 5 Laws of 1876, p. 4; Laws of 1881, p. 102; 1 Purd. Dig. (11th ed.), p. 119, § 6, See Matter of Gump, 13 Phil. 495; Matter of Strickler’s Estate, id. 504; Resen- heim v. Morgan, id. 549; In re John’s Estate, 14 id. 623; Hill’s Estate, 1 Pa. Co. 506 SALE OF ASSIGNED PROPERTY. [CH. XXXV. § 366. Duty in Regard to Sale.— Every trustee to sell is bound by his office to bring the estate to a sale under every possible ad- vantage to the cestui que trust, and, where there are several persons interested, with a fair and impartial attention to the interest of all concerned.2 He is bound to use not only good faith, but also every requisite degre? of diligence and prudence in conducting the sale. If he is wanting in reasonable diligence in the management of the sale, or so manages it as to advance the interest of one of the par- ties to the injury of another, he will be personally liable to make good to the party suffering from his misconduct the amount of his loss. It is the duty of the assignee to be present at the sale, and to superintend and control it; and if the sale is so conducted as to prevent fair competition, whether cognizant of the circumstances or not, he is bound to make good the loss, and should be charged in the settlement of his accounts with the fair value of the prop- erty sold and interest upon it, just as if the money had been re- ceived. A trustee who sells at an improper time, or without conforming to the conditions of his power, will be liable for a deficiency of the proceeds of sale, though his intentions were good. He will be held responsible for the highest value the property can be shown to have had, and be decreed to account for the difference.5 In New York it has been held that the county court has no power to set aside, on motion, a sale made by an assignee, on the ground that the price paid was insufficient and that a better one can be obtained.® § 367. Time of Sale.— An assignee is bound to bring the prop- erty to a sale, and to pay over the proceeds to those who are en- ritled thereto, without delay.’ If he delays unreasonably to sell, Ot. Rep. 584; Betts’ Estate, id. 887. A sale under the statute of 1976 will divest dawer. ‘Youngs v. Hannas, Jid. 579. 4 Lord Eldon, in Downs v. Grazebrook, 8 Mer. 208; Matthie v. Edwards, 2 Coll. 480; Chesley v. Chesley, 49 Mo. 540. 2Sir J. Leach, in Ord v. Noel, 5 Mad. 440; Hunt v. Bass, 2 Dev. Eq. 292. 3 Lewin on Trusts, 367, 368; Perry on Trusts, 404; Pechell v. Fowler, 2 Anst. 550; Johnston v. Eason, 2 Ired. Eq. 330; Quackenbush v. Leonard, 9 Paige, 347; Ringgold v. Ringgold, 1 H. & G, 11: Osgood v. Franklin, 2 Johns. Ch, 27; Chesley v. Chesley, 49 Mo. 540; Equitable Trust Co, v. Fisher, 106 Ill, 189. 4Harvey’s Adm’r v. Steptoe’s Adm’r, 17 Gratt. 289, 5 Melick v. Voorhies, 24 N. J. Eq. 805. 6 Matter of Rider, 23 Hun, 91, ‘Hart v. Crane, 7 Paige, 87. In Clark v. Craig, 29 Mich. 398, where it appeared that most of the property was sold and most of the assets realized in not much more than a year, and the whole, with few exceptions, in little over two years, this was not regarded as evidence of a culpable delay in realizing the proceeds of § 368.] MODE OF SALE. 507 this may be evidence of fraud, and the property may be attached or levied upon as the debtor’s.!’ And, according to some decisions, he is guilty of a breach of trust if he delays a sale for the purpose of retailing the goods.’ In cases of deeds of trust for the double purpose of security and sale, less dispatch is usually required, and a mere delay in selling will not avoid the deed, unless the delay and the uses had of the property by the debtor are such as to give him a false credit, and hold him out to the world as the owner of the property.* Indeed, it has been held that a trustee in a deed of trust to pay debts is not bound to sell within a particular time, but should use his discretion in the matter in order to obtain the high- est price. In Arkansas® the sale must be public and within one hundred and twenty days after the assignee assumes the trust. § 368. Mode of Sale.— An assignee, in general, has a discretion (apart from the authority usually given by the assignment) to sell at public or private sale, as may appear to be most for the interest of the creditors. The proper course is said to be, if he cannot sell the property for its fair cash value at private sale immediately, to sell at auction, giving to the creditors reasonable notice of the sale; and he cannot delay a sale for the purpose of retailing the goods.’ Where the deed expressly directs him to sell by public auction, the trustee is bound to conform to that mode of sale, and cannot adopt the fund. Six months is not an unreasonable delay. Wert v. Schneider, 64 Tex. 327. 1 Parker, C. J., in Gore v. Clisby, 8 Pick. 555, 559. For any mere delay in pay- ment, interest is in law regarded as a sufficient compensation. Clark v. Craig, 29 Mich. 398. 2 Hart v. Crane, ubi supra. Sales need not always be made immediately and for cash, whether well or ill for the creditors, but this may be left to the sound discretion of the trustees. Inloes v. Am. Ex. Bank, 11 Md. 173. 3 Burgin v. Burgin, 1 Ired. L. 453; Dewey v. Littlejohn, 2 Ired. Eq. 495. 4 Hawkins v. Alston, 4 Ired. Eq. 187. And see further, as to sales under deeds of trust, Haynes v. Crutchfield, 7 Ala. 189; Dubose v. Dubose, id. 235. 5R. S. (1874), § 887; Mansf. Dig. (1884), § 309; Teah v. Roth, 89 Ark. 66; Jaf- fray v. McGahee, 107 U. S. 361. 6 Perry on Trusts, pp. 412, 415, 422; Ex parte Dunham, 2 Rose, 66; Ex parte Hurley, 1D. & C. 631; Ex parte Ladbroke, 1M. & A. 384; Ex parte Goding, 1 D. & C. 323; Huger v. Huger, 9 Rich. Eq. 217. In order that a better price may be obtained for a debtor’s property, certain execution creditors agreed with the sheriff that the assignee appointed after fi. fa. issued and levy made should sell the property and account to the sheriff for the proceeds. It was held that in the absence of fraud, the execution being bona fide, the lien of the execution credit- ors was not made void by this agreement. Kent’s Appeal, 87 Pa. St. 165. And if assigned real estate is offered at public sale both in parcels and as a whole, and is sold as a whole for a price less than the amount of the bids from responsi- ble bidders in parcels, the conveyance by the assignee may be restrained and a resale ordered, although there is no proof of actual fraud or collusion between the assignee and the purchaser. Glenn v. Mickey, 1 Pa. St. 586. 7 Walworth, C., in Hart v. Crane, 7 Paige, 87, 38, 508 SALE OF ASSIGNED PROPERTY. [cH. Xxxv. any other, although by doing so he may in reality promote the in- terests of those for whom he acts.! And in general, a trustee for sale must follow the provisions of the trust deed. § 869. Terms of Sale.— In some of the states an assignee is al- lowed to sell the property for cash or credit, in his discretion,’ and the assignment itself frequently gives him this power in terms.‘ But in New York an assignee is not allowed to sell on credit with- out obtaining leave from the court, on application, with notice to the cestuis que trust, or without obtaining their consent;* and an authority to sell on credit will render an assignment void.’ In several of the states authority to sell on credit has been conferred upon assignees by statute, but always under certain restrictions.’ In Indiana the assignee is authorized to sell the real and personal property at public auction, after thirty days’ notice of the time and place of sale, to the highest bidder for cash or upon credit, the trustee taking notes, with security to be approved by him, pay- able not more than nine months from date with interest.® Where sales on credit are allowed, if the assignee sell at private sale except for cash, he may expose himself to liability in the event of the failure of the purchaser. Thus, in Pennsylvania, where as- signees sold some of the goods at private sale and delivered them to the purchaser, who failed to pay, it was held that they were chargeable with the amount, it appearing that the credit of the vendee was doubtful, and that the assignors had refused to trust him before the assignment.? And if an assignee sells the assigned property on a credit without taking security, he sells at his own risk, and is chargeable with any loss that may thereby accrue, 1 Greenleaf v. Queen, 1 Pet. 138. 2 Bebee v. De Baun, 8 Ark. 510. And as to the mode of sale, see Brock v. Headen, 13 Ala. 370. 3 Neally v. Ambrose, 21 Pick. 185; Petrikin v. Davis, 1 Morris, 296; Conkling v. Conrad, 6 Ohio St. 611, 620, 621; Hopkins v. Ray, 1 Metc. 79. And as to what provisions are construed as conferring a power to sell on credit, see ante, § 194. 4 See ante, pp. 255 et seq. 5 Barculo, J., in Burdick v, Post, 12 Barb, 184, As to obtaining the consent of creditors, see Mussey v. Noyes, cited post, p. 509, n. 4. 6 Barney v. Griffin, 2 N. Y. 365; Nicholson v. Leavitt, 6 id. 510. 7See Appendix, I. : 8R. S. (ed. 1870), vol. I, p. 114, § 10. But the neglect of the assignee to re- quire security will not avoid the sale. Yargin v. Shriner, 26 Ind. 369. The statute authorizes an order by the court for the sale by the assignee of the debt- or’s real estate at private sale on a credit not exceeding two years from the date of such sale. Asale under the statute is a judicial sale with reference toa wife’s interest in her husband’s land, Lawson v. De Bolt, 78 id. 563. See Stid- ger v. Evans, 64 Iowa, 91. § Estate of Davis and Desauque, 5 Whart. 530. § 370.] NOTICE OF SALE. 509 although the sale is advised by some of the creditors and the debtor.! Where the liens on the property, due and payable presently, are sufficient in amount to exhaust the purchase-money, the sale should ‘be for cash unless all parties interested unite in requesting a time sale. Ifa time sale carries interest, the interest should be divided pro rata among the creditors as the instalments of the principal fall due.? In Vermont, if an assignee sells on credit, he will be charged with the cash value of the property at the time of the sale, and in- terest on the same from the time of the sale. But he may sell on credit, under the advice and with the consent of the creditors. In case of a deed of trust, it has been held that the maker and benefi- ciaries may change the terms of the sale.* § 370. Notice of Sale.— Where the sale is by auction, it should be preceded by a public notice of the time and place,® the usual mode of which is by advertisement. The length of the notice is sometimes fixed by the assignment itself.’ In some instances it is regulated, as well as the mode of the notice, by statute. In Ar- kansas * the assignee must give at least thirty days’ notice of the time and place of sale. If no time is fixed, a reasonable notice should be given. In Minuse v. Cox’ it was held that where a 1Swoyer’s Appeal, 5 Barr, 387; McKesson’s Estate, 142 Pa. St. 538; 21 Atl. Rep. 994. 2 Burkholder’s Appeal, 94 Pa. St. 522. 3 Page v. Olcott, 28 Vt. 465; Bennett, J., id. 468, 4 Mussey v. Noyes, 26 Vt. 462, 464. The reason given in this case was, that it was customary to make such sales on credit in the country, and that thereby the property could be disposed of at higher prices. Ibid. But it appeared that the assignee had not lost or failed to collect the avails of any sale thus made on credit. Ibid. 5 Bebee v. De Baun, 8 Ark. 510. 6 Hart v. Crane, 7 Paige, 37, 88; Johnston v. Eason, 3 Ired. Eq. 380. 7 Minuse v. Cox, 5 Johns. Ch, 441. Where a deed of trust requires twenty days’ previous notice of the time and place of sale, it is not sufficient to have it pub- lished but once. The obvious intent is to have the publication continued up to the sale. Stein v. Wilkson, 10 Mo. 75. Where a notice was published once in a newspaper called the ‘Evening Gazette,” and then transferred to a newspaper called the ‘‘ Atlas,” it was held insufficient, although the Atlas was the weekly reprint of the Evening Gazette, a daily paper, it appearing that the Atlas was published for and circulated in the country, while the Gazette was almost en- tirely confined in its circulation to the city. Ibid. 8R. S. (1874), § 809; Rice v. Frayser, 24 Fed. Rep. 460. 9 Walworth, C., in Hart v. Crane, ubi supra. And asale by an assignee with- out public notice, and without disclosing the nature of the debtor’s interest, and for an inadequate price, is evidence of fraud, and the assignee will be personally liable to the creditors for the loss resulting from such fraud. Hays v. Doane, 105 Johns, Ch, 441, 510 SALE OF ASSIGNED PROPERTY. [cH. XXxv. trustee is directed to sell the trust property “by public auction or otherwise, and together or by parcels, at his discretion, upon giving three weeks’ notice thereof,” the direction as to notice applies to a sale at auction, and not to a private sale;! and that even if the notice was to be held to apply to both a public and a private sale, a sale without notice would be valid, and confer a good title on the purchaser; and the only consequence would be that the trustee might be responsible for any deficiency in the price for which it sold below the real value of the land. In deeds of trust it is sometimes left to the trustee or one of the creditors to prescribe the day of sale and the length of time for which notice shall be advertised. But in such case the failure to notify any of the creditors of the time and place will not warrant the inference that the sale was fraudulent as to one of the credit- ors provided for, who attended and purchased property; and the grantor who assents to the sale cannot upon that ground defeat an action by the purchaser for the recovery of the article sold.’ § 371. Disability of Assignee to Purchase.— The general rule as now settled in England‘ is that a trustee for sale is disabled from purchasing the trust property® whether it be real estate or chattels personal,’ whether the purchase be made in his own name 11N. J. Eq. 84. If duly advertised and properly conducted, trustee’s sales of land will not be set aside merely because of gross inadequacy of price, though made to a corporation of which he was an officer. Clark v. Trust Co., 100 U. S. 149. But where the purchaser knew that the price paid by him was too small the sale was set aside by a bill in equity. Thomas v. Beals, 154 Mass, 51; 27 N. E. Rep. 1004, 1 To give three weeks’ notice of a private sale would be absurd.” Kent, C., 447, 2 This doctrine is disapproved by Chancellor Tucker, who states the rule to be that where a trustee is authorized to sell upon notice, if he sells without, and executes a deed, the legal title passes. 6 Munf. 358, 367. But the sale may be set aside in equity. 4 Munf. 421; 4 Cranch, 403; 2 Tuck. Com. [458], 446. 3 Haynes v. Critchfield, 7 Ala, 189. And see Lamb v. Goodwin, 10 Ired. L. 320. 4What follows in the text to page 486 is chiefly taken from the valuable treatise of Mr. Lewin on Trust and Trustees, republished in the Philadelphia Law Library, 1839, See Perry on Trusts, §§ 195, 199. 5 Fox v. Mackreth, 2 Bro. C. C. 400; s. c., 2 Cox, 320; affirmed in Dom. Proc. 4 Cro, P. C, 258; Lewin on Trusts, 376. The English cases are very elaborately reviewed in the case of Aberdeen R. R. Co. v. Blaklie Brothers, 1 Macy, 461, in the House of Lords. 6 Crowe v. Ballard, 2 Cox, 258; s. c., 8 Bro. C. ©, 117; Killick v. Flexney, 4 Bro. C. C. 161; Hall v. Hallett, 1 Cox, 184: Whatton v. Toone, 5 Mad. 54; 6 id. 153, A purchase by a trustee under a trust for payment of creditors of a debt owing by the insolvent will be void by reason of the knowledge which his posi- tion as trustee enables the purchaser to acquire, Hamilton v, Wright, 1 Bell’s (Scotch) Appeal Cas, 674, § 371.] DISABILITY OF ASSIGNEE TO PURCHASE. 5il or in the name of a trustee,! by private contract or public auction? from himself as the single trustee, or with the sanction of his co- trustees ;* for he who undertakes to act for another in any matter cannot, in the same manner, act for himself. The situation of the trustee gives him an opportunity of knowing the value of the prop- : erty, and as he acquires that knowledge at the expense of the ces- tut que trust, he is bound to apply it for the cestuc quetrust’s benefit.® Where a trustee deals with trust property as his own, he takes upon himself all the risk and responsibility without the right or prospect of personal benefit, for he must be liable for the value of the trust property and all that is gained by it.® Lord Rosslyn is said to have considered that to invalidate a pur- chase by a trustee it was necessary to show that he had gained an actual advantage;’ but the doctrine, if any such was ever held by his lordship,’ has since been expressly and unequivocally denied.? The rule is now universal that, however fair the transaction, the cestua que trust is at liberty to set aside the sale and take back the property.” As a trustee cannot buy on his own account, it follows that he cannot be permitted to buy as agent for a third person; the court Campbell v. Walker, 5 Ves, Jr. 678; 8, C., 18 id. 601; Randall v. Errington, 10 id. 423; Crowe v. Ballard, 2 Cox, 258; Hall v. Hallett, 1 Cox, 184, 2 Campbell v. Walker, ubi supra; Randall v. Errington, ubi supra; Ex parte Bennett, 10 Ves. Jr. 381, 393; Ex parte James, 8 id. 337, 349; Whelpdale v. Cook- son, 1 Ves. Sr. 9; Ex parte Hughes, 6 Ves. Jr. 617; Ex parte Lacey, id. 625; Lister v. Lister, id. 681; Whichcote v. Lawrence, 3 id. 740; Attorney-General v. Lord Dudley, Coop. 146; Downes v. Grazebrook, 3 Mer. 200. 3 Whichcote v. Lawrence, 3 Ves. Jr. 740; Hall v. Noyes, cited, id. 748, And see Morse v. Royal, 12 id. 374. 4Lord Rosslyn, in Whichcote v. Lawrence, 3 Ves. Jr. 750; Lord Eldon in Ex parte Lacey, 6 id. 623. 5 See Ex parte James, 8 Ves. Jr. 348. The rule that a trustee is not to be al- lowed to make a profit of his trust is based on a rule of human nature that no person having a duty to perform shall be allowed to place himself in a situation in which his interest and his duty may conflict. Broughton v. Broughton, 31 Eng. L. & Eq. 587. 6 Blauvelt v. Ackerman, 20 N. J. Eq. 141; citing Green v. Winter, 1 Johna. * Ch, 27; Harkist v. Alexander, id. 894; Schieffelin v. Stewart, id. 620; Brown v. Rickets, 4 Johns, Ch. 808; Evertson v. Tappan, 4 id. 597; Hawley v. Mancius, 7 id. 174; Holridge v. Gillespie, 2 id. 30; Mathews v. Dragand, 3 Des, 25; Trenton Bank v. Woodruff, Green Ch, (N. J.) 117. ' 7See Whichcote v. Lawrence, 3 Ves. Jr. 750. 8 See Ex parte Lacey, 6 Ves. Jr. 626; Lister v. Lister, id. 632. 9 Ex parte Bennett, 10 Ves. Jr. 885; Ex parte Lacey, 6 id. 626; Attorney-Gen- eral v. Lord Dudley, Coop. 148; Ex parte James, 8 Ves. Jr. 348, 10 Ex parte Lacey, 6 Ves. Jr. 623, 627; Owen v. Foulkes, cited id. 680, note b; Lord Eldon, in Ex parte Bennett, 10 id. 393; Randall v. Errington, 10 id, 423, 428; Campbell v. Walker, 5 id. 678, 680; Lord Eldon, in Ex parte James, 8 id, 347, 348; Lister v. Lister, 6 id. 631; Lord Eldon, in Gibson v. Jeyes, 6 id. 277%. But see Kilbee v. Sneyd, 2 Moll. 186, 512 SALE OF ASSIGNED PROPERTY. {cH. XKXV. \ can, with as little effect, examine how far the trustee has made an undue use of information acquired by him in the course of his duty, in the one case as in the other.! And the rule against purchasing the trust property applies to an agent employed by the trustee for the purposes of the sale as strongly as to the trustee himself? And in a case in bankruptcy, where the partner of an assignee had bid on behalf of the firm at a sale under the fiat, and had been declared the purchaser of a part of the bankrupt’s estate, the court directed a resale, and ordered him and his partner to pay the costs personally.’ The rule prohibiting a trustee or assignee from purchasing the trust estate, either directly or indirectly, has been generally adopted in the United States.‘ In New York it was held by the chancellor, 1 Ex parte Bennett, 10 Ves. Jr. 381, 400; Lord Eldon, in Coles v. Trecothick, 3 id. 148, And see Gregory v. Gregory, Coop. 204. 2 Whitcomb v. Minchin, 5 Mad. 91; Lewin on Trusts, 376-378, The intervention of a third person as a means or channel through whom the title is transferred and eventually vested in the trustee will not uphold the transaction and sustain the title of the latter. Abbott v. Am. Hard Rub. Co., 33 Barb. 578; Butler’s Appeal, 26 Pa. St. 68. But see Miller v. Mulford, 31 N. J. Eq. 661. After asale of goods fairly made by an assignee, he may repurchase them for his own private use and benefit. Lininger v. Raymond, 12 Neb. 19, 167; Creveling v. Fritts, 12 Neb. 19. 3 Ex parte Burnel!, 12 Law J. (N. 8.) 28; 7 Jur. 116. 4 “Tt may be observed as a general rule applicable to sales,” remarks Chan- cellor Kent,‘‘that when a trustee of any description, or any person acting as agent for others, sells a trust estate and becomes himself interested, either directly or indirectly, in the purchase, the cestui que trust is entitled, as of course, in his election, to acquiesce in the sale or to have the property re-exposed to sale under the direction of the court, and to be put up at the price bid by the trustee; and it makes no difference in the application of the rule that the sale was at pub- lic auction, bona fide, and for a fair price. A person cannot act as agent for an- other and become himself the buyer. He cannot be both buyer and seller at the same time, or connect his own interest with his dealings as an agent or trustee for another. It4s incompatible with the fiduciary relation. Emptor emit quam minimo potest; venditor vendit quam maximo potest. The rule is founded on the danger of imposition, and the presumption of the existence of fraud inac- cessible to the eye of the court. The policy of the rule is to shut the door against temptation, and which in the cases in which such relationship exists is deemed to be of itself sufficient to create the disqualification. This principle, like most others, may be subject to some qualification in its application to particular cases; but, as a general rule, it appears to be well settled in the English and in our American jurisprudence.” 4 Kent’s Com. [488], 475. ‘‘It may be laid down as a general proposition,” observes Chancellor Tucker, ‘‘that trustees, executors, . agents, commissioners for sales, sheriffs and auctioneers, are incapable of pur- chasing at sales made by themselves or under their authority or direction. To permit persons standing in the position of sellers to be at the same time buyers is to invest them at the same moment with inconsistent, contradictory and con- flicting characters. . . . The purchase is not to be permitted in any case, however honest be the circumstances; the general interests of justice requiring the practice to be wholly discountenanced, as no court is equal to the examination and ascertainment of the real character of the transaction in cvery instance.” 2 Tucker’s Com. [459], 447, 448, ‘‘It may be laid down as a general rule,” ob- § 371.] DISABILITY. OF ASSIGNEE TO PURCHASE, 518 in Davoue v. Fanning,' that if a trustee or person acting for others sells the trust estate and becomes himself interested in the purchase, the cestui que trust are entitled, as of course, to have the purchase set aside, and the property re-exposed to sale under the direction of the court. And it makes no difference in the application of the rule that a sale was at public auction, bona fide, and for a fair price. The same general doctrine has been repeatedly recognized in this state. The same rule has been adopted in Maine, Massachusetts,‘ Con- necticut,> New Jersey,’ Pennsylvania,’ Ohio,’ Indiana,’ Ilinois,! serves Mr. Justice Story, ‘‘that a trustee is bound not to do anything which can. place him in a position inconsistent with the interest of the trust, or which [can]; have a tendency to interfere with his duty in discharging it. And this doctrine applies not only to trustees, strictly so called, but to other persons standing in like situation; such as assignees and solicitors in a bankrupt or insolvent estate, who are never permitted to become purchasers at the sale of the bankrupt or in- solvent estate.” 1 Story’s Eq. Jur., § 322. And see Story on Agency, § 211; 2 Story’s Eq. Jur., § 1261; and the American editor’s note to Whichcote v. Lawrence, 3 Ves. Jr. 740 (Sumner’s ed.), and to Campbell v. Walker, 5 id. 678. See, also, the opinion of Wayne, J., in the important case of Michoud v. Girod, 4 How. 508, 554-558, 12 Johns. Ch. 252. In this case, which is a leading case on the point, the authorities up to the time of the decision were fully examined, and the doctrine traced to the civil law. The following passage from the Digest shows that it was well settled in Roman jurisprudence: non licit ex officio quod administrat quis emere quid, vel pere se, vel aliam personam. Dig. 18, 1, 46. And see Dig. 18, 1, 34, 7; Dig. 26, 8, 5, 2. See, also, the references to the civil law in the case of: Michoud v. Girod, 4 How. 559, 560. 2Van Horne v. Fonda, 5 Johns. Ch, 388; Hawley v. Cramer, 4 Cow. 717, 718; Giddings v. Eastman, 5 Paige, 561; Campbell v. Johnson, 1 Sandf, Ch. 148; Slade v. Van Vechten, 11 Paige, 21; Iddings v. Bruen, 4 Sandf, Ch, 223; Ames v. Down- . ing, 1 Bradf. 321; Colburn v. Morton, 3 Keyes, 296; Abbott v. Am. Hard Rub, Co., 83 Barb. 570. See Matter of Coffin, 10 Daly, 27; Matter of Black, 13 id. 21. 3 Pratt v. Thornton, 28 Me. 855. 4Copeland v. Mercantile Ins. Co,, 6 Pick. 158; Litchfield v. Cudworth, 15 id. 21, 23; Arnold v. Brown, 24 id. 89; Morton, J., id. 96. 5 Mills v. Goodsell, 5 Conn. 475. , 6 Den v. Wright, 2 Halst. 175; Den v. McKnight, 6 id. 385; Blauvelt v. Acker- man, 20 N. J. Eq. 141; Melick v. Voorhies, 24 N. J. Eq. 305. 7 Lessee of Lazarus v. Bryson, 3 Binn. 54; Campbell v. Pa. Life Ins. Co., 2 Whart. 61; Bartholomew v. Leach, 7 Watts, 472; Painter v. Henderson, 7 Barr, 48; Beeson v. Beeson, 9 id. 279, As to bidding in land mortgaged, see Wine- brener’s Appeal, 7 id. 833. In Sheffy’s Appeal, 97 Pa. St. 317, the assignee, who was also a judgment creditor, became a purchaser at the sale and bought subject to mortgages which he afterwards paid. It was held that he was not entitled to subrogation as against the assignors personally for the sum paid in discharging the mortgages; that he could not manipulate the estate to his advantage as a creditor beyond what he would have did he appear only as a lien creditor 8 Wade v. Pettibone, 11 Ohio, 57; Bohart v. Atkinson, 14 id, 228. 9 Brackenridge v. Holland, 2 Blackf. 377; Clark v. Wilson, 77 Ind. 176, 10Thorp v. McCallum, 1 Gilm. 614; Scanlan v. Scanlan, 134 Ill. 680; 25 N, E, Rep. 682, 33 514 SALE OF ASSIGNED PROPERTY. [cH. XXXV. North Carolina,! Maryland,? South Carolina,’ Alabama,‘ Mississippi,” Florida,® Tennessee,’ Kentucky,® Missouri,® Michigan, Wisconsin " and Kansas.” In Kentucky, indeed, it is held that the sale itself, when the property is purchased by or for the trustee, is void." And the rule was formerly laid down to the same extent in New Jersey," but this was afterwards qualified and the true rule stated to be that such sales are voidable, not void —that they may be avoided by cestwis gue trust and their heirs, from whose acquies- cence or ratification they may become valid; but that strangers or third persons cannot impeach or question them.» This qualifica- tion of the rule is now generally admitted and has been expressly asserted in some cases.!* In the case of Michoud v. Girod,” in the supreme court of the United States, the subject of purchase by executors and other trustees at their own sale was examined at some length, and the doctrine laid down in Davoue v. Fanning was fully recognized. 1 Boyd v. Hawkins, 2 Ired. Eq. 864; Hunt v. Bass, 2 Dev. Eq. 292; Pitt v. Pet- way, 12 Ired. L. 69; Patton v. Thompson, 2 Jones’ Eq. 285. 2Davis v. Simpson, 5 Harr. & Johns. 147; Richardson v. Jones, 8 Gill & J. 163; Mason v. Martin, 4 Md. 124. In Spindler v. Atkinson, 3 Md. 409, it was held that a trustee may purchase the trust property levied on and sold at a sher- iff’s sale at the instance of others, and he will be entitled to reimbursement for his expenditures in the purchase; but he cannot deprive the cestui que trust of the benefit arising from the purchase if there be such benefit. In the same case the general rule was recognized that a person who undertakes to act for another cannot in the same manner act for himself; but it was said to be not universally true that a trustee cannot purchase the trust estate; circumstances may render it necessary in order to protect the interests of the cestui que trust. Ibid. 3 Perry v. Dixon, Desaus. 594, note; Butler v. Haskell, id, 654; Rimmerman v. Harman, 4 Rich, Eq. 165. 4 Saltmarsh v. Beene, 4 Port. 283; Andrews v. Hobson’s Adm’r, 23 Ala. 219. 5 Scott v. Freeland, 7 Sm. & M. 409. 6 Bellamy v. Bellamy’s Adm’r, 6 Fla. 62. 7 Armstrong v. Campbell, 8 Yerg. 201; Welckler v. Staples, 88 Tenn. 49; 128. W. Rep. 340; 17 Am. St. Rep. 869. 8 Gryder v. Payne, 9 Dana, 188, 190; Price v. Thompson, 84 Ky, 219; 18, W. Rep. 408. 9Wasson v. English, 13 Mo. 176. A purchase of trust property by a trustee at a very reduced price carries fraud upon its face. Smith v. Isaac, 12 Mo. 106; Ownby v. Ely, 58 id. 475. 10 A sale made by a trustee or agent to himself is voidinlaw. Clute v. Barron, 2 Mich. 192. See opinion of Whipple, C. J., in this case. ll Geisse v. Beall, 3 Wis. 367. 12 Dunlap v. Beckes, 23 Kan, 154, 13 Gryder v. Payne, wbi supra. Den v. Wright, 2 Halst. 175. 5 Den v McKnight, 6 Halst. 885. See Blauvelt v. Ackerman, 20 N. J. Eq. 141. 16 Prevost v. Gratz, 1 Pet. C. C. 368; Harrington v. Brown, 5 Pick. 519, 521; Painter v. Henderson, 7 Barr, 48; McKinley v. Irwin, 18 Ala. 681. But see Michoud v. Girod, 4 How. 557. 174 How. 503, 556, $$ 372, 373. ] MISCELLANEOUS. 515 A trustee becoming the purchaser at a sale of the trust property cannot take advantage of the objection that he was trustee in order to avoid the purchase.! § 372. Disability, How Removed.— If a trustee or assignee be desirous of purchasing the trust estate or any part of it, he may be allowed to do so on application of the court having jurisdiction? But in order to accomplish this object he must be divested of the character of trustee, either temporarily or wholly.2 In Con- necticut this has been effected under the statute of assignments by the appointment of another person to sell the estate or some part of it upon giving bond to the court appointing him; and at any sale made by such person the trustee may be a purchaser. In England an assignee may be removed at his own request in order that he may bid at a sale of part of the bankrupt’s estate.® § 373. Conveyance by Assignee.— It seems that an assignee for the benefit of creditors may convey land by attorney, though there ke no special authority given in the assignment to delegate his power. This opinion was held by Gibson, C. J., in the case of Blight v. Schenck. But in Hawley v. James’ it was held by Chan- cellor Walworth that a trustee who has only a delegated discre- tionary power cannot give a general authority to another to exe- cute such power unless he is specially authorized to do so by the deed or will creating the trust; and that a general authority to an ‘agent to sell and convey lands belonging to the estate, or to con- tract absolutely for the sale of such lands, cannot therefore be given by the trustees. But they may intrust an agent with an authority to make conditional sales of land lying at a distance from the place of residence of the trustees, subject to the ratifica- tion of such trustees or any two of them. And they may also - 1 McClure v. Miller, 1 Bailey’s Ch. 107. 2Campbell v. Walker, 5 Ves. Jr. 678, 681; Wayne, J., in Michoud v. Girod, 4 How. 557; Carson v. Marshall, 37 N. J. Eq. 213. 3 Lord Eldon in Ex parte Bennett, 10 Ves. Jr. 381, 394; Lewin on Trusts, 379. 4Gen. Stat. (Rev. of 1875), p. 895, § 40; Gen. Stat. (1888), § 603. 5 Ex parte Perkes, 3 Mon., D. & De G. 385. 610 Barr, 285. By the Pennsylvania act of March 14, 1850, section 1, any “rustee, executor or other person acting in a fiduciary character, with power to convey lands or tenements in Pennsylvania, may make conveyance under such power by 4nd through an attorney or attorneys duly constituted: and such conveyance shall be of the same validity as if executed personally by the constituent, and all conveyances as heretofore bona fide made by such trustees are confirmed. Laws of 1850, p. 195; Purdon’s Dig. (Brightley, 10th ed.), p. 1245, § 69; 2 Purd. Dig. {11th ed., Brightley), p. 1659. Trustee of the legal title may convey by agent. Olney, J., in Telford:v. Barney, 1 Iowa, 575. See Perry on Trusts, p. 411, 75 Paige, 318, 323, 487. This was a case of trusts created by will. 516 SALE OF ASSIGNED PROPERTY. [CcH. XXXv. empower him to make and execute valid conveyances of the land thus sold, upon a compliance with the terms of sale, after such sales have been so ratified by them.! No covenant can be required of an assignee in a conveyance by him except the ordinary covenant against his own incumbrances.? It seems that assignees take as joint tenants and must all unite in the execution of the trust, and especially in giving a deed to a purchaser of lands. § 374. Title of Purchaser.— A dona jide purchaser for valuable consideration, without notice, under a deed of trust not void upon its face, cannot be affected by any intended fraud of the grantor in the deed of trust. And a sale to a bona fide purchaser for value by assignees for creditors under a deed voidable for a defect. apparent on its face cannot be avoided by the insolvent trustee of the assignors where the sale was made before an election by the trustee to disaffirm the assignment.’ A bona jide purchaser of trust property from the trustee without notice of the trust will be protected in his purchase.6 And notwithstanding the invalidity of an assignment as it respects the creditors of the assignor, a sale of goods assigned, made by the assignee before the creditors have ob- tained a specific lien upon them, to an innocent purchaser for a valuable consideration, is valid. But where the assignee, after exe- 1 Cranston v. Crane, 97 Mass. 459; Gillespie v. Smith, 29 Ill. 473. 2Ennis v, Leach, 1 Ired. Eq. 416; Perry on Trusts, p. 421; White v. Folgambe, . 11 Ves. 345; Onslow v. Londesborough, 10 Hare, 74; Worley v. Frampton, 5- Hare, 560; Stephens v. Hotham, 1 Kay & J. 571; Page v. Broom, 3 Beav. 36; Copper Mining Co. v. Beach, 18 Beav. 478; Hodges v. Blagrave, 18 Beav. 405;. Phillips v. Evarard, 5 Sim. 102; Barnard v. Duncan, 38 Mo. 170. As to convey- ances by surviving assignees, see Benedict v. Morse, 10 Metc. 223. 3 Brennan v. Wilson, 71 N. Y. 502; 4 Abb. N. C. 279; Hart v. Rust, 46 Tex. 556. And the debtor is not a necessary party for the purpose of passing title to a purchaser. Graves v. Long, 87 Ky. 442; 9S. W. Rep. 297. 4Ewing v. Cargill, 138 Sm. & M. 79; Sheldon v. Striker, 42 Barb. 284. See Wood v. Augustine, 61 Mo. 46. But where the deed is fraudulent on its face it is said the purchaser gets no title. Palmer v. Giles, 5 Jones’ Eq. (N. C.) 75, If the grantor be present at the sale and not objecting, he is bound by it, at least at law. Lamb v. Goodwin, 10 Ired. L. 329. A sale by the assignee of an insolvent corporation, made by him in good faith, is not invalidated by the fraud of a stockholder committed without the knowledge or privity of the assignee. Trevitt v. Converse, 31 Ohio St. 60, 5 Okie v. Kelley, 12 Pa. St. 323, 6 Henderson v. Dodd, 1 Bailey’s Ch. 188; Christmas v. Mitchell, 3 Ired. Ey. 535. A purchaser for value from the grantee in a deed of trust for the benefit. of creditors has a title superior to that of a donee ina deed of gift, though exe- cuted previous to the trust deed, but unaccompanied by possession. Ward v. Wooten, 74 .N, C. 418. The right of a purchaser from the assignee of an insolv- ent copartnership to the exclusive use of the firm name was denied in the care of Iowa Seed Co, v. Dorr, 70 Iowa, 481; 80 N. W. Rep, 866; 59 Am. Rep. 443. § 374.] TITLE OF PURCHASER. 517 cutions against the assignor had been delivered to the sheriff, sold the assigned property to two of four preferred creditors in one lot at a reduction of fifty per cent. from the prime cost, the amount of the purchase not being known to either of the parties at the time, and no money was paid by the purchasers, but they gave their note for the price of the goods as eventually ascertained, not, how- ever, until after the goods had been levied on by the sheriff under the executions, it was held that the purchasers were not entitled to be considered innocent purchasers for a valuable consideration. A purchaser has constructive notice of the trust from the regis- try of the deed, and where the trust remains unexecuted, and the property is still subject to the debts, he must not be content with the recital that the trust has ceased, but must ascertain at his peril whether such is the case.? The maxim caveat emptor does not apply to the case of a sale by assignees for the benefit of creditors, whether the property be real or personal. And where an assignee under a voluntary assign- ment for the benefit of creditors sold at public sale a tract of land which had been purchased by the assignor under articles of agree- ment duly recorded, and in the advertisement it was described gen- erally as a tract of land belonging to the assignor, it was held that the purchaser at the assignee’s sale was entitled to a deduction from the purchase-money of the amount remaining due to the orig- inal owner.‘ Where the creditors have neither released the debtor nor as- sented to the deed, he has such an interest in the sale of the prop- erty that if, at a sale made by his trustee, he stands by and sees property sold in which he knows that there is a latent defect, and does not disclose it, he makes himself liable to the purchaser in an action for deceit.? If a cestut que trust, under an assignment for the benefit of cred- itors, buys a right of property which the assignees were empow- ered to sell in the execution of their trust, he must claim as ‘a purchaser under them, not as a cestwi que trust.§ 1 Pine v. Rickert, 21 Barb. 469. 2 Briggs v. Davis, 20 N. Y. 15; s. c., 21 N. Y. 574, 3 Lindemann v. Ingham, 35 Ohio St. 1. 4 Adams v. Humes, 10 Watts, 305. Asa general rule it is the duty of the as- signee or trustee in selling property upon which prior incumbrances rest to fer- ret out the exact state of such liens and ascertain how much, if any, may be due upon them. Wicks v. Wescott, 59 Md. 220, 5 Case v. Edney, 4 Ired. L. (N. C.) 93. 6 Wilkinson v. Wilkinson, 2 Curt. 582. CHAPTER XXXVI. EXPENSES OF THE TRUST AND COMPENSATION TO THE ASSIGNEE. § 875, Expenses Are a Charge Upon the Estate. 376, Compensation to Assignee. 877. Compensation to Assignee — Continued. 378. Allowance of Compensation. 379, Amount of Compensation. 880. Counsel’s Fees. 881. Compensation, When Forfeited. §375. Expenses Are a Charge Upon the Estate.— The payment of the expenses of the trust is usually provided for by the assign. ment; and these the assignee is authorized to deduct and retain out of the first moneys which come into his hands as proceeds of the assigned property. And even where they are not provided for in the assignment itself, all the necessary expenses of the assignce are to be reimbursed to him out of the estate.! In every instru- ment conveying an estate in trust there is an implied direction that all such expenses as the preservation or protection of the estate may require shall be incurred, and an implied stipulation or prom- ise that when incurred they shall be a charge upon the estate.? The expenses of the trustee in the execution of the trust are a lien upon the estate, and he will not be compelled to part with the property until his disbursements are repaid.® The principal items of expense or disbursement incurred in the execution of trusts created by voluntary assignments are advertis- ing, insurance,‘ interest,° taxes and assessments, commissions on sales, salaries and wages of persons employed as agents, clerks, etc.,® office and store rent, costs of suits to recover debts and property, 1Noyes v. Blakeman, 3 Sandf. S. C. 581; Miles v. Blakeman, 4 J. J. Marsh. 457; Lowe v. Morris, 14 Ga. 165; Clark v. Hoyt, 8 Ired. Eq. 222; Egbert v. Brooks, 3 Harr. (Del.) 110; Hill on Trusts (8d Am. ed.), [570], 861; Blow v. Gage, 44 Ill. 208; Akers v. Rowan, 368. C, 92. ?Duer, J., in Noyes v. Blakeman, 8 Sandf. 8. C, 544; Lewin on Trusts, 450, 455. 3 Perry on Trusts, 587; Ex parte James, 1 D. & C. 272; Hill v. Morgan, 2 Moll. 460; Ex parte Norwich Yarn Co., 22 Beav. 143: Ex parte Chippendale, 4 De G., M. & G. 19; Trott v. Dawson, 1 P. Wms. 78; Morrison v. Morrison, 7 De G., M. & G. 226; Burke v. Railroad Co., 62 N, H, 5381; Boyd v. Meyers, 80 Tenn, 175. 4See ante, p. 267. 5 See ante, p. 267. 6See ante, p. 267. § 375.] EXPENSES ARE A CHARGE UPON THE ESTATE. 519 costs of defending suits, and fees of counsel for services in suits or for advice in the general management of the trust.!. But if an as- signee allows the debtor to act as his agent, and receives large com- pensation therefor, he will have to account for the amount to cred- itors on a bill filed on behalf of all of them.2 In Pennsylvania it has been held that an assignee may make a contract with counsel for the recovery of assets assigned, and an agreement with counsel to pay them one-half of all that should be recovered was sustained.? When the assignees make a charge for money paid out they must prove that the estate was in some manner benefited by such pay- ment, before the payment becomes a proper credit to the assignee.* A trustee ought to keep a regular account of his expenses, and if he does not do so every intendment of fact will be against him,® and the lowest estimate put upon his charges for expenses.® A trustee is entitled to be reimbursed his expenses, though the trust be subsequently declared void, if he have acted in good faith.’ But in a case in New York where trustees of an invalid trust, who 1Noyes v. Biakeman, 3 Sandf. S. C. 581; Jewett v. Woodward, 1 Edw. Ch. 195, 200. See In re Noyes, 6 N. B. R. 977; In re Davenport, 3 id. 77; In re Tully, id. 82; In re Warshing, 5 id. 850; Hill on Trusts (8d Am. ed.), [551], 825; id. [565], 845, note 1; Perry on Trusts, ch. 30; Duffy v. Duncan, 35 N. Y. 187; Mat- ter of Scott, 53 How. Pr. 441; Matter of Thomas, 5 Abb. N. C. 344; Collier v. Munn, 41 N. Y. 148; Levy’s Accounting, 1 Abb. N. C. 177; Matter of Van Horn, 10 Daly, 131. A trustee should be allowed the costs and expenses of suits and arbitrations expended in good faith in the concern of the trust; but not those incurred after he has been called upon by his cvestui que trust to surrender the trust and has refused. Towle v. Mack, 2 Vt. 19. As against the proceeds of at- tached property, expenses incurred in resisting the attachment suit are proper allowances, McLain v. Simington, 37 Ohio St. 660. In Ingham v,. Lindemann, 37 Ohio St. 218, the assignee was not allowed his expense in employing an auc- tioneer, no authority from the court heing shown. It is not necessarily sufficient to entitle trustees to their costs of a suit that they have acted under the advice of counsel. Devey v. Thornton, 12 Eng. Law & Kg. 197. An assignee for the benefit of creditors is not allowed out of the funds of the assigned property his necessary expenses of resisting a successful suit to set aside the assignment. Mayer v. Hazard, 49 Hun, 222; 1 N. Y. S. Rep. 680. 2Redmond v. Wemple, 4 Edw. Ch. 221. 3McLellan’s Appeal, 26 Pa. St. 463. 4 Duffy v. Duncan, 25 N, Y. 187. 5Perry on Trusts, 541; Ex parte Caswell, 5 Watts, 442; Green v. Winter, 1 Johns. Ch. 27, 6 McDowell v. Caldwell, 2 McCord’s Ch. 42. 7 Hawley v. James, 16 Wend. 61; In re Wilson, 4 Barr, 430; Stewart v. McMinn, 5 W. & 8S, 100; Hunt v. Weiner, 39 Ark. 70. See Bishop v. Hart’s Trustees, 28 Vt. 71; White v. Hill, 148 Mass. 396; Rouse v. Bowers, 108 N. C. 182; 128. B, Rep. 985. An assignee under a void assignment who has acted under the direc- tion of the court and in perfect good faith, believing the assignment valid, should be allowed all such necessary disbursements as benefited or were intended to benefit all the creditors of the assignor, excluding commissions of the assignee, Haydock Carriage Co. v. Pier, 78 Wis. 579; 4.N. W. Rep, 945, 520 EXPENSES OF THE TRUST? [CH. XXXVI. unreasonably defended it, were cognizant of all the transactions out of which its invalidity arose, they were decreed to bear their own costs.' “ § 376. Compensation to Assignee.— In addition to the allow- ance of his expenses and disbursements, the assignment sometimes contains a provision allowing the assignee a compensation for his own time and services; and this is either fixed at a certain amount in the shape of an annual salary,? a gross sum,’ or commissions,‘ or stipulated for in general terms, leaving the amount to be settled upon the principle ofa guantum meruit; and sometimes a compen- sation is stipulated for by agreement independently of the assign- ment. Where there is no express stipulation or agreement for compen- sation to the assignee beyond his expenses, the rule in some states is that he is entitled to none, while in other states he is held to be entitled to a reasonable compensation whether there be any pro- vision or agreement to that effect or not. The general rule of equity as held in England is that trustees are not entitled to com- missions or compensation for their services in the execution of their trusts, where no provision was made therefor in the instrument creating the trust.’ This rule was formerly adopted to its full ex- tent by the court of chancery of New York.’ But in the case of Meacham v. Sternes,’ in which the subject was fully considered by the chancellor with reference to the act of April, 1817,8 and the provisions of the Revised Statutes * allowing commissions to execu- tors, administrators and guardians, it was considered to be settled that in all cases of express trusts where nothing is said in the deed or instrument creating the trust on the subject of compensation to the trustee for his personal services in the execution of the trust, ‘1 Leavitt v. Yates, 4 Edw. Ch. 184. But see, as to the validity of the trust, the case of Curtis v. Leavitt, 15 N. Y. 9. 2Vernon v. Norton, 8 Dana, 247. 3 Andrews v. Ludlow, 5 Pick. 28. See Winn v. Crosby, Daily Reg., Dec. 14, 1876; Lewin on Trusts, 443, 4Barney v. Griffith, 2 N. Y. 365; Donelson’s Adm’rs v, Posey, 18 Ala. 752. 5 Lewin on Trusts, 488, 448. For the reason of this rule, see ibid. And see Manning v. Manning, 1 Johns. Ch. 527; Hill on Trustees [574], 857; Perry on Trusts, p. 585, § 904. For a statement of the rules in various states governing the compensation of trustees, see Perry on Trusts, § 918. Manning v. Manning, 1 Johns. Ch. 527. See the opinion of Walworth, C., in coe v. Sternes, 9 Paige, 399-403. And see Jewett v. Woodward, 1 Edw. h. 195. 79 Paige, 398. 8 Laws of 1817, p. 292. 93 R. S. (7th ed.), p. 23038, The assignee now receives five per centum, (8th ed.), p, 2542, § 261. P m, 4R8. § 376.] COMPENSATION TO ASSIGNEE. 521 and where there is no agreement on the subject for a different al- lowance, the trustee upon the settlement of his accounts will be allowed the same. fixed compensation for his services by way of commissions as are allowed by law to executors and guardians, and to be computed in the same manner. In other words, the court will consider the statutory allowance to executors, administrators and guardians as the compensation tacitly understood and agreed on by the parties to all trusts of a similar nature where nothing appears to show a different agreement or understanding on the subject of compensation.! Where the instrument creating the trust, however, fixes a different compensation,? or declares that none is to be allowed, or where the trustee, previous to the accept- ance of the trust, makes a valid and binding agreement with the cestwz que trust as to the rate of compensation to be allowed for his serv- ices in the execution of the trust, that, of course, must prevail. And where such instrument contains an express provision that the trustee shall receive a compensation for his services, in addition to his expenses and disbursements, leaving the amount to be settled upon the principle of a guantum meruit, the amount of compensa- tion must necessarily depend, to a certain extent, upon the pecul- iar circumstances of each case, and must be adjusted with reference to what is usually paid by the agreements of parties for similar services.? In Connecticut, also, it has been held that although it is a gen- eral rule of equity that a trustee is not to receive compensation except for time and expenses unless it be stipulated by the parties to be paid, yet where the assignee of the stock of a manufacturing company, in trust to work it up, and from the avails to indemnify himself for his responsibilities for sach company, accepted the trust, under an agreement with one of the partners, who was agent of the company, that he should be allowed the same compensation to which he would have been entitled if he had not been trustee; and it appeared that he conducted the business with good faith, and 1In Duffy v. Duncan, 85 N. Y. 187, where commissions at the rates payable to executors were allowed, it was suggested that commissions allowed at the rates provided for trustees in proceedings in relation to concealed and abscond- ing debtors might be sustained. The commissions allowed in such cases are at the rate of five per cent. on the whole sum which comes into the hands of the trustee. 2In Keteltas v. Wilson, 36 Barb. 298, it was said: ‘‘Compensation at a fixed sum, provided it should not exceed what the laws of the state allow to execu- tors or administrators, and, if it should exceed that amount, then at the rate so prescribed for executors and administrators, limits and does not enlarge their legal claims, and is unobjectionable.” And as to what provisions in an assign- ment for the payment of the expenses and commissions of the trustee are illegal, see ante, p. 273. 3 Walworth, C., in Meacham v. Sternes, 9 Paige, 404, 408, 522 EXPENSES OF THE TRUST. [cH. XxXxvi. without unnecessary delay; that his services were highly impor- tant to the company and all concerned, and without them the con- sequences would have been ruinous,— it was held that certain sums charged in his account as commissions on his responsibilities, which were found to be, all things considered, only a reasonable compen- sation, ought to be allowed.! § 377. Compensation to Assignee — Continued.— In Delaware the general equity rule appears to prevail without qualification, that a voluntary trustee, not stipulating for compensation, is not entitled to any compensation for his time and trouble; that he is en- titled to have his expenses and charges paid, and to be indemnified against expenses and loss; but not to be remunerated.’ In Pennsylvania’ and Maryland,‘ on the other hand, by an equi- table construction of the statutes allowing commissions to execu- tors, guardians and trustees, commissions may be allowed to con- ventional trustees, although there was no agreement to that effect.® And in Pennsylvania the rule is now established that all trustees are entitled to a reasonable compensation for their services as they are rendered, and unless a contrary intention appear, the compen- sation must come out of the fund with which they are intrusted.® The same rule seems to prevail in Vermont,’ Kentucky,$ Michigan, Georgia ® and Florida," and formerly prevailed in Ohio.’? In Mis- 1 Kendall v. New England Carpet Co., 18 Conn. 383. 2Egbert v. Brooks, 3 Harr. 110; The State v. Platt, 4 id. 154; The State v. Rog- ers, id. 5 3 Prevost v. Gratz, 8 Wash. C. C. 484, 4Ringgold v. Ringgold, 1 H. & G. 11. 5Id. See Winder v. Diffenderffer, 1 Bland, 166; Bentley v. Shreve, 2 Md. Ch. Dec. 215. 6 Spangler’s Estate, 21 Pa. St. 8335; Heckert’s Appeal, 24 id. 482, The general rule is to allow compensation by commissions, and five per cent. is the ordinary rule. Pusey v. Clemson, 9 S. & R. 209; Burkholder’s Appeal, 94 Pa. St. 522; Perry on Trusts, § 908, note. The rule of five per cent. is not adhered to where the amount is small and some time is taken. Sprenkle’s Appeal, 1 Atl. Rep. 51. In Brice’s Appeal, 95 Pa, St. 145, the fund arising from the sale of real estate by the assignee amounted to $16,535. It was held that in the absence of any especial trouble two and one-half per cent. commissions were properly allowed. 7 Hubbard v. Fisher, 25 Vt. 539. 8 Phillips v. Bustard, 1 B, Mon. 848; Fahey v. Clark, 80 Ky. 613. But see McMillen v. Scott, 1 Mon. 150; Miles v. Bacon, 4 J. J. Marsh, 457; Lane v. Cole- man, 8 B. Mon. 581. An assignee for the benefit of creditors, although a cred- itor himself, is entitled to compensation for his services as such, if the cireum- stances of the case authorize it. Fahey v. Clark, 80 Ky. 613, Schwartz v. Wendell, Walk. Ch. 267, Stultz v. Fleming, 83 Ga. 14; 9S, E. Rep. 1067; Ford v. Cook, 73 id. 215. 11 Muscogee Lumber Co, v. Hyer, 18 Fla. 698; 43 Am. Rep. 443, 12 Gilbert v, Sutliff, 3 Ohio (N. S.), 129; Ingham v. Lindemann, 37 Ohio St. 2183 McLain v, Simington, id. 660. § 377.] COMPENSATION TO ASSIGNEE. 528 souri an assignee can receive pay out of the trust fund for such services and expenditures only as are within the line of duties im- posed upon him by the instrument creating the trust. In North Carolina it seems to have been formerly held that a trustee was entitled to no compensation for his services, unless there was some understanding to that effect when the trust was created.? But this opinion was afterwards modified,* and the rule is now settled that a trustee is entitled to commissions as compen- sation for his labor in managing the trust committed to him, though no provision be made for it in the deed of trust.