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 KF 1548.A7B97 1877 
 
 A treatise on the law and practice of vo 
 
 3 1924 019 348 543 
 
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 tine Cornell University Library. 
 
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 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924019348543 
 
A TilEATISE 
 
 ON THE 
 
 LAW ^:nx> practice 
 
 OF 
 
 VOLUNTARY ASSIGNMENTS 
 
 FOK THE 
 
 BENEFIT OF CREDITORS; 
 
 ADAPTED TO THE LAWS OF THE VAEIOUS STATES. 
 
 WITH AN 
 
 APPENDIX OF FORMS. 
 
 ALEXANDER M. pRRILL, 
 
 ATTTHOB OF A LAW DICTIOSABT AITO GLOS8ABT, A TEEATISE OK OIBCUUSTANTIAL EVIDEHOE, AITD- 
 JL TREATISE OJX FBAOTIOE, ETC. 
 
 THIRD EDITION. 
 REVISED AND ENLARGED 
 
 BY 
 
 JAMES L. BISHOP, 
 
 COUNSELLOK AT LAW. 
 
 NEW YORK: 
 BAKER, VOORHIS & CO., PUBLISHERS, 
 
 66 NASSAU STREET. 
 1877. 
 
Entered, according to Act of Congress, in tiie year eigtteeu hundred and fifty-eight, by 
 
 ALBXANDEB M. BURRILL, 
 
 In the Clerk's OSBce of the Bistrict Court of the United States for the Southern District of New Yorli. 
 
 COPTBIGHT, 18T7, BY BAEEB, VOOKHIS 4 Co. 
 
 Bakbr He CoDwtN, Fhintsrs, 
 25 Parl£ Row, N. Y. 
 
PREFACE. 
 
 Mr. Burrill's "Treatise on Assignments" is well 
 known to the profession as a work of a high order of 
 merit, and requires at this time no formal introduction. 
 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 explana- 
 tion. During the period which has elapsed since the ap- 
 pearance 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 avail- 
 able in preparing a new edition was therefore extensive 
 as well as important. The plan upon which the work 
 was originally prepared by the learned author, included, in 
 some instances, 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 been repealed or amended.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 modifications and changes 
 which have .taken place in the law might prove unsatis- 
 factory. The editor has, therefore, undertaken the deli- 
 cate task of revising as well as annotating the text. 
 
 The design has been to make as few alterations in 
 
IV PREFACE. 
 
 the language of the original work as possible, although in 
 some instances, for the sake of brevity, the order of chap- 
 ters, paragraphs and sentences has been changed. Thus the 
 first, third and twelfth chapters, which treated respectively 
 of " assignments in general," " assignments distinguished 
 from other modes and instruments of transfer," and " as- 
 signments directly to creditors," have been condensed 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 chapters are here condensed into 
 one chapter treating of the "form of the assignment." 
 
 A new chapter, on voluntary assignments considered 
 in connection with the bankrupt law, has been added, 
 and it should here be remarked, that several important 
 cases touching upon the questions discussed in that chap- 
 ter, 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 lex loci has been partially rewritten, 
 in accordance with the intention of the learned author, 
 and partly from notes left by him. 
 
 The perplexing questions which formerly arose in re- 
 lation 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 chap- 
 ters which refer to the creation of the trust, and the duties 
 of the trustee, have been more carefully 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 
 
PREFACE. V 
 
 supply the wants of practitioners under the various State 
 'statutes, but are inserted 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 relia- 
 bility; but the changes were necessarily so numerous, and 
 of such a character, that no acceptable plan suggested 
 itself, and the purpose was reluctantly abandoned. In 
 presenting the edition in this form, therefore, the editor 
 must justly be held responsible for any errors or short- 
 comings 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 anti«%)ated will have been ac- 
 complished. 
 
 J. L. B. 
 
 New York, January, 1877. 
 
PREFACE TO THE SECOND EDITION. 
 
 Since the publication of the first edition of the following work, a 
 large addition has been made to the number of adjudged cases on the 
 subject of voluntary assignments ; and many statute provisions affect- 
 ing the form of these insti'uments, or the course of proceedings under 
 them, have been either enacted, or brought for the first time, within 
 the author's reach. The incorporation of this matter, comprising 
 references to upwards of three himdred new decisions (chiefly Amer- 
 ican, and some of great interest and importance), has considerably 
 increased the size of the volume ; but, with the exception of a few 
 portions which have been rewritten, the general arrangement of the 
 subject has not been disturbed, and the number and order of the 
 chapters remain as before. 
 
 In the course of the revision, the author has been favored with 
 valuable contributions froipi members of the profession in this and 
 other States, consisting of notes of new cases — some not yet reported — 
 and references to or extracts or copies of late statutes, not otherwise 
 accessible. For these, of which free use has been made, he takps this 
 method of returning his acknowledgments. 
 