‘ In South Carolina assignees and agents of the creditors under an assignment are entitled to commissions by statute.6 And in Georgia all trustees are by statute entitled to compensation for their services, and commissions are allowed them.’ and for permitting the debtor to retain possession of assigned property and receive the proceeds.’ An assignee may be liable for damages occasioned by a breach of a remedy was in equity. Where it appears by the findings of an auditor that the assignee has been guilty of wilful and supine negligence he will be surcharged, and where the surcharge is imposed for negligence and mismanagement in the disposal of the assigned property, the correct rule is that the difference between the price which the assignee received and the price which he might have re- ‘ceived is to form the basis of the surcharge. In re Wear, 1 Luz. Leg. Reg. 104. An assignee is only liable for such portion of the trust fund as he failed to show was properly applied. Bruen v. Gillet, 115 N. Y. 10. 1 Litchfield v. White, 3 Sandf. 8. C. 545; affirmed by the Court of Appeals, 7 N.Y. 438. ? Willis on Trustees, 125, 169; Goodwin v. Mix, 38 Ill. 115; Davis v. Harman, 21 Gratt. 200; Olmsted v. Herrick, 1 E. D. Smith, 310; Parker v. Straat, 839 Mo. App. 616. 3 Willis on Trustees, 172, 173; 2 Kent’s Com. 230; cited by Sandford, J., 3 Sandf. §. C. 551. And see the observations of Ruggles, C. J., in Litchfield v. White, 7 N, Y. 443, 444; Owings v. Rhodes, 65 Md. 408; 9 Atl. Rep. 908; In re Cornell, 110 N. Y. 351; 18 N. E. Rep. 142; Cohen v. Morris, 70 Ga. 318. 4Royall’s Adm’r v. McKenzie, 25 Ala, 863; Winn v. Crosby, 52 How. Pr. 174, cited ante, p. 526, n.6. Where a debtor conveyed his property in trust to pay cer- tain debts divided into three classess, and one of the second class creditors di- rected the trustee to withhold from collection an amount sufficient to pay his debt, which was done, and the note so withheld by the trustee became worth- less, but not through any default of the trustee, it was held that the creditor was not entitled to a pro rata share of the money collected for the benefit of the sec- ond class creditors, and that the trustee was not liable therefor. Bason v. Har- den, 72 N. C. 287; Matter of Carpenter, 45 Hun, 552. 5Pingree v. Comstock, 18 Pick. 46. And where the assignee had paid a divi- dend to all the creditors excepting one, to whom he paid nothing, and had through motives of charity permitted one claim to remain uncollected until it was barred by the statute of limitations, it was held that the assignee was personally liable to the unpaid creditor to the amount of the uncollected claim. Simpson v. Gowdy, 19 Ind. 292. And see Blackburne’s Appeal, 39 Pa, St. 160. 6 Harrison v. Mock, 16 Ala. 616. As to the measure of the trustee’s liability in such case, see Ibid. In Detweiler’s Appeal, 96 Pa. St. 323, it was held that the assignment did not impose on the assignee any duty to let the real estate, and where he permitted the assignor to remain in possession and use the real estate, he was held not chargeable with the rental thereof, 564 LIABILITY OF ASSIGNEES. [cH. XL. contract made by his assignor which he has undertaken to com- plete. So where a trustee, after accepting and acting under the trust, neglected to record the trust deed, he was charged with a loss resulting therefrom.2 On the same principle, assignees who delay the collection of debts,* or neglect to apprise creditors of dividends due to them, are chargeable with interest.‘ In the case of a trust deed in Virginia to secure the payment of debts, where the trustees, having sold a portion of the trust property to three partners, all men of wealth, without taking security for the pur- chase-money, suffered them to retain it for a number of years, until they all became insolvent, they were held personally respon- sible for the amount of the purchase-money.? In a case in Ver: mont it was held that if an assignee barter away the trust prop- erty in exchange for other property, he will be charged with the value of the property at the time of the exchange, and the interest, unless those in interest elect to affirm the exchange. And in a case in Alabama it has been held that if a trustee, without the sanction of the cestui que trust, receives lands in settlement and satisfaction of the trust debts, equity will hold him responsible for whatever loss may ensue, and, if the cestue gue trust so elect, treat the lands as his own individual property.’ : In a case in Pennsylvania® the assignee, being informed that a debtor of his assignor had no title to lands held by the latter as security, made no proper investigation, but took from the debtor other securities and reconveyed the land to him. The debt having 1 Patton v. Royal Baking Powder Co., 45 Hun, 248. 2 Cooper v. Day, 1 Rich. Eq. 86. See Hext v. Porcher, 1 Strobh. Eq. 170. 3 Royall’s Adm’r v. McKenzie, 25 Ala. 363. 4For any mere delay in payment interest is, in law, regarded as a sufficient compensation. Clark v. Craig, 29 Mich. 398. But an assignee will not be charged with interest where the creditor neglected to make a demand for his dividend for a period of three years, Tomlinson v. Smallwood, 15 N. J. Eq. 286. An assignee will be charged with interest on balances on his hands where he has neglected to perform his duties faithfully. Assigned Estate of Truitt, 10 Phila. 16. 5 Miller v. Molcombe’s Ex’r, 9 Gratt. 665. Where an assignee under a trust deed for creditors had collected in June, 1861, in good money, a part of the trust fund applicable to pay a creditor who was ready to receive payment, and in- vested the fund in Confederate bonds, under the order of the court, made ina suit brought by the trustee to obtain instructions as to the administration of the estate, he was, after the close of the war, held liable for the fund in good money. The assignee was not held liable for interest on the fund during the continuance of the war. Kirby v. Goodykoontz, 26 Gratt. 298. See Davis v. Harman, 21 Gratt. 194; Dorr v. Gibboney, 3 Hughes, 382; Clark v. Giboney, id. 391. 6Page v. Olcott, 28 Vt. 465, 469, TRoyall’s Adm’r v, McKenzie, 25 Ala. 364; Blauvelt v. Ackerman, 20 N. J. Eq. 141, 8 Chambersburg Association’s Appeal, 76 Pa. St, 203, § 410.] EXTENT OF LIABILITY. 565 been lost the assignee was held liable for the amount on the ground of supine negligence. The rule recognized in Maryland is that when a trustee has acted in good faith in the exercise of a fair discretion, and in the same manner as he would ordinarily do in regard to his own prop- erty, he ought not to be held responsible for any losses accruing in the management of the trust property.! Cases of mistake have sometimes been considered as exceptions to the general rule of an assignee’s or trustee’s liability.2, Thus, in a case in South Carolina, where a trustee, by a mistake honestly made, had a deed recorded in the wrong office of registration, it was held that this was not sufficient to render him liable? The court in this case took occasion to observe that “the liability of trustees is not measured by the abstract rule of their duty. The universal test of their liability or exemption from liability is this: Is there or is there not, in this case, evidence of faithful endeav- ors to perform his duty?” It is clear, however, that mere mistake or misapprehension of duty, however honest, will not always protect an assignee from consequent liability. Thus, in a case in Massa- chusetts, where, under an assignment directing certain preferred creditors to be paid in full, the assignee in good faith and through a misconception of his duties, or a misconstruction of the assign- ment, paid all the money which he had received in trust to other ereditors, it was held to be no defense to a bill filed against him by a preferred creditor whom he had neglected to pay, but he was charged with the amount of such creditor’s demand with interest.‘ Ina case in Alabama it has been held that a trustee who applies the trust fund in his hands to the payment of one creditor, leaving the remainder of the creditors wholly unpaid —the deed under which he acts contemplating a payment pro rata among all the ereditors — acts at his peril, and is individually responsible to them.’ A trustee may not be accountable for an honest mistake, but when his duty is so plain that no man of ordinary intelligence could mis- 1Gray v. Lynch, 8 Gill. 408, And see Higgins v. Whitson, 20 Barb. 141; Me- lick v. Voorhis, 24 N. J. Eq. 305. 2In re Durfee, 4R. I. 401; Perry on Trusts, 562. - 8 Hext v. Porcher, 1 Strobh. Eq. 170. 4 Ward v. Lewis, 4 Pick. 518. In a case in England where trustees without sufficient cause doubted the identity of their cestui que trust, and in breach of trust paid the trust fund to others, they were ordered to make good the same and pay the costs -and interest at five per cent., the accounts to be taken with rests. Hutchins v. Hutchins, 15 Jur. 869; s. c., 6 Eng. L. & Eq. 91. 5 Pinkston v. Brewster, 14 Ala. 315. And where the assignees, after a federal court had acquired jurisdiction, submitted to the jurisdiction of a state court without opposition, and passed over to a receiver appointed by it the assets of the trust, they were held personally liable for them all. Chittenden v. Brewster, 2 ‘Wall. 191. 566 LIABILITY OF ASSIGNEES, [cH. xL. take it, he is held responsible if he have such intelligence. He can- not shield himself from responsibility by doubts that he takes no. measures to either verify or dispel.! In a Tennessee case it was held that where a trustee wrongfully or by mistake pays money to a third person, supposing he was re- lieving the trust property from an incumbrance, he will not thereby be relieved from responsibility in the matter of his trust to the beneficiaries under the deed. An assignee may in most cases secure himself against mistake, or where he is in doubt as to the line of his duty, by taking the advice of counsel; and for reasonable fees for such advice he will be allowed in his account.? But even the advice of counsel will not protect him from the consequences of a failure to discharge his duties properly, but in a case of doubt he shouid apply to a court of equity. The rule is that, when a trustee is in doubt as to any matter arising in the execution of the trust, he may wait till a bill is brought against him, or he may bring a bill seeking the direction of the court.* An important instance of a bill filed for this purpose occurred in the case of Pratt v. Adams,'® jn the court of chancery of New York, alluded to on a former page.’’ Chancery, it is said, will assist and protect trustees in the performance of trusts committed to them whenever they seek the aid and direction of the court as. to the establishment, management or execution of them.® And where a bill for such purpose is filed dona fide by the trustees, the costs will be decreed to be paid out of the trust estate.’ In a case in Maryland ” the defendants were trustees under a deed of trust, and were authorized by order of court to complete certain houses conveyed to them by the deed. They were held individually liable for work and material furnished by the plaintiff upon their order, it appearing that the plaintiff had not agreed to look to the trust estate alone. The order of the court was a complete indem- nity to the trustees for having the work done, but it did not bind the plaintiff to look exclusively to the trust fund for payment, un- less he expressly agreed to do so. 1 Gilbert v. Sutliff, 8 Ohio St. 129. 2 Wasson v. Garrett, 2 Baxter (49 Tenn.), 477. 3 Jones v. Stockett, 2 Bland, 409; Booth v. Conn. Mut. Ins. Co., 43 Mich, 299. 4 Freeman v. Cook, 6 Ired. Eq. 378. 5 Dimmock v. Bixby, 20 Pick. 368; Wilde, J., id. 374, 875; Lockwood v. Slevin, 26 Ind. 124; Anon. v. Gelpcke, 5 Hun, 245, And creditors may also apply for directions to the assignee. Wilson v. Brown, 12 N. J. Eq. 246. 67 Paige, 615. 7See ante, p. 581. 8 Trotter v. Blocker, 6 Port. 269, Trotter v. Blocker, ubi supra; Harvey’s Adm’r v. Steptoe, 17 Gratt. 289; Booth v. Conn. Mut. Ins. Co., 43 Mich. 299, 10 Gill v. Carmine, 55 Md. 339. § 411.] ASSIGNEES, WHEN PROTECTED. 567 § 411. Assignees, When Protected.— It is a further and impor- tant general rule under this head, that assignees and trustees acting in good faith under an assignment or other instrument which is afterwards declared void by judicial decree will be protected from liability, and their acts under such instrument will be ratified and confirmed.! Thus, in New York, it has been repeatedly held that assignees acting under a fraudulent assignment will not be held ac- countable for proceeds of the assigned property which they have actually paid over to dona fide creditors of the assignor, in pur- suance of the assigninent, before any other creditors have obtained a lien (general or specific, legal or equitable) upon the assigned property.2, So in New Hampshire and Massachusetts, where trust- ees under fraudulent conveyances have paid the proceeds of the property assigned to them to dona fide creditors before the service of process upon them, they have been discharged from liability on the ground that there remained nothing in their hands that could be subjected to a judgment.’ So in Pennsylvania, assignees under an assignment which was void on the ground of not having been recorded within the time prescribed by the statute were held to be not liable in an attachment, at the suit of creditors not coming in under the assignment, for moneys collected and paid over before the attachment, in pursuance of the attachment.! So in Georgia it was held that an assignee who in good faith accepts and dis- charges an assignment which is void for want of a proper affidavit is not liable. Anda voluntary assignee was protected in payments made by him to his cestuzs gue trust, under a fraudulent assignment, before an adverse claim by an insolvent trustee and bankrupt assigee.© And more recently it has been held in the same state 1See Hawley v. James, 16 Wend. 61, 182; Barney v. Griffin, 4 Sandf. Ch. 552; affirmed, 2 N. Y. 365; Boyd v. Myers, 12 Lea(Tenn.), 175; Pond v. Comstock, 20 Hun, 492; Cannon v. Young, 89N. C. 264: Haydock Carriage Co, v. Pier, 78 Wis. 679; ante, p. 512. 2 Wakeman v. Grover, 4 Paige, 23, 24; Ames v. Blunt, 5id. 18; Averill v. Loucks, 6 Barb. 470, 471; Bostwick v. Berger, 10 Abb. Pr. 197. And see Grimsley v. Hooke, 8 Jones’ Eq. (N. C.) 4; Therasson v. Hickok, 37 Vt. 454; Fahnestock v. Bailey, 8 Metc. (Ky.) 48; Hunt v. Weiner, 39 Ark. 70. But an assignee cannot divest himself of liability by merely surrendering an assignment and taking a new one upon different trusts. Meacham v. Sternes, 9 Paige, 398, 3Thomas v. Goodwin, 12 Mass. 140; Hutchins v. Sprague, 4 N. H. 469; ap- proved in Crowninshield v. Kittredge, 7 Metc. 520. 4Stewart v. McMinn, 5 W. & S. 100. 5 Chattanooga Stove Co. v. Adams, 81 Ga, 329; 6S. E. Rep. 695. : 6In re Wilson, 4 Barr, 480. In Neill v. Jackson, 8 Fed. Rep. 144, a decree of a United States court required the voluntary assignee to deliver the assets to the assignee in bankruptcy. It was held that the voluntary assignee was entitled to the protection of such decree, notwithstanding, by consens of parties, he with- drew his appeal therefrom, and by the like consent the United States court mod- ified its decree, it appearing that he acted under the advice of counsel. But the 568 LIABILITY OF ASSIGNEES. [oH. XL. that a sale to a bona fide purchaser for value, by assignees for creditors, under a deed voidable for a defect apparent on its face, cannot be avoided by the insolvent trustce of the assignors, where the sale was made before an election by the trustee to disaffirm the assignment.? And in a case in New York the court, on setting aside a conveyance of all the debtor’s real estate in trust, made prevision for the ratification of sales in good faith by the trustees.” In another New York case it was held that an assignee receiving and enforcing securities held by his assignor, as agent or trustee for a third party, and having notice, will be individually liable for any appropriation of the funds of such third party. Nor is the as- signee relieved from his liability by his discharge. But if the as- signee had acted in ignorance of such third party’s rights he would probably have been protected.’ § 412, How Assignees Are Dealt with.— In regard to the mode in which assignees are dealt with by the courts, the rule has been stated to be, that where trustees act in good faith and with due. diligence they receive the favor and protection of the court, and their acts are regarded with the most indulgent consideration ; but where they betray their trust, or grossly violate their duty, or where they have been guilty of unreasonable negligence, their acts are inspected with the severest scrutiny, and they are dealt with according to the rules of strict if not rigorous justice.‘ The legal presumption always is that a trustee has faithfully executed his trust unless the contrary is fully and satisfactorily evinced. § 413. Liability of Co-assignees.— Where there are several as- signees or trustees, the general rule is that they are responsible only for their own acts, and not for the acts of each other, unless modified decree having excepted from the order directing the delivery of the as- sets to the assignee in bankruptcy certain moneys which the voluntary assignee had collected and claimed to have disbursed under the voluntary deed, it was held that, to the extent of the excepted fund, he might be compelled to settle an account of his trust in the state court having jurisdiction thereof. 1 Okie v. Kelly, 12 Pa. St. 323. And see Butler v. Jaffray, 12 Ind. 504. 2 Barney v. Griffin, 4 Sandf. Ch. 652; affirmed, 2 N. Y. 365. A trustee who suffers funds to pass improperly into the hands of his co-trustee is chargeable for any loss arising from such negligence or abuse of trust.6 And where a sole trustee, who was also joint trustee with another person of another fund, suffered the several fund to be mingled with the joint fund, and to pass into the hands of his co-trustee, it was held that he was respon- sible for the property so misapplied to a person who was cestuc que trust in both funds, though such cestud que trust had discharged the co-trustee in ignorance of the mingling of the funds by the sev- eral trustee.’ In Ohio, however, it has been held that where a loss accrues to a trust fund through the default of one of five trustees, his co-trustees will not be held responsible for such loss, if they have 1 Ward v. Lewis, 4 Pick. 518, 524, 2 Lewin on Trusts, 274. 311 Ves. Jr. 319. 45 Johns. Ch. 283. 5 Graham v. Davidson, 2 Dev. & Batt. Eq, 155. 6 Mumford v. Murray, 6 Johns. Ch. 1; In re Niles, 113 N. Y. 547, iIbid. See Hart v. Bulkley, 2 Edw. Ch. 70. § 413.] ‘ LIABILITY OF CO-ASSIGNEES. 571 acted in good faith, and exercised that vigilance over the fund which a man of ordinary prudence will exercise over his own prop- erty! And in Virginia, where a person named as trustee in a deed to secure debts united in sales necessary in the execution of the trust, and other formal acts, but received none of the trust funds, they being received by his co-trustee, and was guilty of no fraud in relation thereto, it was held that he was not responsible for the misapplication or waste of the funds by his co-trustee.’ A further rule established by the English cases is, that if one trustee be connusant of a breach of trust committed by another, and either industriously conceal it,? or do not take active measures for the protection of the cestwi que trust's interest,* he will himself become responsible for the mischievous consequences of the act. A trustee is called upon, if a breach of trust be threatened, to pre- vent it by obtaining an injunction;® and if a breach of trust has been already commitied, to file a bill for the restoration of the trust fund to its proper condition,‘ or at least to take such other active measures as, with a due regard to all the circumstances of the case, may be considered the most prudential.’ Nor is it any excuse for a trustee who has not himself taken an active part in the duties of the trust that he had nothing to do with the conduct of his co-trustees to whom he left the manage- ment of the business. This was expressly held by the court of exchequer in the case of Oliver v. Court;*® the Lord Chief Baron laying down the rule that where several trustees leave the entire performance of the duties of the trust to one, all are equally re- sponsible for the faithful and diligent discharge of their joint and several duty by that one to whom they have delegated it. ‘The same doctrine was lately applied in New York to the case of co- assignees; the court holding that if an assignee once accepts an assignment, he undertakes the duties of the office and is responsi- ble, “although he takes no active part but leaves the control to his co-assignees; and that in such case he is liable for the misapplica- tion of the trust funds by his associate.’ In Maryland, also, it 1§tate of Ohio v. Guilford, 18 Ohio, 500. 2 Griffin’s Ex’r v. Macaulay’s Adm’r, 7 Gratt. 476. And for a fuller view of the American cases as to the liability of co-trustees generally, see the American editor’s note to Hill on Trustees (3d Am. ed., Phil. 1857), 450. 3 Boardman v. Mosman, 1 Bro. C. C. 68. 4 Brice v. Stokes, 11 Ves. Jr. 319, And see Walker v. Symonds, 3Swanst. 64; Oliver v. Court, 8 Price, 166; In re Chertsey Market, 6 Price, 279. 5 See In re Chertsey Market, 6 Price, 279. € Franco v. Franco, 3 Ves. Jr. 75. 7See Walker v. Symonds, 3 Swanst. 64, 71; Lewin on Trusts, 287. 88 Price, 127. See 2 Story’s Eq. Jur., § 1275. 9 Bowman v. Rainteaux, Hoff. Ch. 150. See, also, Monell v. Monell, 5 Johns. Ch. 283. 572. LIABILITY OF ASSIGNEES. [cH. XL. has been held that it is not sufficient to exempt one of two joint trustees from liability that the duties of the trust have been ex- clusively performed by the co-trustee, with the concurrence and consent of the former; on the contrary, he is accountable for the conduct and management of the co-trustee to whom he has thought proper to delegate his powers, in the same manner and to the same extent as if they had been executed by himself! In Alabama a trustee who, after accepting the trust, voluntarily per- mits his co-trustee to take the entire management of it and the possession and control of the trust property, is equally with him liable to account.2 And in Virginia, if property be conveyed to trustees to secure the payment of the debts of certain creditors of the grantor, and the grantees accept the trust and undertake to dispose of the property, notwithstanding any agreement among themselves as to which shall take charge of and be accountable for particular portions, they are all jointly responsible to the creditors for the proper application of the whole property? Ina late New York case‘ it was held that where one or more trustees simply re- mains passive and does not obstruct the collection by a co-trustee of moneys belonging to the trust fund, he is liable for the latter’s waste if he himself receives the funds and either delivers them over to his associates or does any act by which they come into the sole possession of the latter or under his control, and but for which he would not, have received them. Such trustee is liable for any loss resulting from the waste. - $414. Liability of Sureties on Assignee’s Bond.— The liability of the sureties on the assignee’s bond is ordinarily regulated by the statute requiring the giving of the bond. Ordinarily, the sure- ties on the bond stand in no better position than their principal. The measure of his responsibility is the measure of theirs;® and 1 Maccubbin v. Cromwell, 7 Gill & Johns, 157, 2 Royall’s Adm’r v. McKenzie, 25 Ala. 364. 3 Miller v. Holcombe’s Ex’r, 9 Gratt. 665, 4Bruen v. Gillett, 115 N. Y. 10; 21 N. E. Rep. 676. The facts in the case were: Defendants were joint assignees for the benefit of creditors. Defendant H. col- lected certain moneys from the assets, which he deposited to the joint credit of himself and G., his co-assignee. These deposits were withdrawn upon the joint ‘checks of the assignee and the funds deposited with H., who was carrying on a business as an individual banker. H. also collected other monevs which never came into the possession or under the control of G. H. subsequently became in- solvent. In an action for an accounting, it was held that G. was jointly liable with H. for the funds so drawn out upon the joint checks and deposited with the latter, but that as it appeared that H. paid out in the proper administration of the trust more than that amount, G. was only liable for such portion of said fund as he failed to show was properly applied, and that the burden of showing such application was upon him, - §Patterson’s Appeal, 48 Pa, St. 842. But where the statute provided that § 414.] LIABILITY OF SURETIES ON ASSIGNEE’S BOND. 573 where by a final decree upon the account of an assignee he is di- rected to pay the claims of a specific creditor, his sureties are liable for default of payment, and cannot defend on the ground that they were not bound by the decree.! Where the bond given under the statute was conditioned for the faithful discharge of the duties of the assignee, and for the due ac- counting for all moneys received by the assignee, it was held in a case in New York that the accounting referred to was an account- ing to creditors under the assignment, and that where the assign- ment had been set aside as fraudulent, and judgment creditors entitled to the funds in the hands of the assignee were unable to collect them, there was no liability created by the bond in favor of such creditors against the sureties.2 Where the assignee attempts to defend an action on the bond, on the ground that he has faith- fully discharged his duties under the assignment and that creditors had not presented their claims, they must allege and show that they were ready and willing to receive the claims, and that one or more meetings were called for that purpose, of which the creditors had notice.’ In a case in Ohio‘ a creditor was allowed to recover on the as- signee’s bond the proportionate amount of his claim to the whole. amount of those claims which had been presented and allowed pur- suant to the statute. In New Jersey,’ after the damages have been assessed against an assignee and his sureties on their bond, the surety cannot have the amount of a creditor’s claim deducted therefrom, on the ground that it was not presented to the assignee under oath, where such claim was allowed and included in all of the assignee’s accounts and no creditor objects thereto. He is bound to answer for all the money found due from his principal. A new trustee cannot, by virtue of his appointment, sue upon the bond of his predecessor for a breach thereof.§ when the assignee fails to make payment of the trust fund on demand he should pay interest at the rate of twenty per cent. per annum, ina suit brought upon the official bond for breach of condition, it was held that the action sounded in tort, and the measure of damages was the demand and interest at six per cent. State v. Hart, 38 Mo. 44. 1 Little v. Commonwealth, 48 Pa. St. 837. But in New York it has been held, in an action brought against the sureties to recover an amount which the assignee had been directed but failed to pay, that the order made in the proceedings against the assignee is prima facie but not conclusive evidence of his failure to faithfully discharge his duties and account for all the moneys received by him. The Peo- ple, etc. v. White, 28 Hun, 289. 2 People v. Chalmers, 1 Hun, 683. 3 Morrill v. Richardson, 9 Pick. 84. 4Lahm v. Johnston, 32 Ohio St. 590. 5In re Stelle, 34 N. J. Hq. 199. 6Thompson v. Childress, 1 Tenn. Ch, (Cooper), 869. CHAPTER XLI. PROCEEDINGS IN CASE OF THE DEATH, REMOVAL, NON-ACCEPT- ANCE, RESIGNATION, MISCONDUCT, INSOLVENCY OR INCAPAC- ITY OF AN ASSIGNEE. § 415. In Case of Death. 416, In Case of Removal. 417. In Case of Non-acceptance. 418. In Case of Resignation, 419, In Case of Misconduct. 420. In Case of Insolvency. 421. In Case of Incapacity. 422, Powers of New Assignee, 423. Discharge of Assignee. § 415. In Case of Death.— Where there are several assignees, and one dies, the execution of the trust devolves (in the absence of any special provision to the contrary) upon the survivors.! In a case in Mississippi, where a corporation assigned all its property to two trustees, to be held by them, “and the survivors of them, and the heirs, executors, administrators and assigns of such sur- vivor,” in trust for the payment of the debts of the corporation, and after the trust had been accepted by the trustees, one of them died, and the corporation and the surviving trustee (A. J.) exe- cuted a new deed, by which they assigned to the surviving trustee and one G. R. all the property embraced in the original deed, to be held by them for the same uses and subject to the same trusts specified in the original deed, which latter trust was accepted by A. J. and G. R., it was held that the original deed gave the power of assignment to the surviving trustee, and that the title of A. J. and G. R. as trustees was valid in law? If a sole assignee die before the trust be finally executed, the court having jurisdiction either appoints a new assignee,’ or selects and empowers some other person to discharge the duties of the trust. 1 Stewart v. Pettus, 10 Mo. 755; Shook v. Shook, 19 Barb. 653; Hannah v. Car- rington, 18 Ark, 85. See Hill on Trustees, 303, and note. In New York every estate vested in trustees as such is held by them in joint tenancy. 3 RB. S. (7th ed.) 2179, § 44. See Belmont v. O’Brien, 12 N. Y. 394; Brennan v. Willson, 71 N. Y. 502; s. 0,4 Abb. N. C, 279. As to the rights of a surviving trustee against the estate of a deceased co-trustee, see Hart v. Bulkley, 2 Edw. Ch, 70. ?Peck v. Ingraham, 28 Miss. 246, 32 Tuck, Com. [458], 446, p. 44. §§ 416, 417.] IN cash OF REMOVAL OR NON-ACOEPTANCE. 575 In a Maryland case it was expressly held that the appointment of a new trustee to take charge of the trust estate, where the trustee died without completing the trust, was but the ordinary exercise of equity jurisdiction.! So in Batesville Institute v. Kauff- man,’ it was held that, if a trustee is dead, the trust being still alive and unexecuted, a court of equity will carry it out through any other appropriate person in whom the control of the prop- erty may be; or, if necessary, through its own officers and agents, without the intervention of a new trustee. The administrator of a deceased assignee is not bound to assume the supervision of the trust property, or to be legally responsible for its administration.’ § 416. In Case of Removal.—If a trustee remove from the state, abandoning the trust without executing it, the court of equity jurisdiction’ has authority to execute it. This point was expressly decided in an Alabama case. § 417. In Case of Non-acceptance.— If a sole assignee have been: appointed by the assignment, and he decline to act, a new assignee will be appointed by the court having jurisdiction.’ No trust will be allowed to fail for want of a trustee.® In New York and Missouri, where one of several trustees refuses to accept the trust, it devolves upon the others, and the whole trust estate vests in them; but if all refuse, though the legal estate nominally vests in the trustees, the execution of the trust devolves upon the court and new trustees may be appointed, if necessary.” In Tennessee an appointment by the county court of a new trustee, where the original one in open court refuses to act, made upon the application of the principal beneficiary in a deed of trust for creditors, is good without notice to the assignor, although the deed provides that the surplus proceeds, after satisfying the pur- poses of the trust, shall be paid to the maker.® 1Gorsuch v. Briscoe, 56 Md, 573, 218 Wall. 151. 3 Bowman v. Raineteaux, Hoff. Ch. 150. 4Cullum v. Branch Bank at Mobile, 23 Ala, 797. 5 No one is more unsuited to act than one who denies the trust. Irvine v. Dunham, 111 U. S. 827; 48. Ct. Rep. 501; Barcroft v. Snodgrass, 1 Cold. (Tenn.) 430; Furman v. Fisher, 4 Cold. (Tenn.) 626. Where a deed of trust is made to several trustees, and a part disclaim, the others will take both the legal estate and the power to administer the trust, unless the intention that all shall act is expressly or clearly implied from the conveyance. Ratcliffe v. Sangston, 18 Md. 383. 6 Johnson v. Harvey, 46 Pa. St. 415; Golden’s Appeal, 3 Hast. Rep. 313. i King v. Donnelly, 5 Paige, 46; Shockley v. Fisher, 75 Mo. 498, 8 Edmonson v. Harris, 2 Tenn. Ch. (Cooper), 427. See Thompson v. Childress, 1 id. 89; Hobart v. Andrews, 21 Pick. 526; Houghton v. Davis, 23 Me, 28, 576 DISABILITY OF ASSIGNEE. [cH. XLI. § 418. In Case of Resignation.— After a trustee has once ac- cepted the trust he cannot discharge himself from liability by a resignation merely.! He must either be discharged from the trust by virtue of a special provision in the deed which created it, or by the direction of a court of competent jurisdiction,’ or with the general consent of all the persons interested in the execution of the trust.’ And upon the discharge of the trustee or assignee a receiver will be appointed upon application in equity. In New York a trustee, on being discharged for no other cause than his own wish to be relieved from the duties of the trust, must pay the cost of the petition and of the appointment of his suc- cessor, and resign all claim to commissions on the capital of the estate.4 In Pennsylvania an assignee may obtain his discharge from the trust by application to the proper court of common pleas; but the discharge will not be allowed unless the assignee’s account shall have been duly settled or confirmed, so far as he shall have acted ‘in the trust,’ nor unless notice of such application shall have been given to all parties interested, either personally or by advertise- ment, nor until such assignee shall have surrendered the trust estate remaining in his hands to some other assignee or other person ap- pointed by the court to receive the same, and have performed all such other matters as may be required in equity.® In the same state, if a sole assignee, after formally accepting the trust, refuse to execute it, it is competent to any of the parties interested in it to call upon the proper court to appoint another.’ Under the Texas statute which authorizes a county judge to re- 1 Bethune v. Dougherty, 30 Ga. 770. See Perry on Trusts, § 267. ?McCullough v. Sommerville, 8 Leigh (Va.), 415; Alpaugh v. Boberson, 27 N. J. Eq. 96. In New York the resignation must be made to the supreme court. Its acceptance and the discharge of the assignee and the appointment of his suc- cessor are matters for the action of that court. Keiley v. Dusenberry, 42 N. Y. Superior Ct. 238; affirmed, 77 N. Y. 597; Thatcher v. Candee, 3 Abb. Dec. 3873 S. C., 3 Keyes, 157, 160; Leggett v. Hunter, 19 N. Y. 459; Cruger v. Halliday, 11 Paige, 818. 3 Shepherd v. McEvers, 4 Johns, Ch. 186; Cruger v. Halliday, 11 Paige, 314; Jones v. Stockett, 2 Bland, 409; Breedlove v. Stump, 3 Yerg. 257. See Read v. Robinson, 6 W. & S, 329; Hill on Trustees (3d Am. ed.), [554], 830; Appeal of Geo. T, Smith, 86 Mich. 149; 48 N. W. Rep. 864; Mc¥Ferran v. Davis, 70 Ga. 661; Hill v. W. & A. R. R, Co., 86 Ga. 284; 12 S. E. Rep. 635. 4 Matter of Jones, 4 Sandf. Ch. 27, 5 See Fournier v. Ingraham, 7 W. & S. 27; Matter of Union Banking Co., 12 Phil. 214. 6 Act of June 14, 1836, § 22; Purdon’s Dig. (Brightley, 10th ed.), p. 1418, § 22. See, also, Stat. of Kan. (ed. 1868), ch. 6, § 39, 7Seal v. Duffy, 4 Barr, 274; Bell, J., id. 278. For the rule in Alabama, see Drane v. Gunter, 19 Ala. 731. In Georgia the appointment of a receiver ig proper. McFerran v, Davis, 70 Ga. 661, § 419.] IN CASE OF MISCONDUCT. 577 move an assignee and appoint another in his place, the judge may accept the resignation of the assignee named by the debtor who refuses to act and appoint another in his stead. The acceptance of the resignation is equivalent to a removal.! § 419. In Case of Misconduct.— If an assignee misconducts him- self in his office, by wasting, neglecting or mismanaging the estate, or refusing or neglecting to comply with some requirement of law, as to file an inventory, or give bond, or to account, proceed- ings may be taken to dismiss or remove him.2 As to what amounts to misconduct for which an assignee will be removed there have been a number of cases in several states. Thus in Wisconsin? it was held that where a trustee refuses and neglects to account upon proper and reasonable application, or neglects or refuses to execute the trust in a proper and legal manner, or converts the trust es- tate to his own use, or otherwise becomes unfaithful to the duties and obligations which he has assumed as such trustee, a court of equity will remove him and provide other agencies for the due execution of the trust. And in North Carolina,’ where the as- signee refused the creditors access to the books of the debtor, and there were other suspicious transactions between the assignor and 1Keating v. Vaughan, 61 Tex. 518. : 2See 2 Story’s Eq. Jur., § 1287. A court of equity has power to remove a trustee, and will do so when the safety of the fund and the due execution of the trust shall require it. Geisse v. Beall, 3 Wis. 367; Mandell v. Peay, 20 Ark. 325; Pinneo v. Hart, 30 Mo. 561; Hatcher v. Winters, 71 id. 80; Crouse v. Frothing- ham, 97 N. Y. 105; Cohen v, Morris, 70 Ga. 313. See Perry on Trusts, §$ 817, 318; Golden’s Appeal, 110 Pa. St. 581. For maladministration the assignee is subject to removal, and if he colludes with the assignor against the creditors he certainly should be removed. Thomas v. Talmadge, 16 Ohio St. 433. In the case of The People v. Norton, 9 N. Y. 176, it was held by the court of appeals (Ruggles, C. J.) that the court of chancery of this state had the power, by its general authority, independent of any statute, to displace a trustee on good cause. shown, and to substitute another in his stead. In Pennsylvania the court of common pleas has power to dismiss a trustee at any time, even before he has entered upon his duties, upon good cause being shown by the cestui que trust. Piper’s Appeal, 20 Pa. St. 67. An assignee who has been discharged for mal- feasance and has not settled his account in the proper court, and satisfied the court that there was a balance due him from the assigned estate, has no legal or equi- table claim which he can enforce against the assigned estate in the hands of the subsequently appointed assignee. Fournier v. Ingraham, 7 W. & 8. 27. 3 Geisse v. Beall, 3 Wis. 367. 4Manning v. Stern, 1 Abb. N. C. 409; Matter of Mayer, 66 How. Pr. 106. The examination of witnesses and the production of books may be ordered, though no other proceeding under the act is pending. Matter of Bryce, 56 How. Pr, 359; 4 BR. 8. (8th ed.), p. 2541, § 21. In the New York statute, 3 R. 8. (7th ed.), p. 2280, § 21, provision is made for the examination of witnesses and books, See Matter of Isidor, 59 How. Pr. 98; Matter of Burnett, 8 Daly, 363, The as- signor may be examined. Matter of Koontz, 11 N. Y. Weekly Dig. 55; Matter of Strauss, 1 Abb. N. C, 402. See, also, note under § 406, ante. 37 B78 DISABILITY OF ASSIGNEE. (cH. x1. assignee, it was held that there was ground for the appointment of a receiver on an application for the removal of the assignee. In Texas! it was held that at the instance of one or more of the creditors an assignee delinquent as trustee may be removed by order of the district court under its equity jurisdiction. So in Kentucky, in the case of Cromie v. Bull,? the court held that when the trustee acts fraudulently or abuses the power confided to his discretion by refusing to exercise the trust, or if in the attempt to exercise it he does that which is unreasonable, the chancellor will, at the instance of the parties in interest, interfere for the preser- vation of the trust estate and compel the trustee to discharge his duty. It is difficult, if not impossible, to create a trust where the trustee has such unbounded power over the estate as to preclude a court of equity from controlling his action when his conduct indi- cates a palpable abuse of his power. § 420. In Case of Insolvency.— In New York, if an assignee becomes insolvent or is insolvent at the time of the assignment, a receiver will be appointed by the court having jurisdiction.’ In some of the states the statutes regulating assignments contain pro- visions which in effect make an insolvent assignee subject to re- moval. § 421. In Case of Incapacity.— If an assignee becomes incom- petent to perform the duties of his office from lunacy,‘ habitual drunkenness * or other cause, he may be removed and a new assignee appointed as in other cases. Also where the functions of an assignee are suspended by in- junction it is proper to appoint a receiver to take charge of the property. Where there is a failure of suitable trustees to perform a trust, either from accident or refusal of the trustees to act, or 1 MclIlhenny Co. v. Todd, 71 Tex. 400; 98. W. Rep. 445, 281 Ky. 646. See Walker v. Smyer’s Ex’rs, 80 id. 620. 3 Keyes v. Brush, 2 Paige, 311; Reed v. Emery, 8 id. 417; Connah v. Sedgwick, 1 Barb. S. C. 210. These decisions were previous to the act of 1860, which re- quired the execution of a bond on the part of the assignee, It seems that in case of a failure to give the bond the court will compel the giving of a bond or the surrender of the property to an assignee in bankruptcy where such assignee has been appointed. Von Hein v. Elkus, 8 Hun, 516. See the present statute, 3 R. 8S. (?th ed.) p, 2276, 4Penn. Act of 1836, § 20; Purdon’s Dig. (Brightley, 10th ed.) p. 1418, pl. 20. 5 Penn. Act of June 14, 1836, § 20. See Bayles v. Staats, 1 Hals. Ch. 513. On a trustee’s becoming incapable of executing a trust, a court of equity will carry it into execution in behalf of the parties interested. Suarez v. Pumpelly, 2 Sandf. Ch. 336; Walker v. Stone, 70 Iowa, 103; 30 N. W. Rep. 39; Irvine v. Dun- ham, 111 U. 8. 827; 48. Ct. Rep. 501; ante, p. 575; Ellison v. Ellison, 6 Ves. 656, 663; Lake v. De Lambert, 4 Ves. 292; Hibbard v. Lamb, Ambler, 309; 2 Mad. Pr. Ch. 133, §§ 422, 423.1 PoWERS OF ASSIGNEE — DISCHARGE OF ASSIGNEE. 579 from original or supervenient incapacity to act, or from any other cause, courts of equity will appoint new trustees. § 422. Powers of New Assignee.— Where an assignee has been appointed or substituted by the court in the place of another, as described in the present chapter, he succeeds to all the rights, pow- ers and duties of his predecessor.! In a California case it was held that if a debtor makes an assign- ment of his property in trust to pay creditors pro rata, one to whom the trustee assigns the property, with notice of the trust, must execute it. 3 423. Discharge of Assignee.— As we have already seen, pro- vision is in some instances made by statute for the discharge of the assignee from his trust. Where no such statutory provisions exist the assignee will be discharged from the duties and liabilities of his office in the same manner as other trustees are relieved of their trusts.’ “The discharge of a trustee upon the termination of the trust or upon the appointment of another trustee does not of itself release the trustee from responsibility for his past conduct, and the cestut que trust may still inquire into his administration prior to his discharge, and may require him to account for all his trans- actions; therefore it is usual, upon the final settlement and trans- fer of the trust property to the parties entitled, to discharge the trustee by a formal release of all claims, executed by all the cestwis que trust who are sui juris.” * 1 Fouche, Assignee, v. Brower, 74 Ga. 251; citing Moise v. Chapman, 24 id. 249. See Glenn v. Busey, MacArthur & Mackey (D. C.), 454. 2 Sharp v. Goodwin, 51 Cal. 219. 3 Perry on Trusts, § 921. See Matter of Dryer, 10 Daly, 8; Matter of Lewen- thal, id. 14; Matter of Merwin, id. 13; Matter of Parker, id. 16; Matter of Yeager, id. 7% 4 Perry on Trusts, § 922. The special power, when conferred upon creditors, to appoint a substituted assignee cannot be delegated. Porter v. West, 64 Miss. 548; 8So, Rep. 207; citing Clark v. Wilson, 53 Miss, 119; Fuller v. Davis, 63 id. 78, CHAPTER XLII PROCEEDINGS OF CREDITORS — COMING IN UNDER THE ASSIGNMENT. § 424, General Consideration. 425, Coming in Under the Assignment. 426. What Creditors May Come in. 427, When to Come in. 428. How to Come in. 429, Consequence of Coming in. 430. Proof of Debts. 431, Application of Dividend. 432, Effect of Taking Dividend. 438. Rights of Preferred Creditors, 434. Coming in Under Decree. § 424. General Consideration.— A voluntary assignment being. in its nature a mode and instrument of provision for creditors, and deriving its validity from the sufficiency or legality of such provis- ion, the rights of creditors obviously form an essential element in any adequate view which can be taken of the law regulating this description of transfer, and of the practice established thereupon. These rights of creditors have already been alluded to in the prog- ress of this work as the subject suggested. It has been found most convenient, however, to consider fully, first, how the trust for creditors is created on the part of the assignor, and secondly, how. it is executed on the part of the assignee, before finally showing under a distinct head, as it is now proposed to do, what are the rights of creditors, either under the assignment or in opposition to: it or independently of it, and what proceedings it is competent for them to adopt for the enforcement of such rights. § 425. Coming in Under the Assignment.— On receiving notice of the execution of an assignment, or becoming otherwise informed that such a transfer has been made, the creditors either accept of the provision made by it or reject it as fraudulent or illegal, with the view of taking active measures to avoid it; or in some cases disregard it entirely, and proceed as though it had not been made.! If they accept the assignment they come in under it and proceed 1]¢ is optional with the creditors to treat the assignment as void and disregard the claims of the trustee or assignee, or to hold him to an accountability for the trusts which he has voluntarily assumed. Geisse v. Beall, 8 Wis. 867; Hatchett v. Blanton, 72 Ala, 423; Watts v. Eufaula Bank, 74 id. 474, § 426.] WHAT CREDITORS MAY COME IN, 581 to take such steps for obtaining its benefits as may be required of them, either by the provisions of the instrument or by the general rules of law applicable to the case. An executor holding a bond and mortgage of an assignor whose estate pays a dividend has been held guilty of laches in not present- ing his claim on the bond to the assignee.' § 426. What Creditors May Come in.— Creditors are entitled to avail themselves of the benefit of an assignment, although it has been made without their knowledge or privity, and may compel the trustee to execute the trusts created by it2 And they may come in if they choose, even under a fraudulent assignment.2 And even where they have already taken legal proceedings against the property of the debtor, which have proved unavailing, or where they have abandoned such proceedings, they may still claim under the assignment; and they are not precluded in such cases from re- ceiving a dividend nor from calling the assignee to account. The doctrine of election does not apply to such cases.* But a creditor cannot hold an assignment good in part and bad in part; if he rati- fies it at all he must stand by it.’ Fi A married woman may prove her claim against the assigned es- tate of her husband like any other creditor, it appearing that her claim was bona fide and upon good consideration. An unliquidated claim for damages is not provable against an assigned estate in the hands of an assignee.’ An assignee, under the assignment act of South Carolina, by purchasing claims of creditors of the assigned estate, becomes: en- titled to the rights of such creditors against the agent.® 1 Wilson v. Staats, 33 N. J. Eq. 524, , 2 Ward v. Lewis, 4 Pick. 518; New England Bank v. Lewis, 8 id. 118; Pingree v. Comstock, 18 id. 46; Wilde, J., id. 50, 51; Shepherd v. McEvers, 4 Johns, Ch. 136; Ingram v. Kirkpatrick, 6 Ired. Eq. 452; Robertson v. Sublett, 6 Humph, 316. 3 Ames v, Blunt, 5 Paige, 13; Mills v. Argall, 6 id. 577; Geisse v. Beall, 3 Wis. 367. _ 4 Jewett v. Woodward, 1 Edw. Ch. 105. Where there was an agreement be- tween a debtor and some of his creditors, whereby they were to forego the bene- fits of an assignment, it was held that if such agreement were valid, and he had so violated it as to absolve the other parties from their obligations, they could claim under the assignment with the other creditors, and there would be no oc- casion for an equitable proceeding to vacate the agreement, Hatcher v. Winters, 71 Mo, 30. See Empey v. Sherwood, 12 Nev. 355, 5Geisse v, Beall, ubi supra; Jefferie’s Appeal, 33 Pa. St. 39; Williams’ Appeal, 101 id. .474; Geist’s Appeal, 104 id. 851; Frierson v. Branch, 80 Ark. 453; Zuver v, Clark, 104 Pa. St. 222. 6 Zeigier’s Appeal, 84 Pa. St. 342, 7 Matter of Adams, 12 Daly, 454. § McIntyre v. McClenaghan, 128. C. 185, 582 PROCEEDINGS OF CREDITORS. [cH. XLII. .§ 427. When to Come in.— Where a specific time is prescribed by the assignment for creditors to come in and assent to it, as par- ties or otherwise, and they have had due notice of it, they must comply strictly with the condition, and cannot come in after the expiration of the time limited! It has been held, however, that they are not, in such case, absolutely excluded; but they can only claim the benefit of any surplus which may remain after satisfying the claims of those creditors who have complied with the terms of the assignment.? In some states this is expressly provided by stat- ute. Thus, in New Jersey, if any creditor shall not exhibit his. claim within three months from the date of the assignment, he will be barred of a dividend, unless the estate prove sufficient after the debts exhibited and allowed are fully satisfied, or unless he shall find some other estate not accounted for by the assignee be- fore distribution, in which case, he will be entitled to a ratable pro- portion therefrom; but if he prove his claim at any time before a final dividend shall have been declared he shall share proportion- ately with other creditors in any dividend thereafter declared.* In Ohio‘ creditors are required to present their claims to the as- signee within six months after the publication of notice of his appointment. It has been decided that this provision does not bar the right of a creditor to present his claim and have it allowed after that period has elapsed, at any time before the settlement of the trust. He is entitled to his equitable share of the assets unad- ministered or not lawfully disposed of at the time when he pre- sents his claim.® In New York the county judge may, upon the petition of the as- signee, authorize him to advertise for claims;® and it seems that the assignee will not be discharged until he advertises.’ 1 Phoenix Bank v. Sullivan, 9 Pick. 410; Battles v. Fobes, 21 id. 239; Dedham Bank v. Richards, 2 Mete. 105. 2 De Caters v. Le Ray de Chaumont, 2 Paige, 490, 493. 3R. 8. (ed. 1878), p. 40, § 20; Sup. to Rev. (1886), p. 25. See Vanderveer v. Conover, 16 N, J. L. 487. The posting of aclaim on the last day for presenta: tion is not a ‘‘ presenting” or ‘‘exhibiting” within the meaning of the statute, where it does not, in fact, reach the assignee on that day. Ellison v. Lindsley, 33 N. J. Eq. 258, 4R. S. 1880, § 6352; 1 R. S. (1889), § 6352. 5 Owens v. Ramsdell, 33 Ohio St. 439; Lahm v. Johnston, 82 id. 590, See Dye v. Dye, 21 id. 86; Haskins v. Alcott, 18 id. 210, SLaws of 1877, ch. 466, § 4; 8 B.S. (7th ed.), p. 2277, § 4; 4 R. S. (8th ed.), pp. 2587, 2538. See Matter of Gilbert, 9 Daly, 479. A creditor who does not prove his claim is not entitled to a share in the estate. Matter of Burdick, 10 Daly, 49. 7 Matter of Groencke, 5 Abb. N. C. 298; Matter of Lewenthal, 10 Daly, 14. See Ludington’s Petition, 5 Abb. N. C. 807; Matter of Schaller, 10 Daly, 57; 5. c., 62 How. Pr. 40. §§ 428, 429.] How To COME IN— CONSEQUENCE OF COMING IN. 583 Where creditors were unable to comply with the terms of an assignment by coming in and accepting the benefit of it within a time prescribed, in consequence of want of notice, mistake or ac- cident, it was held in New York that they might come in after- wards; and some of the creditors being in Europe, six months was allowed for that purpose.! § 428. How to Come in.— Creditors may express their intention to come in under the assignment in several ways: as by becoming parties to the instrument; by giving notice to the assignee of their acceptance of it; and, less formally, by simply presenting their claims for payment or dividend.? Where the creditors are named in the assignment as parties, and they are required to execute it before they can take under its pro- visions, they must signify their assent in that mode, otherwise they cannot take under the instrument.’ But where they are not re- quired to be parties to the instrument, they may take the benefit of the trust by notice to the trustee within the time prescribed! therefor, if any, and if none is prescribed, then within a reasonable time, and before a distribution is made of the property.*. And-in any case where creditors choose to come in under an assignment, and claim the benefit of its provisions, they must comply with such terms or conditions as the debtor has thought proper to impose.° § 429. Consequence of Coming in.— By coming in under a vol- untary assignment the creditors express their election to accept of its provisions, and are considered as acquiescing in the disposition directed by the assignor to be made of the proceeds of the prop- erty. Thus, where some of the debts directed by the assignor to 1De Caters v. Le Ray de Chaumont, 2 Paige, 490, 493. See Raworth v. Parker, 2K. & J. 168. Andin Missouri it has been held that an assignee may subse- quently allow a demand which for good cause was not presented at the time set apart for that purpose, without notice to other creditors. Matter of Joseph: Uhrig Brewing Co., 11 Mo. App. 387, 2Cavanaugh v. Morrow, 67 How. Pr. 241; Wilson Bros. Co. v. Daggett,9 NY. Civ. Pro, 408; Matter of Kobi. 10 Daly, 42. 3Garrard v. Lord Lauderdale, 3 Sim. 1. Where the assignment provided for the distribution of the property among such creditors as should execute it before: a certain day, it was held that when the parties assumed to act under the instru- ment, although it was not actually executed by the creditors, the creditors might maintain an action after the expiration of fifteen years to have the trusts en- forced. Nicholson v. Tutin, 2 K. & J. 18. And see Broadbent v. Thornton, 4 De G. & S. 65; Lancaster v. Elce, 31 Beav. 325. 4Halsey v. Whitney, 4 Mason, 206, 214, 225; Acton v. Woodgate, 2 Myl. & K. 492; 2 Story’s Eq. Jur., § 1036a. 5 Jewett v. Woodward, 1 Edw. Ch. 195, 197: Sandford, J., in Litchfield v. White, 3 Sandf. 8, C. 545, 553, See Wallace v. Cumming, 27 La. Ann, 681. 584 PROCEEDINGS OF CREDITORS. [cH. XLII. be paid are usurious, other creditors claiming under the assignment cannot on that ground object to their allowance. “In the case of a voluntary assignment,” observes Chancellor Walworth, “ where the assignor creates his own trusts, a creditor who comes in to claim a share of the fund under it must be contented to take such share of it as the assignor intended to give him, and cannot claim that which was intended to be given to the assignees in trust for others. A creditor of the assignor, whether provided for by the assignment or not, who wishes to repudiate the trusts of the as- signment on the ground that they are illegal and a fraud upon the honest creditors of the assignor, must apply to set aside the as- signment as fraudulent and void against him as a creditor, instead of coming in under the assignment itself, as a preferred creditor or otherwise.” ! . _In a case in Tennessee? it was held that a beneficiary under a trust assignment for creditors, who is a party to a suit for the exe- cution of the trust, consenting thereto and accepting its benefits, cannot acquire a title to any of the property under a tax sale free from the trust. Another consequence of coming in under an assignment in cer- tain cases is that the creditor elects to take the provision made for him by the debtor in full discharge of his demands. This conse- quence, however, arises only in virtue of some express stipulation contained in the assignment to which the creditor has become a party (such as the stipulation for a release, which has been already considered), or some positive statutory provision. Thus, in New 1Pratt v. Adams, 7 Paige, 615. See Green v. Morse, 4 Barb. S. C. 332, 842; Jewett v. Woodward, 1 Edw. Ch. 195; Olmstead v. Herrick, 1 E. D. Smith, 310: Frierson v. Branch, 30 Ark. 453; Hatchett v. Blanton, 72 Ala. 423; Watts v. Eu- faula Bank, 74 id. 474; Appeal of Geo. F. Smith, 86 Mich, 149; 48 N, W. Rep. 864, In the case of Johnson v. Rogers, 15 N. B. R. 1, in the district court of the United States for the northern district of New York, where it appeared that the assignors called their creditors together and explained their financial situation, and after consultation, and with the advice and concurrence of many of the creditors, it was concluded that a general assignment, without preferences, should be made to three assignees, two of whom were to be selected by the cred- itors, and one by the assignor, and subsequently various creditors became dissat- isfied, and actions were commenced and judgments recovered against the assign- ors, it was held that, having concurred in the execution of the assignment, they could not be heard to allege that it was fraudulent because of facts of which they were fully informed when they gave their assent. Anda transferee of a claim from one of the creditors, where the transfer is colorable merely, will stand in no better position than the transferrer. But it seems that if the transfer were for a valuable consideration, the purchaser might prevail upon a title upon which the vendor could not. and the court may order an officer to take possession of the insolvent debtor’s estate before tae appointment of a trustee, and to sell the property. The trustee may, with the consent of the court, employ the assignor as agent to dispose of the estate under his direction.’ Trustees of an insolvent corporation may call for and collect unpaid stock. A trustee of an insolvent railroad corpora- tion may release, subject to any existing liens or title, to any pro- prietor of land, any right of way or other easement or incum- brance which said corporation may have in or upon the same, sub- ject to the approval of the probate court.? If any part of the said property be an interest in a vessel on a voyage at sea, the trustee may dispose of the same or complete the voyage." VI. Insolvent Debtors.— An insolvent debtor is entitled to his necessary household furniture, not exceeding three hundred dollars in value,” and a small allowance from his estate for the support of his family; and if he pays seventy per cent. of all his claims proved, and complies with the above provisions, he may obtain a full dis- charge.” 1Id., § 505. 2Td., § 504, 31d., § 503, 4Td., § 533, 5Id., § 520. 6Id., § 522, 71d, $521, 8Td., § 519, 9Td., § 517, 10Td., § 518, NId., $529. 12 1d., 8§ 580, 581. SYNOPSIS OF STATUTE LAWS. 619 DELAWARE. I. Execution of Assignment.— Deeds of voluntary assignment for the benefit of creditors must be properly acknowl :leed and filed in the office of the register of the chancery court.! The as- signee mnust file in the same office, within thirty days after the exe- cution of the deed of assignment, an inventory of all the property assigned, with an affidavit that the same is complete,? and take possession of the property not exempt from execution.’ II. Appraisers.— The chancellor then appoints two disinter- ested persons to appraise the estate, who are sworn and required to file their inventory and appraisement in the office of the regis- ter in chancery. The assignee shall then give bond, with warrant of attorney, and with sureties to be approved by the chancellor, in double the amount of the value of the estate assigned.‘ III. Accounting.— The assignee must account every year from the date of his bond before the register in chancery of the proper county until the trusteeship is closed and a final account rendered and approved. Any person interested may file exceptions to this account within one year from its date.® IV. Removal of Assignee.— The chancellor, upon cause shown, may remove an assignee and appoint another in his stead. Any order by the chancellor in the premises may be enforced by at- tachment and imprisonment.® VY. Insolvency Law.— Under the general insolvency law releases and preferences are forbidden. Rent is a preferred claim, and the trustee is vested by law with all the property of the insolvent debtor.’ DISTRICT OF COLUMBIA. In the District of Columbia it is provided by a late act of con- gress that the assignor shall annex to the assignment an inventory, under oath or affirmation, of all his property, and also a list of creditors, their residences and places of business, if known, and the amount of their respective demands; such inventory shall not be conclusive as to the amount of the debtor’s estate, but the title to any other property of the debtor, not exempt and reserved in the deed, shall vest in the assignee. The assignee shall be a resident of the District of Columbia, and every assignment shall be duly acknowledged and recorded. Preferences are void. Creditors may proceed in equity to attack the assignment as made to hinder, delay or defraud creditors. Writs of attachment may issue in cases of fraudulent assignment. (Act Feb. 24, 1893, 27 U.S. Stats., ch. 157.) 1R. C. 1874, p. 721. 2 Laws 1875, ch, 187. 2R. C, 1874, p. 722. 4 Laws 1885, ch. 187. 5Td. 6 Id, TR, C. 1874, pp. 722, 723, 62U APPENDIX I. FLORIDA I. How Executed.— In this state every voluntary assignment for the benefit of creditors must be in writing, and provide for the equal distribution of all the assignor’s property not exempt by law among his several creditors in equal proportions.' The as- signor must sign a written oath within not more than ten days after the assignment that he has assigned, and that his true inten- tion therefor was to place with his assignee all his property not exempt by law, to be prorated among his creditors.? Both the assignment and the oath must be recorded in the office of the clerk or clerks of the county or counties in which the property assigned is situated.® II. Bond.— The assignee must file in the office aforesaid a bond in double the value of the property assigned, for the faithful dis- charge of his duties, upon taking possession of the property.* III. Notice of the Assignment.— Immediately upon taking possession of the property the assignee must publish in a newspa- per in the county where the assignee lives, if he lives in the county where the assigned property is situated, and if he does not, then in the county wherein a portion of the same is, once a week for four consecutive weeks, to all the creditors of the maker of the assignment, and calling upon them to file with him within sixty days, if such creditors reside in the state, or, if out of the state, four months, sworn statements of their claims against the assignor, and shall mail to each of them known a copy of the newspaper.° IV. Disposition of the Property.— The assignee shall then pro- ceed to dispose of all the property to the best interests of all of the parties concerned, at either public or private sale, as to him may seem best, and recover at law or otherwise all the debts due the assignor; he may employ an attorney to prosecute such claims.’ VY. Reports.— Semi-annually, as long as is necessary, the as- signee shall file his sworn statement in the office of the clerk of the circuit court of all of his transactions as assignee.’ VI. Discharge of Assignee.— After the final settlement of the assignee he may, after publication for thirty days in a newspaper in the county where the notice of his appointment was published, 1R. S. 1892, § 2307. 2Id., § 2308, 31d., § 2809. 4Id., § 2310, 5Id., § 2311. 8Id., § 2812. Assignee may sue at law in his own name. Robinson v. Nix, 22 Fla. 821. Assignee cannot make a defense not open to assignor. Einstein v. Shouse, 24 Fla. 490. TR. S. 1892, § 2313, SYNOPSIS OF STATUTE LAWS. 621 apply by petition to the judge of the circuit court for his discharge, which the court may grant, if satisfied that he has complied with all his duties as assignee.! GEORGIA. I. Resulting Benefit.— Every assignment or transfer by an in- solvent debtor of real or personal property or choses in action of any person, either in trust or for the benefit or in behalf of cred- itors, where any trust or benefit is reserved to the assignor, or to any person for him, is void. So is every conveyance by an insolv- ent debtor made in fraud or without a valuable consideration.? II. Preferences.— A debtor may prefer one creditor to another, and to that end may dona fide give a lien by mortgage or other legal means, or he may sell in payment of the debt, or give collat- eral security, provided the surplus is not reserved for his own bene- fit or that of any other creditor to the exclusion of other cred- itors.2 No payments shall be made by the assignee to preferred creditors until thirty days after the assignment has been filed with the clerk of the superior court.‘ III. Schedule and Bond.— The assignor must attach to his as- signment a complete schedule, on oath, showing the names, the amounts due and the residences of each of his creditors. Upon ap- plication, in writing, to the judge of the superior court of the county in which the assignee resides of one-fourth in number and one-third in amount of the creditors, or upon any one creditor showing cause therefor, the assignee may be required to give a bond to be ap- proved by the judge. Upon failure to make the bond the judge may appoint a successor, requiring from him like security.® IV. Fraud.— The fraud of the assignor alone makes the assign- ment void.$ VY. Judgments.— No assignment shall be set aside except upon direct proceedings for that purpose, and no creditor can obtain any 1Id., § 2314, 2Code 1882, § 1952. 3Id., § 1953. 4Laws of 1885, p. 101, § 3. 5Code 1882, § 195, a, bh Where the schedule of creditors did not appear as full, and the affidavit did not so state, but stated it was just and true, the assign- ment was held void. Fort v. Martin Tobacco Co., 77 Ga. 111. See Albany, etc. Co. v. Southern Ag. Works, 76 id. 185, Under the act of October 17, 1885, it is not necessary to state in the deed of assignment that the assignors are “ fail- ing or insolvent debtors.” Stultz v. Fleming, 83 Ga. 14. The acts of 1881 and 1885 will be strictly construed against assignors and assignees and liberally in favor of creditors. Turnipseed v. Schaefer, 76 Ga, 109; Crittenden v. Coleman, %7 id. 293, 6 Acts of 1885, p. 101, § 5. 622 APPENDIX I. preference or priority of payment out of the assets on any judg- ment rendered after the filing of the bill when the assignment is set aside as void.! IDAHO. Insolvent Debtors.— This territory has passed a general insolv- ency law, upon compliance with which an insolvent debtor may be fully discharged.? It provides that an insolvent, owing three hundred dollars or more, may by petition, with inventory annexed, to the district judge of his district, set out the facts that compelied him to make a surrender of his property. The judge may then order that proceedings be stated and the creditors cited by publica- tion, to show cause why the assignment should not be made.* At a meeting of the creditors an assignee is elected;* or upon their failure to elect an assignee the judge may appoint one.’ All cred- itors whose debts are duly approved share pro rata without pref- erence.’ ILLINOIS. I. Execution of.— In this state every assignment for the bene- fit of creditors must be acknowledged ‘ and recorded in the county where the assignor resides, or where the business assigned was carried on, and in every county where an interest in realty .con- veyed in the deed is situated.® If. Inventory and Bond.— The assignor must annex to his as- signment an inventory under oath of his estate, to his best knowl- edge, which must contain a list of his creditors, their residences and places of business, if known, and the amount due each; but the in- ventory shall not be conclusive as to the amount of the property, as all the property of the assignor not exempt by law vests in the assignee without any inventory.? The assignee shall also forth with file a full inventory and valuation of the estate under oath, so far as the same has come to his knowledge, and enter into a bond in double the amount of the valuation, to be approved by the court where the assignment and inventory are filed. III. Assignee. The assignee must at once give notice for six weeks in some newspaper published in the county; if none, in the IT. 2R. S. 1887, § 5875. 3Id., §§ 5880, 5881. 4Id., § 5882, 5Id., § 5883, 6Id., § 5893, ‘ 7 Zimmerman v. Willard, 114 IIL 864, 8R. 8, 1889, p. 118, § 1. 9Id., pp. 118-120. SYNOPSIS OF STATUTE LAWS. 623 nearest county, and mail a notice direct to each creditor of whom he shall be informed, directing that all claims against the assignor be presented under oath or affirmation within three months there- after! And in three months he shall file with the clerk proof of the publication, a complete list of all the creditors, their places of . residence, the dates of notices mailed to them, and the number of ' claims presented? The assignee and the administration of the as- signment are at all times under the supervision of the county court.’ The assignee may sue in his own name, and may dispose of all real and personal estate assigned. No sale of any real estate belonging to the assigned estate shall be made except on notice published, as in cases of sales of real estate, unless the county court direct otherwise.‘ IV. Claim.— Within thirty days after the above report is filed, any creditor, by himself or attorneys, may file exceptions to the claim of any other creditor, giving bonds for costs, and then the claim must be proved.’ Claims not presented within three months, as above provided, cannot participate in the dividends until after the payment in full of all claims presented within that time, and his and all claims for wages entered within three months before the assignment, and filed within this time, shall be preferred.? In all other cases preferences are forbidden.’ Claims not due shall be paid, but a reasonable abatement shall be made for interest.’ V. Vacancy in Office of Assignee.— If an assignee die before closing the trust, or is removed for cause, the judge of the county where the assignment is recorded may, upon application of an in- terested party, appoint another in his place.® VI. Discontinuance of Proceedings.— All proceedings under assignments may be discontinued upon the assent in writing of the debtor and a majority of his creditors in number and amouut, and 1Td., p. 118, § 3. 21d., p. 119, § 4. 31d., p. 120§ 8; p. 121, § 14; Freydendall v. Baldwin, 103 Ill. 825; Baker v. Barber, 16 Ill. App. 621; Traver v. Rogers, id. 373; Messinger v. Yager, id. 260; Colby v. O’Donnell, 17 id. 478; Field v. Ridgley, 18 id. 55; Preston v. Spaulding, id. 841; Frank v. Moses, 4 N. E. Rep. 250. But courts of equity still have juris- diction of a creditor’s bill to set aside a fraudulent assignment, or preference consummated before the making of the assignment. Strong v. Goldman, 8 Biss. 552; Colburne v. Shay, 17 Ill. App. 289; Hanchett v. Waterbury, 6 N. E. Rep. 23. And other courts have jurisdiction in a proper case. Rumsey v. Lown, 20 Fed. Rep. 558. 4R.8., p. 120, § 11, 5Id., p. 119; McCracken v. Milhous, 7 Ill. App. (Brad.) 169. ®R.8., pp. 119, 120. 7Id., p. 121, § 13. ' 81d., p. 120, § 10. 9Id., p. 121, § 12, 624. APPENDIX I. in such cases all parties are remitted to the same right and duties as existed at the date of the assignment, except so far as such estate shall have been administered and disposed of." INDIANA. I. Who May Make.—Any failing debtor may make a general assignment in trust for the benefit of his bona fide creditors, and may select his trustee, unless his trustee is opposed by fifty per cent. in amount of his creditors, who may, upon petition to the court, have another trustee appointed in his stead. Any failure to comply with the provisions of the law in this state upon this sub- ject shall render the assignment void? II. How Made.— The assignment must be in writing, signed, ac- knowledged and recorded within ten days in the register’s office of. the county where the assignor lives. The indenture must disclose, all the real estate assigned, and contain a schedule enumerating all, personalty assigned, under oath, with the statement that nothing had been reserved or transferred except by the assignment; that no asset had been mortgaged or judgment confessed to defraud or delay creditors. 11d., pp. 121, 122. 2R. 8. 1892, § 6911, act of March 6, 1891, amending act of March 5, 1859, This. statute does not prevent a preference of a bona fide debtor. Wilcoxon v. Annesley, 23 Ind. 286; Cushman v. Gephart, 97 id. 46; Redpath v. Tutewiler, 109 id. 248; Schwab v. Lemon, 111 id. 54. But the assignment cannot provide that after cer- tain creditors are paid in full others shall be paid ratably. Henderson v. Pierce, 108 Ind. 462. Nor that certain creditors shall be paid, the balance excluded, and the surplus of the proceeds returned to the assignor. Thompson v. Parker, 83 Ind. 96. In an assignment of all the assignee’s property for the benefit of all his’ creditors, he cannot, under the statute, prefer any creditor, but the statute does not apply to partial assignments (Grubbs v. Morris, 103 Ind. 166); nor to any as- signments for the benefit of a part of the creditors. Cushman v. Gephart, 97 id. 46. The statute does not suspend the creditor’s right to sue for a personal judg- ment against the assignor. Lawrence v. McVeagh, 106 Ind. 210. An assignment. of all the debtor’s property to pay certain creditors to the exclusion of others, and return the balance to the debtor, is fraudulent and void under the statute. Thompson v. Parker, 83 Ind. 96. A sale by the assignee of real property is a judi- cial sale within the meaning of the statute in reference to the inchoate interest. of married women. Wright v. Gelvin, 85 Ind. 128; Lanson v. De Bolt, 78 id. 563. But a voluntary assignment by the husband is not such asale. Hall v. Howell, , 92 id. 408, There is no substantial conflict between the statute and the provisions. of the code relative to the appointment ofreceivers, and both should stand, al- though the same purpose may be accomplished under either. Pressley v. Lamb, 4N. E. Rep. 682. , 3R, S. 1888, § 2663. Actions on the bond of the assignee must be brought in the name of the state of Indiana upon relation of the party interested. Jack- son v. Rounds, 59 Ind. 116. The schedule is not part of the indenture of assign- ment, and need not be recorded. Black v. Weathers, 26 Ind. 242, An assign- SYNOPSIS OF STATUTE LAWS. 625 III. Trustees — Appraisement.— Within fifteen days thereafter the trustee must file a copy of the assignment and schedule in the office of the clerk of the circuit court, and before acting must make oath that he will faithfully execute the trust, showing the kind and value of the property delivered to him, and file a bond in double the amount thereof, to be approved by the clerk.! He must then publish notice of his appointment for three consecutive weeks in a newspaper in that county, if there be any, if not, by written notices posted in five public places, and by publication in the nearest news- paper, and within thirty days he must file a complete inventory of all the property that has come into his hands, or of which he has knowledge, and thereafter additional inventories if other property comes to his knowledge. In twenty days after the filing of the inventory he must file an appraisement, made by two reputable householders of the neighborhood, under their oaths,’ who shall fix the value of each article,‘ and if the assignor is a resident house- holder of this state they shall set off to him six hundred dollars’ worth of real estate or personal property, as he may select.’ The trustee must then proceed to collect the rights and credits of the assignor, and thirty days after the notice to sell the personalty for cash, or on a credit of not more than twelve months, with security, at auction, and report the same to the clerk. The court has super- visory power over the entire estate, and may upon petition of the trustee, or a creditor, make all the necessary orders for the interests of creditors before sale. Thé court may authorize or ratify private sales, or extend the time on sales not exceeding two years. Within six months after accepting the trust the trustee is required to report, under oath, showing cash on hand and amount collected, claims pre- ment purporting to carry all the property of the assignor is not rendered invalid by the omission of property. Seibert v. Milligan, 110 Ind. 106; Ellenberger v. Same, id. 599; Hassele v. Seyforth, 105 Ind. 535. Title to real estate does not pass to the assignee until the deed of assignment has been recorded. New v. Reissner, 56 Ind. 118. If real estate lies in diferent counties the assignment should be re- corded in each of the counties, Switzer v. Miller, 58 Ind. 561. 1R, S. 1888, § 2664. 21d., § 2667. 31d., § 2668. 4Id., § 2669, 51d.,'§ 2670; O’Neil v. Beck, 69 Ind. 239. 6R. S. 1888, § 2671. A sale by the assignee of real property is a judicial sale within the meaning of the statute in reference to the inchoate interest of married women. Wright v. Gelvin, 85 Ind. 128; Lanson v. De Bolt, 78 id. 563. But a voluntary assignment by the husband is not such asale. Hall v. Howell, 92 id. 408. There is no substantial conflict between the statute and the provisions of the code relative to the appointment of receivers, and both should stand, although the same purpose may be accomplished under either. Pressley v. Lamb, 4N. 5, Rep. 682, 40 626 APPENDIX I. sented, and those allowed and disallowed.! The trustee may compro- mise any debt due the assignor if fo~ the best interest of the parties ;? and may reserve such compensation for services as allowed by the judge of the court. The judge of the circuit court may remove a trustee for good cause shown, and shall, whenever a vacancy occurs, fill the same by appointment.* IV. Fraud.— Any creditor, or the trustee, may by verified peti- tion obtain an order of the court for the examination of the as- signor, or any person, corporation or association to whom a fraud- ulent transfer is believed to have been made, and all persons alleged to have been concerned in such transfer, and compel them to answer all pertinent questions concerning the disposition of the property of the assignor; and the assignor may be compelled to answer all question concerning the management of his business and affairs for the six months previous to his assignment, and shall be compelled to produce all books, papers and accounts in reference to his business from that time.® V. Liens.— Where there are liens on the said property it may be sold by the trustee subject thereto, or the court may order them paid if the general fund would be materially increased thereby.® VI. Surviving Partner.— A surviving partner may make an as- signment of the partnership effects for the benefit of creditors.’ VII. Claims.— Where a trustee has reported a list of the credits, those disallowed and those objected to by a creditor the clerk shall set for trial at the next term of the court. Persons filing claims with the trustee must make oath that they are just and lawful, and no part of the same are usurious interest, or if so, what part, and such amount shall be deducted from the claim before it is allowed. The trustee may administer the oath.® VIII. Distribution.— Whenever the assets are shown to be suffi- cient to pay a dividend of ten per cent. a distribution may be had upon application of any one interested ;° and after the first report has been confirmed, if there be no contest of the claims the court shall order the trustee to pay to the clerk the money in his hands 1R. S. 1888, § 2672, 2Td., § 2678. 3Id., § 2682. 4Id., § 2680; O'Neil v. Beck, 69 Ind. 239; Jackson v. Rounds, 59 id, 116; Craven v. Chambers, 56 id.5; Marsh v. Vawter, 71 id. 22; Robbins v. Magee, 76 id. 881; New v. Reissner, 56 id. 118; Wright v. Thomas, 1 Fed. Rep. 716. SR. S., § 6912. 6R. S. 1888, § 2674, 71d., § 2688. 8Id., §§ 2673, 2677, 9Id., § 2671, SYNOPSIS OF STATUTE LAWS. 627 for pro rata distribution, deducting proper expenses and allow- ances for the trustee.' IX. Appeal—Fees.— Any party may appeal to the supreme court as in other civil actions.’ The clerk’s fees are the same as in other actions; appraisers’ fees one dollar per day, and the trustee’s remuneration is allowed by the court.? INDIAN TERRITORY. Voluntary assignments for the benefit of creditors made in the Indian Territory are regulated by the laws of the state of Ar- kansas. IOWA. I. How Executed.— In this state preferences in general assign- ments for the benefit of creditors are prohibited.* And the assent of creditors is presumed.? The assignor must annex to his assign- ment an inventory, under oath, of all his estate, to the best of his knowledge, and a list of creditors, and the amount of their respect- ive demands. Such inventory is not conclusive. Every assign- ment must be recorded as are conveyances of real estate in the county where the assignor resides, or where the business has been ‘earried on.$ II. Assignees.— The assignee shall forthwith file with the clerk ‘of the district court of the county where the assignment is re- corded, a true and full inventory and valuation of the estate, under oath, so far as the same has come to his knowledge, and there- after from time to time, if need be." He must give bond to the 1Id., § 2675. 21d., § 2681. 3Id., § 2682. 4McClain’s Ann. Code 1888, § 8292, A transfer of property by the debtor -without fraud in payment of or security for a debt prior to the assignment will be valid, even though made in contemplation of insolvency. McKindley v. Nourse, 67 Iowa, 118; Van Patten v. Burr, 52 id. 518; Hutchinson v. Watkins, 17 id. 475; Fromme v. Jones, 13 id. 474; Whittaker v, Lindley, 14 id. 598; Lyon v. Mcllvane, 24 id. 9; Davis v. Gibbon, 24 id. 257; Farwell v. Howard, 26 id. 881. A partial assignment in good faith preferring certain creditors is not void. Sampson v. Arnold, 19 Iowa, 480; Gray v. McCallister, 50 id. 497; Cole v. Deal- ham, 13 id. 551; Loomis v. Stewart, 75 id. 387. 5 McClain’s Ann. Code 1888, § 3293. The assent of the creditors to the general assignment for their benefit will be presumed. Price v. Parker, 11 Iowa, 144. But not to a conditional assignment. Williams v. Gartrell, 4G. Gr. 287. 6 McClain’s Ann. Code (1888), § 3294. An assignment for the benefit of cred- itors, though unacknowledged and unrecorded, takes priority over a judgment rendered after its execution. Munson v. Frazer, 73 Iowa, 177. See American v. Frank, 62 id. 202. | 7McClaiu’s Ann. Code 1888, § 3304. 628 APPENDIX I. clerk of the court, for the use of the creditors, in double the amount of the estimated value of the property, for faithful per- formance of the trust.! The assignee must then publish notice of the assignment for six weeks in a newspaper in the county, if any, and if none, then in the nearest county thereto, and mail a notice to each creditor of whom he shall be informed, notifying the cred- itors to present their claims, under oath, to him within three months.2, Three months after first publishing notice the assignee must report and file a list, under oath, of all claims presented, with a statement of the claims, and an affidavit of publication notice and a list of those creditors notified by mail; but no assign- ment shall be declared fraudulent or void for want of a proper list or inventory.’ An assignee has power to sue in his own name, and recover and dispose of all of the property assigned, but no sale of real estate shall be made without publication, as in sales of real estate under execution, unless the court direct otherwise.‘ III. Death, etc., of Assignee.— If the assignee die before closing his trust, or fail for twenty days after the assignment to file an inventory and valuation and give bonds, the court, on the applica- tion of any person interested, shall appoint some person to execute the trust, who shall be subject to the same requirements and have the same powers as his predecessor. If the assignee is wasting or misapplying the estate the court may require additional security, or appoint another in his -place.6 On application of two-thirds of the creditors in number and amount the court shall remove the assignee named by the debtor, and appoint one approved by such creditors.® IY. Claim.— Within three months after the filing of the list of creditors by the assignee any person interested may file exceptions. to the demand of any creditor, and the clerk shall forthwith give the creditor notice, returnable at the next term.’ Any creditor may claim debts not due as well as debts due, but on the former a reasonable abatement shall be made when they are not drawing interest. All creditors who do not file their claims in three months from publication of notice of the assignment shall not participate in a dividend until after the payment in full of all claims presented within that time and allowed by the court.® 1Td., § 3295. 2Td., § 3296, 31d., § 8803, 4Td., § 3306, 5Id., § 3807, 6Td., § 8295, 7Id., § 8298, 8Id., § 8305, : SYNOPSIS OF STATUTE LAWS. 629 V. Dividends.— The assignee shall from time to time make pro- portionate dividends among the creditors,! and the court shall order to be paid in full, as preferred claims, the earnings of any creditor for personal services to the assignor within ninety days prior to the assignment.? If the assignee be unable to locate any creditor or person authorized to receive the dividend due, such assignee shall report that fact to the court, which may, at its discretion, order the distribution of the unclaimed dividend among the other creditors.’ VI. Reports — Settlements.— The assignee shall dispose of the personal property and divide the proceeds within six months and real estate within one year from the date of the assignment, and make full settlement within that time, unless the court for good reason extend the time. The assignee shall at all times be subject to the order and supervision of the court or judge! The court may also, upon application of the assignee or any creditor, compel the assignor to appear in person and answer, under oath, questions as to his estate, and the names and residence of his creditors and their places of business, and may compel the delivery to the as- signee of any property embraced in the assignment. KANSAS. I. How Executed.— Every voluntary assignment for the benefit of creditors must be without preferences and proved, acknowl- edged, certified and recorded as are conveyances of real estate.® A schedule of the liabilities of the assignor, with the names of the creditors, the amount and character of their debts, their postoffice addresses, so far as known, verified by affidavit, must be filed on the day of executing the assignment in the office of the district court of the county in which the assignment is recorded.’ II. Notice of the Assigument — Election of Assignee.— Within two days after the filing of the schedule the clerk shall mail to the postoffice address, as given, of each of such creditors whose claim exceeds ten dollars in amount, notice of the assignment, giving the names of the assignor, of the assignee and of all the creditors, and amounts as stated in the schedule, and the date of the assignment ; and shall name a day, not less than twenty and not more than 1Id., § 8299. 21d., § 3300, 31d., § 3301, 4Td., § 3302. ‘$Id., § 3303, 6G. S. 1889, § 842; Tootle v. Coldwell, 80 Kan. 125, 71d, § 383. bw 630, APPENDIX I. thirty days from the date of the assignment, on which the credit- ors or their authorized attorneys may meet at the clerk’s office to choose an assignee; and until after such meeting the assignee named in the assignment shall exercise no powers thereunder other than the safe keeping and control of the property assigned." If a majority in interest of the creditors whose claims exceed tev: dollars be present, either in person or by attorney, an assignee may be elected by a majority in number and value of such creditors.’ IIl. Clerk’s Report.— The clerk shall forthwith file in his office- a report of such meeting, giving the names of the creditors attend- ing or represented, and the amounts of their respective claims. An assignee thus chosen must, within five days after being noti- fied of his election, express in writing, filed with such clerk, his ac- ceptance of the trust, and file his bond as provided by law. If no choice is made by the creditors, or if the assignee chosen fails to accept, the judge of the district court, or, in his absence from the county, the probate judge, shall appoint an assignee. All elections of assignees shall be subject to be set aside by the judge of the. district court upon exceptions taken at the time of making the same by one-third in value of the creditors. Such exceptions must. be reported by the clerk to the judge, who shall determine the same in a summary manner and confirm the choice, or set it aside and appoint some suitable person as assignee, who shall at once file his written acceptance with the clerk, and the assignee named in the assignment must turn over to him all the assigned property.® IV. Inventory of Assignee.— Within thirty days after the execution of the assignment the assignee must file in the office of the clerk of the district court of the county in which the assignor, or, if there be more than one, in which any of them resides, an in- ventory, under oath, of the property, effects and things assigned, except for good cause shown a longer time be allowed by the judge of the court. And if afterwards other property come to his. knowledge he must file a schedule of it and the appraisers must. value it.5 Y. Appraisers.— The district court or the judge, or the clerk thereof in vacation, shall appoint two or more disinterested per- sons to appraise the property so inventoried,’ and they, or a ma- jority of them, after qualifying on oath or affirmation, shall value 1Td., § 884, 21d., § 885. 31d., § 886. 41d., §§ 348, 344, 5 Id., § 849; Dudley v. Whiting, 10 Kan. 47; Marshall v, Shibley, 11 id, 1143 Case v. Ingersoll, 7 id. 367. 6G. S, 1889, § 345, SYNOPSIS OF STATUTE LAWS. 631: and file their report and their oath of office in five days after its completion.! VI. Assignee’s Bond.— The assignee must give a bond, with two or more sufficient sureties, in double the amount of the appraised value of the estate, which must be approved by the court or judge, or the clerk in vacation, and fiied and recorded in the court where the inventory is filed? If his bond is rejected the court shall order him to fite another and sufficient bond, which shall relate’ back to the date of the assignment, and if he fail to do so in such’ time as the court directs, not exceeding thirty days, his authority. as assignee stands revoked.’ Any person injured by a breach of. the condition of the bond may sue thereon in the name of the state to his use.‘ VII. Sale of the Property.— The court or judge may order the: sale of all the assigned estate, either for cash or upon such rea- sonable credits as shall appear most advantageous to the parties interested.® VIII. Adjusting Accounts.— The assignee shall appoint a day: within six months after the date of the assignment when, at the county seat of the county where the inventory is filed, he will pub-. licly adjust and allow demands against the estate of the assignor.® This notice shall be by publication in some newspaper in the county, or if there be none, in one nearest the place where the in- ventory is filed, for three months, the,last insertion to be at least four weeks before the appointed day, and also, when the residence: of the creditor is known, by letter addressed at least three weeks . before the appointed day. The assignee shall attend in person and remain two consecutive days, and the hearing of any demand. may, for good cause shown, be continued for such time as is deemed - right.’’ The assignee may administer oaths to creditors and exam- ine them touching any claim exhibited to him for allowance; ® and such evidence shall be required as is necessary to establish demands of a similar character in suits on the contract in the district courts.® From the decision of the assignee on any claim presented an ap-. peal may be had to the district court,” which shall be taken and. 1Id., § 347. 21d., S$ 850, 352, 853, 31d., 88 354, 855. 4Id., § 356, 51d, §875. 6 Id., § 361. TId., § 362, 8Id., § 863. 9Id., § 364, 10Td., § 865; State v. Kansas Ins, Co., 32 Kan. 655, See Sams v. Binns, 88 id, 199, — 632 APPENDIX I. held in the same manner as if from a justice’s court,' and if a judg- ment is rendered in favor of the claimant it shall be certified by the clerk of the assignee who shall allow the same.? A claim of an assignee against the assigned estate may be allowed upon his petition to the court.3 IX. Assignee — Settlement.— The assignee must exhibit, on oath, a statement of the accounts of the trust, with proper vouchers, to the district court, at its first regular term after the end of one year from the execution of the assignment, and at the correspond- ing term of said court every year thereafter, until the estate is fully settled. Ifthe assignee fail to make such report within the first three days of the term, upon application of any person interested, the court will cite him to appear and exhibit such statement, and upon his failure to do so may dismiss him from the trust. Notice of the exhibition and filing of such accounts shall be published in a newspaper at the expense of the trust fund.» The assignee may, upon the request of any proper person, be required to exhibit the condition of the assets.’ X. Power of the Court.— The court having jurisdiction may require an assignee to file an inventory or give a bond.’ Or for cause shown may remove an assignee® and appoint another in his place,? and order all the books, papers, effects, moneys and evi- dences of debt to be delivered to his successor." XI. Distribution.— As soon as practicable, and not exceeding one month after the time of the allowance of demands, the as- signee shall, after reserving proper fees, costs and expenses and demands legally continued, pay upon the demands allowed as much as the means in his hands will permit, and thereafter a divi- dend of five per cent. as often as it can be paid. Notice of distri- bution shall be published for one week in the same newspaper that contained the notice of the allowance of demands, or insome other paper if the court, or the judge thereof in vacation, so direct. If the assignee fail to make such payment for more than three days after the same has become due and been demanded, he shall pay any person aggrieved five per cent. per month interest on the sum due such person." 1G, S, 1889, $8 366, 377, 2Id., § 368. 3Td., § 369, 41d., $957. 5Td., § 859. 6Td., § 360. TId., §§ 370, 871, 8Td., § 870. DId., § 373. WW Id, § 374, Id., §376, SYNOPSIS OF STATUTE LAWS. 633 XII. Discharge of Assignee.— When the assignee has per- formed the trust he may, after publishing notice for at least six weeks before the time, file a verified petition in the court where the inventory is filed for a discharge from his trust. If within one week thereafter no person interested file written special objections to such discharge, the court shall refer the application to a com- missioner, and if proper it will be allowed.! XIII. Appeals.— Appeals may be taken to the supreme court as in original actions within sixty days after final decision.? XIV. Compensation.— Clerks shall receive such fees as are al- lowed by law for like services in other cases and for services for which no fees now authorized by law are applicable; and for the services and expenses of the assignee the judge of the district court shall, upon application, make proper allowances.’ Appraisers shall each receive $3 per day for attendance.! KENTUCKY. I. How Executed.— Deeds of trust for the benefit of creditors must be acknowledged and approved, and lodged for record.® II. Assignee.— The assignee shall not proceed to execute the trust until he qualify on oath in the county court, and give a bond to be approved by the court, payable to the grantor, or any bene- ficiaries in the conveyance, upon which bond any person injured may sue, The assignee must within sixty days thereafter return to the court an inventory of all that has come to his hands, or been conveyed by deed to him, and make a report of sales within two years from the time of qualification. Both the inventory and the report shall be recorded.® III. Preferences.— Under the general statutes of Kentucky, in- corporating the provisions of the acts of 1856 and 1862, assignments made in contemplation of insolvency, with the intent to give a pref- erence, inure equally to the benefit of all creditors in proportion to the amount of their respective demands, including those which - are future and contingent.’ IV. Control of Court.— All such transfers as are declared to in- ure to the benefit of creditors are subject to the control of a court of equity upon the petition of any person interested, filed within 11d,, §§ 379, 380, 2Td., $382. 31d., § 387, 1Td., § 348. 5G. S. 1887, ch. 24, § 11; ch. 109, a, § 1. 6Id., ch. 109, a, §§ 1, 2, p. 1251. 7Id., ch. 44, art. II, § 1, p. 671; Drake v. Ellman, 80 Ky. 438, 6384 APPENDIX I. six months after the transfer is lodged for record or the delivery of the property transferred, and the court will compel the delivery of the property to a receiver, and its equal distribution among creditors.' LOUISIANA. I. Insolvency Law.— In Louisiana the laws in relation to the cession of property? afford to debtors such facilities in giving up their property for the benefit of creditors that there is little or no inducement in that state to make assignments; and the courts are. rarely called upon to act on any but those made in other states.’ II. Mortgages.— Mortgages given within three months previous to the failure of the debtor are presumed fraudulent and void, and so the inscription of a judgment against the debtor within ten days preceding his failure.‘ MAINE. Insolvency Law.— A general insolvency law was passed in this state in 1878, and it has been held that so far as debtors who are insolvent are concerned the general assignment act was repealed by the insolvency law.® MARYLAND. I. Insolvency Law.— In this state there is a very elaborate sys- tem of insolvency laws.§ II. Assignments.— Common-law assignments may be made, and: every trustee of such assignment shall file with the clerk of the court where the deed is recorded a bond in double the amount of the estate, to be approved by the clerk; until then no title passes to the assignee. The amount of this bond may be reduced by the circuit court of the county, or the superior court of the city of Bal- 1Jd., ch. 44, art. II, § 4, p. 675; Roberts v, Phillips, 11 Bush, 11; Linthicum v. Fenley, id. 181; Whitehead v. Woodruff, id. 209: Thompson v. Heffner, id. 353;. Ebersole v. Adams, 10 id. 88; Cecil v. Sowards, 10 id. 96; German Security Bank v. Jefferson, 10 id. 326; Cogar v. Stewart, 78 Ky. 59; Dobyns v. Dobyns, 79 id. 95; McKee v. Scober, 80 id. 124. 2Voorhies’ Rev. Civ. Code, 1889, arts. 2170 to 2184. 3 Garland J., United States v. Bank of the United States, 8 Rob. (La.) 404, 4Voorhies’ Rev. Civ. Code, 1889, arts. 8359 to 8861. And so with all fraudulent. preferences. Id., arts. 1988, 1984, 5 Laws of 1878, ch. 74; amended L. 1879, ch. 154; L. 1880, ch. 149; L, 1881, ch. 15; L. 1883, chs. 55, 180; L. 1885, chs, 316, 319, 828; L. 1887, chs. 32, 68, 182; L. 1889, chs. 162, 182, 212, 218, 236; L. 1891, chs, 46, 64, 101, 109, 118; L, 1893, chs, 240, 246, 278, 312. : 6 Pub. Gen. Laws, 1888, art. 47. SYNOPSIS OF STATUTE LAWS. 635° timore, if deemed proper.’ If the trustee fail to give bond within three months the clerk shall notify the court or judge thereof, who shall appoint another trustee,? who shall comply with the above requirements.’ It is the duty of the assignee within six months after giving the bond to make report of the whole amount of the trust estate and of the disposition of the same, and he may be compelled to appear by summons and attachment.! MASSACHUSETTS. I, Insolvency Law.—In Massachusetts there is an insolvency law similar in many provisions to the United States bankrupt act of 1867.5 II. Assignments.— By a later act it is provided that where a voluntary assignment by an insolvent debtor provides for a dis- tribution of the proceeds of his estate in substantial conformity with the provisions of the insolvency law, and where a majority of the unsecured creditors assent to it in writing, all proper acts of the trustee thereunder shall be valid notwithstanding subsequent. proceedings in insolvency by or against the debtor. The trustee shall immediately and before acting give written notice of the as- signment, by mail or otherwise, to all known creditors. MICHIGAN. I. How Executed.— A general assignment for the benefit of creditors must be acknowledged, and convey all the property of the: assignor, not exempt from execution, without preference; and the. original or a duplicate, accompanied by an inventory, a list of the creditors and a bond of the assignee shall be filed in the office of the circuit court clerk of the county where the assignor resides, or, if he is not a resident, in the county where the assignee resides ; and if neither are residents in the county where the property is. principally located, within ten days after the assignment is. made. No title to the trust property passes to the assignee until the bond 1Td., §§ 205, 206. It has been held that the place of recording the assignment does not rest in the discretion of the trustee, and that such deed comes within and is governed by the general registration laws of the state, which require every conveyance of real estate to be recorded within six months from its date (art. 21, § 18). Stiffel v. Barton, 73 Md. 408. -2Pub, Gen. Laws, 1888, § 207. 3Id., § 208. 41d., §§ 209, 210. 5P, &., ch. 157; Sup. to P. S, 1888, pp. 34, 162, 195, 216, 265, 352, 438, 450, 786. 6P, §., ch. 157, § 46; Sup. to P. S. 1888, pp. 587, 588, ie 636 APPENDIX I. is filed and approved by the clerk. Between the date of the as- signment and the time provided for filing the bond no attachment or execution levied shall be valid or create any lien.! Every such assignment confers upon the assignee a right to recover all the property or rights or equities in property which have been recov- ered by any of the creditors of the assignor.’ II. Inventory.— The inventory must be a detailed statement, as near as may be, of the general description, value and location of the property and rights assigned. When the assignment is made by one or more persons engaged in business, and the assigned property consists wholly or partly of goods, wares, merchandise, materials, fixtures and furniture, or any of them, used by such person, the inventory shall also contain, as near as practicable, a statement of the original cost of such goods, wares, merchandise, fixtures and furniture. The list of creditors shall, as far as the as- signor can state, contain the name and postoffice of each, amount of each debt, consideration, when contracted, and all securities and value thereof held by each creditor for the debt. The inventory and list of creditors must be sworn to. The assignee’s bond shall be to the assignor for the joint and several use of himself and the creditors, with sufficient sureties, in double the amount of the value of the property as shown by the inventory.’ III. Notices — Dividends.— The assignee upon completing the inventory must publish notice in a newspaper in the county in which the business was carried on, fixing a time and place fora sale of the property, within not less than ten nor more than twenty days from the date of the notice.‘ The assignee must also within ten days after receiving the trust notify each creditor, either per- sonally or by mail, that creditors are required to prove their debts within ninety days thereafter, by proof of claim to be filed in the clerk’s office, or in default the estate will be distributed, within ten days thereafter, without reference to claims not proved. At least ten days before making any dividend the assignee must send to each creditor whose name is on the schedule, and to each cred- itor who has proved his claim, a list of all claims proved. It must 1 Howell’s Stat. 1882, §§ 8739, 8740. Statutes re-enacted by acts of 1889, ch. 215. The act of 1879 applies only to common-law assignments and not to other proceedings which are claimed to be fraudulent as to creditors. Rollins v. Van Baalen, 56 Mich. 610. A mortgage executed contemporaneously with an as- signment for the benefit of creditors and destined to give the mortgagees a preference is void under the statute. Burnham v. Haskins, 79 Mich. 37. But see Neumann v. C. & H. Min, Co., 57 id. 896. The act of 1889 was held to be not retroactive in its operation in the case of Old Nat. Bank v. Joslin, 81 Mich. 418, 2 Acts of 1889, ch, 215, § 3. 3 Howell’s Stat. 1892, § 8740, 4 Acts of 1889, ch, 215, § 3. SYNOPSIS OF STATUTE LAWS. 6387 contain the name and address of each creditor and amount claimed. No claim shall be entitled to a dividend unless embraced in the list. The assignee shall retain enough funds to pay contested claims and claims proved but not on the list. No dividends shall be paid on a claim while being contested.! IV. Reports of Assignee.— Within three months after receiv- ing the trust, and quarterly thereafter, the assignee shall file im the clerk’s office a report containing a statement of all property and moneys received by him, and the disposition thereof, attach- ing his vouchers.? VY. Appraisement.— The assignee shall also, as soon as practi- cable, cause an appraisement of the property to be made by two disinterested competent persons, under oath, and file the same with the assignment.? VI. Claims.— Every proof of a claim must be sworn to; state the actual amount unpaid and owing; the actual consideration; when contracted; when the same became due or will become due; whether any securities are held therefor; whether any and what payments have been made thereon that the sum claimed is justly due: and that neither the claimant nor any one for him has re- ceived any security or satisfaction whatever than that set forth.4 The assignee may contest any claim. Any creditor may, by writ- ing, request the assignee to contest any claim, and the service of such request stays the payment of the claim. If the assignee fails to contest such claim, the creditor by a petition, on oath, may ob- tain an order from the circuit court in chancery requiring him to do so. The contest is instituted by service of the note personally or by mail upon the creditor, stating that his claim will be pro- tested. Upon proof of such service being filed with the clerk he enters such contest on the law side as a cause by the creditor against the assignor. The cause is tried as other suits at law, al- lowing a jury if demanded, and pleadings and amended pleadings to be filed. The court shall have the same power over the verdict as in other suits at law, except that no execution shall be awarded or issued in favor of the claimant. The court awards the costs as seems to it just.é VII. Removal of Assignee.— Upon the petition of a majority in number and value of the unsecured creditors who have proved their claims, the court shall remove an assignee and appoint one 1 Howell’s Stat. 1882, § 8742. 21d., § 8743. 31d, 41d., § 8745. 51d., § 1846, ©Id., § 1847. 638 APPENDIX I. designated by such creditors, and the assignee so removed shall lawfully vest the trust estate in his successor, and remain liable on his bond for acts done.! VIII. Sale of the Property.— At the time and place men- tioned in the above notice the property shall be offered for sale by the assignee. Ifa sum equal to one-half of the property, as shown by the inventory, be received, it shall be sold to the highest bidder, otherwise the sale shall be postponed not exceeding thirty days. The entire property may be sold together or separately, as the majority in interest of the creditors may request, and if no re- quest is made the assignee may sell as he deems proper. All sales must be for cash.? IX. Compensation of Assignee.— The assignee must give notice that he intends to apply for an allowance for compensation for disbursements or expenses by service personally or by mail on each creditor. The notice must contain a statement of the dis- bursements and expenses and the amount intended to be applied for as compensation, and the time when the application will be made, which time must not be less than ten days from the date of service. _ XX. Circuit Court.— The circuit court in chancery of the proper county shall have supervisory power over all matters, questions and disputes arising under an assignment, except as otherwise pro- vided, and may, on application of the assignee or any person interested, make all proper orders for the management and dispo- sition of the said property, the distribution of the assets and avails, and recover all property claimed by third persons, and from time to time give new bonds or sureties.! MINNESOTA. I. Execution of.— Every assignment by a debtor of the whole or any part of his estate for the benefit of creditors is void unless it is made to an assignee who is a resident and freeholder of this state, and in writing subscribed by the debtor, acknowledged as a deed, and filed in the office of the clerk of the district court for the county wherein the debtor resides, or wherein the business has been principally carried on.5 1 Acts of 1889, ch, 215, § 1. 21d., § 3. 3 Howell’s Stat. 1882, § 8748, 41d., § 8749, 5R. S. 1881, ch. 41, § 28; L. 1876, ch. 44, § 1; Williams v. Frost,.29 Minn, 255, This provision does not apply to foreign assignments. In re Page-Sexsmith Lumber Co., 31 Minn. 186; 16 N. W. Rep. 700. ‘ SYNOPSIS OF STATUTE LAWS. 639 II. Inventory.— Within ten days thereafter the debtor shall file with the clerk aforesaid an inventory, under oath or affirmation, containing a full and true account of his creditors, their places of residence, if known, the sum owing to each, and the nature and consideration of the debt, and where it arose, whether upon writ- ten security account or otherwise; a statement of any existing judg- ment, mortgage, collateral or other security for its payment; and a complete inventory of all the debtor’s estate, both real and per- sonal, in law or in equity, all incumbrances thereon, vouchers and securities relating thereto, and the value of each item thereof, to the best of his knowledge and belief.' III. Bond.— Before the assignee shall act, and not later than five days after the filing of the inventory, he must file with the clerk a bond to the state, with two or more freeholders and res- idents of the state as sureties, to be approved by the judge, and in double the value of the estate as shown by the inventory, or by the affidavit of the debtor if the bond be given before the inventory is made, for the faithful and just performance of the trust. The judge may at any time thereafter require additional sureties if he deem those given insufficient. Any creditor may for cause, upon leave of the court, sue upon this bond.” IV. Notice.— The assignee shall forthwith publish notice in one or more newspapers in the county, if any; if none, then in the near- est county, if any; if none, then in the city of St. Paul, and also mail a notice to each known creditor.’ V. Claims.— No claim, or any part of it, except debts due to the United States or the state, or for taxes or assessments against the debtor, shall be paid unless verified by oath or affirmation of the parties making it. After the payment of all necessary costs, charges and expenses of the trust, the claims of creditors shall be paid in full in the following order: 1. All debts owing to the United States, the state, and all taxes and assessments levied and unpaid. 2. Debts owing for wages to servants, laborers, mechanics and clerks for services performed for the debtor within three months 1R, 8, 1881, ch. 41, § 24; L. 1876, ch. 44, § 2. Where an assignment purports to convey all the property of the assignor the schedule does not limit the opera- tion of the deed, nor ‘does the omission to record the schedule impair its opera- tion. Strong v. Lynn, 88 Minn. 315;.37 N. W. Rep. 448. 2R. S. 1881, ch. 41, § 25; L. 1876, ch. 44, § 2, as amended 1877, ch. 67, § 1. If the bond is not given within the time limited the assignment becomes void, Kingman v. Barton, 24 Minn. 295. See Prosser v. Hartley, 85 Minn. 840; 29 N. W. Rep. 156. 3R. S. 1881, ch. 41, § 26; L. 1876, ch. 44,§4. Such publication is not conclusive notice to a debtor of the assignor. Graham v. Evans, 39 Minn. 382; 40 N. W. Rep. 368 640 APPENDIX I. next preceding the date of the assignment. If the trust property is insufficient to pay these claims in full they must be paid pro rata. The verification of such claims must show the character of the service, and that the same was performed within the time men- tioned. 8. All other claims shall be paid in full if there be left funds sufficient; if not, then pro rata; but every secured creditor must first exhaust his security, or surrender or release it to the as- signee! VI. Assignee — Distribution.— The assignee shall be considered as representing the rights and interests of the creditors as against all transfers of property by the debtor which would be held to be fraudulent or void as to creditors; and shall have all the rights of the creditors to avoid such transfers.? At least twenty days before the assignee shall make any distribution, he shall file with the clerk aforesaid a true statement under oath of the verified claims filed with him, and their amounts and nature; and as often thereafter as any creditor shall in like manner present his claim.’ VII. Power of the District Court.— All proceedings shall be subject to the supervision of the judge of the district court, who may, upon petition of one or more of the creditors, require an as- signee to report ; and may order distribution; or for cause shown remove an assignee, compel him to deliver all the trust property, and appoint another in his stead. When an assignee so removed shall have accounted and turned over to his successor all the prop- erty, or where the assignee shall have fully performed his trust, or the assignment shall have been declared void, he may be fully discharged by the judge after publication.’ VIII. Insolvent Law.— The act of March 7, 1881,° as amended by the act of April 28, 1889, is in effect a bankrupt law.’ 1R, S. 1881, ch. 41, § 28; L. 1876, ch. 44, § 5, as amended by the act of 1877, ch. 67, § 2. 21d., § 27; L. 1877, ch. 142, § 1. 31d., § 82; L. 1876, ch. 44, § 1, as amended by the act of 1877, ch. 67, 3 9. 4 Laws of 1885, ch. 82. 5R. S. 1881, ch. 41, §29; L. 1876, ch. 44, § 6, as amended by the act of 1877, ch. 67, § 3. 6 Laws of 1881, ch. 148, This statute is in effect a bankrupt law, and is the only insolvent law now in force in the state. Donohue v. Ladd, 31 Minn. 244. The Jaw is constitutional. Weston v. Loyhed, 30 Minn. 221; Matter of Nesbit, 4 McCrary, 505. See on the construction of this statute, Matter of Mann, 32 Minn. 60; Lord v. Meachen, id. 66; North Star Boot and Shoe Co. v. Lovejoy, 33 id. 229; Simon v. Mann, id. 412; Bennett v. Denny, id. 530; First Nat. Bank of Fargo v. Briggs, 26 N. W. Rep. 6; Petition of Lundeke, 25 id. 602; Johnson v. Bray, 28 id. 504; May v. Walker, id. 252. 7 Laws of 1889, ch, 130, oe SYNOPSIS OF STATUTE LAWS, 641 MISSISSIPPI. I. To be Administered in Chancery.— Assignments for the ben- efit of creditors may be executed as heretofore; but where the property assigned exceeds in value the sum of one thousand dol- lars, the assignee or trustee shall, before he enters upon the dis- charge of his duties, after taking possession, and within twenty- four hours thereafter, file a petition in the chancery court in the county of the assignor’s residence or place of business, or, if he has no residence or place of business in this state, then in the county of the residence of some of his creditors where the property, or some of it, may be, for the administration of the trust. The assignor and all his creditors must be made parties to the peti- tion. The assignee then, upon approval of his bond, shall become the receiver of the court, like other receivers in equity. II. Bond.— The assignee or trustee must file a bond with his petition, to be approved by the clerk, in a penalty equal to the value of all property assigned, and two hundred and fifty dollars additional, with at least two sureties, conditioned for the faithful administration of his trust. III. Inventory.— The assignee shall, and as speedily as may be, within ten days after the filing of his petition, prepare and filea perfect inventory of the effects assigned; and if afterwards other property conveyed by the deed of assignment shall come into the possession or knowledge of the assignee, he shall make supple- mental inventory thereof speedily, and within ten days there- after. The time for making either the first or supplemental inven- tory may for cause be extended by the court or the chancellor in vacation.’ IV. Schedules.— With every general assignment there shall be filed, unless the data appear on the face of it, at least two of the schedules. One of them, aschedule of liability, must set forth, so far as known to the assignor, the name and postoffice address of every one of his creditors, and the sum due each of them, how each debt is evidenced, the rate of interest, and if in any way the debt was usurious the fact must be stated, and the consideration of each debt, and in case of renewal the history of the transaction must be traced to the original consideration. Any security of the creditors must be shown. The other schedule of assets must describe the property conveyed, and give its location and value; both sched- ules —if the data be on the face of the deed, then the assignment — must be under oath of the assignor. A general assignment which 1 Ann. Code 1892, §§ 117, 119, 21d., § 118, 3Id., § 120, 41 642 APPENDIX I. does not comply with these provisions shall be void as to all pref- erences contained in it. V. Rights of Creditors.— Any creditor may file a cross-petition against the receiver, making the assignor or other person defend- ant, and show that the assignment is fraudulent and ought not to be enforced, and if successful he shall have priority over all other creditors and a lien from the filing of the cross-petition. A cred- itor may demand a personal decree against the assignor for the amount of his debt; but priority in such decrees shall not affect the distribution? VI. Claims.— It shall be the duty of all creditors to establish their claims to the satisfaction of the court, and any creditor may controvert the claim of another.’ MISSOURI. I. Execution of.— Every voluntary assignment by a debtor in trust for the benefit of his creditors shall be approved, acknowl- edged and recorded as are conveyances of real estate. Every pro- vision for a preference is void. All debts, including judgments con- fessed thirty days previous to the assignment, shall be paid pro rata." II. Inventory.— With the assignment deed there must be filed for record by the assignor, his agent or attorney, a verified state- ment, in writing, of the nature and value of the effects assigned.® Within fifteen days after the execution of the assignment the as- 1Td., § 124. 21d, § 121. 31d., § 123. +R. S. 1889, § 424. Prior liens remain valid. Sampson v. Shaw, 19 Mo. App. -275; Drew Glass Co, v. Baldwin, 27 id. 45. The assignment law is not a bank- rupt law. MHargadine v. Henderson, 97 Mo. 375. This statute does not avoid the assignment which gives the preference. The assignment will stand, but it will inure to the benefit of all the creditors, as well those not named as those named. Crow v. Beardsley, 68 Mo. 435. It is not necessary to mention in the deed the name of a creditor or the amount of his claim to entitle him to share in the pro- ceeds of the estate. The statute supersedes provisions in the deed in conflict with the statute. Jeffries v. Bleckman, 86 Mo. 350. The statute applies to in- struments by which the debtor surrenders to his creditors all dominion over his property. A distinct and special transfer by a debtor before he has surrendered such dominion, even though in contemplation of a general assignment, is valid. Simpson v. Shaw, 19 Mo. App. 274. The United States courts have jurisdiction of cases arising under the statute, and have treated various conveyances as assign- ments within the prohibition of the statute as to preferences. Clapp v. Ditman, 21 Fed. Rep. 15; Perry v. Colby, id. 737; Kerbs v. Ewing, 22 id, 693; Freund v. Jaegerman, 26 id. 812. Fora history of the Missouri statutes on assignments, see Shultz v. Sutter, 2 Mo. App. 187, 5R. 8. 1889, p. 432. SYNOPSIS OF STATUTE LAWS. 643 signee is required to file an inventory, under oath, of the property, in the clerk’s office of the county in which the assignor resides, or, if there be several, in which any one of them resides, unless longer time be allowed by the judge for good cause shown.! An assignee failing to thus exhibit the estate, or to at any time give any other reasonable information to any person or his agent en- titled to demand such, or to make his regular reports, or who has become insolvent, or is about to remove from the state, shall upon petition of a person interested be compelled by the court to appear and perform its orders, or be dismissed from the trust.? If after the first inventory has been filed other property conveyed by the assignment come to the possession or knowledge of the assignee, his duty thereto, and that of the court or judge, and that of the ap- praisers, shall be the same as that to the property mentioned. Omis- sion of the assignee to file an inventory cannot render the deed of assignment inoperative. III. Appraisement.— Then two or more disinterested and com- petent persons are required to be appointed by the court, or judge or clerk in vacation, to appraise the things so inventoried, and they, or a majority of them, shall make the appraisement, and file the same, and their oath of office, with the clerk, within five days after its completion? The appraisers shall each receive three dollars per day for their attendance.’ IV. Bond.— Within three days after the filing of the deed and statement the assignee must file in the clerk’s office a bond, with two or more sureties to be approved by the court, or judge or clerk in vacation, in double the amount of the appraised value of the estate; and if afterward the appraisement of the estate be greater than the amount specified in the statement, then the as- signee must give a like bond in double the amount of the appraised value of the estate.’ If the bond be rejected the court shall order the assignee to give a sufficient bond; and if he fails to give such bond within such time as the court directs, not exceeding thirty days, his authority to act stands revoked.’ Any person injured by a breach of the condition of the bond may sue thereon in the name of the state to his use.® 1Id., 88 425, 426. 21d., $$ 489, 451, 452, 458, 459, 31d., $481. Omission of an assignee to file an inventory cannot render the deed of assignment inoperative, Hardcastle v. Fisher, 24 Mo. 70; Duval v. Raisin, 7 id. 449, 4B. S. 1889, S$ 427, 428, 429. 51d., § 430. 6Id., $$ 482, 434, 485. TId., § 486. 8Id., § 488, 644 APPENDIX I. V. Notice to Creditors — Adjusting Claims.— The assignee shalt appoint a day, within three months after the day of the assign- ment, when he will publicly adjust and allow demands against the estate, at the county seat where the inventory is filed, or such other place in the county most convenient to all the parties in in- terest, and where any court of record may lawfully be;! and notice to this effect must be published in some newspaper in the county, and, if there be none, in the one nearest the place where the inven- tcry is filed, for four successive weeks, the last insertion to be at least one week before the appointed day; and also, whenever the residence of the creditor is known to the assignee, he must notify him by letter addressed at least four weeks before the appointed day. The assignee must attend at the place in person, and remain for two days, from Q o’clock A. M.to5o’clock P.M. The assignee may administer all necessary oaths to debtors, creditors and wit- nesses; and may examine them touching any claim exhibited to him for allowance. The hearing on each demand may, for good cause shown, be continued to such time as is deemed right. Any cred- itor who fails to present his claim during this time on account of sickness, absence from the state, or other good cause, may, at any time before the declaration of a final dividend, file and prove his claim, and the same may be allowed, and the remaining dividends paid thereon as on all other claims.’ VI. Proof of Claims— Appeal.— The assignee shall require such proof of the justness of demands as is required on contract in the circuit court,’ and his decision shall be final, unless an appeal to the circuit court is asked, which shall be allowed upon the ap- pellant or some one for him making and filing an affidavit that the appeal is not filed for vexation or delay, but because affiant be- lieves that the appellant was prejudiced by the decision, and giving such time as the assignee may require.* In the circuit court the case is heard and determined in the same manner as if it came up by appeal from the judgment of a justice of the peace. An appeal may be taken from the judgment of the circuit court.’ Judgments in favor of any claimant shall be certified by the clerk to the as- signee. If the assignee have a demand against the assignor he may upon petition to the circuit court have a temporary assignee ap- pointed, who shall upon oath pass upon the same, and report his conclusion to the court, and if allowed it will be ordered paid.’ If 11d., § 442, 2Id., $8 443, 444, 8Td., § 445, 41d., 88 446, 447, 51d., § 448, 61d., § 449, 71d., § 450. SYNOPSIS OF STATUTE LAWS. 645 the temporary assignee appointed fails to act or report, then it shall be the duty of the court to hear evidence touching his action upon the claim, and if proper allow the same.! VII. Accounting of Assignee.— The assignee must exhibit on oath, and file a statement of the accounts with vouchers, to the circuit court at its first regular term after the execution of the as- signment, unless for good cause postponed, and thereafter at each term until the trust is closed.?, The court shall direct the clerk to publish notice of the exhibits and filing of such accounts in such newspaper as it shall appoint, at the expense of the trust fund. VIII. Sale of the Property.— The circuit court, or the judge thereof in vacation, shall order a sale of the property, either for cash, or if to the best interest of the parties, on credit with security, and on fixed terms. Before selling any real estate the assignee must give bond, with at least two sureties, to be approved by the court or judye, in an amount equal to its value. IX. Distribution.— As soon as practicable, and not exceeding one month after the allowance of demands, and as often thereafter as a dividend of five per cent. can be paid upon the demands allowed, after reserving enough for proper fees, costs, expenses and demands whose trial is continued, the assignee must pay dividends upon the claims allowed; and notice thereof must be published for one week in the same newspaper in which was published notice of the allow- ance of demands, or in such other newspaper as the court may direct. If the assignee fail to pay over a dividend for three days after it has become due and been demanded by the person entitled thereto, his agent or attorney, he shall pay to the person aggrieved five per cent. a month interest on such sum.® Dividends not called for by the owners within one year after the date of the allowance may, before final settlement by the assignee, and upon order of the court, be paid by him into the state treasury, for which he shall obtain two receipts; one he shall file with the state auditor, and the other with the clerk of the court. When the owner of the undistributed dividend appears and claims the money paid into the treasury, the court will grant him a certificate under its seal, upon presentation of which he shall receive a warrant on the treasurer for the amount.® X. Compromise of Debts. —If it appear to the best interest of the estate, the court, or judge in vacation, may direct the assignee to compromise or sell doubtful debts or discharge any vested or 11d, § 464, 21d., § 439. 31d., §§ 440, 441. 4Td., § 456. 5Id., § 457. SLaws of 1891, p. 44. 646 APPENDIX I. contingent right in or to the estate, under the direction of the court, and the assignee shall report his proceedings to the first term, and within the first three days of the court; provided, any creditor may file his objections to such report within three days after it is filed, if the term shall continue so long; if not, within such time as the conrt may direct; and such objections shall be heard and deter- mined without delay. The assignee shall give such notice as the court may direct of his intent to apply for such order.! XI. Removal and Appointment of Assignees.— The court or judge having jurisdiction may, for cause shown, remove an assignee, and appoint another in his place, and require the delivery of all the books, papers, effects and evidences of debt to the new assignee.? XII. Discharge of Assignee.— When the assignee becomes satis- fied that it is no longer advantageous to the creditors to keep the assignment open, he may file a verified petition in the circuit court for a discharge from his trust, having published his intention to make such application for six weeks in the newspaper aforesaid. _ If within one week after the filing of the petition no person inter- ested file specific written objections to a discharge, the court shall refer the application to the commissioners of the court, or commis- sioners appointed for the cause, who shall examine the merits of the application and report to the court with all convenient speed.* If objection be made to the application the court shall consider and determine the same ;‘ and to the decision an exception may be taken and appeals on writs of error taken to the supreme court, or the St. Louis court of appeals, as the case may be, within sixty days after the final proceedings.® MONTANA. In this state there has been no special legislation on the subject. of voluntary assignments for the benefit of creditors. NEBRASKA. I. How Executed.— No voluntary assignment for the benefit of. creditors is valid unless it conform to the statutory provisions on this subject in this state.6 Such an assignment must convey all the assignor’s property not exempt from execution, describing the real 1R, S. 1889, § 465, 21d., $$ 452, 455, 31d., $$ 460, 461. 41d., § 462, 5Id., § 463, 6(. 8, 1891, ch, 6, § 1. SYNOPSIS OF STATUTE LAWS. 647 estate as in ordinary conveyances,’ and be made in the county in which the assignor resides;” the assignment must be in writing, executed and acknowledged like a deed, and filed for record in the clerk’s office of the county in which the assignee resides, within twenty-four hours after its execution. Within thirty days there- after it must be filed for record in every other county in this state in which there shall be situate real property conveyed therein. A failure to file for record within that time avoids the deed as to the property situated in the county where such failure took place; and if such failure is due to the negligence or misconduct of the as- signee, he shall be liable to creditors for the amount of the prop- erty as to which such assignment shall be avoided.’ The sheriff must immediately take possession of the said property, and shall be liable on his official bond for the faithful execution of the trust. II. Inventory.— Within ten days after the assignment is made the assignor must file in the county judge’s office of the county in which the assignee resides, to be recorded, a complete inventory, under oath, showing all the creditors, their places of residence, if known; if not known that fact must be stated; the amount, nature and consideration of each debt or liability, and how it arose; every existing mortgage, judgment or other security against the assignor ; all the assignor’s property at the date of assignment not exempt from execution, its kind, value, where situated, incumbrances thereon, and all vouchers and securities relating thereto.’ The as- signee must file additional inventory of after-discovered property. III. Meeting of Creditors.— Within fifteen days after the re- ceipt of the inventory the county judge must publish notice to the creditors to assemble at a fixed time and place and choose an as- signee to succeed the sheriff. At such meeting the assignee must be chosen by a majority in value and one-third in number of the creditors, and poly those creditors who have verified their debts on oath can vote.’ The meeting can be adjourned from day to day for three days, and in case of failure to choose the sheriff re- mains assignee.® IV. Inventory — Appraisement.— Immediately after the méet- ing the sheriff and the assignee, if any is chosen, shall make and return to the court an inventory and appraisement of the entire estate assigned.® 1fd., 85 2, 3, 4. 21d., $5. 31d., § 6. 41d.,§7. See Hulan v. Hoagland, 10 Neb. 611; Stout v. Rapp, 17 id. 462. 5C, 8. 1891, ch. 6, § 8 61d, § 36. TId., § 10. 8Id., § 11. 91d., §12. ie os 648 / APPENDIX I. V. Bond.— Within forty-cight hours thereafter the assignee must give bond in double the amount of the appraised value of the whole estate, with one or more sureties, to be approved by the county judge, for the faithful discharge of his duties as assignee. If he fails to give the bond as required his election becomes void." Then the sheriff must quitclaim the real estate, and deliver the personal property to the assignee chosen.” VI. Claims.— All claims must be filed at a time to be fixed by the county judge, not less than thirty days nor more than sixty days after the meeting of the creditors, of which time notice must be published, and the assignor or any creditor may file an objec- tion, defense, set-off or counter-claim. Any claim, objection, set- off or counter-claim not filed as required shall be forever barred from a dividend under the assignment.’ On the next day after the time for filing, all uncontested claims shall be allowed, and pleadings, as in other cases, as near as practicable, shall be made on contested claims, and afterwards, not exceeding sixty days, they shall be tried.‘ From final judgment an appeal may be taken in twenty days.® VII. Sale.— Immediately upon the return of the inventory and appraisement, and approval of the assignee’s bond, the assignee must advertise and sell the assigned estate, in all respects as though the same had been taken on execution issued out of the district court. Sales of real estate must be confirmed by the court. The county judge, upon the request of the creditors, may order the personal property to be sold at private sale, within sixty days, but unless the creditors consent in writing it must not be thus sold for less than its appraised value. The assignee must report all sales to the county court, and make a like report between the first and fifth of every month.’ VIII. Distribution of Punds.— After three months from the date of the inventory and appraisement, or sooner, and as often as the assignee shall be in possession of sufficient funds, the county court shall order a distribution of all the money in the assignee’s hands, and enforce the same by attachment if necessary.2 When the entire estate is converted into money final distribution shall be ordered and enforced in like manner.? Moneys shall be dis- tributed in the following manner: 1. Fees and allowances to the 1Id., § 13. 2Id., §15. 3Id., §16, 4Td., § 17. 5Td., § 19. 6Id., § 20. TId., § 21. 8Id., $22. 9Id., § 23. SYNOPSIS OF STATUTE LAWS. 649 assignee and officers. 2. Public taxes and assessments. 3. Pre- ferred claims. 4. Balance among the creditors pro rata.’ Divi- dends in favor of contested claims shall be retained by the assignee until the litigation is determined.? Claims not due shall be paid, but a rebate shall be made for interest. IX. Discharge of Assignee.— When proceedings under the trust are closed the court may order a final distribution, and upon proof by the assignee that he has obeyed all orders for distribu- tion, he may be discharged.‘ X. Power of the County Judge.— The county judge may at any time cite and compel by attachment, if necessary, the assignee to account; and upon complaint from any creditor may, for cause shown, remove the assignee and restore the sheriff.6 Full author- ity over the assignment is vested in the county court.6 The county court may, upon application of the assignee or any creditor, com- pel the assignor to appear and answer under oath any question relative to his estate and creditors and the completion of the in- ventory.” XI. Void Assignments.— Every assignment shall be void as to the creditors if it prefer one set or class of creditors over another, except a preference to a person for not more than one hundred dollars for labor or wages; or require any creditor to release or compromise his demand, or reserve any interest in the assigned property to the assignor before his existing debts are paid; or con- fer any power upon the assignee different from the provisions of the law in this state; or if the assignor fails to make the inventory required; which, however, he may be compelled to do. But an omission of property does not avoid the assignment.’ XII. Fraudulent Conveyances.— If the assignor shall have made any fraudulent disposition of his property, directly or indi- rectly, for his benefit, the assignee shall, upon the direction in writing of a majority of the number of the creditors owning two- thirds in amount of all the approved claims, maintain an action to have the same adjudged void.° XIII. Partnership Assignments.— A copartnership may as- sign without including individual property of the partners.” 1Id., § 24. 21d., § 26, 31d., § 87. 41d., $§ 26, 27, 5Td., § 81. 6Id., § 89. 1Id., § 34, 5I1d., § 29. 91d., § 30. WId., § 82 650 APPENDIX I. XIV. Rights of Creditors. The existence of an assignment, nor the fact that any creditor has proved his claim against an assigned estate, shall not affect his right to pursue any remedy in law or equity; nor shall the proving of a claim against either an individual or a copartnership estate affect the right of a cred- itor to attack the validity of an assignment.! XY. Suits by Assignee.— The assignee may sue in his own name, execute and give releases, acquittances and discharges, and generally do all things that the assignor could have done.’ XVI. Assignment by Insolvent.— If any person insolvent, or in contemplation of insolvency, within thirty days before making an assignment, makes a sale, transfer or other conveyance of any of his property toa person who then has reasonable cause to believe him to be insolvent, or in contemplation of insolvency, and such sale, assignment, transfer or other conveyance is made with a view to prevent the property from coming to his assignee in insolvency, or to defeat the object of, or in any way impair, hinder, impede or delay the operation and effect of, or to evade any of said provis- ions, the sale, assignment, transfer or conveyance shall be vaid, and the assignee may recover the property with the assets of the insolvent. And if such sale, assignment, transfer or conveyance is not made inthe usual and ordinary course of business of the debtor, that fact shall be prima facie evidence of such cause of belief.? XVII. Preferences.— Ifa person insolvent, or in contemplation of insolvency, within thirty days before the making of an assign- ment, with a view to give a preference to a creditor, procures any part of his property to be attached, sequestered or seized on exe- cution, or makes any payment, pledge, assignment, transfer or con- veyance of his property, the person receiving the same having reasonable cause to believe such person to be insolvent, or in con- templation of insolvency, and that such payment, pledge or trans- fer is made in fraud, the same shall be void, and the assignee may recover the property.! XVIII. Penalty.— For fraudulent evasions of the statute laws in this state on this subject,one may be punished by imprison- ment.° 1Id., $33. 21d,, § 88, 31d., § 42, 4Td., § 43, 5Id., § 45. SYNOPSIS OF STATUTE LAWS, 651 NEVADA. I. Insolvent Law.— In this state the “act for relief of insolvent debtors and protection of creditors” provides for a discharge of the insolvent debtors, and repeals all prior acts on the subject.! NEW HAMPSHIRE. I. How Executed.— Any inhabitant of this state who is unable to pay his debts may make an assignment for the benefit of his creditors of all his estate not exempt from attachment to the judge of probate for the county in which he resides, and to such assignee and his successor as the judge may appoint. If real estate is con- veyed the assignment must be executed like deeds of land, and the instrument shall be construed to convey all the debtor’s estate not exempt. The debtor shall at the same time deliver to the judge a schedule, on oath, containing a full and true list of the names of his creditors, and their places of residence, if known.? II. Warrant to Sheriff— Notice to Creditors.— If the judge be satisfied that the applicant is not able to pay his debts in full, he shall issue a warrant to the sheriff, or one of his deputies, direct- ing him forthwith, as messenger, to take possession of the debtor’s estate not exempt, and of all the deeds, books of account and papers, and to keep the same until the appointment of an assignee, to send written notices, by mail or otherwise, to all creditors upon the debtor’s schedule, and to publish and give such other notices as the judge may direct. The notices shall state that the warrant has been issued; that payment of debts and transfers of property to or by the debtor are forbidden; the time and place of a meeting at which an assignee may be nominated by creditors whose claims have been allowed.’ III. Schedules.— Within ten days after the beginning of pro- ceedings the debtor must file a schedule of his creditors, on oath, stating the place of residence of each, if known; the amount, nature and consideration of each debt, and any security for its payment; and a schedule of his estate, giving its location and description, and the date, amount, consideration and nature of all incumbrances thereon. If schedules are not furnished within the above time they may be delivered thereafter before the meeting of the creditors ;* 1G, S. 1885, §§ 8845-3894, 4912, 4913; amended by act of February, 1887 (L. 1887, ch. 92), amended by act of March, 1887 (Id., ch. 114). 2P, S, 1891, p. 559, 31d, 41d., p. 560, ‘ 652 APPENDIX I. and the debtor may amend his schedule at any time within three months.! IY. The Property.— The debtor must deliver to the messenger, on demand, all his assets, and, if there be living animals or perish- able property, the judge may order the same to besold. The judge may direct the messenger to collect any debts due the insolvent, by suit if necessary. The messenger must file his account in the register’s office, and deliver all property to his successor. Y. Proof of Claims.— Claims due and those not due, allowing a rebate for interest, may be proved by a statement in writing, signed by the creditor, or his agent having knowledge of the facts, setting forth on oath the claim, its consideration and security held there- for, and any credits that should be allowed, and that the claim is justly due from the debtor to the creditor; if founded upon a writing, that writing should be attached to the proof.’ In case of mutual debts and credits a balance only should be allowed, and pref- erences must be surrendered. All claims must be proved within two months from the beginning of the proceedings, but any claim not proved before that time may be proved before the final divi- dend. The proof of a claim shall not affect any dividend already made, but in any subsequent dividends the claim if allowed shall be a preferred claim for dividends equal to those which have been pre- viously made upon like claims. All objections to claims shall be made within four months from the beginning of the proceedings, except in cases of claims proved after the time limited, in which cases objections may be made within thirty days after they are proved, All hearings on the claims shall be had within five months of the beginning of the proceedings, or, in cases of claims proved after the time limited, as soon as may be after objection is made. Allowed claims may be reheard at any time before the final divi- dend. Asurety or grantor may prove his claim in the name of the creditor if the creditor neglects to do so.* VI. Assignee.— The judge shall appoint as assignee the person nominated by a vote of two-thirds in number and a majority in value of the creditors who have secured an allowance of their claims, and are present at the meeting in person or by attorney or by proxy. No creditor can be assignee, and no preferred creditor can vote. The court may at any time remove the assignee for cause, and fill all vacancies. If the assignee accept the trust he must file a bond within five days after notice of his appointment. Proceed- 11d., p. 563. 21d., p. 560. 3 Mandatory and prospective only. Nichols v. Cass, 65 N. H. 218, See Tucker v. Beacham, id. 119. 4P, 8, 1891, pp. 560, 561. SYNOPSIS OF STATUTE LAWS. 653 ings in insolvency dissolve all attachments of the debtor’s property made within three months before the beginning thereof, and all fraudulent pledges, mortgages, conveyances, sales and transfers within that time, except that existing liens for labor or material shall be preferred! ; VII. The Debtor.— The debtor may be required by the court, upon reasonable notice, to appear and be examined on oath by the © assignee or any creditor touching his estate in insolvency, and wit- nesses may be summoned. The death of the debtor after the issu- ance of the warrant does not affect the continuance of the proceed- ings.? VIII. Accounting and Dividends.— Within six months from the beginning of the proceedings, or at such time as the judge may direct, the assignee shall file in the office of the register of probate an account of his receipts, payments and charges. The judge shall appoint a time and place for consideration of the same, and notify the debtor and creditors thereof. Within eight months from the beginning of the proceedings, and prior if proper, the judge shall order dividends to be paid on allowed claims in the following order of priority: 1. Debts due the United States, and all taxes. 2. Wages due an operative. 38. Clerk or servant, not exceeding $50, for labor performed within six months prior to the beginning of the proceedings. 4. Taxable costs in any shit begun in good faith in which an attachment is dissolved, and insolvency proceed- ‘ings. 5. Preferred claims. 6. Generalclaims. Further dividends shall be made as occasion requires.’ IX. Discharge ot the Debtor.— After eighteen months from the beginning of his proceedings, the debtor may petition the court to be discharged. A creditor may file written objections thereto. Taxes and debts created by the debtor’s fraud as a public officer, or in any fiduciary capacity, shall not be discharged as to the debtor, or as to his surety therefor. A discharge shall not be granted to a debtor whose assets do not pay fifty per cent. of the claims allowed, which are not entitled to priority, unless the assent in writing of two-thirds in number and value of the creditors who have such claims, and whose claims have been allowed, is filed. A debtor shall not be discharged if he has sworn falsely in the pro- ceedings, fraudulently concealed any of the property, or within six months before the beginning of the proceedings obtained anything of value with intent to not pay for it, or used any other fraud therein. Ifa creditor refuses to accept the dividends decreed to 11d., p. 562. 21d., p. 663, 31d,, p. 563, 654 APPENDIX I. him they shall be paid to the judge, and at the end of one year paid to the debtor. : ; X. Appeals. — Appeals shall be claimed within thirty days after the decision, and shall be taken in the same manner as other appeals from the court, except that in appeals for the allowance or disallow- ance of the claims of a creditor, the claimant, if appellant, shall file in the office of the register of probate his statement of reasons for appeal and a declaration in proper form upon his appeal; if appellee, he shall file such declaration within five days after notice of the appeal.? XI. Creditors’ Petition.— Upon petition, under oath, of creditor or creditors, whether individuals, corporations or partnerships, whose claims amount to three hundred dollars or more, and a state- ment that the debtor’s property not exempt within the state is in- sufficient to pay his debts, the judge of probate may adjudge the debtor insolvent, and proceedings against him be begun.’ NEW JERSEY. I. Execution of.— A debtor making an assignment for the ben- efit of creditors shall annex an inventory of his property, to his best knowledge, under oath, and a list of his creditors and the amount of their respective claims, but such inventory shall not be conclusive as to the guantwm of the debtor’s estate; and the as- signee shall be entitled to any other of the debtor’s property com- prehended within the general terms of the assignment. Al pref- erences are void.‘ The assignment must be recorded as of deeds to real estate.® 11d., pp. 564, 565. 21d., pp. 577, 588, 31d., p. 565. 4R. 8. 1877, pp. 36, 37. 5Id., p. 87. See Hays v. Drake, 11 N. J. Eq. 84; Varnum v, Camp, 13-N. J. L (1 Green), 326; Brown v. Holcomb, 1 Stock. 297; Tillou v. Britton, 9 N. J. L. 121. A. executed a mortgage to three of his creditors to secure certain notes, and also confessed judgment to a creditor, under which his personal property was sold, and bought by one of the tbree creditors, and transferred by him to the wife of A., upon her executing a chattel mortgage for the full amount of the pur- chase-money. The object of the mortgage and judgment was to prevent the sale of the property, so that A. might from its advance in value and the profits of his business be able to pay all his creditors in full. Held, that the mortgage and judgment violated both the statute regulating assignments and the statute of frauds; that a preference was given, and the creditors were prevented from having the property applied to the discharge of their debts by due course of law. Livermore v, McNair, 84 N. J. Eq. 478. But preferences not declared in the assignment, and not made in contemplation of it, are not prohibited by the act. Moses v. Thomas, 26 N. J. L. 124; Van Waggoner v. Moses, id. 570; Gar- SYNOPSIS OF STATUTE LAWS. : 655 II. Notice.— The assignee shall forthwith publish, for three suc- cessive weeks, weekly notices of the assignment, in two newspa- pers in this state circulating in the neighborhood where any of the creditors reside, and one or more newspapers in any other state where any creditor of the assignor is known to reside.! ' IIL. Inventory and Bond.— The assignee shall forthwith ex- hibit to the surrogate of the county wherein the debtor resides, under oath or affirmation, a true inventory and valuation of the estate, so far as it has come to his knowledge, and enter into a bond to the ordinary of this state, with sufficient surety, for the faithful performance of the trust, which bond, inventory and valu- ation being first filed in the surrogate’s office, the assignee may proceed to sell the estate and perform the trust.? IY. Claims.— At the expiration of three months from the date of assignment, the assignee must file with the surrogate a list, under oath or affirmation, of all claims, with a true statement of each claim, having first advertised at least once a week, for six weeks next preceding the end of that time, in one newspaper in the county, and by putting advertisements in five or more public places in the neighborhood. The time to file the list and give such notice may be extended by the orphans’ court. Creditors not ex- hibiting their claims within three months from the date of the assignment, or within such time as may be fixed by the court, after notice, shall be barred of a dividend, unless the estate prove sufficient after claims allowed are paid, or the creditor find some other estate not accounted for by the assignee before distribution, in which case he shall be entitled to a ratable proportion there- from.’ Butif a creditor omit to file his claim within the time limited by law, he may present it at any time before a final divi- dend shall have been declared, and it shall share proportionately with any dividend thereafter declared. Creditors who present their claims are barred from afterwards having any action at law or in equity against such debtor, or his heirs or legal representa- tives, unless on the hearing of the case the creditor shall prove i fraud in respect to the assignment, or concealing his property, whether in possession, held in trust, or otherwise.’ Exceptions to the allowance of any claim may be filed at the next term of the court by the assignee or creditor, in person or by attorney, and the court shall cause notice to be served on the owner of such retson v. Brown, 26 id. 425. See Livermore v. McNair, 34 N. J. Eq. 478, As to the power of the orphans’ court, see See v. Zabriskie, 28 id, 422, 1P, L, 1884, p. 183; Sup. to Rev. of N. J. 1886, p. 24, 21d. 3Id., p 25. 4R, S, 187%, p. 40, § 21; Sup. to Rev. of N. J. 1886, p. 25. 656 APPENDIX L claim, and proceed to a trial by jury, if demanded, and from the decision an appeal may be taken in thirty days. At the first term of the court after the time limited for proving claims, and after disputed claims have been settled, the assignee may proceed to make, and shall from time to time make, dividends of the assets which come to his hands. The assignee shall render a final ac- count, on oath, in not exceeding one year, which may be excepted to. Wages due at the time of making the assignment to clerks, minors, mechanics and laborers, and one year’s rent, are preferred debts, not exceeding three hundred dollars to one person; goods and chattels to the value of two hundred doliars are exempt to every assignor having a family, whether reserved in the deed or not.! Y. Assignee.— The assignee shall sell the real estate like an executor or administrator, and has power to sue and recover in his own name any property belonging to the estate, or refer to arbitration, settle and compromise the same, and redeem all mort- gages and conditional contracts? Ifthe assignee die his surety may proceed to a final settlement of the estate. Other security on the assignee’s bond may be required at any time by the court, and the court may remove an assignee for cause shown. The as- signee’s commissions are allowed by the court, which has at all times supervision of the execution of the trust.’ VI. Re-assignments.— When an assignor has compromised with his creditors, his assignee may make a re-assignment to his assignor ; in which case the assignee must within one year after the assign- ment file a verified petition in court to that end, and the court shall order notices to be published for three weeks in a selected newspaper, and copies of the petition to be mailed 1o each known creditor at least ten days before the return day, and upon proof the court may confirm the composition, and order the property reconveyed to the assignor.* NEW MEXIOO. I. How Executed.— In this territory all proceedings in cases of voluntary assignment are under the control of the district court. Every assignment must be approved or acknowledged, and certified and recorded as are conveyances of real estate.5 Preferences inure 1R, 8. 1877, pp. 38, 39; Sup. to Rev. N. J., p. 26, § 15 2R, 8. 1877, p. 39, § 1. 3Id., pp. 89, 40, 41. 4Sup. to Rev. N. J., p 26, 5L, 1889, ch. 71, § 1. SYNOPSIS OF STATUTE LAWS. 657 for the benefit of all creditors alike, and prior attachment liens are not disturbed, while those subsequent to the attachment are void.!. II. Fraudulent Preferences.— Every sale, mortgage or assign- ment made by debtors, and every judgment suffered by any defend- ant, or act done by a debtor in contemplation of insolvency and with design to prefer one or more creditors to the exclusion in whole or in part of others, operates as an assignment of all of his prop- erty for the benefit of his creditors, without preferences, except as hereinafter provided; but this does not affect any mortgage made in good faith to secure any debt or liability created simultaneously with such mortgage, if the same be lodged for record forthwith in the office of the recorder of the county where the property is situated. All such transfers are subject to the control of the court of equity upon bill filed by any person interested after the instrument is lodged for record or the delivery of the property transferred. Thereupon the court shall order that all creditors not complainants shall appear before the master on a day named and prove their claims; notice of which shall be given by publication or other- wise, if the court direct. Any creditor who fails to prove his claim agreeable to such order shall not share in the assets. Such claims must be veritied by the oath of the creditor, his agent or attorney. The court has power to appoint a receiver, make distribution of the assets on hand from time to time, and make other proper orders thereon.? III. Inventory.— Within ten days after the delivery of the deed of assignment, unless longer time is allowed by the judge, the as- signee must file in the office of the clerk of the district court a complete inventory, under oath, of all the property assigned, to the best of his knowledge, and of other property afterwards should it come to his knowledge.’ IV. Appraisement.— The court or judge shall then appoint two or more disinterested persons to appraise the property, who shall file their report and oath of office in the office of the clerk.* Prop- erty exempt by law must be set off by the appraisers.* Y. Bond.— The assignee, or his agent or attorney, at the time of the delivery of the assignment deed, shall file a written state- ment, verified by affidavit, of the nature and value of the estate, and within five days thereafter give bond in double the amount thereof, with two or more sureties, to be approved by the court or judge; and if the assignee fails to give the bond required within 11d., §§ 86, 87, 38. 21d., ch. 67, $$ 1, 7. 81d. ch. 71, §§ 2, 3, 8 4Td., 8§ 4, 5, 6. 5Id., § 85. 42 658 APPENDIX I. such time as the judge or court directs, not exceeding twenty days, his authority stands revoked. Suits on the bond must be in the name of the territory, for the use of the party injured.! VI. Reports of Assignee.— The assignee must exhibit, on oath, a statement of the account, with vouchers, to the district court at the first regular term of the court after the execution of the assign- ment, unless for good cause postponed, and a like statement every three months thereafter until the trust is closed. The assignee may be required by the court to make such settlements. Notice of the filing of the same must be given by advertisement at the expense of the estate? The assignee must give all reasonable in- formation concerning the estate to any person entitled thereto upon demand; and, upon’petition of such person, he may be cited to ap- pear before the court or judge and answer allegations in the peti- tion by order of the court.* VII. Claims.— The assignee shall appoint a day within three months after the date of the assignment when, at the county seat or at some more convenient place, he will publicly adjust and allow claims. He must publish notice of the same in some newspaper in the county, or, if there be none, in the one nearest, for four weeks successively, the last insertion to be at least one week before the appointed day; and also mail a letter to every creditor whose place of residence is known, at least four weeks before the ap- pointed day. The assignee shall attend the place prescribed, in person, from 9 o’clock A. M. to 5 o’clock P. M., for three days, administer all necessary oaths, and allow or reject claims. A cred- itor whose claim has been rejected must begin action against the as- signee in a court of competent jurisdiction, or a recovery thereon will be barred. If his suit be dismissed at the instance of the defend- ant, otherwise than on its merits, the plaintiff may bring a suit thereon within thirty days thereafter. All judgments in favor of plaintiffs on rejected claims shall be certified to the assignee, who shall allow the same. Claims of the assignee against the assignor shall be heard and determined by a temporary assignee, appointed by the court, upon petition of the assignee.‘ VIII. Dismissal of Assignee.— When an assignee fails to file an inventory and bond, as required by law, or any surety on his bond has or is likely to become insolvent, or has removed, or is about to remove himself from the territory, he may be dismissed by the court and his successor appointed, to whom he shall forthwith de- liver all of the effects. 1Id., $8 9, 12, 18, 15, 2Td., §$ 16, 17, 18. 31d, §§ 38, 84, 4Id., $$ 19, 25. SYNOPSIS OF STATUTE LAWS. 659 IX. Sale of the Property.— The district court, or the indge in vacation, shall order the sale of all of the property, either for cash or upon reasonable credit, upon such terms and notice as appear most advantageous. Before any sale of real estate is made the as- signee must give bond in an amount equal to its value, with at least two sureties, to be approved by the court. X. Distribution.— As soon as practicable, and not exceeding thirty days after the time for allowance of demands, the assignee shall pay dividends on allowed claims, if he have sufficient money on hand, reserving enough for proper fees, expenses and litigated claims, and as often thereafter as a dividend of five per cent. can be paid. Notice of dividends must be published for one week in the same newspaper that published the notice of allowance of de- mands. If the assignee fail to make such payments for more than three days after they become due and have been demanded by the person entitled thereto, his agent or attorney, or if he fail to com- ply with these provisions for distribution, he shall for every such neglect pay to the person aggrieved five per cent. interest on the claim of such person.' If the assignee fail within twelve months to settle the estate and properly distribute the proceeds, he may be compelled to do so bya bill filed in the district court by any agreed creditor.’ XI. Discharge of Assignee.— When the assignee becomes satis- fied that it is no longer advantageous to the creditors to keep the as- signment open he may apply, by a verified petition, to the district court for a discharge from his trust, upon notice of his intention to make such application published in the newspaper aforesaid for at least four weeks next before said time. Ifno person interested files specific written objections to such discharge within one week after the filing of the petition, the court may refer the application to some competent person, who shall examine its merits and re- port to the court thereon; and if proper the assignee will be dis- charged.’ XII. Fees — Appeals.— Fees and commissions to the assignee shall be fixed and allowed by the court. If the assignee be an at- torney in practice he may be allowed compensation for services as counsel. Appeals may be taken.! XIII. Compromise of Debts.— When it appears to the best in. terest of the estate, the court or judge may direct the assignee to sell, compound or compromise all bad or doubtful debts, and re- 11d, § 82. 21d., ch, 67, $9 31d., § 89. 41d,, $§ 48, 44. 660 APPENDIX I. lease any vested or contingent right or interest in or to any of the estate. The assignee must report the proceedings to the court, and any creditor may file his objections and be heard.’ NEW YORK. I. How Executed.— Every assignment for the benefit of credit- ors must be in writing, acknowledged like a deed, and recorded in the county clerk’s office of the county in which the assignor re- sides or carries on his business. An assignment by copartners must be recorded in the county where their principal place of busi- ness is situated. A certified copy of the assignment must be’ re- corded in every county where any real estate assigned is situated. The instrument must specify residence of the assignor and the kind and location of his business. The assent of the assignee, sub- scribed and acknowledged by him, shall appear in writing before the assignment is recorded. Il. Preferences.— Preferences are allowed; but, if other than for wages or salaries of employees, they will not be valid except as to the amount of one-third in value of the assigned estate after deducting such wages or salaries and the costs and expenses of executing the assignment. If such one-third of the estate is insuf- ficient to pay in full the preferred claims, it is to be applied pro rata.* III. Inventory.— The assignor must, at the date of the assign- ment, or within twenty days thereafter, deliver to the county judge of the county where the assignment is recorded an inventory, under oath, containing: 1. The name, occupation, place of resi- dence, and place of business of the assignor. 2. The name and 1TId., § 42. 24R. S. (8th ed.), part II, ch. V, title 1, a, § 2. Corporations not moneyed can- not make a general assignment. L, 1825, ch. 325. The requirement that the as- signor state his residence and kind and place of business in his assignment is di- rectory only. Dutchess Co. v.Van Wagonen, 132 N. Y. 398; 30 N. E. Rep. 271. An assignment may be executed and acknowledged by a properly authorized agent. Lowenstein v. Flaurand, 82 N. Y. 494. See Matter of Croughwell, 9 Benedict, 360; Matter of Leahy, 8 Daly, 124: Pratt v. Stevens, 26 Hun, 229; Scott v. Mills, 115 N. Y. 376; Rennild v. Bean, 24 Hun, 23. Title does not pass to the assignee until actual delivery of the instrument. MclIlhargy v. Chambers, 117 N. Y. 532; Nichol v. Spowers, 105 N. Y. 1. But the filing of his official bond is not a condi- tion precedent thereto. Kilpatrick v. Dean, 15 Daly, 182. The assignment laws do not apply to specific transfers. Royer Wheel Co, v. Fielding, 101 N. Y. 504. See Knapp v. McGowan, 96 N. Y. %. 34 R. S, (8th ed.), part II. ch. V, title 1, a, 8§ 29, 830; Matter of Eaton, 59 Hun, 84; Manning v. Beck, 54 Hun, 102; Schwartz v. Soutter, 41 Hun, 23, Judg- ments confessed in contemplation of an assignment are void. Spelman v. Freed- ae 54 Hun, 409. This act held constitutional, Richardson v, Thurber, 104 . Y. 606. SYNOPSIS OF STATUTE LAWS, 661 place of residence of the assignee. 3. A full and true account of all creditors, stating the last known place of residence of each, the sum owing to each with the true cause and consideration therefor, and a full statement of any. existing security for the pay Mens of the same. 4. A fuli and true inventory of all the assignor’s estate at the date of the assignment, with the incumbrances thereon, and all vouchers and securities relating thereto, and the nominal as well as actual value of the same according to his best knowl- . edge. If the assignor should fail to deliver the inventory required, the assignee shall, within thirty days after the date of the assign- ment, deliver to the said judge the inventory required, under oath, in so far as he can; and the judge may upon the application of the assignee compel the assignor or any other person to appear before him and disclose, upon oath, any information he may possess neces- sary to the proper making of the inventory. The court may, for good reasons, allow the assignee further time to make and file the inventory, not exceeding sixty days, or such further time as may be allowed; any person interested may demand his removal, and the judge shall order him to forthwith appear and show cause why he should not be removed. The books and papers of such delin- quent assignor shall at all times be subject to the examination of any creditor, and the judge may compel him by order, or attach- ment, if necessary, to allow such examination.! The judge may require or allow any inventory filed to be corrected or amended and completed, by attachment if necessary, supplemental invento- ries to be made and filed at such time as he may prescribe.’ IV. Bond.— The assignee must, within thirty days after the as- signment and before he shall have authority to convert any prop- erty to the purposes of the trust, file in the clerk’s office of the county where the assignment is recorded a bond to the people of the state of New York, for an amount fixed by the judge and with sufficient sureties to be approved by the judge, conditioned for the faithful discharge of his duties as assignee. Should the assignor fail to file his inventory within twenty days as required, the as- signee, before the ten days thereafter shall have elapsed, may apply to the judge, by verified petition, for leave to file a provis- ional bond until he can make his inventory.’ Failure to file any required bond within the specified time will not deprive the county 148. S. (8th ed.), part II, ch. V, title 1, a, § 3, Omission by assignor of assets from the schedule does not ipso facto make the assignment void. Schultz v.. Hoagland, 85 N. Y. 464. 24 R. S, (8th ed.), part IL, ch. V, title 1, a, §6. The inventory is a part of the assignment. Roberts v. Vietor, 130 N. Y. 585. Its actual aniachenoms to the deed is not necessary. Franey v. Smith, 125 N. Y. 44. 34 R, 8. (8th ed), part II, ch. V, title 1, a, § 5. 662 APPENDIX I. judge of his power over the assignee and the trust estate.’ The judge may require further security to be given if that on the bond is not adequate. Actions may be prosecuted upon the bond by leave of the court. V. Advertisement for Claims.— The county judge may, upon petition of the assignee, authorize him to advertise for creditors to present to him their claims, with the vouchers therefor, duly veri- fied, on or before the day specified in such advertisement, not less. than thirty days from the last publication thereof; each adver- tisement must be published in two newspapers designated by the judge, not less than once a week for six successive weeks; and if it appears that any creditor resides out of the state, then in like manner in the state paper.‘ VI. Removal of Assignee.— At any time on petition of one or more creditors, showing misconduct or incompetency of the as- signee, or on petition of the assignee himself, showing sufficient. reason therefor, and after due notice of not less than five days to. the assignor, assignee, surety and other designated persons, the judge may remove or discharge the assignee and appoint one or more in his place, and order an accounting of and non-interference- with the estate by the assignee so removed, and upon his discharge his bond shall be canceled. The new assignee shall give the re- quired bond. VII. Death of Assignee.— If the assignee die after filing any required bond and before closing the trust, his personal representa- tive or successor in office, or both, may be substituted in his stead, on notice of not less than eight days; if the assignee die after filing his bond but before any proceedings had thereunder, the surety may apply to the judge for an accounting, have another assignee appointed and be released.® VIII. Accounting.— The county court may issue a citation to. all parties interested, requiring them to appear in court and show cause why a settlement by the assignee should not be had, upon 11d., §8. 21d., 8% 3Id., $9. The assignee’s hond is not exclusively for the benefit of the original creditors of the assignor. Van Slyke v. Bush, 123 N. Y. 47. 44R. 8. (8th ed.), part II, ch. V, title 1,a, § 4. Creditors whose names and claims appear on the schedule of the assignor are entitled to their dividend al- though they do not present statement. Matter of Currier, 8 Daly, 119; Matter of Gilbert, 9 Daly, 479. 54R. 8. (8th ed.), part II, ch. V, title 1, a,§6. The words “ incompetency ” and ‘‘ misconduct” in the statute embrace all the reasons for which an assignee ought to be removed. Matter of Cohn, 78N. Y. 248. For a full exposition of these statutes, see Bishop on Insolvent Debtors, parts III and IV. 64 R, S, (8th ed.), part II, ch. V, title 1, a, § 10. SYNOPSIS OF STATUTE LAWS. 663 petition of the assignee at any time, or on petition of a creditor, or the assignee’s surety, or the assignor, at any time after one year from the date of the assignment, or where the assignee has been removed or ordered to account.! A citation issued on petition of a creditor may be served on the assignee alone, but on or after its return the assignee may have a general citation to all parties in- terestec. Citations to all parties interested need not be served on creditors who have not presented their claims as required in the ad- vertisement. Upon proof that the creditors who have proved their claims exceed twenty-five in number, the judge may direct that such citation be served by mailing a notice of the same to each of them at least thirty days prior to the return day, and by publish- ing a citation once a week for at least four weeks prior to such re- turn day in one or more designated newspapers.? A personal service within the county or an adjoining county must be at ieast. eight days before the return day; and if in any other county at least fifteen days before the return day.2 The judge may direct service to be made by publication when satisfied by affidavit or verified petition either that the person to be served is unknown or that his residence cannot be found, or when he cannot be found in the state. Such publication must be made not less than once a week for six weeks in a newspaper designated by the judge, and if it appear that any such person reside without the state, then in the state paper; and a copy of the citation must be mailed to each known creditor at least thirty days before the return thereof.' When publication has been ordered, personal service without the state, made if within the United States at least thirty days, or without the United States at least forty days before the return day, is equivalent to publication and mailing.” Personal service on minors and persons incompetent shall be as in case of final account- ing;® personal service on one or more joint creditors is equivalent to personal service on all, and voluntary appearance in person or by attorney shall be equivalent to personal service.’ On the re- turn of the citation to all parties interested, any person interested may become a party on duly presenting his claim.’ On proceed- ings for an accounting the county court has power: 1. To exam- 1fd., § 11. The supreme court may entertain a similar action. Hurth v. Bower, 30 Hun, 151; Converseville Co. v. Chambersburg Wool Co., 14 Hun, 609, 24. S. (8th ed.), part II, ch. V, title 1, a, § 13, 31d., § 14. 4 Ia., § 15, 5Id., §16. 6Id., §17. 7Id., $18, 8Id., § 19. 664 APPENDIX I. ine the parties and witnesses on oath in relation-to all matters con- cerning the assignment and compel their attendance and the pro- duction of books and papers. 2. To require and compel, if neces- sary, the assignee to file an account of his proceedings. 3. To take and state such account or appoint a referee to do so. 4. To adjudicate the claims presented and decree payment of the proper amount thereon. 5. To discharge the assignee and his surety upon performance of the decree, or upon proof of a composition between the assignor and his creditors; provided, that if there be any creditors not assenting to the composition, the court shall de- termine what proportion of the fund shall be paid to or reserved for creditors not assenting, which shall not be less than the amount to which they would be entitled if no composition had been made, and may decree distribution accordingly. 6. To adjourn the pro- ceedings when necessary. ‘7. To punish contempt of the court. 8. To exercise such further powers as a surrogate may by law ex- ercise in the accounting by an executor or administrator.! The judge may also, at any time, on petition of any party interested, order the examination of witnesses and the production of books and papers, and the answers of no witness shall criminate him.? IX. Effect of Orders and Decree — Appeal.— All orders and decrees under these provisions shall have the same effect as if they had been made in an original action in the county court, and all proceedings shall be deemed to have been made in court. Proper records shall be kept.? Appeals may be taken.! X. Sale or Compromise of Debts.— The judge may, upon ap- plication of the assignee, for sufficient cause shown, and upon fixed terms, ratify or direct and authorize the sale, compromising or com- pounding of any claim belonging to the estate of the assignee in good faith. The assignee is liable for any sum which might or ought to have been collected by him.’ XI. Disputed Claims.— The court may order a trial by jury, or before a referee, of any disputed matter and award reasonable counsel fees and costs.° XII. Compensation of Assignee.— Assignee should receive for services five per cent. on the whole sum received.’ 1Td., § 20. 21d., § 21. IId., § 22. 41d., § 25. 5Id., § 23; In re Connell, 110 N. Y. 351, 64 R. S. (8th ed.), part II, ch. V, title 1, a, § 26. The authority to compromise debts cannot be general. Matter of Ransom, 8 Daly, 89. 74 R. 8. (8th ed.), part II, ch. V, title 1, a, § 26. SYNOPSIS OF STATUTE LAWS. 665 NORTH CAROLINA. In this state assignments for the benefit of creditors are regu- lated only by the rules of common law and the special statutes in the state respecting conveyances, under which all such assignments must be in writing, probated and recorded.! Insolvent debtors may, upon petition, have their estates adminis- tered for the benefit of creditors under the supervision of the su- perior court.? NORTH DAKOTA. I. Who May Make. — When a debtor is unable to pay his debts from his own means as they become due, he may make an assign- ment for the benefit of his creditors, subject to the provisions of the code relative to trusts and to fraudulent transfers, and the re- strictions imposed by law upon assignments by special partner- ships, by corporations or by other specified classes of persons.’ Il. How Executed.— Unless the assignment be in writing, sub- scribed by the assignor or his agent thereto authorized in writing, acknowledged or proved, and certified and recorded like transfers of real property, it is void. An assignment is also void as to cred- | itors not assenting thereto, if it tends to coerce any creditor to re- jease or compromise his demand; or provide for the payment of any claim known to the assignor to be false or fraudulent; or for the payment of more upon any claim than is known to be justly due from the assignor; or if it reserve any interest in the assigned property to the assignor, before all his existing debts are paid other than property exempt by law; or if it confer upon the as- signee any power which, if exercised, might prevent or delay the immediate conversion of the assigned property to the purposes of the trust; or if it exempt him from liability for neglect of duty or misconduct. The instrument must appear on its face to be in- tended by the parties thereto as an assignment, and may provide for any subsisting liability of the assignor which he might lawfully pay, whether absolute or contingent. Preferences are forbidden, and inure for the benefit of all the creditors proportionately. Ex- empt property and insurance on the life of the assignor do not pass to the assignee unless the instrument declare an intention that they shall do so. The assignee is not regarded as a purchaser for value.‘ 1 Code 1888, §§ 1246, 1254. 21d., S$ 2942, 2981. $C, L, 1887, § 4661: L. 1891, ch. 35. 4, L. 1887, §§ 4660, 4662, 4663, 4665, 4666, 4667; L. 1891, ch. 35, 666 APPENDIX I. III. Inventory.— Within twenty days after the assignment is made the assignor must file a complete inventory, on oath, show- ing all the creditors; their places of residence, if known to the as- signor; if not known that fact must be stated; the amount, nature and consideration of the liability to each creditor; every existing judgment, mortgage or other security for the payment of any debt or liability; all the property’of the assignor at the date of the as- signment which is exempt by law, and all not exempt, and the in- cumbrances thereon; all vouchers and securities thereto and its value to the best knowledge of the assignor. The assignment must be recorded and the inventory filed with the register of deeds of the county in which the assignor resided at the date of the assignment, or, if he was a non-resident, in the county in which his principal place of business was then situated, or if he had then a residence or place of business in the county where the property was then situated. If there be more than one assignor the assignment must be filed in like manner in every county in which any one of the assignors resided at its date, or in which any of them, non-residents, had a place of business. The assignment. is void against creditors, purchasers and incumbrancers in good faith unless recorded and the inventory filed as required.! IV. Bond.— Within thirty days after the date of the assign- ment the assignee must give bond for double the amount of the property assigned, with sufficient sureties, to be approved by the court. Until the assignment is recorded, the inventory filed and the bond given as required, the assignee cannot convert the prop- erty? Y. Accounting by Assignee.— After six months from the date of filing the bond the assignee may be ordered by the court or judge to render an account of his proceedings, within a time fixed by the court, not exceeding fifteen days, upon motion of a creditor, with ten days’ notice, accompanied by his affidavit, or that. of his agent or attorney, setting forth his claim and the amount. thereof, and that no account has been filed within six months. VI. District Court.— All proceedings in assignments are under the supervision of the district court or the judge, who may, for cause shown, remove an assignee and appoint his successor. When the assignee shall have fully performed the trust he may be dis- charged by order of the court, after having published notice in some newspaper in the county, if there be one, if not, in one pub- lished at the state capital, for three successive weeks.® 1C, L, 1887, §§ 4667-4671, 2Td., 88 4673, 4674, 31d., § 4677. SYNOPSIS OF STATUTE LAWS. 667 VII. Compensation — Cancellation.— In the absence of any provisions in the assignment to the contrary, the assignee is enti- tled to the same commissions as are allowed by law to executors and guardians; but the assignment cannot allow more and may grant less, or nothing. The assignee is not liable for his acts done in good faith under an assignment afterwards adjudged void. After the assignment has been duly executed and recorded so as to trans- fer the property to the assignee, it cannot be canceled or modified by the parties without the consent of every creditor.! OHIO. I. Execution of.— When any person, partnership, association or corporation makes an assignment for the benefit of creditors, it shall be the duty of the assignee, within ten days after the delivery of the assignment to him and before disposing of any property so assigned, to file the original assignment, or a copy thereof in the probate court and give bond to be approved by the court; the court may subsequently require the assignee or any trustee to give ad- ditional security when necessary. Such assignment takes effect from the time of its delivery to the probate judge.’ If the assign- ment or a copy thereof is not filed as required, or if the assignee named fail to give bond as required, the court shall, on application of the assignor or of any of his creditors, remove such assignee and appoint a trustee in his place, but if several assignees are named in the instrument one or more of them may comply.* II. Resignation of Assignee — Appointment.— Any assignee or trustee who has qualified may, with the consent of the court, resign his trust; and in case of death, removal or resignation of a sole assignee or trustee, the court shall appoint one or more trust- ees in his place; and if there is a vacancy among several assignees or trustees the court may allow those remaining to execute the trust, or on application of the majority of the creditors in amount appoint an additional trustee. An assignee or trustee who has re- signed or has been removed must forthwith file full settlement and convey to his successor all the property.’ III. Election of Trustee.— Whenever creditors who own not less than one thousand dollars of debts against the assignor, as shown by the schedule or otherwise established, petition the 11d., §§ 4678-4680. 21 R. S. 1889, § 6335. 81d., § 6336, See Brigel v. Starbuck, 34 Ohio St. 280; Bloomingdale v. Stein, 42 id. 168, 41 B.S. 1889, § 6387. 5Id., S$ 6341, 6342, 668 APPENDIX I. court for permission to elect a trustee, the court shall fix the time for such election and cause notice to be sent to the creditors to meet at the court room; if creditors representing fifty per cent. or more of the debts are present in person or by attorney at such meeting, they may proceed to elect such trustee, a majority in value of the debts so represented being necessary to a choice. If the court ap- prove the choice, and the trustee elected appear within ten days thereafter and give bond, the court must appoint him trustee and remove his predecessor.! IV. Removal of Assignee.— The court may remove an assignee or trustee, specifying in the order the cause of removal; and on ap- plication of any surety the court may require the assignee or trustee to give a new bond and such surety may be discharged. The trustee appointed by the court must within ten days give an ap- proved bond, and his predecessor may be compelled to turn over to him all the property belonging to the trust. Y. Notice of Appointment.— Every assignee, or trustee ap- pointed on the assignee failing to qualify, shall, within thirty days of giving bond, cause notice to be given in some newspaper of gen- eral circulation in the county, for three successive weeks, of his ap- pointment.’ VI. Appraisement.— Immediately upon the assignee or trustee giving bond, the court shall appoint three suitable persons ap- praisers of the assets; and the assignee shall, within thirty days after giving bond, unless the court allow longer time, file an inven- tory under oath of all the property which shall have come to his possession or knowledge and a list of all the known creditors, with the appraisement; provided that if any of the property be in another county, separate appraisers may be appointed for it, or if any real estate be situated out of the state it may be sold.t VII. Exempt Property.— No assignment for the benefit of creditors shall be construed to include any property exempt by law (which shall be set off by the appraisers), unless in the assignment the exemption is expressly waived; or any property belonging to the wife of the assignor.® VIII. Examination of the Assignor.— The probate judge has power to examine the assignor or witnesses at all times, upon reason- able notice, concerning the estate, and in like manner the assignee as to all matters pertaining to the estate and the administration of 11d., $6388, The approval by the probate court of an election of an assignee by the creditors cannot be appealed from. Brigel v. Starbuck, 34 Ohio St. 280. 21 B.S. 1889, §§ 6339, 6340, ; 31d., § 6346, 4Id., § 6347. 5Id., § 6848. SYNOPSIS OF STATUTE LAWS. 669 the trust; and to make and enforce any orders for the protection of the estate.! IX. Conversion of the Assets.— The assignee must proceed at once to convert all the assets received by him into money and to sell the property, either for cash or upon such other terms as the court may order, at public auction or private sale, if ordered by the court, at such time and place as may be published in some news- paper in the county for four consecutive weeks; but all such sales of real estate must be made at not less than two-thirds the appraised value, being subject to re-appraisement, as upon execution at law, and shall be confirmed or rejected by the court.’ Difficult claims may be compromised or sold, and incumbrances and liens upon any of the property sold or rights or credits collected shall be paid out. of the proceeds thereof by order of the court. The assignee upon application may be authorized by the court to‘carry on the busi- ness of his assignor for a limited time. X. Claims.— Within six months after the publication of the notice of the appointment of the assignee, unless further time is allowed by the court, creditors must present their verified claims and the assignee shall indorse his allowance or rejection thereon. If re- jected, suit to enforce the claim must be brought against the as- signee within thirty days. At the expiration of the six months the assignee shall file in the court a report of all claims presented to him for allowance, amounts, interest, those allowed, those rejected and those under advisement; and the postoffice of every creditor whose claim is either allowed or rejected.‘ If the assignor or any creditor file in the court a written requisition on the assignee or trustee to disallow any claim presented, which he has not reported as disallowed, and give bond, such claim shall be disallowed by the 1Id., § 6349. 2The court may direct the assignee to sell the real estate for an amount not less than two-thirds of its appraised value. Bell v. Dudnit, 40 Ohio St. 880. The power given to the assignee under section 6350 to sell and convey the real estate assigned does not enable such assignee to extinguish by sale the wife’s inchoate right of dower. Dwyer v. Garlough, 31 Ohio St. 158, The wife may, however, be made a party, and ask the court to have the real estate sold free of her contingent right of dower. Laws of 1880, p. 190. As to the jurisdiction of the courts and the right of appeal, see Dwyer v. Garlough, 31 Ohio St. 158; Aultman v. Seiberling, id, 201. 31 RB. S, 1889, §§ 6350, 6351. 4Id., § 6852. See Carpenter v. Dick, 41 Ohio St. 296. The provision of section’ 6852 which requires a creditor to present his claim to the assignee for allowance within six months after the publication of notice of his appointment does not bar the right of a creditor to present his claim and have it allowed after that period has elapsed at any time before the settlement of the trust. Owens v. Rams- dell, 88 Ohio St, 489; Carpenter v. Dick, 41 id. 295. See Dye v. Dye, 21 id. 86; Haskins v, Alcott, 13 id. 210; Lahm v. Johnston, 32 id. 590. : 670 APPENDIX I. court, and the creditor notified thereof. A claimant shall make and file an affidavit setting forth that his claim is just and lawful, stating the consideration thereof, and what, if any, set-offs or counter-claims thereto, and also what collateral or personal security, if any, he holds for the sum, or that he holds any security whatever. The assignee may examine the claimant under oath on any matter relating to his claim. XI. Preferred Claims.— Preferences in general assignments are not allowed, except for taxes, and the full amount of wages due for labor performed within twelve months preceding the assignment, not exceeding three hundred dollars. These preferences shall not affect securities given or liens obtained in good faith, for value, but judgments by confession or warrants of attorney rendered within, two months prior to such assignment, or securities given within such time to create a preference among creditors, or to secure a pre-existing debt other than upon real estate for the purchase-money thereof, shall not be valid against such claims for labor.’ All as- signments made in contemplation of insolvency with design to pre- fer one or more creditors to the exclusion of others inure for the benefit of all creditors.? XII. Reports of Assignee — Dividends.— Eight months after the assignee has qualified, and as often thereafter as the court may order, the assignee or trustee must file his report in court showing the condition of the trust, and also file his accounts. The court shall fix a time and publish notice thereof, and, when the settlement shows a balance in the hands of the assignee subject to distribution, declare a dividend. If payment on all claims is not called for within sixty days after the time fixed for their payment, the court shall order a new notice to be given to the owners of unpaid claims, and if the same are not demanded within twelve months thereafter they shall be divided pro rata among the other creditors until the claims of other creditors are paid in full, and the remainder, if any, to the assignor. Dividends reserved for claims under advisement may afterwards be divided among the creditors if such claims are disallowed.* XIII. Compensation of Assignee.— Before any dividend is de- clared the assignee or trustee may be allowed his commissions, which are fixed by law. He shall be allowed his necessary ex- penses and counsel fees.‘ 11 B.S. 1889, § 6856, 21d., § 6348, 3Td., § 6356. 41d., § 6357, SYNOPSIS OF STATUTE LAWS. 671 OKLAHOMA. I. Who May Execute.— An insolvent debtor may, in good faith, execute an assignment of his property in trust toward the satisfaction of his creditors, in conformity to the provisions of the : laws of this territory; subject, however, to the provisions of the code relative to trusts and to fraudulent transfers, and to the re- strictions imposed by law upon assignments by special partner- ships, by corporations and by other specific classes of persons; but such assignment shall not be valid if it prefer any creditor over any other creditor, and in such case the property of the insolvent shall inure to the benefit of all the creditors proportionately.) II, Insolvency Defined.— A debtor is insolvent when he is un- able to pay his debts from his own means as they become due.” III. Subsisting Liabilities— An assignment for the benefit of creditors may provide for any subsisting liability of the assignor which he might lawfully pay whether absolute or contingent.’ IV. When Void.— An assignment for the benefit of creditors in kind against any creditor of the assignor not assenting thereto, if it tend to coerce any creditor to release or compromise his demand ; or provide for the payment of any claim known to the assignor to be false or fraudulent; or for the payment of more on any claim than is known to be justly due from the assignor; or reserve any interest in the assigned property, or in any part thereof, to the as- signor, or for his benefit, before all his existing debts are paid, other than property exempt by law from execution; or confer upon the assignee any power which if exercised might prevent or delay the immediate conversion of the assigned property to the purposes of the trust, or exempt him from liability for neglect of duty or misconduct, shall be void.* V. Execution of— An assignment for the benefit of creditors must be in writing and subscribed by the assignor or by his agent thereto authorized by writing.’ Unless these provisions are com- plied with the assignment is void against every creditor not assent- ing thereto. VI. Assignee.— An assignee is not to be regarded as a purchaser for value, and has no greater rights than his assignor has in re- spect to things transferred by the assignment.’ 1Stat. of Ok. 1890, ch. 6, § 1. 21d., $2. 81d., § 8 41d., §4. 5Id., $5. §Id., § 6. iId., §% 672 APPENDIX I. VIL. Inventory.— Within twenty days after the assignment is made the assignor must file a true inventory, under oath, showing all the creditors; their places of residence if known; if not known that fact must be stated; the sum owing to each and the nature and consideration of the debt or liability, whether arising on writ- ten security, contract or otherwise; every existing judgment, mort- gage and other security; all the property of the assignor at the date of the assignment which is exempt by law, and that which is not exempt, its value, the incumbrances thereon and securities re- lating thereto.! VIII. Record of the Assigninent.— The assignment must be recorded within twenty days after the date of its execution and the inventory required filed with the register of deeds.’ IX. Bond.— Within thirty days after the date of the assign- ment the assignee must give a bond in double the amount of the value of the property assigned, with sufficient sureties, to be ap- proved by the judge of the district court of the county in which the original inventory is filed.’ X. Authority of Assignee.— Until the inventory and affidavit have been made, the assignment recorded and the bond approved, the assignee has no authority to dispose of the estate or convert it to the purposes of the trust.‘ XI. Assignee Required to Account.— After six months from the date of the filing of the bond, the assignee, on motion of any creditor, with ten days’ notice, accompanied by an affidavit of the creditor, his agent or attorney, setting forth his claim, the amount thereof, and that no account has been filed within six months, may be ordered by the court to render an account within not to exceed fifteen days. Upon a final accounting by the assignee, the judge, after notice by publication, may order that he be fully discharged.® XII. Compensation.— In the absence of any provision in the assignment to the contrary, the assignee is entitled to the same commissions as are allowed by law to executors and guardians; but the assignment cannot grant more and may allow less, or deny them altogether.® XIII. Good Faith Protects Assignee.— The assignee will not be held liable for his acts done in good faith in the execution of the trust where the assignment is afterwards adjudged void.’ 11d., $88, 9. 21d., § 10. 31d, § 14 4Td., §15, 5Id., § 16, 61d., $ 19. 1Id., § 20, SYNOPSIS: OF STATUTE LAWS. 673° XIV. Assignment Cannot be Canceled.— After the assignment has been executed and recorded it cannot be canceled or modified by the parties thereto without the consent of every creditor af- fected thereby. XY. Exempt Property.— Property exempt from execution and insurance upon the life of the assignor do not pass to the assignee unless the assignment declares such an intention. OREGON. I. Execution of.— Every assignment for the benefit of creditors in this state must be in writing, duly acknowledged as are convey- ances of real estate, and recorded in the county where the assignor resides, or where the business has been carried on. The assent of creditors is presumed? II. Effect of Assignment.— Preferences in an assignment render it invalid. The assignment has the effect of discharging all attach- ments on which judgments shall not have been taken at its date; and after the payment of the costs and disbursements thereof, in- cluding the attorney’s fee allowed by law in case of judgment, out of the estate of the insolvent, such claim shall be deemed as pre- sented, and shall share pro rata with other claims.! III. Procedure After Execution.— Upon petition of two or more creditors to the judge of the circuit court of the county in. which the assignment is or should be recorded, within thirty days after its execution on record, the judge shall direct the clerk to order a meeting of the creditors to choose an assignee in lieu of the as- signee named in the assignment; thereupon the clerk shall forth- with give notice thereof to all the creditors to meet at his office at the time stated, not to exceed fifteen days from the date of the notice. A majority of the creditors present in person, or by proxy, who shall have presented a verified statement of their claims shall elect one or more assignees, who must reside in the same county as the assignor. If the creditors fail to elect an assignee one may be appointed by the court. The assignee named in the assignment must then forthwith convey all the trust estate to the new assignee, who shall upon giving the required bond have all the powers and 1Id., § 21. 21d., §18. 3Hill’s Ann. L, 1887, §§ 3174, 3175. The statute should be construed liberally. Halm v. Salmon, 20 Fed. Rep. 891. Recording of the deed of assignment is not essential to its validity where possession accompanies the conveyance of personal! property. Dawson v. Crossen, 10 Ore. 41. 4Hill’s Ann, L, 1887, § 3173; Stout v. Watson, 19 Ore, 251; Tichenor v. Coggins, 8 Ore. 270. The assignee is regarded as a trustee for creditors rather than a pur- chaser for value. Jacobs v. McCally, 29 Ore. 52, 43 674 APPENDIX I. duties of his predecessor. In the interval between the application for a new assignee and his election or appointment perishable prop- erty only shall be disposed of.! IY. Inventory and Valuation.— The assignee shall forthwith file with the clerk of the circuit court of the county where the as. signment will be recorded, a full and true inventory and valuation of the estate, under oath, as far as the same has come to his knowl- edge, and shall give bond in double the amount of the valuation, with two or more sureties to be approved by the clerk.? V. Notice to Creditors.— The assignee shall forthwith publish notice of the assignment for at least six weeks in some newspaper in. the county, if any; and if none, then in the county nearest, and mail a notice to.each creditor of whom he shall be informed, notify- ing the creditors to present their claims under oath to him within three months thereafter.’ VI. Assignee’s Report.— Three months from the time of first publishing notice the assignee must file with the clerk a true and full list, under oath, of all creditors and their claims, and an affida- vit of publication of the notice, and a list of the creditors, with their places of residence, to whom notices were mailed, and the date of mailing such verified. VII. Claims Excepted to.— Any person interested may, within three months after the filing of such report, file exceptions to the claim of any creditor, and the clerk shall forthwith serve the court with notice at the next term, and the court shall hear and deter- mine the same, and may allow a jury. VIII. Dividends.— On all claims not excepted to, and allowed by the court, the assignee shall from time to time make proportion- ate dividends out of the assets in his hands. As soon as may be the assignee shall render a final account of the trust to the court, which may allow proper commissions. Debts not due must be paid, but a reasonable abatement must be allowed for interest. All cred- itors who do not exhibit their claims within three months from the publication of notice shall not participate in the dividend until after payment in full of all claims presented within that time, and allowed by the court.$ IX. Supervision of the Court.— The assignee shall at all times be subject to the order of the court or judge, who may compel the 1 Hill’s Ann. L, 1887, § 3175. 2Id., § 3176. No assignment shall be declared void for want of an inventory. Dawson v. Crossen, 10 Ore. 41. 3Hill’s Ann, L, 1887, § 3177. 4Id., § 3178, 5Id., § 3179, 8Id., §§ 3180, 3184, SYNOPSIS OF STATUTE LAWS. 675 assignee to file reports of his proceedings from time to time, and to file inventories of any additional property which may come into his hands after filing the first inventory.!. The assignor may also be compelled by the court or judge, upon application of the assignee or any creditor, to appear in person and answer under oath ques- tions concerning his estate and creditors. X. Authority of Assignee.— The assignee has full power to dis- pose of the said estate, and to sue for and recover, in his name, everything belonging to the estate, and generally to do whatever the debtor might have done in the premises; but no sales of the real estate shall be made without notice published as in case of sale of real estate on execution, unless the court otherwise order it. XI. Removal of Assignee.— If the assignee die before closing his trust, or if he fail, for thirty days after the making of the as- signment, to file an inventory and valuation and give bond, as re- quired, the circuit court or judge, upon application of any person interested, shall appoint some person to execute the trust, who shall comply with all the lawful requirements of assignees; and if any surety be discovered insufficient, or if it appear that the assignee is wasting or misappropriating the trust estate, the court or judge may require additional security, and may remove such assignee, and appoint others in his stead.‘ XII. Assignor’s Discharge.— When it appears to the satisfac- tion of the court or judge, pending a final report of the assignee, that the assignor was guilty of no fraud in making the assignment, nor concealment or diversion of his property in order to keep it be- yond the reach of his creditors, that he acted fairly, that his estate has been made to realize the fullest amount possible, and not less than fifty per cent. of the full amount of his indebtedness of all expenses, the court or judge may order his discharge from further liability.® PENNSYLVANIA. I. Who May Execute.— Any debtor may make an assignment of all or part of his property in trust for the benefit of his credit- ors, but corporations for internal improvements cannot make such assignment when indebted to contractors, laborers and working- men employed in the construction or repairs of the improvement, without first having obtained the written consent of such creditors.’ 1]d., 8§ 3181, 3183, 21d., § 3182. 3Id., § 3185. 4Id., § 3186. See Estate of Goldsmith, 12 Ore, 444, 5Hill’s Ann, L, 1887, § 3187. 61 Purd. Dig., p. 118, $1. Banks of issue may make voluntary assignments, Driesach v. Price, 133 Pa. St. 560. 676 APPENDIX I. Ii. Execution of—In this state every assignment must be in. writing, acknowledged like a deed and recorded within thirty days after its execution in the office for the recording of deeds in the county in which the assignor resides, or, if the assignor is a non- resident, in the county where the estate is, and takes effect from date, but not as to a bona fide purchaser, mortgagee or creditor having a lien thereon, without actual notice.’ III. Inventory.— Within thirty days after the execution of the assignment the assignee must file in the office of the prothonotary of the court of common pleas, in the county in which the assignor resides, an inventory on oath.’ IV. Appraisement — Bond.— The court shall then appoint two or more appraisers, who shall, under oath, make and return to the court their appraisement.? Thereupon the assignee must give bond, with at least two sureties to be approved by the court, in double the amount of the appraised value of the estate.* VY. Exempt Property.— Where an assignment transfers the. debtor’s household goods the court may, upon his application, and after appraisement and notice to the creditors, have set aside such articles as will be of use to himself and family, not exceeding three hundred dollars in value.® VI. Preferences.— All preferences and assignments inure for the benefit of all the creditors, except that the unpaid wages of minors, mechanics and laborers may be preferred to the amount of one hundred dollars of each claim. Proceedings on the collection of any claim due the estate shall be suspended by the assignment. of the debtor.’ A stipulation for a release is deemed a preference.® 11 Purd. Dig. 1888, pp. 121, 122. Failure to record the assignment in this. state will not give pricrity to foreign attachments. Long v. Girdwood, 150 Pa. St. 413; 24 Atl. Rep. 711. No assignment shall be declared void for want of an inventory, but the absence of the same shall be prima facie evidence that the assignor has con- cealed some of his estate, and, upon application by a person inter- ested, the judge may, upon reasonable notice, compel him to appear and be examined on oath concerning his estate. 1M. & V. Code, § 2429. 21 Sayles’ C. S, 1888, art. 65, b. 3Id., art. 65, a,s, The title to the property passes to the assignee by the execu- tion and delivery of the deed and before the assignee qualifies. Schoolher v. Hutchins, 66 Tex. 324, 41 Sayles’ C. S, 1888, art. 65, e. In executing an assignment substantial con- formity to the act only is necessary. McCart v. Maddox, 68 Tex. 456. The cap- tion of the act of 1879 is sufficient, and the act is not unconstitutional. Duncan v. Taylor, 63 Tex. 645. It did not repeal the act concerning fraudulent convey- ances in force prior to that time. La Belle Wagon Works v. Tidball, 59 Tex. 291. An assignment must convey all non-exempt property; if the assignment is by a firm, it must convey the orm property as well as the individual property of its members. Donoho v. Fish, 58 Tex. 164. On the construction of the statutes, see Keller v. Smalley, 63 Tex. 512; National Bank v. Lorenberg, id. 506; Leon v. Welborne, 58 id. 157; Keating v. Vaughn, 61 id. 518; Schneider v. Bullard, 1 Tex. App. Civ. Cas, 676; Winslett v. Randle, id. 678, 5 1 Sayles’ C. S. 1888, art. 65, b. 6Id., art. 65, k. It is not essential to the validity of the assignment that the inventory be verified by the oath of the debtor. McKee v. Coffin, 66 Tex, 304, SYNOPSIS OF STATUTE LAWS. 683. III. Notice of Assignment.— Within thirty days after the exe cution of the assignment the assignee must publish, for three weeks, notice of his appointment in some newspaper in the county where the assignor resides or where his principal place of business was conducted, or, if no newspaper is printed therein, then in the one nearest to such place or residence or business; and so far as he can the assignee must mail notices to each creditor.! IV. Consent of Creditors.— Within four months after the publi- cation of the above notice creditors who desire to take any benefit under the assignment must consent in writing thereto, but a cred- itor who had no actual notice of the assignment may consent thereto: at any time before any distribution of the assets has been made; and a receipt by a creditor of a portion of his claim from the as- signee shall be conclusive evidence of the assent of such creditor.” VY. Assignee.— The assignee must be a resident of this state and of the county in which the assignor resides, or in which his princi- pal place of business was conducted, and he shall forthwith have the assignment recorded in the county of the assignor’s residence and also in every county in which there is any real estate assigned, and execute and file a bond within five days after the delivery of the assignment, with sureties, to be approved by the judge of the county court or the judge of the district court; for any breach of this bond creditors may sue jointly or severally? Any creditor not consenting to the assignment may garnish the assignee for any excess of the estate remaining in his hands after the payment of the debts of consenting creditors and the necessary expenses of the trust.’ VI. Fraud.— No fraudulent act, intent or purpose of the as- signor or assignee shall defeat the assignment, but any fraudulent act, intent or purpose on the part of the assignee shall be sufficient cause for his removal;* and all property transferred by the assignor previous to and in contemplation of the assignment, with the intent . to defeat, delay or defraud creditors or to give a preference, shall pass to the assignee, who may sue for and recover the same.’ Con- cealment of property by an assignor which belongs to his estate 11 Sayles’ C. S. 1883, art. 65, d. 21d., art. 65, e. The assignee may waive written notice. Sanborn v. Norton, 59 Tex. 308. 31 Sayles’ C. S. 1888, art. 65, f. 41d., art. 65, h. An assignee is an officer of the law as to the trust (Faut v. Elsbury, 68 Tex. 1); and cannot be divested of his fiduciary character by binding the estate or conveying it to another. McIlhenny v. Todd, 71 Tex. 400, The fail- ure of the assignee to give bond will not invalidate the assignment. Windham v. Patty, 62 Tex. 490. 51 Sayles’ C. S. 1888, art. 65, f. 6Id., art. 65, i; Simmons Hdw. Co, v. Kaufman, V7 Tex. 131, 684 APPENDIX I. and fraudulently transferring it in contemplation of an assignment is a felony.! VII. Claims.— Within six months after the first publication of the notice of appointment of the assignee, every consenting cred- itor must file with the assignee a distinct statement of the particu- lar nature and amount of his claim, under affidavit of the creditor, or his agent or attorney, that the statement is true, that the debt is just, and that there are no credits or offsets that should be allowed against the claim, except as shown by the statement; and no creditor shall take any benefit under the assignment who neg- lects to file such statement.? Olaims not due may be allowed at their present value, discounting them at the contract rate of inter- est, if any; if none, at the legal rate; and the value of security, if any, may be estimated and deducted.’ The assignor or any cred- itor may dispute the allowance of the claim of any other creditor, by action in the district court, within sixty days after the time within which creditors are required to file their claims.‘ VIII. Removal and Appointment of Assignees.— If any as- signee becomes unsuitable to perform the trust, or refuses or neg- lects to do so, or mismanages the property, the county judge, or the judge of the district court, may, upon application of any per- son interested, after reasonable notice, remove such assignee, and, in case of vacancy by death or otherwise, shall appoint another in his place. IX. Distribution.— When the assignee has enough funds in his hands to pay ten per cent. of the debts, he must make a pro rata distribution of the same among the creditors. The assignee shall have reasonable compensation for services, necessary expenses and attorney’s fees.’ X. Discharge of Assignee.— When the assignee has fully per- formed his trust and desires to be discharged, he may file a report of his proceedings, under oath, in the office of the county clerk; and no action shall be brought against the assignee unless within twelve months thereafter. Any funds on hand shall be paid into the district court subject to be paid out upon decree of that court.‘ XI. Mortgages or Merchandise.— Every mortgage, deed of trust, or every lien attempted to be given by the owner of any 11 Sayles’ C. S. 1888, art. 65, 1. 2Td., art. 65, g. 3Td., art. 65, n, 4Id., art. 65, m. 51d., art. 65, 0. No appeal lies from an order of the district judge removing the assignee and appointing his successor in vacation. Perry v. Stephens, 77 Tex. 246. : 61 Sayles’ C. S. 1888, art. 65, p. 7Id., art. 65, q; Becker v. Shayne, 79 Tex. 260, SYNOPSIS OF STATUTE LAWS. 685° stock of goods, wares or merchandise daily exposed to sale, in par- cels, inthe regular course of such business, and contemplating a continuance of possession of the goods and control of the business by og of the goods by the owner, shall be deemed fraudulent and void. UTAH. In this territory there has been no special legislation on the sub- ject of assignments for the benefit of creditors. VERMONT. I. Execution of.— In this state assignments for the benefit of creditors must be specific, in writing, signed by the debtor and without preference; if the assignment conveys real estate it must be executed and recorded like a deed. An assignment shall not be valid against creditors if a person interested in its provisions be made assignee.? IL. Inventory.— A copy of the assignment and a full inventory of the property assigned and a list of the creditors and the sums due each, as near as may be known, must be filed in the county clerk’s office in the county where the assignment is made and the property assigned is situated.’ III. Bond.— At the time of making the assignment the assignee shall execute to the probate court, for the district in which the as- signor resides, a bond with sureties satisfactory to the court, con- ditioned for the faithful performance of the trust. If such copies and the bond are not filed as directed, the property so assigned shall be liable to process of law as if no assignment had been made.‘ IV. Assignee.— The assignee shall proceed with reasonable dis- patch in the discharge of his trust; and when completed he shall file with the clerk of the county court a copy of the settlement of 11 Sayles’ C. S. 1888, art. 65, r. See Duncan v. Taylor, 68 Tex. 465; Nat. Bank v. Lorenberg, 63 id. 506; Bettis v. Weir Plow Co,, 84 id. 543; 19 S. W. Rep. %5. 2R, L. 1880, §§ 1886, 1887. See the history of the legislation on this subject discussed in Passumpsic Bank v. Strong, 42 Vt. 29. See Vail v. Pecks, 27 Vt. 764, The provisions of this act do not apply to assignments made out of the state by non-residents. Hanford v. Paine, 32 Vt. 442. The act of 1848 was con- fined to general assignments. Partial assignments were still permitted. Mussey v. Noyes, 26 Vt. 462; Noyes v. Hickok, 27 id. 36, But the act of 1852 applies also to assignments of a part of a debtor’s property for the benefit of a part of his creditors. Passumpsic Bank v. Strong, 42 Vt. 29; overruling on this point, Stanley v. Robbins, 36 Vt. 422. 3R,. L. 1880, § 1888, 41d,, $ 1889, 1890; Kimball v. Evans, 58 Vt. 655, 686 APPENDIX I. his trust and account on oath. If in the opinion of a creditor the assignec neglects to close the trust and file a copy of his account for an unreasonable time, such creditor may apply to the chan- cellor for an order upon the assignee to do so. The chancellor may enforce his orders according to the usages of the court of chancery.! V. Fraudulent Conveyances.— Transfers made by a person in- solvent or in contemplation of insolvency, to any person who had reasonable cause to believe such person insolvent or in contempla- tion of insolvency, are void if made within four months before the proceedings in insolvency.” VIRGINIA. I. No Statutes.— In this state there has been no special legisla- tion on the subject of voluntary assignments by debtors, and these conveyances are governed by the statute of fraudulent convey- ances as applied and construed by the courts, and certain general provisions of statutes relative to trusts. II. Trusts.— After reasonable notice to the trustee of his ap- pointment, the court having jurisdiction, or the judge thereof in va- cation, may, on motion of any person interested, if deemed proper, order such trustee to give bond with surety, within a reasonable time, for the faithful execution of the trust, and if such order is not complied with, or whenever for any cause it appears proper, re- move such trustee and appoint another in his place.’ Within four months after a sale of trust property by a trustee he must file, in the office where the deed creating the trust was.first recorded, an inventory of the property sold and account of sales, which shall be recorded by the clerk.* III. Preferences.— Preferences by chartered companies are for- bidden.® WASHINGTON. In this state there has been no special legislation on the subject of voluntary assignments for the benefit of creditors, TR. L, 1880, §§ 1891-1893, A party making an assignment in accordance with this chapter, R. L. ch. 94, is not included by the recitals of the instrument in a subsequent suit with a creditor therein named. Reed v. Newcomb, 62 Vt. 75. 2 BR. S. 1888, § 1861. 3 Code 1887, § 3420. See Planters’ Bank v. Whittle, 78 Va, 73%. 4 Code 1887, §§ 2674, 2675, 5Id., § 1149, SYNOPSIS OF STATUTE LAWS, 687 WEST VIRGINIA. I. Trusts.— In this state voluntary assignments for the benefit of creditors are regulated by statutes only in so far as they are af- fected by the provisions relative to trusts, preferences and fraudu- ‘ lent conveyances. The grantor, or any cestui que trust, may, at any time after the execution of the trust, by notice in writing, require any trustee to give bond with good security, to be approved by the clerk of the court, and upon his failure to do so for twenty days after such notice, his power shall cease and another trustee may be appointed by the circuit court of any county wherever such deed of trust is recorded, or by the judge in vacation. Atleast ten days’ notice in writing of such application shall be given to the trustee, grantor and to all cestuzs que trust in such deed, if they be residents of the county. If both the trustee and grantor, or either of them, be non-residents of the county, publication for two successive weeks must be made as to them, or either of them, in some newspaper in the county; if there be none, then in some newspaper of general circulation in the county.! The trustee must, within six months after a sale of any of the property, return to the clerk of the court wherein the deed was recorded an inventory thereof and an account of the sales.? II. Fraudulent Conveyances.— Every gift, sale, conveyance, as- signment, transfer or charge, made by an insolvent debtor to a trustee or assignee, or otherwise, giving or attempting to give a priority or preference among his creditors, or which provides or attempts to provide for the payment, mm whole or in part, of a cred- itor or creditors, to the exclusion or prejudice of other creditors, shall be void as to such priority or preference; and all property so conveyed or charged shall be applied upon the debts and paid to the creditors pro rata; provided, that prior liens, priority or in- cumbrances acquired by a creditor on the real estate of the debtor shall not be affected; provided further, that the transfer, sale or as- signment of bonds, notes, stocks, securities or other evidences of ' debt in payment of, or as collateral security for the payment of, a bona fide debt, or to secure any indorser or surety either at the time the debt is contracted or for a pre-existing debt, shall not be impaired or affected.* 1Code 1891, pp. 639, 640. 21Td., p. 690. 3Id., pp. 649, 650. 688 APPENDIX I. WISCONSIN. I, Assignments — When Void.— All voluntary assignments for the benefit of creditors in this state are void against the creditors unless the assignee be a resident of the state, and not a creditor, and shall before taking possession of the property assigned deliver to the county judge or the court commissioner of the county in which the assignor or some one of the assignors reside a bond exe~ cuted to the clerk of the circuit court, with two or more sureties, freeholders of this state, who shall each testify to his responsibility” and qualify on oath as to the value of his property, for an amount not less than the nominal value of the assets, as ascertained by the oath of one or more witnesses and the assignors. Such bond and a copy of the assignment must be filed in the office of the clerk to whom it is executed. II. Preferences.— Assignments for the benefit of creditors are void if they contain preferences, except that the claims of all serv- ants, clerks or laborers for personal service or wages owing from the assignor for services or labor performed within three months’ preceding the assignment shall be preferred and shall be paid first by the assignee, after the payment of costs, debts due the United States or the state, and all taxes and expenses of the trust.’ III. Exempt Property.— The assignor may reserve in his as- signment his property which is exempt by law, and it need not be described.’ IV. Assignees’ Consent.— The assignees named shall each in the presence of the officer taking the bond, before delivering the copy of the assignment, indorse thereon in writing their consent to assume the discharge of the trust.* 18. & B, Ann. St. 1889, §§ 1694, 1695. The bond must be executed and filed as this section requires. Ingram v. Osborn, 70 Wis. 184; Gole v. Hubbell, 61 id. 293; Fuhrman v. Jones, 68 id. 497; Farwell v. Webster, 71 id. 485. A creditor may s0 ratify an assignment as to estop him from denying its validity under this. act. Boynton Furnace Co, v. Lorensen, 80 Wis. 594; Mezesheimer v. Kennedy, 75 id. 411; Churchill v. Whipple, 41 id. 611; Smith v. McCulloch, 42 id. 564; Hutchinson v. Brown, 88 id. 465; Klauber v. Charlton, 47 id, 564; Same v. Same, 45 id. 600; Howitt v. Blodgett, 61 id. 376. 28. & B. Ann. St. 1889, § 1693, a,c; Mack v. Meisen, 70 Wis. 2384; Smith v. Bowen, 61 id. 258; Bates v. Simmons, 62 id. 69; Ansted v. Bentley, 61 id. 629; Howitt v, Blodgett, id. 876; Bradley v. Croft, 19 Fed. Rep, 293, 38. & B. Ann. St. 1889, § 1694, a. 4T4., § 1696. If such indorsement is not made the assignee acquires no right to the assigned property as against attaching creditors. Clark v. Lamoreux, 70 Wis. 508; Scott v. Seaver, 52 id. 175. There is no ‘‘execution of the assign- ment” until delivery, acceptance and giving of the bond as required by law. Wadleigh v. Merkle, 57 id. 517, SYNOPSIS OF STATUTE LAWS. 689 Y. Inventory.— Within twenty days after the execution of the assignment the assignor must file in the clerk’s office a correct i in- ventory of all his assets and a list of his creditors, under oath, stat- ing their places of residence, and the amount due each, with a cer- tificate of the assignee that the same is correct according to his best knowledge. VI. Notice to Creditors.— Within twelve months after the exe- cution of the assignment the assignee must publish notice for three successive weeks in a newspaper in the county, or, if none, in an ad- joining county, and mail a copy thereof to each known creditor, stating the making of the assignment, his postoffice address, and requiring every creditor to file, within three months, with him or the clerk of the circuit court, an affidavit nebting forth his name, residence, postoffice address, the nature and consideration and amount of his claim over and above all offsets, or be debarred a dividend.? VII. Claims.— After three months from the first publication of such notice the assignee shall file, under oath, with the clerk, proof of the publication and a list of the creditors to whom notices were mailed, with the dates thereof; and also a list of the creditors who have filed their claims, stating their names, residences and amounts claimed. Any time within thirty days thereafter the assignee or any creditor may file written objections, specifying the grounds thereof, to the whole or any part of any claim, and serve a copy thereof upon the claimant, if a resident of the state; if not, to summon him as the court may direct. The court will hear and determine the case, and from its decision an appeal may be taken, within thirty days, to the supreme court.’ A rebate for interest may be allowed on claims not due. The assignee may pay, or the court may order a dividend to be paid at any time, providing for the protection of disputed claims.‘ VIII. Assignee Every assignee shall, within six months after acceptance of his trust, or within such further time as the circuit court or judge may allow, file in the circuit court a 18, & B. Ann. St. 1889, § 1697. I£ the inventory and lists are filed as required they relate back to the time when the assignment was executed and form a part of it. Conlee Lumber Co, v. Ripon L. & M. Co., 66 Wis. 481; Shakeman v. Schleuter, 77 id. 402; Hanson v. Dunn, 76 id. 455. The omission of property through a mistake of law is immaterial. Brahe v. Eldridge, 17 Wis. 184. Innocent omis- sion of creditors from the list will not invalidate the assignment. Smith v. Bowen 61 Wis. 258. The verified inventory is prima facie evidence of insolvency. Ball v. Bowe, 49 Wis. 495. 29. & B. Ann. St. 1889, § 1698; Bradley v. Kroft, 19 Fed. Rep, 295; First Nat. Bank v. Hackett, 61 Wis. 395. 38. & B. Ann, St. 1889, § 1699. 4Id., § 1700. 44 690 APPENDIX T. full report of his proceedings. If he fails to do so the court may, upon application of any creditor, compel such settlement, and may deny the assignee his compensation. Upon filing such report, the assignee may apply to the court, upon not less than twenty days’ notice thereof by mail, to the creditors, for a final settlement of his account, and the court shall hear any objections made by creditors, adjust the account and allow the compensation and expenses of the assignee, and his order shall be conclusive; but the assignee or any creditor may file exceptions and appeal from such order within six months from the entry thereof to the supremecourt. Atany time after three months from the publication of the notice to creditors the assignee may file in court a release of the assignor by all cred- itors who have filed proof of their claims, and upon payment of all costs and expenses the court shall order the assignee to deliver all the trust property to the assignor, and thereupon the assignee shall be released." IX. Removal of Assignee.— The circuit judge may, upon notice and after a hearing, remove an assignee who is shown to be incom- petent, or to have become disqualified, or to have wasted or mis- applied any of the trust estate, and shall also remove any assignee, upon application of a majority in number and amount of the cred- itors, compel him to settle, and appoint a person named or some suitable person as his successor. If an assignee die the court may appoint another in his place.” X. Inspection of Assignor’s Books.— The assignee or any cred- itor, upon application to the circuit judge of the proper court, or the county judge or court commissioner of the county where the assignment is filed, may have an order for the inspection of the books of the assignor and for the examination on oath of the assignor and other witnesses. Upon proper notice witnesses may be compelled by the court to attend and be examined concerning the estate.* XI. Annual Statement by Assignees.— The assignee must file with the clerk of the circuit court of the county where the assign- ment is made, at least once a year during the continuance of the trust, a full and itemized statement, under oath, of the condition of the estate and his proceedings.‘ XII. Judgments, Sales, etc., Void.— “Every execution levy made under a judgment confessed against an insolvent debtor, within sixty days prior to an assignment for the benefit of cred- itors, or under a judgment entered on a judgment note, by any such debtor, within sixty days prior to such assignment, and a lien of any 1Id., § 1701; Magnus v. Sleeper, 69 Wis. 219; In re Baker, 72 id. 395. 28. & B. Ann, St. 1889, § 1702. 3Id., 1702, b; Cribben v. Ellis, 69 Wis. 337. 48, & B, Ann. St. 1889, § 1702, e. SYNOPSIS OF STATUTE LAWS. 691 such judgment upon real estate shall be void and have no effect. Every sale, mortgage, hypothecation, lien or other security of any name or nature, made, given or executed upon his property, real or personal, by the insolvent debtor, within sixty days prior to the making of such assignment, and in contemplation thereof, or of insoly- ency, shall be void and have no effect; provided the vendor in such sale, or the person benefited thereby, or receiving such mortgage, hy- pothecation, lien or other security, knew or had reasonable cause to believe such debtor insolvent. The assignee in such assignment shall possess all the powers thereunder necessary to institute any action or proceeding to set aside and avoid any levy, sale, mortgage, hypothecation, lien or other security named in this section. In case any writ of attachment shall be levied upon the property of the debtor within sixty days prior to the execution of such assign- ment the assignee may appear in the action in which the attach- ment was issued, and, in the name of the debtor, traverse by an- swer or otherwise an affidavit, or any part thereof, on which such writ issued, and the verification of the answer traversing such affi- davit, made upon information and belief, shall be sufficient. XIII. Assignee.— The assignee is considered as representing the rights and interests of the creditors as against all transfers and conveyances of property which would be held to be fraudulent and void as to creditors.2, Whenever an insolvent debtor has made a conveyance or transfer of his property with intent to hinder, delay or defraud his creditor, or any conveyance, transfer or charge upon his property which is void by reason of being preferential or otherwise, and shall thereafter make a general assignment for the benefit of his creditors, if the assignee named in such assign- ment shall neglect, for sixty days after the delivery thereof, to in- stitute proper suit to vacate such fraudulent or preferential convey- ance, transfer or charge, it shall be lawful for any creditor of the assignor, having first proved his claim as required by law, to insti- tute and prosecute to judgment any such suit mm the name of the assignee and for his benefit, upon giving to the assignee a bond in the sum of one thousand dollars, with sufficient surety resident in this state to hold said assignee harmless from loss, costs or ex- penses to arise or accrue to him in case the suit shall be decided adversely to him. In case of recovery such creditor shall be allowed all his costs and expenses out of the estate.’ XIV. Circuit Court.— The circuit court, or the judge thereof in vacation, shall have supervision of the proceedings in all voluntary assignments for the benefit of creditors.‘ 1Id., § 1698, 2; Backhaus v. Sleeper, 66 Wis. 68; Willis v. Brenner, 60 id. 622. 28, & B, Ann, St. 1889, § 1702, a. 8Id., § 1693, b. 4Id., § 1698; Lawson v. Stacy, 82 Wis. 303; Steinlein v. Halstead, 59 id. 289, 692 APPENDIX I. WYOMING. I. Who May Make.— Any debtor who is unable to pay his debts from his own means as they become due may make an assignment for the benefit of his bona fide creditors, and all such assignments must conform to the following provisions, or be deemed fraudu- lent and void.! II. How Made.— Such assignment must be in writing, signed and acknowledged like a deed, and within ten days after its execu- tion be filed with the county court clerk and ex officio register of deeds in the county in which the assignor resides or has his prin- cipal place of business, if he is a non-resident of the state. The deed must fully describe the real estate assigned and be accompa- nied by a schedule containing a description of all the personal property assigned, under oath. Until this is done the assignee’s interest does not vest.? SII. Filing in Court.— Within fifteen days after the execution the assignment the assignee must file a certified copy thereof and schedule in the office of the clerk of the district court of the county in which the debtor resides or is engaged in business; and, before entering upon the execution of the trust, make oath that he will faithfully execute the same, and file a bond in double the amount of the property assigned, with at least one surety, to be approved by the clerk. Ii the assignee fail to comply with these provisions the court or judge, or clerk if the judge be absent from the county, on petition of the assignor or a creditor, may remove the assignee and appoint another in his place, who must comply.’ IV. Notice to Creditors.— Then the assignee must publish no- tice of his appointment for three successive weeks in some news- paper in the county; and if there be none, by written notices put up in at least five of the most public places in the county, and pub- ’ lication in the nearest newspaper.! Y. Inventory.— Within thirty days after entering on the duties. of his trust the assignee must file, under oath, a complete inven- tory of all the trust property possessed by or known to him. And if the assignee learn of other property later he must file an addi- tional inventory.® VI. Appraisement.— Within twenty days after filing his inven- tory the assignee must have the property appraised, under oath, The court may, in a proper case, authorize the assignee to sell the property free from all incumbrances. Severson v. Porter, 73 Wis. 70. 1L, 1890, ch. 51, § 1. *Id., § 2. 31d., §§ 3, 5. 4Td., § 6 $Id. SYNOPSIS OF STATUTE LAWS. 693 by two reputable citizens of the neighborhood, who shall also set ee eo the assignor such property as he claims under the exemption aw, VII. Sales by the Assignee.— The assignee, as soon as possible after the appraisement is filed, shall collect the assets, and, after giving thirty days’ notice of the time and place and manner of sale {the time may be extended by the judge for cause shown), shall sell the property to the highest bidder for cash, or upon credit in no case to exceed two years, and make return of all sales to the clerk.’ Incumbered property may be sold subject to the incum- brance; but the assignee may, if he deem best, petition the court or judge, and be allowed to pay off such incumbrances before sell- ing the property.’ VIII. Supervision of the Court.— The court shall exercise a supervisory power over the estate of the assignor, and the assignee may, after the expiration of the time for presenting claims, compel a distribution when the funds on hand are sufficient to pay ten per cent. of the indebtedness.‘ IX. Assignee’s Report.— The assignee must, within six months after entering upon the duties of his trust, make a full report, under oath, of his proceedings, showing claims presented to him and those allowed. The court shall then try, at the next term, claims which the assignee has refused to allow and all the allow- ance which is objected to by a creditor.® X. Claims.— Persons filing claims with the assignee must make oath that they are just and lawful and that there are no set-offs or counter-claims, and that no part of the claim is for usurious inter- est; or, if so, what part; and such part must be deducted from claims before they are allowed. The assignee may administer the necessary oaths to creditors. Creditors who do not present their claims within six months after they are notified to do so shall not be entitled to dividends from the estate of the debtor, unless the court extend the time for filing of claims.’ Under direction of the court, and upon reasonable notice to all persons interested, the as- signee may compound doubtful claims.® XI. Distribution.— When the court shall have confirmed the report of the assignee showing the list of the creditors, and when no contested claims are standing on the docket, the court shall 11d., S$ 7, 9 21d., § 10. 31d., § 13. 4Id., § 10, 5Id., § 11. $1d., $12, 7Id., §16, $Id, §1% 694 APPENDIX I. order the assignee to pay all moneys then in his hands to the clerk, to be by him distributed among the creditors. Final distribution shall not be made until after six months from the first publication of notice of the assignee’s appointment, nor until after publication for four consecutive weeks, in a newspaper in the county of the as- signor’s residence or place of business, of such distribution." XII. Discharge of Assignee.— One year after entering upon his duties the assignee must make a final report to the court, upon approval of which by the court he may be discharged from his trust.” XIII. Removal of Assignee.— The judge of the district court may at any time remove an assignee for cause shown, and shall fill all vacancies. XIV. Preferences.— Preferences in an assignment render it. void; except that the wages of employees of the assignor for three months prior to the assignment are preferred claims.’ XV. Exemptions.— Property exempt by law and all insurance upon the life of the assignor do not pass to the assignee.® XVI. Discharge of Assignor.— Where the assignor complies. with these provisions, a creditor accepting a dividend out of the assignment must release the assignor from all further liability on the claim or claims on which payment is made.® XVII. Fraudulent Conveyances.— If any person insolvent, or in contemplation of insolvency, within twenty days before making an assignment, gives preferences; or procures or secures any part of his property to be attached, sequestered or seized on execution, or makes any payment, pledge, assignment or transfer, or convey- ance of any part of his property, either directly or indirectly, abso- lutely or conditionally, the person receiving such payment, pledge, etc., of any part of his property, or to be benefited thereby, or by such attachment, having reasonable cause to believe such person is insolvent, and that such attachment, payment, etc., is made in fraud of the provisions of this act, the same shall be void, and the assignee may recover the property or the value of it from the per- son so receiving it or so to be benefited.” Property conveyed or fraudulently withheld by the assignor from his assignment may, upon proof, be subjected by the court to the general trust.é 11d., $$ 14, 18. 21d., § 19. 31d., § 20. 41, 1898, ch. 15. 5L, 1890, ch, 51, $§ 2, & d., § 28. 81 7Id., § 27. 8Id., § 15. APPENDIX II. FORMS AND PRECEDENTS. I. ASSIGNMENTS BY INDENTURE BIPARTITE. No. 1. A General Assignment of Real and Personal Property for the Ben- efit of Creditors Ratably. This indenture, made this —— day of ——, in the year ——, between —— —, of ——, party of the first part, and —— ——, of —— party of the second’ part, witnesseth, that whereas the party of the first part is indebted to divers persons in sundry sums of money, which he is unable to pay in full, and is desirous of pro- viding for the payment of the same, so far as in his power, by an assignment of all his property for that purpose: Now, therefore, the said party of the first part, in consideration of the premises and of the sum of one dollar to him paid by. the party of the second part upon the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, has granted, bargained, sold, assigned, transferred and set over, and by these presents does grant, bargain, sell, assign, transfer and set over unto the said party of the second part, his successors and assigns, all and singular the lands, tenements, hereditaments, appurtenances, goods, chattels, stock, promissory notes, debts, claims, demands, property and effects of every description belonging to the party of the first part, wherever the same may be, except such property as is exempt by law from levy and sale under execution, to have and to hold the same, and every part thereof, unto the said party of the second part, his successors and assigns: In ‘trust, neverthe- less, to take possession of the same and to sell the same with all’ reasonable dis- - patch, and to convert the same into money, and also to collect all such debts.and demands hereby assigned as may be collectible, and with and out of the pro- ceeds of such sales and collections — 1. To pay and discharge all the just and reasonable expenses, costs and charges of executing this assignment and of carrying into effect the trust hereby created, together with a lawful commission to the party of the second part for his serv- ices in executing said trust. : 2. To pay and discharge in full, if the residue of said proceeds is sufficient for that purpose, all the debts and liabilities now due or to grow due from the said party of the first part, with all interest money due or to grow due; and if the res- idue of said proceeds shall not be sufficient to pay the said debts and liabilities and interest moneys in full, then to apply the said residue of said proceedsto the payment of said debts and liabilities ratably and in proportion. 696 APPENDIX II. 8, And if, after the payment of all the said debts and liabilities in full, there be any remainder or residue of said property or proceeds, to repay and return the same to the said party of the first part, his executors, administrators and assigns. And in furtherance of the premises the said party of the first part does hereby make, constitute and appoint the said party of the second part his true and law- ful attorney, irrevocable, with full power and authority to do all acts and things which may be necessary in the premises to the full execution of the trust hereby created, and to ask, demand, recover and receive of and from all and every per- son or persons all property, debts and demands due, owing and belonging to the said party of the first part, and to give acquittances and discharges for the same, to sue, prosecute, defend and implead for the same, and to execute, acknowl- edge and deliver all necessary deeds, instruments and conveyances. And he said party of the first part does hereby authorize the said party of the second part to sign the name of the said party of the first part to any check, draft, promissory note or other instrument in writing which is payable to-the order of the said party of the first part, or to signthe name of the party of the first part to any instrument in writing whenever it shall be necessary so to do to carry into effect the object, design and purpose of this trust. The said party of the second part doth hereby accept the trust created and re- posed in him by this instrument, and covenants and agrees to and with the said party of the first part that he will faithfully and without delay execute the trust created according to the best of his skill, knowledge and ability. In witness whereof, the parties to these presents have hereunto set their hands and seals the day and year first above written. — —. [SEAL] — —. [SEAL] Sealed and delivered in presence of —— ——. State oF NEw York, ss City and County of New York, ‘ On this -— day of ——, in the year of our Lord one thousand eight hundred and eighty ——-, before me came ——-—— and —— ——, to me personally known, and known to be the persons described in and who executed the above instrument, and each for himself severally acknowledged that he executed the same, No. 2. Assignment Bipartite, with Preferences.! This indenture, made this thirteenth day of February, in the year of our Lord one thousand eight hundred and fifty-eight, between Augustus G. Mansfield, of the town of Marengo, county of McHenry, and state of Illinois, of the first part, and Anson Sperry, of the same place, party of the second part. Whereas, the said party of the first part is indebted to divers persons in divers sums of money, which by reason of difficulties and misfortunes he has become at present unable to pay, and is desirous of providing for the payment thereof by an assign- ment of his property and effects for that purpose, not exempt to him by the laws of the state of Illinois: Now this indenture witnesseth that he, the said party of the first part, in con- sideration of the premises and of the sum of one dollar to him in hand paid by the said party of the second part at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, hath granted, bargained, ‘1 This deed is taken from Sackett v. Mansfield, 26 Ill. 22, 23, 24. See remarks of Breese, J., in ref- erence to its provisions. Id. 27, FORMS AND PRECEDENTS, 697. sold, assigned, transferred and set over, and by these presents doth grant, bar- gain, sell, assign, transfer and set over, to the said party of the second part, his heirs, executors, administrators and assigns, all and singular the lands, tene- ments, hereditaments and appurtenances, goods, chattels, accounts, promissory notes, debts, choses in action, claims, demands, property and effects of every de- scription belonging to the said party of the first part, or in which he has any right or interest now due or payable, or to become due or payable, to the party of the first part, except what are exempt to him by the law of the state of Illinois, the same being fully and particularly enumerated and described in a schedule thereof hereunto annexed, marked ‘‘Schedule A.” Also the books of account of the said party of the first part, and all papers, documents and vouchers relating to his business, dealings, property or affairs. To have and to hold the same, and every part and parcel thereof, unto the said party of the second part, his heirs, ex- ecutors, administrators and assigns. In trust, nevertheless, and to and for the uses, interests and purposes following, that is to say: That the said party of the second part shall take possession of the said property hereby assigned, or intended so to be, and shall, with all convenient diligence, sell and dispose of the same at public or private sale, as he may deem most bene- ficial to the interest! cf the creditors of the said party of the first part, and con- vert the same into money, and shall also, with all reasonable diligence, collect, get in and recover all and singular the said debts, dues, bills, bonds, notes, ac- counts and balances of accounts, judgments, securities, claims and demands hereby assigned, or intended so to be, and with and out of the proceeds of said sales and collections that the said party of the second part shall first pay and disburse all the just and reasonable expenses, costs, charges and commissions attending the due execution of these presents, and the carrying into effect the trusts hereby created, together with a reasonable compensation or commission for his own serv- ices, and shall also pay the taxes now due, or.to grow due, from and upon the premises at present occupied by the said party of the first part, until the said property and effects hereby assigned shall be sold and disposed of, and with and out of the residue, or net proceeds of such sales and collections, shall pay and discharge the debts due and owing by the said party of the first part to and in the order and manner following, that is to say: . First. The said party of the second partshall pay all and singular the debts set forth and enumerated in a schedule of debts hereto annexed, marked ‘‘ Schedule B,” and designated in said schedule as class No. one, the same to be paid with lawful costs and interest, if the said proceeds shall be sufficient for that purpose, and if the same be not sufficient, then the said party of the second part shall apply the net proceeds to and in the payment of the said debts ratably and in proportion to the respective amounts thereof. Secondly. After the payment in full of all the debts designated in Schedule B as number one, in manner above directed, the said party of the second part shall pay in full all and singular the debts enumerated and designated as class number two, and all other indebtedness due and owing by said party of the first part, to any person or persons whomsoever, if there be sufficient of the said net proceeds remaining in his hands for that purpose, and if there be not sufficient, then the said party of the second part shall apply the same, as far as they will go for that purpose, to and in payment of the last mentioned debts ratably and in propor- tion to the respective amounts thereof. Lastly. After the payment of all the costs and charges and expenses attending the execution of the trust. hereby created, and the payment and discharge in full of the lawful debts due and owing by the said party of the first part of any and every kind and description, if any part or portion of the proceeds of said sales "The controversy in the case of Sackett v. Mansfield, 26 Ill. 21, from which this form is taken, turned upon the propriety of this provision, and it was there held not to indicate a fraudulent in- tent on the part of the grantor. 698 APPENDIX II. and collections shall remain in the hands or control of the said party of the sec- ond part, his executors, administrators and assigns, he or they shall return the same to the said party of the first part, his executors, administrators and assigns, and if, after payment in full of all the said debts, there should remain in the hands or possession of the said party of the second part, his executors, adminis- trators or assigns, any part or portion of the property and effects hereby assigned which shall not have been sold or collected, or converted into money, he or they shall return, re-assign and redeliver the same to the said party of the first part, his heirs, executors, administrators or assigns. And for the better and more effectual execution of these presents, and of the trusts hereby created and re- posed, the said party of the first part doth hereby make, constitute and appoint. the said party of the second part his true and lawful attorney, irrevocable, with full power and authority to do, transact and perform all acts, deeds, matters and things which may be necessary in the premises, and to the full execution of the said trust, and for the purposes of said trust to ask, demand, recover and receive: of and from all and every person or persons all the property, debts, demands, be- longing and owing to the said party of the first part, and to give acquittances and discharges for the same, and to sue, prosecute and defend for the same, and to execute, acknowledge and deliver all necessary deeds and instruments of con- veyance, and also for the purposes aforesaid, or any part thereof, to make, con- stitute and appoint one or more attorneys under him, and at his pleasure to re- voke the same, hereby ratifying and confirming whatever the said party of the. second part or his substitutes shall lawfully do in the premises, In witness whereof, the said Augustus G. Mansfield, party of the first part to these presents, has hereunto set his hand and seal the day and year first above written. ——. [LS] ScHEDULE A. REFERRED TO IN THE FOREGOING ASSIGNMENT. Real Estate. Allthat certain messuage or dwelling-house and lot, piece or parcel of land situate,. lying and being on the southerly side of —— street, between —— and streets, in the —— ward of the city of ——, and known and distinguished as No. —, —— street, etc. [describing it]. All that certain lot, piece or parcel of land situate, etc., in the town of ——, in the county of ——, and state of ——, and known and described as follows, to wit: [description]. Subject to a mortgage to J. A., of ——, for one thousand dollars, ‘ Personal Estate. Goods and merchandise now in the store No. —, —— street, in the city of —,. as follows, to wit: [giving the items]. Household furniture now in house No. —, —— street, in said city, as follows, to wit: [giving the items]. One-half of a cargo of iron on board the ship —, now on the homeward voyage from ——, as per bill of lading and invoice delivered, Stocks. Ten shares of the —— Insurance Company . . . « « « «© « « $1,000 00 Ten shares of the —— Land Company . . . . 2. «2 6 « 6 e —_— Four shares of the —— Banking Company . . . . . ss ee — FORMS AND PREOEDENTS. 699 Bonds and Notes. A bond executed by E. J. to the said J. D., dated ——, conditioned for the payment of $2,000, on whichis nowdue . ... . . . $1,500 00: W. & M.’s note in favor of B, M., at six months from August 20, 1850 1,000 00 N. T.’s note in favor of L, E., at four months from [date] . . . . 1,000 00 Judgments. A judgment recovered by the said J. D, against T. F., in the superior court of the cityof New York. . . . . 2... 550 75 A judgment recovered against S. R., in the [court] . 2... ee 427 00: Claims. A claim for insurance on one-half interest in Brig —— at the —— In- surance office . . . . . 1. we ke wk Z 1,200 00: A claim on the estate of C. C., deceased, in[Savannah, Ga.] . . . 800 00 A claim for indemnity under the treaty between the United States and——,dated,et. . . . . . 1... ww ew we we 2,000 00 Books, Debts and Balances, Due from the following persons: [giving the items,] Dated, etc., J.D. Witness, etc, SCHEDULE B, REFERRED TO IN THE FOREGOING ASSIGNMENT. Class Number One. W. A. B., money deposited by him, as per receipt given. . . . . $1,000 00 S. J., dividends on stock collected forher . . . . . . « « e 500 00 F. N., minor ward of J. D., legacy collected forher . . . . « « 2,000 00 Class Number Two. J. G., money borrowed of him, as per note dated, et. . . . . « 1,500 00 M. E., money received for him, as perreceipt . . . . ...s 850 00 A. N., surety on J. D.’s bond to ——, dated, etc., conditioned for. . 2,000 00 E, P.’s indorsement of J. D.’s note, dated, eto., held by W.P.. . . 1,000 00 Dated, etc. J. D. Witness, etc, No. 3. A General Assignment of Real and Personal Property, Giving Preferences, Without Schedules. This indenture, made the —— day of ——, in the year ——, between A. B. of —,, party of the first part, and C. D. of ——, party of the second part. ‘Whereas, ete. [recital, as in preceding forms]. Now, this indenture witnesseth that the said party of the first part, in consid- eration of the premises, and of thesum of one dollar to him in hand paid by the said party of the second part, the receipt whereof is hereby acknowledged, hath granted, bargained, sold, assigned, transferred and set over, and by these pres- ents doth grant, bargain, sell, assign, transfer and set over, unto the said party 700 APPENDIX IL. of the second part, his heirs, executors, administrators and assigns, all the estate, real and personal, goods, chattels, effects, debts and choses in action of the said party of the first part, that is to say: All that certain lot of land, situate, etc. [describiug it]. One pair of horses and one carriage, now in the possession of G. H., of ——. A bond executed by W. B., dated ——, conditioned for the payment of $1,000. A promissory note for $800, dated ——, made by 8. W., payable to the order of D. G., and by him indorsed. To have and to hold the said above-described property, and every part and parcel thereof, unto the said party of the second part, his heirs, executors, ad- ministrators and assigns: In trust, however, and to the uses, intents and purposes following, that is to say: that he, the said party of the second part, shall take possession of the said property, and with all reasonable diligence sell and dispose of the said lands and personal estate, and collect and recover the amount of the said bond and promis- sory note, and out of the moneys arising therefrom, after deducting the costs, charges and expenses of the said sales and collections, and other expenses attend- ing the execution of this trust, and the lawful commissions of the said party of the second part, as compensation for his services, shall pay and discharge the debts and liabilities of the said party of the first part in the order and manner following, that is to say: First, The said party of the second part shall pay in full to H. R., of ——, the amount of a promissory note held by him, dated ——, for fone thousand] dollars, made by the said party of the first part, and given for money borrowed by him of the said H. R., together with the interest thereon. And after fully paying and discharging the said debt, if there be any residue or surplus of the said moneys remaining— - Secondly. The said party of the second part shall pay in full to G. C. the amount of a promissory note held by him, dated ——, for [five hundred] dollars, made by. the said party of the first part, and given for services rendered to him by the said’ G. C., together with the interest thereon. And after fully paying and discharging the said last-mentioned debt, if there be any residue or surplus of the said moneys remaining — Thirdly. The said party of the second part shall distribute the said moneys among all the other creditors of the said party of the first part, ratably, and in proportion to their respective demands. Lastly. After paying all the costs, charges and expenses attending the exe- cution of the trust hereby created, and after fully paying and discharging all the iawful debts due and owing by the said party of the first part, of any and every kind and description, if any part, etc. [surplus to debtor, as in No. 1]. And, etc. [power of attorney as in No. 1). And i said party of the second part [covenant by assignee, if necessary, as in No. 1]. In witness whereof, the parties to these presents have hereunto set their hands and seals, the day and year first above written, A. B. [SEAL] C.D. [SEaL.] Sealed and delivered in presence of E. F, FORMS AND PRECEDENTS, Wl No. 4. A General Assignment, with Stipulation for a Release [Here insert Form No, 1 to number 2.] 2. To apply the residue of such proceeds to the payment of the claims of all the creditors of the said party of the first part, pari passu, and without any pref- erence, who shall on or before the —— day of ——, 18—, agree to accept such dividend or dividends as they may severally be entitled to under this deed in full satisfaction and discharge of their respective claims against the said party of the first part, and execute and deliver to the said party of the first part a legal release thereof. 3. After the payment and satisfaction of the claims of creditors as aforesaid, then to apply the residue of the said trust property to the payment of all other creditors of the said party of the first part, pari passu, and without any prefer- ence or priority. [Here insert Form No. 1, beginning with number 3.] No. 5. Copartnership Assignment — Assignment by Copartners Without Preference. This indenture, made this —— day of ——, in the year of our Lord one thou- sand eight hundred and ——, between —— ——, of ——, and —— ——, of ——, and —— ——, of ——, who have hitherto composed the partnership of ——. hitherto doing business at ——, parties of the first part, and —— ——, of —-, party of the second part, witnesseth, that whereas the said parties of the first part are justly indebted to sundry persons in divers and sundry sums of money, and being unable to pay the same in full, are desirous of making an equitable distribution of their property and effects among their creditors: Now, therefore, First. The parties of the first part, in consideration of the premises and the sum of one dollar to them in hand respectively paid by the party of the second part, the receipt whereof is hereby acknowledged, have granted, bargained, sold, assigned, delivered and conveyed, and by these presents do grant, bargain, sell, assign, deliver over and convey, unto the party of the second part, his suc- cessor or assigns, all and singular the estate and property, real and personal, of every kind and nature, and wheresoever the same may be, of the said parties of the first part, which is held or owned by them as such copartnership firm as aforesaid. To have and to hold the same, and every part and parcel thereof, with the appurtenances, to the said party of the second part, his successor or as- signs, In trust, nevertheless, for the following uses and purposes: Second. The said party of the second part shall forthwith take possession of all and singular the estate, property and effects hereby above assigned, trans- ferred and conveyed, and set over or intended so to be, and shall with all reason- able diligence sell and dispose of the same, and convert the same into money, and shall collect any and all bills, promissory notes, bonds, accounts, choses in action, claims, demands and money due or owing to the said parties of the first part, and such copartnership, so far as the same shall prove collectible. 1 §ee Moennel v. Murdock, 13 Md. 164. 702 APPENDIX II. Third. Out of the proceeds of such sales, collections, and estate and property, the said party of the second part is authorized to pay and retain all reasonable costs, charges and expenses of making, executing and carrying into effect this assignment in this behalf, including a reasonable compensation to the party of the second part for his services in executing and carrying out the trust created in this behalf in this assignment. Fourth. That the said party of the second part is directed to pay out of the residue of the said proceeds of such sales, collections, estate and property, if these should be sufficient therefor, to each and every of the creditors of the said parties of the first part, as such partnership or firm, the full sum that may be justly due and owing to them respectively from such partnership or firm, with- out any priority or preference whatsoever; and if the proceeds of such sales and collections, estates and property shall not be sufficient to pay and satisfy the debts of each and all of the creditors of the said partnership or firm in full, then the said party of the second part is directed out of the proceeds to pay the said creditors ratably and in proportion to the amount due and owing to each of them respectively. Fifth. With and out of the residue and remainder of the said proceeds, if any shall remain after paying all the said copartnership debts, the party of the second part is directed to pay and discharge all the private and individual debts of the parties of the first part, or either of them, whether due or to grow due, pro- vided the respective amounts of the individual debts of each of said parties do not exceed his portion of the surplus that may remain after paying all the said partnership debts; and if it should, then his interest in said surplus is to be di- vided pro rata among his individual creditors in proportion to their respective demands, it being understood no part of the said surplus which will belong to each of said individual parties of the first part respectively, after the payment of the copartnership debts, is to be made liable for the individual debts of the other of them. Sixth. And whereas, the said parties of the first part are respectively justly indebted to sundry persons, in divers and sundry sums of money, and are respect- ively unable to pay the same in full, and are respectively desirous of making an equitable distribution of their property and effects among their creditors: Now, therefore, Seventh. The parties of the first part, in consideration of the premises and of the sum of one dollar to each of them in hand paid by the party of the second part, the receipt whereof is hereby acknowledged, have respectively granted, bargained, sold, assigned, delivered over and conveyed, and by these presents do respectively grant, bargain, sell, assign, deliver over and convey, unto the party of the second part, his successor or assigns, all and singular the estate and prop- erty, real and personal, of every kind and nature, and wheresoever the same may be, of the said parties of the first part, which is held and owned by them respect- ively as their separate and individual property, to have and to hold the same, and every part and parcel thereof, with the appurtenances, to the said party of the second part, his successor or assigns, in trust, nevertheless, to and for the fol- lowing uses and purposes: Eighth. The party of the second part shall forthwith take possession of all and singular the estate, property and effects hereby lastly above assigned and con- veyed, or intended so to be, and shall with all reasonable diligence sell and dis- pose of the same, and convert the same into money, and shall collect any and all claims of every kind and nature hereby lastly above assigned, due or owing to the parties of the first part respectively, so far as the same shall prove collectible. Ninth. Out of the estate, property and claims hereby lastly above assigned, or the proceeds thereof, the said party of the second part is authorized to pay and retain all reasonable costs, charges and expenses of carrying into effect this assignment in this behalf, including all reasonable compensation to the party of FORMS AND PREOEDENTS. 703 the second part for his services in executing and carrying out the trust in this behalf by this instrument. Tenth. The party of the second part is directed, out of the residue and re- mainder of said estate, property and proceeds, to pay and discharge all the pri- vate and individual debts of the parties of the first part, or either of them, whether due or to grow due, as follows: To apply and devote the estate, property and proceeds belonging to each of the said parties of the first part respectively to the payment of his individual debts, so that no part of the estate, property or effects belonging to either of the parties of the first part individually shall be devoted or appropriated to the payment of the individual debts of the other of them. Eleventh. If the individual estate or property of either or any of the parties of the first part shall be insufficient to pay his individual debts in full, then the party of the second part is directed to apply the same to the payment and liqui- dation of said debts ratably, share and share alike, according to their respective amounts, so far as the same will extend for the purpose. Twelfth. If the individual property and estate of the parties of the first part, or any or either of them, shall be more than sufficient to pay their respective in- dividual debts and liabilities, then any surplus that may remain is to be applied by the party of the second part to the payment and liquidation of any of the partnership debts, or any balance thereof which may remain unpaid out of the aforesaid partnership property and effects, said surplus to be applied to the pay- ment and liquidation of said partnership debts ratably, share and share alike, according to their respective amounts. Thirteenth. The parties of the first part hereby except from the foregoing assignment, and from the effect thereof, all such property as is by the laws of the state of New York and the laws of the United States of America, or other- wise, exempt to them, or any or either of them, from levy and sale under execu- tion or otherwise for payment of debts. Fourteenth. If any surplus shall remain of the property and estate hereby as- signed, after the payment of all the just debts owing by the parties of the first part, or either of them, the party of the second part shall return the same to the parties of the first part, their executors, administrators or assigns, according to their respective rights thereto. And in furtherance of the premises the said parties of the first part do hereby make, constitute and appoint the said party of the second part their true and lawful attorney, irrevocable, with full power and authority to do all acts and things which may be necessary in the premises to the full execution of the trust hereby created, and to ask, demand, recover and receive of and from all and every person or persons all property, debts and demands due, owing and belong- ing to the said parties of the first part, or each or any of them, and to give ac- quittances and discharges for the same, to sue, prosecute, defend and implead for the same, and to execute, acknowledge and deliver all necessary deeds, in- : struments and conveyances. And the said parties of the first part do hereby authorize the party of the sec- ond part to sign the copartnership name of the parties of the first part to any check, draft, promissory note; or other instrument in writing for the payment of money, which is payable to the order of the parties of the first part in their copartnership name, and to sign the said copartnership name to any instrument in writing of any name, kind or nature, which may be necessary to more fully carry into effect the object, design and purpose of this trust; an the said par- ties of the first. part respectively, in their individual capacity, do hereby make, constitute and appoint the party of the second part the attorney of each and every of them, and do hereby authorize him to sign the name of each or any of them to any check, draft, promissory note or other instrument in writing which is payable to the order of each or any of the parties of the first part, or to sign 704 APPENDIX II. ‘ 5 the name of each or any of the parties of the first part to any instrument in | writing, whenever it shall be necessary so to do to carry into effect the object, design and purpose of this trust. The said party of the second part doth hereby accept the trust created and re- posed in him by this instrument, and covenants and agrees to and with the said parties of the first part that he will faithfully and without delay execute the trust created according to the best of his skill, knowledge and ability. In witness whereof, the parties to these presents have hereunto set their hands. and seals the day and year first above written. ——. [SEAL.] ——. [SEAL] —-——. [SEAL] Sealed and delivered in presence of —— ——. [Here insert acknowledgment, as in Form No. 1.} No. 6. Assignment by Copartnership (shorter form). This indenture, made and entered into this —— day of ——, in the year one thousand eight hundred and eighty ——, by and between —— ——, of ——, and —— ——, of ——, copartners doing business in the city of New York under the firm name of ——- —-, parties of the first part, and —— ——, of ——, party of the second part, witnesseth, that whereas the said parties of the first part are insolvent and unable to pay their debts in full or at maturity, and are desirous of providing for their payment by assigning all their property for that purpose: Now, therefore, the said parties of the first part, in consideration of the premises and of one dollar to each of them in hand paid by the said party of the second part, have granted, conveyed, bargained, sold, assigned, transferred and set over, and by these presents do grant, convey, bargain, sell, assign, transfer and set over, unto the said party of the second part, all and singular their copartnership and individual estate, real and personal, goods, chattels, effects, credits, choses in action and property of every name and kind, whether held by and in the name of said parties of the first part and each or either of them, or by and in the name of any other person for them, except such property, if any, held or owned by said parties of the first part separately and individually, as is exempt by law from levy and sale under execution: To have and to hold the same, and every part thereof, unto the said party of the second part, his successors and assigns, in trust, however, to take possession of the same, and to sell the same with all rea- sonable dispatch, and convert the same into money, and also to collect all such debts and demands hereby assigned as may be collectible, and with and out of the proceeds of such sales and collections — 1. To pay and discharge all the just and reasonable expenses, costs and charges of executing this assignment, and of carrying into effect the trust hereby created, together with a lawful commission to the party of the second part for his serv- ices in executing said trust. 2. With and out of the net proceeds of the separate and individual property of each of the said parties of the first part to pay in full his separate and individual debts and liabilities, Ifthe net proceeds of the separate and individual property of each or either of the said parties of the first part is insufficient to pay his sep- arate and individual debts and liabilities in full, then the proceeds of the indi- vidual property of the said party of the first part so insufficient to pay his debts and liabilities in full shall be applied pro rata to the payment of the said party’s ’ 1 For a short form of assignment by copartnership, see Carey’s Forms and Precedents, p. 373, FORMS AND PRECEDENTS. 705 separate and individual debts and liabilities. If, however, any surplus remains of the net proceeds of the said separate and individual property of either of the said parties of the first part after payment of his separate and individual debts and liabilities in full, the said surplus shall be applied towards the payment of the copartnership debts and liabilities of the said parties of the first part. 3. The net proceeds of the copartnership property, together with the surplus, if any, of the proceeds of the individual property of the said parties of the first part or either or each of them, shall be used in the payment in full of the copart- nership debts and liabilities of the said parties of the first part. If, however. said proceeds are not sufficient for that purpose, then the same shall be applied pro rata to the payment of said copartnership debts and liabilities. 4, If any surplus shall remain of the property and estate hereby assigned, after the payment of all the just debts owing by the parties of the first part, the party of the second part shall return the same to the parties of the first part, their ex: ecutors, administrators or assigns, according to their respective rights thereto. [Here insert power of attorney, as in Form No. 1] [Here insert acceptance by assignee, as in Form No. LJ In witness whereof, the said parties to these presents have hereunto set their hands and seals the day and year first above written. —-—. [sHAL.] ——. [SEAL] ——. [SEAL.J Sealed and delivered in presence of —— ——. [Here insert acknowledgment, as in Form No. LJ No. 7. An Assignment with Special Provisions as to the Employment of: Agents, Hiring of Store, Insurance of Property and Correc- tion of Schedules. , This indenture, made the —— day of ——, in the year —— [as in the preced- ing forms, according to the case, to the end of the declaration of the trusts]. And it is hereby provided and agreed between the parties to these presents that the said party of the second part shall have power to appoint and employ all such agents, clerks and attorneys as may be necessary in and for the execu- tion of the trusts hereby created, and to allow them a just and reasonable com- pensation for their services; and also to hire such places or store-rooms as may be necessary for the proper and safe keeping of the property hereby assigned or any part thereof, or for the proper execution of the said trusts; and also to keep the said property or any part thereof insured until the same shall be sold and disposed of as hereinbefore directed. And it is hereby further provided that if any error or omission shall be found in the schedules hereunto annexed, or either of them, the same shall be corrected and supplied by the said party of the second part according to the fact, And, etc. [power of attorney as in the preceding forms]. In witness whereof, etc. 45 , 706 APPENDIX II. No. 8. An Assignment by a Bank for the Payment of its Depositors and the Holders of its Notes, with Special Provisions as to Divi- dends.' This indenture, made the seventh day of June in the year of our Lord one thousand eight hundred and forty-one, by and between the president, directors and company of the Bank of the United States of the one part, and John Bacon, Alexander Symington and Thomas Robins of the other part: Whereas, the said party of the first part are indebted to sundry persons, de- positors in the said bank, and the branches or officers thereof; and also to sundry persons, holders of notes of the late Bank of the United States, incorporated by congress; and to sundry persons, holders of notes of the present bank, being notes of the ordinary kind, payable on demand and commonly used in circula- tion; and also to sundry persons, holders of notes of the said bank, commonly called post-notes? (other than post-notes held by or issued to certain banks in the city and county of Philadelphia, for which security was provided and given by an indenture bearing date the first day of May in the present year, and which are not intended to be provided for and embraced in the present indenture). And whereas the said party of the first part has resolved and agreed to provide an adequate security for the payment of the said deposits and of the said notes and of the said post-notes (save and except the said post-notes heretofore provided for as above said), and of the interest to accrue upon them: Now this indenture witnesseth that the said party of the first part, as well for the consideration aforesaid as for and in consideration of the sum of one dollar to them in hand well and truly paid by the said party of the second part, at or before the sealing-and delivery of these presents, the receipt whereof they do hereby acknowledge, have given, granted, bargained, sold, aliened, evfeoffed and delivered, assigned, transferred and set over, and by these presents do give, grant, bargain, sell, alien, enfeoff and deliver, assign, transfer and set over, to the said party of the second part, all and singular the lands, tenements and her- editaments, goods, chattels, moneys, rights, credits and effects of the said party of the first part, contained, described and set forth in a certain schedule hereto annexed, sealed with the seal of the said party of the first part, and bearing even date herewith, together with all deeds, papers and evidences following or re- lating thereto: To have and to hold all and singular the premises hereby given or granted or intended so to be to the said party of the second part, and the sur- vivors and survivor of them, and their heirs, executors, administrators and as- signs of the survivor, to and for their and his own use and benefit forever as joint tenants and not as tenantsin common: In- trust, nevertheless, to and for the following uses, purposes and trusts, and to and for no other use or purpose what- soever, that is to say: in trust, in the first place, to enter upon the said real es- tate hereby granted, and to sell and dispose of, and to convey the same in fee- simple or for any less estate, by public or private sale [for cash or on credit], for the best price that can be had for the same, as may seem to them most expedient, 1 This assignment was held valid in Louisiana in the case of The United States v. The Bank of the United States, 8 Rob. 262, and in Kentucky in the case of The Bank of the United States v. Huth, 4 B. Mon, 423. See, also, the case of Hogg’s Appeal, 22 Pa. St. 479. 2 See the case of Hogg’s Appeal, 22 Pa. St. 479, in which it was decided that the post-notes here meant and designed to be secured were such notes, payable at a future day, as were designed as a part of the circulating medium, and that the assignment did not include notes or obligations of the bank under seal payable at a future day in London, and being for £1,000 sterling with interest, which were issued for a loan of money to the said bank, and which were not designed to be a part of the circulation of the bank. * As to the effect of this clause in New York and other states, see ante, pp. 333, 846, at rs FORMS AND PRECEDENTS. "07 and to give receipts for the purchase-money so that the purchaser or purchasers shall not be accountable for the application of the same; and in the meantime, and until a sale shall be made, to receive the rents, issues and income of the said real estate, and to pay the charges thereon; and in the next place in trust to col- lect, receive and get in all and singular the moneys due and owing to the said party of the first part and hereby assigned, and the same, as well as the proceeds of the said estate, safely to keep, to and for the uses and purposes hereinafter de- clared, that is to say: Firstly. To pay and discharge all reasonable and necessary expenses, costs and charges attending the execution of this trust, in which, however, it is expressly understood and agreed that the commission charged by or allowed to the trustees shall not exceed one per centum upon the amount collected, nor amount to more than $2,000 in any one year to each trustee. Secondly. From time to time, as often as they shall have moneys on hand of sufficient amount for a dividend, to divide and distribute the same, ratably and equally, in and towards the payment of the said deposits, notes and post-notes (except the post-notes hereinbefore excepted), and the interest accrued thereon, so that all and each may participate ratably and alike in every such dividend until the said deposits, notes and post-notes shall be fully paid off and discharged. And in further trust, from and after the payment and discharge of the said deposits, notes and post-notes and interest in full, to transfer, convey and pay over tothe said party of the first part, their successors and assigns, whatever may remain of the premises hereby granted, and all moneys, credits and effects which may have been raised therefrom, or from any part thereof, and not ap- plied to the purposes of the trusts herein and hereby created, together with all debts, papers, evidences and securities relating thereto. Provided always, nevertheless, and it is hereby expressly declared, understood and agreed as the condition of this indenture, and of the trusts therein and thereby created, that before the said trustees, their successors or assigns, shall proceed to make or declare any dividend of the moneys raised or collected as aforesaid, they shall give thirty days’ notice of their intention to do so, in two or more daily newspapers of the city of Philadelphia, at least twice a week during the same period of thirty days, calling upon the claimants to come forward and prove their debts; and such dividend shall be declared and made only on the amounts so brought forward and proved; and no creditor shall be entitled to claim or receive such dividend who shall not have brought forward and proved his debt before the time appointed for making and declaring the dividend. But if any dividend or dividends shall thereafter be made, such neglecting or default- ing creditor or creditors bringing forward and proving his or their claim or claims in time therefor, as aforesaid, shall be entitled to receive, in addition to such dividend, an amount equal to the rate of dividend or dividends which shall have been before made and paid. and so on from time to time until a final dividend shall be declared and made; which final dividend the said trustees, their suc- cessors and assigns, are hereby authorized and required to declare and make, whenever the moneys arising from the premises hereby granted and assigned shali, by the payment of the said final dividend, be disposed of and exhausted, or when all the creditors who have brought forward and proved their claims shall be paid in full, principal and interest; it being understood, however, that no in- terest shall be paid until the final dividend; and from and after such final divi- dend, no creditor shall have any claim upon the remaining fund, if any there be, nor upon the said trustees, their successors or assigns, for or by reason of these presents, or of the trusts herein and hereby created; but the same, except the trust for reconveying the surplus to the said party of the first part, their successors or assigns, shall thenceforth cease and be determined and atan end. Provided also, and it is expressly understood and agreed, that if the said party of the first part, their successors or assigns, shall at any time pay off and discharge the said de- 708 APPENDIX II. posits, notes, post-notes (the said notes and post-notes being surrendered and can- celed), then and from thenceforth the trusts herein and hereby created, or so much of them as shall then remain unexecuted, shall cease and be determined. and the whole of the trust property then remaining be conveyed, transferred and delivered to the said party of the first part, their successors or assigns. And it is hereby expressly agreed by and between the parties to these presents, as a condition or part thereof, that the said trustees, their successors or assigns, shall not be answerable for the acts, omissions or defaults of each other, but. only each for his own acts, omissions or defaults; and that they shall not be an- swerable for the misconduct, omissions or default of any agent or agents they may find it necessary to employ, being accountable only for the exercise of fair and reasonable skill and judgment, as well in the appointment of such agent or agents as inthe general management of the trust hereby created, if the same be conducted in good faith and intention. And the better to enable the said party of the second part, and the survivors. and survivor of them, and the executors and administrators of the survivor of them, to execute the said trusts, the said party of the first part do hereby con- stitute, make and appoint them their true and lawful attorneys and attorney ir- revocable, in the premises, for them and in their name, but to and for the uses. and purposes of this trust, and at the cost of the same, to ask, demand, sue for and recover and receive all and every sums or sum of money due or to become due by reason of any matter or thing herein granted and assigned, or intended so be, to give receipts and acquittances for the same, and generally to act and do as fully and effectually in the premises as they themselves might or could do; and substitute or substitutes one or more under them to nominate and appoint, and again at pleasure to revoke; hereby ratifying and confirming whatsoever they or their said substitutes or substitute may lawfully do in their premises. It is understood that the foregoing indenture, or anything therein contained, is not in any manner to impair or affect the liabilities of the Bank of the United States, nor the rights of depositors, or of the holders of the said notes and post- notes. In witness whereof, the said parties have hereunto interchangeably set their hands and seals, the president, directors and company of the Bank of the United States of the first part, acting by their president, William Drayton, Esquire, av. Philadelphia, the day and year first above written. ‘W. Drayton, President. Signed, sealed and delivered, in the presence of us, T. S. TAYLOR, { SEAL OF ' G. W. FaIRMAN. THE BANK. Attest: T. S. TaYLor, Cashier, - We accept the trust created by the above indenture of assignment. JoHuN Bacon. [L. S.J A. SYMINGTON. [L. 8.] THomas R i [Schedule.] ee eel No. 9. An Assignment by a Married Woman. This deed, made this ——- day of ——, 18—, by A. B. and her husband, C. D., both of ——: Whereas, the said A. B. is indebted unto various persons in different sums of money for goods sold and delivered to her in the course of trade, and being un- able to pay the same in full, has concluded to convey and assign the whole of FORMS AND PRECEDENTS. 709 her estate unto D. E., of ——, for the benefit of her creditors, so that the said estate, or the proceeds of any sale of the same, may, after payment of the nec- essary costs and expenses as hereinafter provided, be applied in full or pro rata, as the case may be, to the payment of all her creditors; and whereas the said ‘C. D. has agreed to unite in these presents for the purpose of enabling the said sa to convey to the said D, E. all her estate and property in trust as afore- said: Now, therefore, this deed witnesseth that in consideration of the premises and of the sum of one dollar, the said A. B. andC. D. do hereby grant, convey and assign unto the said D. E, all of the estate and property of the said A, B,, real and personal, and of every kind and wherever situated. To have and to hold the above granted property unto the said D. E., his heirs, personal representatives and assigns, in trust, nevertheless, for the following pur- poses: [Here insert provisions for the execution of the trusts, as in Form No. LJ Witness our hands the day and year first above written. A. B. Cc. D. [Here insert acknowledgment and attach schedule.] II. ASSIGNMENT BY DEED POLL. No. 10. A General Assignment for the Benefit of Creditors Ratably, with Schedules. Know all men by these presents, that I, A. B., of ——, in consideration of the sum of one dollar to me paid by C. D., of ——, the receipt whereof I hereby ac- knowledge, and of the uses, purposes and trusts hereinafter mentioned, have granted, bargained and sold, assigned, transferred and set over, and by these presents do grant, bargain and sell, assign, transfer and set over, unto the said . C. D., his heirs and assigns, all my lands, tenements and hereditaments, goods, chattels and effects, and all accounts, debts and demands due, owing or belong- ing to me, together with all securities for the same, which said lands, goods, chattels, debts and demands are particularly enumerated and described in a schedule hereunto annexed, marked ‘‘ Schedule A.” To have and to hold the same, with the appurtenances, unto the said C, D,, his heirs, executors, administrators and assigns: In trust, nevertheless, that the said C. D. shall forthwith take possession of the premises hereby assigned, and with all reasonable diligence sell and dispose of the same, by public or private sale. for the best price that can be obtained, and ‘convert the same into money; and shall as soon as possible collect the debts, ac- counts and demands aforesaid; and with and out of the proceeds of such sales and collections, after deducting and paying all reasonable costs, charges and ex- penses attending the execution of the trust hereby created, together with a rea- sonable and lawful compensation to the said C. D., shall pay to each and every of my creditors (a full list of whom, with the amount due to each, is contained in a schedule hereunto annexed, marked ‘‘ Schedule B”) the full sum that may ‘be due and owing to them from me. And if the proceeds of the said sales and collections shall not be sufficient fully to pay and satisfy each and all of my said 710 APPENDIX II. creditors, then the said C. D. shall, with and out of the said proceeds, pay the said creditors, ratably and in proportion to the amount due and owing to each. And if, after fully paying all the said creditors, there shall be any balance or residue left of the said proceeds, the said C. D, shall pay and return the same to me, the said A. B. And in furtherance of the premises, I, the said A. B., do hereby make, consti- tute and appoint the said C. D. my true and lawful attorney, irrevocable, with. full power and authority to do all acts and things which may be necessary in the premises, and to the full execution of the said trust; and for the purpose aforesaid to ask, demand, recover and receive of and from all and every person and persons, all the property, debts and demands due, owing and belonging to me, and to give acquittances and discharges for the same; and in default of de- livery or payment in the premises, to sue, prosecute and implead for the same,. and to execute, acknowledge and deliver all necessary deeds and instruments of conveyance, and also for the purpose aforesaid, or any part thereof, to make, con- stitute and appoint one or more attorneys under him, and at his pleasure to re- voke the same — hereby ratifying and confirming whatever my said attorney or his substitutes shall lawfully do in the premises. In witness whereof, I have hereunto set my hand and seal, the —— day of —, in the year ——. A.B, [SEAL] Sealed and delivered in presence of E, F, [Schedules as in preceding forms. ] Ill. ASSIGNMENTS BY INDENTURE TRIPARTITE. No. 11. A General Assignment for the Benefit of Creditors, with Prefer- ences to such as become Parties, and with Covenant of Release by Creditors. This indenture, made this —— day of ——, in the year ——, between A, B., of ——, merchant, of the first part: C. D., of —, esquire, of the second part;. and the several persons, creditors of the said A. B., who have executed these presents, or who shall within —— days from the date hereof execute the same, of the third part: Whereas, the said party of the first part is at present unable to pay all his just debts, and hath agreed to convey and assign all his estate, real, personal and mixed, to the said party of the second part, in trust for the benefit of all his. creditors, in manner hereinafter mentioned: Now, this indenture witnesseth, that the said party of the first part, in consid- eration of the premises, and of one dollar to him paid by the said party of the second part, the receipt whereof is hereby acknowledged, hath granted, bar- gained, sold, assigned, transferred and set over, and by these presents doth grant, bargain, sell, assign, transfer and set over, unto the said party of the sec- ond part, his heirs, executors, administrators and assigns, all, etc. [describing the: property, with reference to a schedule annexed, as in the preceding forms}. To have and to hold the same, and every part and parcel thereof, with the FORMS AND PRECEDENTS. T1r appurtenances, unto the said party of the second part, his heirs, executors, ad- ministrators and assigns: In trust, nevertheless, that he, the said party of the second part, shall forth- with take possession of the premises and property hereby assigned, and shall, with all reasonable diligence, sell and dispose of all and singular the estate, goods and effects in the said schedule mentioned, and collect all and singular the debts, sum and sums of money now due and owing to the said party of the first part, according to the said schedule; and after deducting and retaining the costs, charges and expenses of preparing and executing these presents, and of execut- ing the trusts hereby created (including a reasonable compensation to the said party of the second part for his services), then, _ Upon trust, that the said party of the second part shall pay and apply the moneys arising from said sales and collections in manner following, that is to say: First. Shall pay and discharge in equal proportions the debts due respectively to such of the creditors of the said party of the first part, enumerated and men- tioned in a schedule hereunto annexed, marked “Schedule B,” who shall have signed and sealed these presents. And after fully satisfying and discharging the said debts, out of the residue of said moneys (if any there shail be), Secondly. Shall pay and discharge the debts due to all the other creditors of the said party of the first part, in equal proportions. And after fully satisfying and discharging all the said debts, Lastly. Shall pay over the surplus of said moneys (if any) to the said party of the first part, his executors, administrators or assigns. And the said party of the first part [power of attorney]. And the said party of the first part, for himself, his heirs, executors and ad- ministrators, doth hereby covenant, promise and agree, to and with the said party of the second part, his executors and administrators, that he, the said party of the first part, shall not, nor will, in any manner, release or discharge any rights, debts, demands or credits due, owing or belonging to him, nor in any way obstruct or hinder the said party of the second party, his [etc. ], in the recovering, receiving or getting in of the same, and that he, the said party of the first part, will ratify and confirm whatsoever the said party of the second part, or his [etc.], may or shall do in the premises by virtue herecf; and further, that the said party of the first part shall and will, at the costs and charges of the creditors aforesaid [or, at his own charges], from time to time make, do and execute all and every such further acts, matters and things for the better and further assigning and assuring of all and singular the premises to and for the trusts and purposes afore- said, as by the said party of the second part, or his counsel learned in the law, shall be reasonably advised and required; and further, that he, the said party of the first part, his [etc.] shall and will from time to time, as occasion may require, upon reasonable request, and notice to him by the said party of the second part, his [etc.], given, assist him and them in making up his accounts, and in getting in the said debts, etc. according to the best of his ability. And the said party of the second part, for himself, his heirs, executors and ad- ministrators, doth hereby covenant, promise and agree to and with the said party of the first part, his executors, administrators and assigns, and also to and with the said parties of the third part, that he, the said party of the second part, shall and will use his best, endeavors to sell and dispose of the property, estate and effects hereby assigned, for the best prices and on the best terms that can be ob- tained for the same, and to collect and receive such sums of money as are due to the said party of the first part, as soon as may be, and to pay and distribute all such moneys as he shall receive from such sales and collections to and among the creditors of the said party of the first part, according to the true intent and meaning of these presents; and generally, that he will execute and fulfill the trusts hereby created and declared to the best of his skill, knowledge and ability. And the said parties of the third part, each for himself and themselves, and for F12 APPENDIX II. their respective executors, administrators, assigns and copartners in business, in consideration of the conveyances, covenants and conditions herein made and provided on behalf of the parties hereto of the first and second parts, do accept the said assignment and the payments and dividends that they may respectively receive under and by force of the same, in full satisfaction and discharge of all and singular their several and respective claims and demands against the said party of the first part, whether the same are now due or not due; and of all claims and demands which they, as aforesaid, may hereafter have on the said party of the first part, in consequence of any present existing acceptance, indorse- ment, suretyship or liability by them respectively made or assumed for his ac- count. And in consideration of the premises they do severally, as aforesaid, release and discharge the said party of the first part, his heirs, executors and ad- ministrators, of and from all and singular the demands which they, or any or either of them, now have or by possibility may hereafter have against him, the said party of the first part, or his legal representatives. In witness whereof, the parties to these presents have hereunto set their hands and seals, the day and year first above written. A.B. [SEAL] C.D. [SEAL.] N.C. [sean] J. T. [Sear] H.S. [seat] 3 and other creditors. Sealed and delivered in presence of E, P, R. L. . [Add schedules, as on preceding forms.] IV. INVENTORY, BOND AND NOTICE TO OCREDITORS.! No. 12. Title to Inventory. The following is a full and true inventory of all the estate, both real and per- sonal, of the copartnership firm of C. B, & Co., in law and equity, and the in- cumbrances existing thereon, and all the vouchers and securities relating thereto, and the value of such estate, according to the best knowledge and belief of the individuals composing said copartnership: ‘ The following forms are those in use in the state of New York under the General Assignment Act of 1877, as amended. See Bishop on Insolvent Debtors. 713 No. 13. Inventory. FORMS AND PRECEDENTS. Estimated Market Value Above All Incumbrances Vouchers and Securities. Description of Property and Where Situated. Incumbrances, APPENDIX IL 714 ‘ssaupeyqepuy 10j {414 “Nd9eg AIYIO JO [e1A4eT -[0D ‘esesyz0py ‘juemspne *pajoesy -u0D Us puUB ‘ssou -peqqepuy jo uolje1apisuog ‘jootoyy, o1njeNy pus ‘101Ipaig 0} eng JunowWy ‘eouepIsery *I0IPeID jo owen ® “saynpayog “PT ‘ON 715 FORMS AND PRECEDENTS. No. 15. Classification. z Name of Debtor. Amount of Claim. Good. Doubtful. Bad, Remarks, 416 APPENDIX II. No. 16. Affidavit to Inventory and Schedules. State OF New York, City and County of New York, hss, A. B., of ——, and C. D., of ——, copartners, members of the copartnership firm of A. B. & Co., doing business in the city of New York, being severally sworn, say, and each of them for himself says, that he has read the foregoing in- ventory and schedules, and that the same are in all respects just and true accord- ing to the best of his knowledge and belief. Sworn to before me this —— day of ——, 18—. The rules of the court of common pleas for the city of New York in reference to the making and filing of the schedules are as follows: 8. Schedules. The schedule of liabilities and assets required to be filed by the assignor or assignee shall fully and fairly state the nominal and actual value of the assets, and the cause for the difference, and a separate affidavit will be re- quired which shall fully explain the cause of such difference. If required, the affidavits of disinterested experts as to such value may be furnished. 9. Signing of. "Where there may be more than one sheet of paper necessary to contain the schedules, each page shall be signed by the person or persons, veri- fying the same. The sheets of paper on which the schedules are written shall be securely fastened before the filing thereof, and shall be indorsed with the full name of the assignor and assignee, and, when filed by an attorney, shall also be indorsed with his name and business address. 10. Filing by Assignee. Should the schedules be filed by the assignee, there must be a full affidavit made by such assignee and some disinterested expert, showing the nature and value of the property assigned. 11. Name and Residence. The name, residence, occupation and place of busi- ness of the assignor, and name and place of residence of the assignee, may be incorporated in the affidavit, or annexed to the schedules, 12. Recapitulation. There shall be a recapitulation at the end of the sched- ules as follows: Debts and liabilities amount to $—. Assets nominally worth $——. Assets actually worth $—. 13, Contingent. Contingent liabilities shall appear on a separate sheet of paper. No. 17. Assignee’s Bond on Assignment. Know all men by these presents, that we, —- ——, residing at No. —, inthe —, and ———, residing at No, —, in the —, and ——- —,, residing at No. —, in the —, are held and firmly bound unto the people of the state of New York, and their assigns, in the sum of —— dollars, lawful money of the United States of America, to be paid to the said people or their assigns; for which payment well and truly to be made, we bind ourselves, our and each of our heirs, executors and administrators, jointly and severally, firmly by these presents. Sealed with our seals. Dated the —— day of ——-, one thousand eight hundred and ——, FORMS AND PRECEDENTS. "17 Whereas, —— —— has made an assignment of his property, in trust, to the above bounden —— —— for the benefit of his creditors, dated the —— day of —, one thousand eight hundred and ——, recorded on the —— day of ——, 18—, in the office of the clerk of the county of ——: Now, therefore, the condition of this obligation is such, that if the above- bounden —— —— shall faithfully execute and discharge the duties of such as- signee, and duly account for all moneys received by him as such assignee, then this obligation to be void, else to remain in full force and virtue. ——. [SEAL] ——. [SEAL] —-—. [SEAL] Sealed and delivered in the presence of ——- ——. CouNTY oF —, ss. ——-—, one of the sureties to the foregoing bond, being duly sworn, says that he is a resident and —— holder within this state, and is worth the sum of —— dol- lars, over all his debts and liabilities, and exclusive of property exempt by law from execution. Sworn to before me this —— day of ——, 18—. CounTY OF ——, SS. — —, one of the sureties to the foregoing bond, being duly sworn, says that he is a resident and -——— holder within this state, and is worth the sum of —— dollars, over all his debts and liabilities, and exclusive of property exempt by law from execution. Sworn to before me this — day of ——, 18—. —— ss. Icertify that on this —— day of ——, 18—, before me personally appeared the within-named —— —— and —— ——, known to me to be the individuals de- scribed in and who executed the within bond, and severally acknowledged that they executed the same. Lhereby approve of the within bond and of the sufficiency of the sureties therein. [Signature of county judge, or judge of court of common pleas, with title of office.] No. 18. Affidavit to Obtain Order Authorizing Assignee to Advertise for Claims. COURT OF COMMON PLEAS FOR THE CITY AND COUNTY OF NEW YORK. of A. B. to C. D., for the Benefit of In the Matter of the General Assignment Creditors, Ciry anp County or NEw YORK, ss. C. D., being duly sworn, says that on the —~ day of — 18-, A. B., above named, made and executed, in due form of law, a general assignment of all his 718 APPENDIX II. property to deponent, as assignee, for the benefit of his creditors, which said assignment was, on the —— day of ——, duly recorded in the office of the clerk of the city and county of New York, where said A. B. then resided and still resides; that a bond en the part of deponent as such assignee, approved by one of the judges of this court, was on the —— day of —— duly filed, and that deponent has accepted said trust, and entered upon the discharge of his duties as such as- signee, Deponent further says [that none of the creditors of the said A. B., entitled to share in the distribution of the said trust estate, reside out of the state of New York], or [that deponent has reason to believe that certain of the creditors of the said A. B., entitled to share in the distribution of said estate, reside out of the state of New York]. Sworn to before me this —— day of ——, 18—. Cc. D. No. 19. Order of Publication of Notice to Creditors. COURT OF COMMON PLEAS FOR THE CITY AND COUNTY OF NEW YORE, [Title as above.]j On the annexed affidavit of C. D., and on application of C. D., assignee of the estate of A. B., in trust for the benefit of the creditors of said A. B., and it appearing to my satisfaction [that none of the creditors of the said A. B., entitled to share in the distribution of the said trust estate, reside out of the state of New York], or [that certain of the creditors of the said A. B., entitled to share in the distribution of the said trust estate, reside out of the state of New York]: Ordered, that the said C. D., assignee of the said trust estate, be and he hereby is authorized and empowered to advertise by publication for creditors to present to him their claims against the said A. B., with the vouchers duly verified, on or before a day to be specified in said advertisement or notice, not less than three months from the date of the first publication of such notice, which said advertise- ment or notice shaJl be published once in each week, for four successive weeks, in the —— newspaper, published in the county of ——, where said assignment was made; [and where creditors reside out of the state, add:] and also once in each week, for six successive weeks, in the ——, the official newspaper of this state. [This order should be signed by the county judge or judge of court of common pleas, and filed in the office of the clerk of the county where the assignment is recorded, ] No. 20. Notice to Creditors. In pursuance of an order of Hon. ——-—., county judge of —— county [or, one of the judges of the court of common pleas for the city and county of New York], notice is hereby given to all persons having claims against [assignors], lately 6a ae FORMS AND PRECEDENTS. 719 doing business in the city of New York under the firm name of ——, to present the same, with the vouchers thereof duly verified, to the subscriber [assignee], who has been duly appointed assignee of said [assignors], for the benefit of their creditors, at his office, No. —, —— street, in the city of New York, on or before the —— day of ——, 18—. Dated New York, the —— day of ——, 18—. — —, Assignee. [The day named in the notice must be not less than three months from the date of the first publication.] No. 21. Proof of Debt. State or ——, County of —, ss. — —, being duly sworn, doth depose and say: That he is ——; that the annexed statement of the account of —— —, lately doing business at ——, in the state of ——, is just, true and correct; that there is now due —— —— the sum of —— dollars; that no part thereof has been paid or satisfied, and that there are no set-offs or counter-claims thereto to the knowledge or belief of deponent. Sworn to before me this —— day of ——, 18—. , No. 22. Petition for Citation for Final Accounting. PETITION BY ASSIGNEE. In the Matter of Final Accounting of 1 —— ——,, as Assignee of the Estate of A. B., under a General Assign- ment for Benefit of Creditors. To the Court of Common Pleas for the City and County of New York: The petition of the above-named assignee respectfully shows: I. That on the —— day of ——, A. D. 18—, A. B., residing in the city, county and state of New York, at No. —, —— street, executed in due form a general assignment to your petitioner for the benefit of creditors, and that the petitioner duly accepted said assignment and trust. II. That said assignment was recorded in the office of the clerk of the city and county of New York on the day of its execution, and petitioner qualified as such assignee and entered upon the execution of his trust. Ill. That the inventory and schedules,as required by law, were made and filed by your petitioner on the —— day of ——, 18—, in the office of the clerk of New York; and that thereafter petitioner gave a bond as such assignee in the form, for the sum and approved as required by the statutes of New York. IV. That upon the prayer of this petitioner an order was made by Hon. 720 APPENDIX II. —— —,, one of the judges of this court, on the —— day of =} 18—, author- izing the petitioner to advertise for creditors to present their claims to him against said assignor on or before a day to be therein specified ; that said notice was published as provided by said order, and that a copy thereof was duly mailed to each creditor whose name appears on the books of the assignor, postage pre- paid, at least thirty days before the day specified in said advertisement or notice, as appears by the affidavit of said mailing hereunto annexed. “a V. That the time within which claims were to be presented to petitioner as. specified in said notice expired on the —— day of ——, 18—; and that creditors, exceeding twenty-five in number, have presented claims against the assignor to your petitioner, and are interested in the trust fund in the hands of petitioner by virtue of the assignment. VI. That the names and address of creditors who have presented claims are as follows: And your petitioner therefore prays that a citation may issue out of, and under the seal of, this court, to all persons interested in said estate, requiring them to appear in court upon some day to be specified therein, and to show cause why a settlement of the account of the assignee, your petitioner, should not be had, and, if no cause be shown, to attend the settlement of said account, : [Verification.] No. 23. Order for Citation. Ata Special Term of the Court of Com- mon Pleas for the City and County of New York, on the —— day of —, 18—. Present, Hon. —— ——, Judge, {nthe Matter of the Final Accounting of ————, as Assignee of the Es- tate of A. B. under a General As- f signment for Benefit of Creditors. ) On reading and filing the verified petition of the above-named assignee [or, of —— ——,, a creditor of said assignor], dated the —— day of ——, 18—, and on motion of —— ——, attorney for said assignee [or, creditor]: It is ordered that a citation issue herein to all parties interested in the estate assigned by A. B. to the above-named assignee by a general assignment for the benefit of creditors, dated the —— day of ——, 18—, and recorded in the office of the clerk of the city and county of New York, to appear in court on a day therein to be specified, and to show cause why a settlement of the account of the proceedings of the assignee should not be had, and, if no cause be shown, to attend the settlement of such account. [When more than twenty-five creditors have proved claims add:] It is further ordered that said citation be served on each creditor who has proved his claim, by depositing a copy of the same, at least thirty days prior to the return day thereof, in the postoffice at the place where the assignee resides, duly inclosed and directed to each of such creditors, at his last known postoffice address, with the postage prepaid; and by publishing such citation once a week, for at least four weeks prior to such return day, in the ——, a newspaper pub- lished in the city and county of New York, FORMS: AND PRECEDENTS. 721 No. 24. Citation for Accounting. THE PEOPLE OF THE STATE OF NEW York, to all persons interested in the es- tate of A. B., assigned to —— —— for the benefit of creditors, send GREET- ING: You and each of you are hereby cited and required personally to be and ap- pear at a special term of the court of common pleas for the city and county of New York to be holden in the county court-house, in the city of New York, on the —— day of ——, 18—, at ten o’clock A. M., there and then to show cause why a final settlement of the accounts of —— —, assignee of above-named A. B., insolvent debtor, should not be had, and, if no cause be shown, then to attend the final settlement of the assignee’s accounts. In testimony whereof I have hereunto caused the seal of the said court of [saL.] common pleas for the city and county of New York to be hereunto affixed, Witness Hon. —— ——, chief judge of the said court, this —— day of —-, 18—. —_——, Se Clerk, Attorney for Assignee. No. 25. Order of Reference. [Title as in Form No. 22.] A. B., assignee for the benefit of creditors of C. D., under a general assign- At a —— term of, etc, ment made on the —— day of ——, 18—, and recorded in the office of the clerk of the county of ——, having made and filed an account of his proceedings as such assignee, filed herein on the —— day of ——, 18—, and a citation hav- ing been issued out of and under the seal of this court to all persons interested in said assigned estate to attend the final settlement of said account: Now, on the said account and the petition of said A. B., filed herein on the —— day of ——, 18—, and the papers accompanying the same, and on said cita- tion and proof of the due service of the same (and on the objections to said account filed by —— ——), and on application of —— ——, attorney for said as- signee (with appearance for other parties): It is ordered that it be referred to X. Y., counsellor at law, to take and state the accounts of the said A. B., of his proceedings as assignee of the said assigned estate, with authority to the said X. Y. to examine the parties and witnesses on oath in relation to the said assignment and accounting, and all matters connected therewith, And it is further ordered that the said referee take proofs and report as to what persons are entitled to share in the distribution of said assigned. estate, and in what priority and proportion. And it is further ordered that any party to this proceeding, and any creditor, may object to any claim presented before said referee, and that the said referee shall thereupon take the proofs and report as to the validity of such contested ‘claims. And it is further ordered that the said reference proceed at ——, and that ——.days’ notice of the time and place of the first hearing be given to all credit- ors who have presented their claims to said assignee, or who have appeared upon the return of said citation. 46 722 APPENDIX IL No. 26. Referee’s Report. COURT OF COMMON PLEAS» FOR THE CITY AND COUNTY OF NEW YORK. In the Matter of the Final Accounting of t — —, Assignee of —— ——. To the Court of Common Pleas for the City and County of New York: I, —— -——,, referee appointed herein, by order dated ——, to take and state the accounts of the above-named assignee, do respectfully report that, having taken and subscribed the oath required of a referee by section 1016 of the Code of Civil Procedure, I proceeded to take proofs, and from the evidence before me, which is hereto annexed and forms part of this report, I find the following: I, That prior to the —— day of ——, 18—, the above-named —— —— engaged in business in the city of New York under the —— name of —— ——,, and that the said —— —— then resided in ——. IL That on the said last-mentioned date he executed and acknowledged an instrument in writing assigning all his property to the above-named ———— in trust for the benefit of the creditors of said assignor. That the following pref- erences were created in and by said assignment, viz. : [Insert.] III. That the said assignee joined in the execution and acknowledgment of said assignment and accepted said trust. That said assignment was acknowl- edged by —— —— on ——,, and was recorded in the office of the clerk of the city and county of New York on the —— day of ——, 18—. IV. That schedules of the assigned estate and of the liabilities of the assignors, duly verified by ——-—— on ——, were filed in the office of the clerk of this court on the —— day of ——, 18—, showing the liabilities of the assignors to be $——, with $—— nominal assets and $—— actual assets; and on the —— day of —, 18—, Hon. —— ——,, one of the judges of this court, ordered the assignee to file a bond in the penalty of $—. V. That on the —— day of ——, 18—, the said assignee presented to the Hon. — —, one of the judges of this court, his bond with —— ——-, residing at —, and —— —, residing at , a8 sureties, in the penal sum of $——, which bond was, on the said last-named day, approved by the said last-named judge, and was filed on said day in the office of the clerk of the court. VI. That the said assignee having applied to this court upon petition, verified by him on the —— day of ——, 18—, for an order to advertise for creditors to present their claims, with the vouchers duly verified, an order was thereupon made on the —— day of ——, the Hon. —— —— presiding, authorizing such ad- vertisement to be made in the —— newspaper, published in ——, and ——, ounce in each week for —— weeks, VII. That the said advertisement was published as directed in each of said papers, commencing on the —— day of ——, 18—, and the following is a copy of such advertisement: [Insert copy.] VIII. That a copy of such advertisement, inclosed in a sealed envelope, on which was indorsed a direction that if the same wus not delivered in ten days it _ Should be returned to —— ——, and with the proper postage prepaid thereon, was deposited in the postoffice in the city of New York, directed to each of the credit- ors whose names appear on the books of the said assignor. That the following and no others of said notices have been returned by the postmaster, viz., those addressed to —— ——, FORMS AND PRECEDENTS. 723 IX. That the following persons have presented claims duly verified to the _ assignee, viz. : ; NAME, ADDRESS, AMOUNT. DUE. FOR, X. That on the —— day of ——, 18—, the said assignor presented to this court an account of his proceedings as assignee, verified by his oath thereto, made on the —— day of ——, 18—, stating his account as follows, viz. : Dr. Inventory of Stock........... 0. ce cceecsceesceees asians stalin Sistesveielateticlesion’ $— Inventory of Accounts... ............ sa ureie (wien Winieieisiecare case sitet arateia oy we Increase by.......ceceseesevcceees Siaibiacecotar pioje sais fisioretwieinid eistele cleieieliietes 6 we'e's,.- == Cr. DeCrease ss asi sciessee edek Sas eee! ees SUdels ke a talisiatabeiecdl aj Sia sberecsch deauelgrare ie hers $—_ XPONS CS 55.0 5 iss iain olbie oieiale's. os bieisicusrgpeareeiarvele assis ahtiataics wistasobachsstere nie tesess aisigieosese _— Dividends paid t0........ ccc cece cece cen e eet en cece ee etenesneneceees — Balance < 5a sick iseahea oe eh ae ee See SSS es ae iadamnoeins $—_ XI, That upon petition of the said assignee, verified by him on the —— day of ——, 18—, this court, by order made by Hon. —~ ——, one of the judges thereof, directed a citation to issue to all persons interested, requiring them to appear in this court and attend the final settlement of the accounts of said assignee. That such citation was thereupon issued out of and under the seal of this court, re- turnable on the —— day of ——, 18—. That by order of this court, duly made on the —— day of ——, 18—, the said citation was ordered served by publication in —. XI. That said citation was duly served in the following manner upon —— ——. XIII. That on the return of said citation the following parties and none other appeared in this court: [Insert names.] XIV. That the following objections to said account were filed by the following parties: [Insert objections. ] XV. That by order made by the Hon. —- ——, on the —— day of ——, 18—, this court referred the said account to me to take and state the same, and — XVI. That I issued a summons to attend the reference before me at my office, No, —, —— street, on the —— day of ——, 18—, at —— o'clock. All which no- tice was duly served on —— ——. XVII. That the following named persons appeared before me on said reference in person: [Insert names], and the following by counsel, viz.: [Insert names.] G24 APPENDIX II. XVIII. That the said assignee, immediately after the approval and filing of this bond, entered upon his duties as such assignee; that he reduced to posses- sion the assigned estate, consisting of ——; that he sold ——, realizing there- from $—-; that he collected $——; that he paid out and expended for —, $—; that he has faithfully performed the duties of his said trust; that he should be allowed the following expenditures as necessary in the execution of said trust, viz.: [Insert], and that his accounts should be stated, and I do hereby state them as follows, viz.: Dr. To Inventory of Stock. ......-ccececccseccecccceccecsesceseeeeseseteeras ® To Inventory of ACCOUNES.... 0... cece cece cece ce en nt eteteeneecceseecees To Increase (Schedule A)... .... cece cece ne cote ete e ees eeee cence eeseereene — Total sjsicadoasrene wetscaaiesdceewiie sess Ualcigaeai dis osserdieieerasencereeceas 8 — Cr. By Decrease of Stock.........ceeeeees sedab des rol Sole Siawlawies ese eeAL sie) ined ACCOUDES ..... cece ee eee ee ee Scaialayeraidvacoie sala vanstareie aiete isin — Expenses ........ .00-seeeeeeee Sevas Es Kae ER ARS Gee Payments to Creditors, viz. i.....cceceees cer ecercecesece No. 27. Final Decree. At a —— Term, etc. [Title of Proceedings.] A general assignment having been made by C. D. to A. B. for the benefit of creditors, dated the —— day of ——, and recorded in the office of the clerk of the county of —— on the —— day of ——, and the said A. B, having accepted the trust thereby created, and having on the —— day of —— filed his bond, duly approved, for the faithful discharge of his duties as such assignee, and having thereafter duly advertised for creditors to present their claims, duly verified, against said C. D. to him, and the time for the presentation of the same having expired, and the said A. B. having appeared and presented his account as such assignee to this court, and a citation dated on the —— day of —— having been duly issued herein to all persons interested in said assigned estate to attend the settlement of the said accounts, returnable on the —— day of ——, and proof of the due service of said citation upon —— —— [here recite services and appearances}, (and objections having been presented to said report by —— ——), and it having been referred to —— ——, Esq., counsellor at law, to take and state said account (reciting provisions of order of reference), and the said referee having made and filed his report on the —— day of ——, and due notice of the filing of said repurt having. been given to ——-——, and exceptions thereto having been filed by Now upon reading all the papers and proceedings hereinbefore recited, the said report and the testimony, exhibits and vouchers thereto annexed, and the ob- jections to said report filed by the said —— —,, and after hearing —— —, of counsel in behalf of ————. and [recite appearances], and due consideration thereupon having been had, 7 4 It is ordered, adjudged and decreed: First, That the said report be and the same is hereby in all respects confirmed, and a account of said A. B., assignee as aforesaid, audited and allowed as therein stated. FORMS AND PRECEDENTS. 725 Second, That out of the funds in the hands of the said A. B., assignee of the said estate of C. D., the said A. B. retain —— dollars as and for his lawful com- mission as such assignee; that he pay to —— ——, the attorney for said assignee, the sum of $——, for his costs and allowances in this proceeding; and the further sum of $—— to —— ——, referee aforesaid, for his fees as such referee; and out of the rest and residue of said funds remaining in the hands of said assignee, after deducting the costs and expenses aforesaid, said assignee is directed to make payment between the following named creditors, preferred in said assignment, the amounts of their several preferences being the sums set opposite their names respectively as follows: —— in full; and out of the rest and residue of said funds remaining in the hands of said assignee, said assignee is directed to make pay- ment between the following named creditors, whose several claims are settled and adjusted at the sums set opposite their names respectively: [Here insert names of creditors and amounts due them.] Third. That the said assignee do take good and sufficient vouchers for each and every payment so made; and if, after reasonable diligence, any of the per- sons so entitled to share in said distribution cannot be found, or shall decline or neglect to accept their said share, then the share so belonging to such person shall be deposited in the —— Trust Company to the credit of such persons, It is further ordered, adjudged and decreed, that upon compliance with the foregoing provisions the said assignee shall, upon presenting due proof of the same to this court, be entitled to an order relieving him of his liability as such assignee, and releasing the sureties upon the said bond filed by the said A. B., as assignee of said estate, from all liability upon matters included in the afore- said accounting, to all creditors who have appeared, and to such creditors as have not appeared after due citation, and to such creditors as have not presented their claims after due advertisement; and that the said application may be made without further notice. GENERAL INDEX. GENERAL INDEX. Figures refer to pages. ACCEPTANCE of assignment by assignee, 309, when and how to be signified, 309. by one of several assignees, 310. effect of, 311. presumed, 312. prior to assignment, 311. proceedings where assignee refuses, 312. where assignee renounces after acceptance, 313. ACCOUNT, balances of, assignable, 105. bill in equity for, against assignee, 558, 592, ACCOUNTING, final. by assignee, 554. under state statute, 555. See APPENDLX L in Arkansas, 612. in California, 615. in Delaware, 619. in Missouri, 645. in New Hampshire, 653. in New York, 557, 662, in North Dakota, 666, in Oklahoma, 672. in Oregon, 674, in Pennsylvania, 555, 667. in South Carolina, 680. in Wisconsin, 689, 690. in Wyoming, 693. proceedings to compel, 558, without action, 555. in equity, 558. ACCOUNTS, assignee must keep, 554, ACKNOWLEDGMENT of execution of assignment, 289. ACTIONS, by assignee, 494, against creditors, 496, assignor, 496, by defrauded vendor, 497. against assignee by creditors, to enforce the trust, 592-597, time for commencing, 593. : parties to, 594, against assignee — pleadings, 595. defense of, 595. decree, 596. statutory proceedings, 596. See APPENDIX I. for dividend, 596. in other cases, 597. 730 GENERAL INDEX. Figures refer to pages. ACTIONS — continued. by creditors to set aside assignment, 601, partiee to, 503, 604, pending, interests in assignable, 106. ADDITIONS to assignments, 304, 307. AGENCIES, distinguished from assignments, 11, AGENCY, deeds of, in England, 127, note 3. of assignor, 471. AGENT, provision for employment of assignor as, 223, employment of assignor by assignee as, 223, 471. AGENTS, power to assignee to appoint and dismiss, 268. powers of assignee to appoint, 487. AFTER-ACQUIRED property, 113. ALABAMA statute of assignment, 609. . against fraudulent conveyances, 403, note 2. ALLOWANCE of compensation to assignee, 520. See COMPENSATION, AMENDMENTS to assignments, 304. by consent of parties, 304. by the court, 305. in other cases, 306. AMOUNT of property assigned, 98-108, 141, APPEALS by assignees, 503. APPENDIX OF STATUTES, 609-694. APPENDIX OF FORMS, 695-725. APPRAISEMENT of property assigned, 476. under state statutes, 598, See APPENDIX L Delaware, 619. Indiana, 625. Iowa, 598, Kansas, 630. Kentucky, 598, Michigan, 687. Minnesota, 598. Mississippi, 598. Missouri, 643. Nebraska, 647, New Mexico, 657, New York, 598 Ohio, 668. Oregon, 598. Pennsylvania, 676, Texas, 598, Wyoming, 692. ARIZONA, statute of assignments, 609. against fraudulent conveyances, 408, note 3 ARKANSAS, statutes relating to assignments, 612, against fraudulent assignments, 403, note 2. ASSAILING an assignment as fraudulent or void, 599. who may assail, 601. ASSENT of creditors to assignment, 51, 278, 832-848, the rule in various states, 385-339, the English rule, 339. provided for, 340. when necessary, 332, in assignments directly to creditors, 342. GENERAL INDEX, 73) Figures refer to pages. ASSENT — continued. in assignments to trustees, 3338. how and when given, 842, of how many creditors, 844, by attorney, 345. by partners, 345. limitation of time to assent, 249, 845. presumption of, 834. from lapse of time, 816. to void assignments, 316. ASSIGNEE, qualifications of, 92. creditor may be, 93. relative may be, 95. selection of, by creditors, 94, of religious corporations, 95. appointment of, cannot be reserved to assignor, 95. in bankruptcy, avoiding assignment by, 52, right of action exclusive, 54. protection of voluntary assignee in bankruptcy. 55. allowance of expenses to voluntary. assignee, 55, covenant by, in assignment, 150. execution of assignment by, 286. power to mortgage and lease, 266. power to pay interest, insurance and incumbrances, 267. power to employ agents, 268, to compound and compromise debts, 268, 498, to defend suit against assignor, 270. powers in general, 486. powers under statute, 487. , i acceptance of assignment by, 309-318. proceedings of, general outline of, 463. rights, duties and powers of, 252, 464, 478, 483, 490. authority of, 395. how he takes, 478. not a bona fide purchaser, 481, notice of assignment by, 466. taking possession by, 468. inventory and appraisement of property by, 476, bond by, 476. custody of property by, 485. continuing assignor’s business, 242, 490-493. liability of, on taking possession, 897, 473. when protected, 567. how dealt with by court, 568. application of, to court for instructions, 533, collection of debts and recovery of property by, 494, actions by, 494. sale by, 505. disability to purchase at his own sale, 510, how removed, 515. conveyance by, 515. distribution by, among creditors, 528. final accounting and close of trust by, 554, must keep accounts, 554. liability of, 464, 561-568. for misconduct of others, when, 272. 732 - GENERAL INDEX. Figures refer to pages. ASSIGNEE — continued. death of, 574. removal of, 575. non-acceptance of, 575. resignation of, 576. misconduct of, 578, insolvency of, 578. incapacity of, 578. powers of new, 579. discharge of, 579. provisions for expenses and services of, 273. actions against by creditor, 592. ASSIGNEES, when parties to assignment, 126. stipulations for benefit of, 272. special powers and directions to, 266. liability of, 561. when protected from liability, 567. how dealt with by the courts, 568. ASSIGNMENT defined, 1, 2, 3, 4, 124, note 1. when an act of bankruptcy, 30-51. who may make an, 58. under statutory provisions, see APPENDIX I, in California, 613. in Colorado, 615. in Indiana, 624, in North Dakota, 665.. in Oklahoma, 671. in Pennsylvania, 675, in,Wyoming, 692. to whom, 92. of what property, 97-113. for whose benefit, 148. pending what proceedings not to be made, 181. how to be made, 122, parties, 125. general, 124, special, 123, partial, 157. form of, 122, 130. by several instruments, 132, by single instrument, 135, division and varieties of, 185.. form of, particularly considered, 180, writing, when necessary, 129. execution of, 285. formal part, 136, repugnant to laws or policy of forum, 867-372, oath to, 289. acknowledgment of, 289. attestation of execution of, 289, record or registry of, 292, delivery of, to assignee, 301. amending and adding to, 304, acceptance of, by assignee, 309, assent to, by creditors, 332. takes effect, when, 349-351. GENERAL INDEX. 733 Figures refer to pages. ASSIGNMENT — continued. operation of, 852-356, effect on corporation, 354, effect on partnership, 356. what passes by, 103-112. what does not, 112-114. construction of, 381. revocation and canceling of, 459-462, notice of, by assignee, 466, creditors coming in under, 680. creditors treating as a nullity, 599, assailing as void, 601. ASSIGNMENTS in general, 1. in debt, 3. for the benefit of creditors, 8. voluntary, 3-5, and notes, history of, 21, 24. classification of, 20-22. when acts of bankruptcy, 29-50. regulated by statute, in what states, 24. See APPENDIX L Alabama, 609, Arizona, 609. Arkansas, 612, California, 613. Colorado, 615, Connecticut, 617, Delaware, 619. Florida, 620. Georgia, 621. Idaho, 622, Illinois, 622. Indiana, 624, Iowa, 627. Kansas, 629. Kentucky, 633, Louisiana, 634, Maine, 634. Maryland, 634, Massachusetts, 635. Michigan, 635. Minnesota, 638. Mississippi, 641. Missouri, 642. Nebraska, 646, New Hampshire, 651, New Jersey, 654. New Mexico, 656, New York, 660. North Carolina, 665 North Dakota, 665. Ohio, 667. ‘ Oklahoma, 671. Oregon, 673. Pennsylvania, 675, Rhode Island, 678, 734 GENERAL INDEX. Figures refer to pages. ASSIGNMENTS — continued. regulated by statute — continued. South Carolina, 679. South Dakota, 660. Tennessee, 681. Texas, 682. Vermont, 685. Virginia, 686. West Virginia, 687. Wisconsin, 688. Wyoming, 692. by insolvents, 58, distinguished from conveyances direct to creditors, 5-7. from sales, 8-11. from deeds of trust in the nature of mortgages, 16, from mortgages, 11-16. from agencies, 11. principal modes of, 122. special, 123. general, 124, tripartite, 155. partial, special and general, distinguished, 157, by one of several partners, 67, 88. by partners, how to be made, 67-89, with preferences, 154, 162, 378, directly to creditors, 6. with special provisions, 193. parties to, 125. consideration of, 277. trusts of, 280. construction of, 381, fraudulent and void, 399. See FRAUDULENT, void in part, 443. how affected by subsequent events, 440. in connection with mortgages, 450. judgments, 454, other transfers, 455. subsequent instruments, 457. other assignments, 457, releases, 458. may be avoided to what extent, 443. as to property, 446. as to parties, 448, by corporation, 64. how executed, 66, 285. restrictions on the rights of, 66. effect and operation of, 349. ASSIGNOR, reservations of benefit to, 221, 228-231, stipulations for use of property by, 224. for continuance of business by, 242. actions against, by assignee, 496. declarations of in evidence, 501. reservation of powers to, 273. execution of assignments by, 285. retention of possession by, 315, 470. GENERAL INDEX. 735 ; Figures refer to pages. ASSIGNOR — continued. duty to give possession of property assigned, 468. acting as agent, 471. trusts for, 283. ATTESTATION of execution of assignment, 289, ATTORNEY, power of, on assignment, 150. execution of assignment by, 285. assent of to assignment, 345. AVOIDANCE of assignment, proceedings in, 599. of assignment, extent of, 443, AVOIDING assignment by assignee in bankruptcy, 52 : AWARDS, interest in, assignable, 106. BADGES of fraud, 434, BAIL may be secured by assignment, 115. BALANCES of account assignable, 105, BANK may make an assignment, 64. BANKRUPTCY, the system of, 25. assignments, act of, the English doctrine, 26. general grounds of English rule, 35. fraudulent assignments, acts of, 41. assignments with preferences in England, statutes, 26, 41, 164, note 1. pro rata, statutes, under English system, 32-35, assignments, when acts of, under United States law, 34, 37. duty of insolvent, 47. assignments voidable in, 51. not a bar to discharge in, 66. compositions in, 57. ; proceedings on avoiding, 55. protection of voluntary assignee in, 55, 56. BANKRUPT LAW, assignments considered in connection with, 25. right to assign, how affected by, 19. of England, 25-36. acts of United States, 36-39, acts of 1800 and 1841, 36. act of 1867, 37. power to assign, not suspended by, 39, exemption of assignments from operation of English act, 34, transfers under foreign, 361-364. BENEFICIARIES under assignment, who may be, 115. BILL in equity to enforce trust of assignment, 592. to set aside assignment, 601. parties to, 604. form of, 605. proof, 605. decree and subsequent proceedings, 606, BILLS of exchange assignable, 104. BIPARTITE assignment, 135. BONA FIDE purchaser, assignee not, 478-483, assignments must be, 399. BONA FIDES of assignments, 399, BOND by assignee, 476. under state statutes, 476. See APPENDIX L in Arizona, 611, in Arkansas, 612, 736 GENERAL INDEX, Figures refer to pages. BOND — continued. under state statutes — continued. in California, 615. in Florida, 620. in Georgia, 621, in Illinois, 622, in Kansas, 631. in Maryland, 634. 2 in Minnesota, 639. in Mississippi, 641. in Missouri, 643. in Nebraska, 648. in New Jersey, 655, in New Mexico, 657. in New York, 661. in North Dakota, 666. in Oklahoma, 672. in Pennsylvania, 676, in Tennessee, 631. in Vermont, 685. BONDS assignable, 105. liability of sureties on, 572, BOOK accounts assignable, 105. BOOKS of account, delivery of, to assignee, 468. BUSINESS of assignor, continuance of, by assignee, 490, stipulations for, 242. CALIFORNIA statute of assignments, 613. against fraudulent conveyances, 403, note 2, CANCELLATION of assignments, 459-462. CHARGES, assignee takes subject to, 479. CHATTEL mortgages distinguished from assignments, 11-14. CHOSES in action assignable, 104, transfers of, 373. “CLAIM” construed, 398, of landlord for rent, priority of, 545. CLAIMS of creditors doubtful and disputed, 533, growing out of and adhering to property, assignable, 106. against United States, pass by assignment, 108. on foreign governments, pass by assignment, 108, for damages for torts, when assignable, 106, 108. of creditors, how ascertained under state statutes, 536. See APPENDIX I, in Arizona, 611. in Colorado, 616, in Illinois, 623, in Indiana, 626. in Iowa, 628. in Kansas, 637, in Michigan, 637, in Mississippi, 642, in Missouri, 644, in Nebraska, 648, in New Hampshire, $52, in New Jersey, 655. in New Mexico, 657, GENERAL INDEX. 437 Figures refer to pages, CLAIMS — continued. ; of creditors, under state statutes — continued. in New York, 662. ; in Ohio, 669, in Oregon, 674, in Rhode Island, 679. in South Carolina, 537. in Texas, 684, in Wisconsin, 689. in Wyoming, 694. CLERKS, power of assignee to appoint, 487. CLOSE of trust by assignee, 558, CO-ASSIGNEES, liability of, 568. COLLECTION of debts by assignees, 635, COLORADO statute of assignments, 615. against fraudulent conveyances, 403, note 2 COMING in under assignment, 580. who may come in, 581. when to come in, 582. how to conie in, 583. consequences of, 583, under decree, 587. COMITY, rule of, 357. COMMENCEMENT and recital of assignment, 138, COMMISSIONS of assignee, 520-527. COMPENSATION of assignee, 147, 278, 518-522 allowance of, 524, amount of, 524. when forfeited, 526. under state statutes, APPENDIX I, in Arizona, 612, in Arkansas, 612. in Connecticut, 521, in Delaware, 522. in Florida, 522. in Georgia, 522. in Kansas, 633, in Illinois, 674. in Kentucky, 522, 5285. in Maryland, 522. in Massachusetts, 523, 526, in Michigan, 638, in Missouri, 523. in New York, 523, 524, 664, in North Carolina, 523, 525, in North Dukota, 667. in Ohio, 670. in Oklahoma, 672. in Pennsylvania, 522, 525, in South Carolina, 523. in Tennessee, 681. in Vermont, 522, when forfeited, 526. COMPOSITION deeds, 190. COMPOUNDING, power of, given to assignee, 263. 47 {38 GENERAL INDEX. Figures refer to pages. COMPUTATION of dividends, 548. CONDITIONAL assignments, 216, note 2. CONDITIONS of preference, 212. CONNECTICUT statute of assignments, 417. against fraudulent conveyances, 403, note 3, CONSIDERATION of assignments, 277-279. statement of, 137. CONSTRUCTION of assignments, 381-397. general rule of, 381. description of property, what passes, 383-386. designation of debts to be paid, 387-393, stipulation for release, 393. authority to assignee, 395. liability of trustee, 397. effect of release, 397. particular words, 398. of releases, 590. CONSTRUCTIVE FRAUD, 425. CONTINGENT interests assignable, 106. CONTINUANCE of assignor’s business by assignee, 490-493, stipulations for, 224. CONTRACTS, interests in, assignable, 105. CONVEYANCE by assignee, 515. CONVEYANCES, fraudulent, statutes of, 403. CORPORATION may make an assignment, 64. restrictions, 66. moneyed, right to assign, 66. preferences by, 183. effect of assignment by, 354, COSTS against assignee, 498. COUNSEL FEES, allowance of, to assignee, 526. COVENANT by assignee, 150. COVIN, 400. CREDIT, power to assignee to sell on, 255-266. implied power to assignee to sell on, 261. CREDITORS, when parties to assignment, 126. time to become parties or assent, 249, 342, 582. effect of becoming parties, 583. how to come in, 583, assent of, to assignment, 278, 332-348. distribution among, 528-549. coming in under assignment, 580-587. what creditors may come in, 529, 581. releases by, 588-591. enforcing the trust of the assignment, 592. actions by, against assignee, in avoidance of assignment, 599, actions against, by assignee, 496. treating the assignment as a nullity, 599, what, may assail assignment, 601. assailing the assignment as fraudulent or void, 599, 601, CROPS, assignable, 104, note 2. CUSTODY of property by assignee, 485. DAMAGES, right of action for, assignable, 109. DEATH of assignee, proceedings in case of, 574, GENERAL INDEX. 739 -Figures refer to pages. DEBTOR, his right to assign, 19. DEBTS assignable, 104. description of, in assignment, 148, designation of, 887, proof of, 585. collection of, by assignee, 494, due to state, priority of, 545. DECLARATIONS of assignor, when evidence against assignee, 501, DECREE, creditors coming in under, 587. in proceedings to enforce trust, 596, 4 on bill to set aside assignment, 606, DECREES in equity assignable, 107. DEEDS of agency, in England, 127, note 3, of trust, in southern states, 16, of trust, distinguished from assignments, 16-18, DEFENSE of suits, provision for, 270. DEFENSES by assignee against creditors, 496, 595. DEFINITION of voluntary assignments, 3. DELAWARE statute of assignments, 619. DELAY of creditors, 419. See INTENT. DELIVERY of assignment to assignee, 301. what amounts to, 302. evidence of, 308. of release, 590, of possession of property assigned, 315-830. rules on the subject, 816-824. See FRAUD. rule in New York, 320. rule in United States courts, 323. prevailing rule and exceptions, 325. when essential, 315, 316. possession prima facie evidence of, 319. exceptions to rules, 325, time and mode of, 327, of lands, 327. of goods, 327, of debts, 327. constructive delivery, 828. actual, 329. retention of possession, 217, 330. of chattel not in schedule, 331, DESCRIPTION of property in assignment, 138, of amourt assigned, 141, 386. of debts to be paid, 148. DEVISEES, interests of, pass by assignment, 106, note, 110, DIRECT assignments to creditors, 5. DIRECTIONS, special, to assignees, 266. DISABILITY of assignee to purchase at sale by him, 510, how removed, 515. DISCHARGE of assignee before executing trust, 574. after executing trust, 574, 579, DISMISSAL of assignee, 577. See REMOVAL. DISPOSITION of surplus by assignee, 551. DISTRICT OF COLUMBIA, no statute of assignments, 619, DISTRIBUTION by assignee among creditors, 528, how made, 528, what creditors are entitled, 529. 740 GENERAL INDEX. Figures refer to pages. DISTRIBUTION — continued. application to court fr directions, 531, 632, note 3% in particular cases, by statute, 536. order of, 548, 638, course of, 548. DIVIDENDS to creditors, 528. under state statutes, 536, See APPENDIX L in Arizona, 612. in Indiana, 626. in Iowa, 629. in Kansas, 537, 632. in Michigan, 636. in Minnescta, 640. in Missouri, 645. in Nebraska, 648, in New Hampshire, 653. in New Jersey, 587. in New Mexico, 659. in Ohio, 670. in Oregon, 674. in South Carolina, 537, in Texas, 684. in Wyoming, 693. notice of, 538. order of payment of, 538. computation of, 548, application of, 585. effect of taking, 586. action for, 596. interest on, 549, 597. payment of, does not take debt out of statute of limitations, 549, DIVISION and varieties of assignments, 122, 136. DOMICILE of parties affected by assignments, 375, DOWER, assignment does not divest right of, 110. DUTIES of assignee, 473-483. in regard to sale, 506. EFFECT, when assignment takes, 349. of taking dividend, 586. ELIZABETH, statute of 13, ch. 5, 401. EMPLOYMENT of debtor by assignee, 471. See AGENT. stipulation for, 223. ENFORCEMENT of trust of assignment by creditors, 592-598, under statute of New Jersey, 596. of Pennsylvania, 596. EQUITIES, assignee takes subject to, 478, 499. EVIDENCE of delivery of assignment, 303. declarations of assignor when, 501. EXCEPTION of property not exempt, out of assignment, 99. EXCLUSIVE possession of property delivered to assignee, 329, EXECUTION of trust, provisions respecting time for, 245. reasonable time, 247. indefinite postponement, 248. of assignment, 285. by assignor, 285, by assignee, 286. GENERAL INDEX. 741 Figures refer to pages. EXECUTION — continued. of assignment — continued. by creditors, 287. by attorney, 285, note. by wives of assignors, 126, of schedule, 286. acknowledgment, 289-291, attestation of, 289, requisites after, 292. EXEMPT PROPERTY, 98. EXPECTANCIES assignable, 106. EXPENSES of executing the trust, 147, 518, items of, 518. allowance of, to voluntary assignees, 55, FAMILY of debtor, reservations for benefit of, 217 FICTITIOUS debt, preference of, 117. trust for payment of, 117. FINAL accounting by assignee, 554. FLORIDA, statutes regulating assignments, 620. FOREIGN assignments, 357. See Lex Loct. repugnant to law of forum, 367, assignnient, choses in action pass by, 873, preferences in, 378. bankrupt assignment, 361. property passes by assignment, 108, debts pass by assignment, 105, FORM of assignment, 122. particularly considered, 130. of assignment by single instrument, 185, by several instruments, 132, simplest form, 136. of releases, 589. FORMAL parts of assignments, 136. FORMS AND PRECEDENTS, appendix of, 695, FRAUD in selecting an assignee, 93-96. in providing for future indorsers or sureties, 116. under the non-imprisonment act of New York, 182, by assignments without writing, 129, in giving preferences in general assignments, 178. in giving preferences by secret agreement, 190. in stipulations for a release, 197-219. in partial assignments with stipulations for a release, 214, in reserving a benefit to the debtor, 217. in creating a trust for the debtor, 221, 434. in stipulating for the use of the assigned property by the debtor, 224, in reserving surplus moneys or property to the debtor, 228, in stipulating for continuance of assignor’s business, 242, in fixing a time for the execution of the trust, 245. in limiting a time for creditors to become parties or assent, 249, in fixing the time of sale of the property, 251. in prescribing the mode and terms of sale, 254-260, in empowering assignee to compound with creditors, 268, to defend suits by creditors, 270. in postponing collection of bond assigned, 271. 742 GENERAL INDEX. Figures refer to pages. FRAUD — continued. in limiting assignee’s liability, 272. in reserving to assignor power of revocation, and of declaring new trusts, 278. to mortgage, 274. to change order of preferences, 274. to appoint new trustees, 275. in directing assignee to hold property subject to assignor’s order, 276. in not specifying property assigned, 138. in providing for payment of large salaries to trustees, 147. in omitting to annex schedules to assignment, 188, 144, 151. in influencing creditors to become parties to assignment, 287, in retaining possession of property assigned, 315, 319, 324. the rule in Alabama, 320. in Arkansas, 319, 613. in Connecticut, 319. in Georgia, 320. in Indiana, 319. in Kentucky, 320. in Louisiana, 320. in Maine, 319. in Maryland, 318 in Massachusetts, 319, in Michigan, 320, in Mississippi, 320. in Missouri, 319. in Nebraska, 320. in New Hampshire, 319. in New Jersey, 319. in New York, 319, 320. in North Carolina, 319. in Ohio, 319. in Pennsylvania, 316, in South Carolina, 31& in Tennessee, 320. in Texas, 320. in Vermont, 318. in Virginia, 320. in Wisconsin, 320. in the United States courts, 323 exceptions to the rule, 325. in assignments, generally, 417. in law and in fact, 423, constructive, 425. how established, 427, 480. may be presumed, when, 428, on the face of the deed, 480. from matter extrinsic, 433, from both sources, 433. indicia or badges of, 434, effect of subsequent or previous, 440, and fraudulent intent, 421. FRAUDULENT and void assignments, 399-449, proceedings to avuid, 599, intent, 420-423. See InrEnt. how ascertained, 422. GENERAL INDEX. 743 Figures refer to pages. FRAUDULENT — continued. assignment not affected by subsequent events, 440. how far it may be avoided, 443, conveyances, statutes of, 19, 20, 403. relation of the terms ‘‘fraudulent” and “ void,” 899, English statute of 13 Elizabeth, ch. 5, 401-404. statutes of the several states, 403, note 2, emphatic words of, 404. hindrance and delay of creditors, 404-420. penal character of statute, 406, 413, note 2 how construed, 407-420. preferences, 190. FUTURE advances and responsibilities, 116, suretyships may be secured, 116, GENERAL assignment, what, 22, 124. GEORGIA statute of assignments, 621. against fraudulent conveyances, 403, note & GOOD FAITH, 400. GOODS assignable, 104. “GOODS” construed, 398, “GOODS and chattels” construed, 398 GRATUITIES not assignable, 106, note 2 HABENDUM of assignment, 145. HEIRS, interests of, pass by assignment, 110, HENRY VIL., statute of 3, ch. 4, 485-440. HINDRANCE and delay of creditors, 404-420, American decisions, 414. HISTORY of practice of assignments, 19-25, IDAHO statute of assignments, 622. ILLEGAL preferences, 190. ILLINOIS statute of assignments, 622. against fraudulent conveyances, 403, note 2, IMPLIED power to sell on credit, 262-266. trusts of assignment, 281. IMPRISONMENT of parties to conveyances with intent to hinder, delay or de- fraud creditors, 406. INCOMPETENT assignee, 93. proceedings in case of incompetency, 578. INDIANA statute of assignments, 624. statute against fraudulent conveyances, 403, note 2, INDIAN TERRITORY, statute of assignments, 627. INDICIA or badges of fraud, 434. INDORSERS may be secured by assignment, 116. preferred by assignment, 186. are creditors, 115, note 3. INFANTS, assignments by, 58, note 1, INSOLVENCY on the part of an assignor, 58. defined, 61, 64, 613. of assignor, when important, 59, of a corporation, 64. INSOLVENT assignee, 94. proceedings in case of insolvency, 578. 744 GENERAL INDEX. Figures refer to pages. INSOLVENT’S discharge, application for, when barred by assignment, 181; INSURANCE, policies of, assignable, 1035. power to assignees to effect, 267. INTENT to hinder and delay creditors, in the statute of 13 Elizabeth, 417. quality of, under the statute of Elizabeth, 403-421. to defeat execution and prevent sacrifice of property, 420. to defraud, fatal to assignment, 421. in the statute of 18 Elizabeth, 401, 417. on the part of assignor, 421. of assignee, 421. INTEREST on claims of creditors, 549, 597. direction not to pay, 271. power of assignee to pay, 267. on dividends, when recoverable, 549, 597. INTERESTS in personal contracts assignable, 103. in actions pending, assignable, 106. in wife’s property, pass by assignment, 109. of devisees, pass by assignment, 110. of heirs, pass by assignment, 110. INVENTORY of assigned property by assignee, 476, 47%, under state statutes, 476. See APPENDIX L in Arizona, 610. in Arkansas, 612, in Colorado, 616, in Georgia, 621. in Dlinois, 622. in Iowa, 476, note 3. in Kansas, 630. in Kentucky, 477, note, 633. in Michigan, 477, note, 636, in Minnesota, 476, note 8. in Mississippi, 641. in Missouri, 642. in Nebraska, 647. in New Hampshire, 651, in New Jersey, 655. in New Mexico, 657. in New York, 660. in North Dakota, 666. in Oklahoma, 671. in Oregon, 674. in Pennsylvania, 676. in Rhode Island, 679. in Tennessee, 681. in Texas, 682. in Vermont, 685. in Wisconsin, 689, in Wyoming, 692. IOWA statute of assignments, 627. against fraudulent conveyances, 404, note. JUDGMENT not an assignment, 132, 167, in aid of fraudulent assignment, void, 221, 454, in connection with assignment, 454, JUDGMENTS assignable, 107, GENERAL INDEX. 745 Figures refer to pages. KANSAS statute of assignments, 629. against fraudulent conveyances, 404, note. KENTUCKY statute of assignments, 633, against fraudulent conveyances, 404, note. LANDLORD'S claim for rent of assigned premises, priority of, 545. See RENT. LANDS assignable, 103. : LAPSE of time, evidence of assent of creditors, 845. when trust closed by, 558. LEASE or mortgage, power of assignee to, 266. LEASEHOLD interests, when they pass, 110. premises, assignee taking possession of, 473. LEGACY, assignable, 110. LESSEE, right of, assignable, 103, LESSOR, right of, assignable, 103, LETTER, an assignment by, 180. , not a release, 590. LEX FORI governs remedy, 367. LEX LOCI of assignments, 357-380, See FoREIGN ASSIGNMENTS, the general rule, 357. as to real property, 364, as to choses in action, 373. rule of comity, 357-364. LIABILITY of assignees, 561. stipulations respecting, 272-397 on taking possession, 473. extent of, 561-565. in cases of negligence, 561. of assignees —~ mistake, 565. how guarded against, 516. by taking advice of counsel, 566, by application to the court, 532, 566. of co-assignees, 568-572, of sureties on assignee’s bond, 572, LIENS, assignee takes subject to, 478. LIMITATIONS, statute of, payment.of dividend does not take debt out of, 549, assignment not acknowledgment of debt within, 354. in application to trust, 558. LIMITED partnership, assignment by, 90. cannot give preferences, 182. LOUISIANA statute of assignments, 634, MAINE statute of assignments, repealed, 634. . against fraudulent conveyances, 404, note. MALICE in the intent to delay or hinder creditors, 404, 412, ‘* MALICE, fraud, covin, collusion, or guile,” in the statute of fraudulent con- veyances, 401, 405, 421. MARRIED WOMEN, assignments by, 58, note 1. MARYLAND statute relating to assigninents, 634. MASSACHUSETTS statute of assignments, 635, MERCHANDISE, assignable, 104. MICHIGAN statute of assignments, 635. statute against fraudulent conveyances, 404, note, MINNESOTA statute of assignments, 639. against fraudulent conveyances, 404, note. 746 GENERAL INDEX. Figures refer to pages. MISCONDUCT of assignee, proceedings in case of, 577. MISSISSIPPI statute of assignments, 641. statute against fraudulent conveyances, 404, note. MISSOURI statute of assignments, 642, against fraudulent conveyances, 404, note, MISTAKE, liability of assignee for, 565. MONEY in bank passes by assignment, 111, MONTANA, no statute of assignment, 646, MORTGAGE, power to assignee to, 266. power to pay off, 267. power to pay interest on, 267. MORTGAGEE'S interest assignable, 103. MORTGAGES distinguished from assignments, 14-16, in connection with assignments, 450. MORTGAGOR’S interest assignable, 103, NEBRASKA statute of assignmente, 646. against fraudulent conveyances, 404, note. NEGLIGENCE, liability of assignee for, 562. NEVADA statute of assignments, 651. against fraudulent conveyances, 404, note. NEW ASSIGNEE, powers of, 579. NEW HAMPSHIRE statute of assignments, 651 NEW JERSEY statute of assignments, 654. against fraudulent conveyances, 404, note, NEW MEXICO, statute of assignments, 656. NEW YORK statute of assignments, 660. against fraudulent conveyances, 404, note. NON-ACCEPTANCE of trust by assignee, proceedings on, 575, NON-DELIVERY of possession of assigned property, 315-331. when conclusive evidence of fraud, 315, 817. when only presumptive evidence of fraud, 315, 817, 824, when not presumptive evidence of fraud, 315, NON-DUE claims, discounted in Arizona, 611. NORTH CAROLINA, no statute, 665. against fraudulent conveyances, 404, note, NOTES, assignable, 104. NOTICE of assignment, 466. in lieu of record, 299. by statute, 466. See APPENDIX I, in Arizona, 610. in Florida, 620, in Kansas, 629, in Massachusetts, 635. in Michigan, 636. in Missouri, 644, in New Jersey, 655. in Ohio, 668, in Oregon, 674. in Rhode Island, 679. in Texas, 684. in Wisconsin, 689. in Wyoming, 692, object and effect of, 466. effect of omission of, 467. GENERAL INDEX. TAT Figures refer to pages. NOTICE — continued. of sale, 509. of dividend, 538, by assignee to creditors; to prove debt, 270, NULLITY, treating assignment as, 599, © OATH to assignment, 289, See APPENDIX I. OHIO statute of assignments, 667. against fraudulent conveyances, 404, note. OKLAHOMA, statute of assignments, 671. OPERATION of assignment, 852. ORDER of payment by assignee, 539. OREGON statute of assignments, 673. against fraudulent conveyances, 404, note, PARTIAL assignments, what, 21, 157. on condition of release, 158, 214, not within priority acts of congress, 160, with preferences, 160, 179. PARTIES to assignments, 125, assignors, 125, assignor’s wife, 126, assignees, 126. creditors, 126. | time to become, 249, domicile of, 375. in action by assignee to collect debts, 508. te bill to enforce trust, 694. to set aside assignment, 604. See BILL, PARTNERS, assignments by, 67-88. power of each of, to assign his interest, 88. surviving, 89. : preferences by, 234. assent of to assignment, 845, PARTNERSHIP, limited, cannot give preferences, 182. limited, assignments by, 90. appropriation of assets in assignments by, 234. preference of individual creditors in assignments by, 234. preference of firm of creditors in assignments, 236-241. effect of assignment by, 356. PAYMENT, preference by, 166. by assignee, order of, 538. PENAL character of the statute of fraudulent conveyances, 406, PENNSYLVANIA statute of assignments, 675. against fraudulent conveyances, 404, note, accounting in, 555. PERSONAL contracts assignable, 105, statute of uses, 435, PLEADINGS in suit to enforce trust, 595. POLICIES of insurance assignable, 105. POSSESSION of property assigned, delivery of, 315-331. want of, when evidence of fraud, 223, 324. taking by the assignee, 468, actual and continued change of, 329. by assignor, the rule and exceptions, 825. 748 GENERAL INDEX. Figures refer to pages. POSSESSION — continued. by assignor, when not evidence of fraud, 324. effect of change of, under foreign assignment, 372. how taken, 330. how far assignor may be left in, 470. how far assignor may act as agent, 471. how taken when property is not in assignor’s hands, 468. of leasehold premises, 474. of property not in assignor’s, hands, 473, time and mode of delivery of, 327. constructive delivery of, 328. actual delivery of, 329. prima facie evidence of delivery, 319. POSSIBILITIES coupled with an interest assignable, 105. POWER of partners to assign, 67-91. of attorney, may be an assignment, 131. in an assignment, 150, to sell on credit, when it vitiates an assignment, 255-266. implied power, 261. of revocation, void, 274. POWERS to assignee, special, in assignments, 266. to lease or mortgage, 266, tosell or mortgage, 266. to effect insurance, 267, to pay interest, 267. to appoint agents, 268. to declare or change preferences, 268, 273, to compound with creditors, 268. in New York, 270. to give notice to creditors to prove debts, 270. to defend suits, 270. to assignee to sell at public or private sale, 254, to sell for cash or upon credit, 255-265. to assignors, reservations of, 273-276. to lease or mortgage, void, 274. to change order of preferences, void, 274, to name successor of assignee, void, 275. to order future disposition, void, 275. to order sale.of property, when valid, 276, to appoint proceeds, void, 276. of assignee under assignment, 464, 478, of sale, 505. PRECEDENTS AND FORMS, appendix of, 695, PREFERENCE of creditors, right of, 160, 162, 166-176, 378. by payment, 163. by appropriation of property, 166. by direct transfer, 168. in assignments to trustees, 169-178, restrictions in the right to prefer, 178, 181. regarded with disfavor, 1174. in special instances, 176-179, assignments with, 162. statutes against, 173. See APPENDIX I. Alabama, 609. Arizona, 609. GENERAL INDEX. 749 Figures refer to pages, PREFERENCE — continued. statutes against — continued. California, 614, Colorado, 617. Georgia, 621. Kentucky, 633. Nebraska, 650. New Hampshire, 653, New Jersey, 654. New Mexico, 657, New York, 660. Ohio, 670. Pennsylvania, 676. Rhode Island, 678. South Carolina, 680, Tennessee, 681. Virginia, 686, Wisconsin, 688, Wyoming, 694, by assignments not general, when allowed, 176, 178, in partial assignments, 179. by partners to creditors of individual partners, 234, by individual partners to creditors of firm, 236. subjects of, 185. where there is no other security, 186. modes of giving, 162, 187, absolutely, 187. upon condition, 117, 187. future, 188. personal, 186. with reference to lex loci contractus, 878. must be given by the assignment itself, 189. by implication, 190. illegal, 190. fraudulent, 190, secret, 192. form of giving, 154, by corporations, restrictions on, 183, 185. by partnership, 82, 234. by limited partnership, 182. PREFERRED creditors, rights of, under assignment, 586. PRESUMPTION of acceptance of assignment by assignee, 312%, assent of creditors to assignment, 287, 304, 321. of fraud, 428, PRIORITY of payment, who entitled to, 539-547, of United States, 160, 539-543, nature of, 541, assignment must be general, 540, cannot be divested by debtor, 542, of secured creditors, 543, of the state, 545. of landlord of assignor’s premises, 545. in other cases, 547. PROCEEDS, to apply and distribute, 147, PROFITS of lands assignable, 104. 750 GENERAL INDEX. Figures refer to pages. PROMISSORY notes assignable, 1u4. PROOF of debts under assignment, 585, of fraud in assignment, 427. PROPERTY assigned, amount of, 97, 141. description of, 188, 383. delivery of possession of, 315. exception of, 99. exempt, 98. when all the debtors’, must be, 101. proportion of, to debts, 102. what may be, 103-108. what passes under general terms, 108, foreign passes, 108, wife’s, as to, 109. claims for damages, 109, leasehold interests, 110. interests of devisees, 110. interests of heirs, 110. rents, 111. money in bank, 111. what does not pass, 112. taking possession of, by assignee, 468, convert into money, 146. fraudulently transferred passes to assignee, 111. after-acquired does not pass, 112. PURCHASER of land may assign his interest, 103, note 4. QUADRIPARTITE assignments, 136. QUALIFICATIONS of assignees, 93. REAL estate of partners, how assigned, 88. subject of assignment, 103. how conveyed, 125, 145. how described in assignment, 138-141. how delivered to assignee, 328. does not pass by foreign assignment, 358-361. See Lex Loct. conveyance of, by assignee, 515. RE-ASSIGNMENT to assignor by assignee, 460. RECITAL of assignment, 136. RECORD of assignment, 292. in what states necessary, 292-299. See APPENDIX I, notice in lieu of, 299. REFERENCE tw schedule, 141, 151. REGISTRY of assignment, 292. See RECORD. RELATIONSHIP between assignor and assignee, 93-96. RELEASE, stipulations for, in assignments, 158, 197, 393, 588, rule in England, 197, rule in United States, 197. subsequent to assignment, 397. under statute. See APPENDIX I, in Alabama, 198, 609. in Arizona, 610. in Arkansas, 198, in California, 614. in Colorado, 198. ~T or Nee GENERAL INDEX. Figures refer to pages. RELEASE — continued. under statute — continued. in Connecticut, 208, in Florida, 208. in Georgia, 208. in Illinois, 208. in Indiana, 208. in Maine, 198. in Maryland, 199, 216. in Massachusetts, 200, 209. in Michigan, 209. in Mississippi, 208. in Missouri, 208. in New Hampshire, 207, in New York, 201, 209. in North Carolina, 207. in Ohio, 207. in Pennsylvania, 204, in Rhode Island, 206, 216. in South Carolina, 216, 275, in Tennessee, 208. in Texas, 208. in Vermont, 207. in Virginia, 207. in West Virginia, 207. general rule as to, 209. objections to, 213. in partial assignments, 214, in assignments to partners, 215, excluding non-releasing creditors, 212% manner of stipulating for, 216. by creditors, 558, time for executing, 589, form of, 589. delivery of, 590. construction of, 590. when void, 591. RELEASE in connection with assignments, 458, REMOVAL of assignee by the court,,577. See DISMISSAL under statute: in Arizona, 612. in Delaware, 419, in Missouri, 646. in Nebraska, 649. in New Hampshire, 653, in New Mexico, 658, 659. * in New York, 662. in Ohio, 668. in Oregon, 675. in Rhode Istand, 678, in Texas, 683, 684. in Wisconsin, 690. in Wyoming, 694. of assignee from the state, 575. proceedings in case of, 575. 752 GENERAL INDEX. Figures refer to pages. RENT of premises, payable by assignee, 474, 545. claim of landlord for, when preferred, 545. RENTS pass by assignment, 111. REQUISITES after execution, 292. ; RESERVATIONS in assignments for the benefit of the assignor, 217. general rule as to, 217, 220. qualifications, 223, 224. in mortgages and deeds of trust, 228, in preferential assignments, 229, 274, with stipulations for releases, 231. what allowed, 223. or exceptions of property, 218, 223, 224. of trusts for assignor, 221, 230, of surplus to assignor, 228, of powers to assignor, 273. over preferences, 274, over sales, 275, RESIGNATION of assignee, proceedings in case of, 576. RESTRICTIONS on the rizht to prefer, 173, 181. See AppenpIx I. RESULTING trusts for debtor, 217, 221, 280, 283. RETENTION of possession by assignor, fraudulent per se, 315-319, only evidence of fraud, 319. not even evidenco of fraud, 324, REVOCATION, powers of, in assignment, void, 278, 274. of assignments, 459-462, RHODE ISLAND statute of assignments, 678, against fraudulent conveyances, 404, note, RIGHT to assign property, 19. to prefer creditors, 162-179. restrictions on, 173, 182, See APPENDIX L of corporation to assign, 64, restrictions on, 66. to prefer creditors, restrictions on, 181-185. RIGHTS ad rem and in re, assignable, 105. of actions for damages, assignable, 106, 109, of assignee, 478, of preferred creditors, 586, SALE of assigned property by assignee, 506-517, power of, 505. duties in regard to, 506. time of, 252, 506. provision for, in assignment, 251. mode of, 254, 507. provision for, in assignment, 255. at retail, 261, 507. terms of, 508, provision for, in assignment, 255. on credit, 255, 261, 508. of assigned property on credit, provision of, 255-267. prohibition of, 261. notice of, 509. disability of assignee to purchase at, 510, how removed, 515, conveyance by assiznee, 515, title of purchaser, 516. GENERAL INDEX. 453 Figures refer to pages, SALE — continued. provisions in assignment respecting, 251, 266. under statutory provisions, see APPENDIX I. SALES distinguished from assignments, 8. . SCHEDULE of property, reference to, in assignment, 141, 144, 151, qualifies general description, 142, preparation of, 151. “to be annexed,” 144, “annexed,” 145. form of, 151-154, See APPENDIX II. statutory regulation of, see APPENDIX I, provision for correcting, 154, SECRET preferences, 190, trusts void, 283. SECURED creditors, payment of, 643, who may be, 115. debts may be provided for by assignment, 117. SET-OFFS, assignee takes subject to, 478, 499. SETTING aside assignment as fraudulent or void, 601. See BILL SEVERAL instruments, assignments by, 132. SINGLE instrument, assignment hy, 135. SOUTH CAROLINA statute relating to assignments, 679. against fraudulent conveyances, 404, note. SOUTH DAKOTA, statute of assignments, 680. against fraudulent conveyances, 404, note. SPECIAL assignments, 20, 123, 157. provisions, assignments with, 193. clauses in assignments not advisable, 195, powers and directions to assignees, 266-272, STATE, debts due, priority of, 545, STATUTE OF LIMITATIONS not affected by payment, 549. STATUTES of various states relating to assignments, 24. See APPENDIX L of fraudulent conveyances, 401. 18 Elizabeth, ch. 5, 401. 18 Elizabeth and 3 Henry VII. compared, 437. of different states, 403, note 2. See APPENDIX I. of personal uses, 435. of 3 Henry VII., ch. 4, 435. and its re-enactments, 439. STATUTORY assignments, 4. proceedings to enforce trust, 596. STIPULATING for release, manner of, 158, 209. _ STIPULATIONS in assignments for release of debtor, 158, 197, 8938. See RELEASE. for use of property, 224-227. for continuance of assignor’s business, 242-245, for benefit of assignees, 272. limiting assignee’s responsibility, 272. STOCK assignable, 104. unpaid subscriptions to, assignable, 108. SUBSEQUENT instruments in connection with assignments, 457, SUIT to enforce trust, by creditors, 592. See ACTION; BILL. SURETIES may be secured by assignment, 116. official, 116. may be preferred, 186, 387. ability of, on assignee's bond, 572, 48 154 GENERAL INDEX, Figures refer to pages. SURPLUS, reservation of, to assignor, 228-232. disposition of, by assignee, 551-553, belongs to assignor, 150, 551. belongs to creditors, when, 552, SURVIVING partner’s right to assign, 89. SURVIVORSHIP among assignees, 574-579. SYMBOLICAL delivery of property assigned, 328. TAXES, priority of payment, 545. TENNESSEE statute of assignments, 681. against fraudulent conveyances, 404, note. TERMS of sale by assignee, 508. provision for, in assignment, 255. TEXAS statute of assignment, 682. against fraudulent conveyances, 404, note. TIME for executing trust, provisions respecting, 245. for creditors to become parties, or assent, 249, of assignment taking effect, 349-351. of sale by assignee, 506. provisions respecting, 251, of executing release, 589. TITLE of purchaser at assignee’s sale, 516, TORTS, rights of action for, when assignable, 106, 109. TRANSFER, clause of, in assignments, 138. TRIPARTITE assignments, 136. 155. TRUST, close of, by assignee, 558. of assignments, what, 280. when deemed closed by lapse of time, 558. when determined by acts of parties, 559. execution of by assignee, 463. TRUSTS, of assignments, 280. express, 282. must be declared, 280. passive, 283. implied or resulting, 281. resulting, for debtor, 230, 283. for use of assignor, when void, 221, 283, 435. declaration of, 146. to convert the assigned property into money, 146, to apply and distribute, 147. to pay expenses, 147. to retain a compensation, 147, to pay debts, 148. to pay surplus to assignor, 150. enforcement of, by creditors, 592. UNITED STATES, priority of, 160, 539-543, UTAH, no statute of assignment, 685. against fraudulent conveyances, 404, note. USE of property by debtor, stipulation for, 224. of assignor, assignment in trust for, void, 217, 221, 283, 436, USURIOUS claims, assignment for payment of, 119. es how payable, 533. VALID assignments in part, 448. VENDOR, actions by defrauded, 497. GENERAL INDEX. 755 Figures refer to pages. VERMONT statute of general assignments, 685, fraudulent conveyances, 986. VIRGINIA, no statute of assignments, 686, statute against fraudulent conveyances, 404, note, VOID assignments, 399. See FRAUDULENT. in part, and valid in part, 448, 446, 448, as to certain property, 446. debts, 402, 446. parties, 403, 447, 448, assent of creditors to, 346. releases, 591. “VOID” and ‘‘ VOIDABLE,” 487, “VOLUNTARY,” signification of, 4, note 3, VOLUNTARY assignment, what, 3. deeds of agency in England, 127. WASHINGTON, no statute of assignments, 686. WEST VIRGINIA, no statute of assignments, 687, against fraudulent conveyances, 404, note, 687. WIFE'S interests, when they pass, 109, 120, 125. property interests in, assignable, 109, WISCONSIN statute of assignments, 688. statutes against fraudulent conveyances, 404, note. WIVES of assignors, parties to assignments, 126. may prove claim, 120, WRITING, when necessary to an assignment, 129. See APPENDIX I, WRITS of error by assignee, 503. WYOMING, statute of assignments, 692. against fraudulent conveyances, 694. ‘ GT A NEAL ey J un) i: He le oe ) es y My Ra ea a 2 Hameo elite si Hh nh snes i ey Ath EADS AOU is eR eal Ma chim aa a a eset Le fiat cease Bann nae a ie ba mo te aS ah ne oh PN eee Mane Pye ey ti hia i aa * ah ‘i oo a — i Biss ny) etn SES WEY oe ee at Aue TOE He ‘ a ie Ny ain uN Sit i i I nh he i aN i AS na) Hs ve an i ih ¥ SMO a ‘ tq ae Wh ee yi Hatt 4 Nth AN i ni My ’ yy i ue nn : o 7 AD a i