 It was intended to have materially enlarged the Appendix, by 
 presenting, in full, all the statute provisions on the subject of volun- 
 tary assignments now in force in the several States. But in order to 
 avoid delay in publication, this has, for the present, been omitted. 
 
 New York, September 21, 1858. 
 
PREFACE TO THE FIRST EDITION. 
 
 The importance of the subject of voluntary assignnaents for the 
 benefit of creditors, in a mercantile community like the United States, 
 win hardly need any special remark by way of introduction to the 
 following work. The frequency with which these transfers are re- 
 sorted to, and the magnitude of the consequences which they often 
 involve, render them matters of constant practical interest to the mer- 
 chant 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 objects of 
 professional attention and study. Of the law of voluntary assign- 
 ments 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 im- 
 portant 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 9f 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 doctrines 
 of this branch of the law of transfer have not been established with- 
 out severe and repeated contests between the interests of debtor and 
 creditor, which they so largely affect. In some 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 prepon- 
 derance. In other States, the current of decisions, after having been 
 for some time uniform in one direction, has gradually inclined in an- 
 other, leading ultimately to quite opposite conclusions. The difficulties 
 arising from these sources have been increased by the diversities always 
 inseparable from the administration even of the same general system 
 of laws by numerous independent tribunals ; and, still further, by 
 sectional differences growing out of long established modes of transfer 
 
PREFACE TO THE FIRST EDITION. ix 
 
 peculiar to certain 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 
 himself or his family, or to reserve any control over the assignment, 
 the assignee, or the property itself ; the necessity of the assent of cred- 
 itors to the validity of the transfer ; the necessity of a delivery of pos- 
 session 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 emphatic sense, "vexed ques- 
 tions ; " and some of them, to a considerable extent, still remain so. 
 
 The only work in which the principles of this branch of American 
 law have been professedly treated and reduced to anything like a sys- 
 tem,i 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 
 important principles of law affecting their form and operation, and 
 regulating, often with minuteness, the practical course of proceedings 
 under them. 
 
 Under these circumstances, a new work being called for, the pres- 
 ent treatise was undertaken, not without hesitation on the part of the 
 author, in view of the difficulties which have been mentioned. The 
 subject seemed to require a mode of treatment whicli should present 
 a view, first, of the principles constituting what may be denominated 
 the general American law of voluntary assignments, combined with 
 adequate references to the local law of the States ; and, secoadly, of 
 the practice under these transfers — both being reduced, so far as the 
 multifarious character of the materials would permit, to something like 
 a uniform system possessing both general and local utility. The latter 
 branch of the subject was wholly untouched by Mr. Angell, and has 
 not hitherto been illustrated by any American writer. It has been 
 
 ' The author does not here overlook the valuable note to the cases of Thomas v. Jenks 
 and Grover v. Wakeman, contained in the first volume of the American Leading Cases, in 
 which the latest law on the subject is digested in a clear and able manner. 
 
X PREFACE TO THE FIRST EDITION. 
 
 found, however, to possess so much importance, that it has been prin- 
 cipally had in view in the arrangement of the whole work. 
 
 The following pages present, it will be seen, not only a- summary 
 of the principles upon which voluntary assignments are constructed, 
 and by which their operation is regulated, but also a historical 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, successively, 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 rejection of the provision made by it. 
 
 In the treatment of the subject according to the plan here indi- 
 cated, regard has been had not only to the convenience of practiced 
 and professional readers, but to the wants of students and such non- 
 professional persons as may consult the work. This will serve to ex- 
 plain what perhaps might otherwise be considered a too frequent 
 reference to familiar rules, and ^petitions 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 accuracy, 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 modi- 
 fication by local law or usage. The collection might have been con- 
 siderably extended ; and it was the author's design, had time uer- 
 mitted, to have included examples of all the most important 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 Toek, Jdhe 18, 1853. 
 
CONTENTS 
 
 PAGE. 
 
 Table of Cases Cited . . . . . . xvii 
 
 OHAPTEE I. 
 
 Assignments in general ; voluntary assignments for the benefit of 
 creditors defined and distinguished from other modes and instru- 
 ments of transfer ...... 1 
 
 OHAPTEE II. 
 
 The right to assign ; statutory provisions restricting the right to 
 
 assign, and regulating the operation of assignments . . 17 
 
 OHAPTEE III. 
 
 Voluntary assignments considered in connection with the bankrupt 
 
 law . . . . . . ■ . .42 
 
 OHAPTEE IV. 
 
 Who may make an assignment . . . . .78 
 
 OHAPTEE V. 
 
 To whom an assignment may be made ; qualifications of assignees . 116 
 
 OHAPTEE YI. 
 
 The assigned property ; the amount assigned ; what may be assigned; 
 
 what passes by the assignment ..... 121 
 
 OHAPTEE VII. 
 
 For whose benefit assignment may be made . . . 140 
 
 OHAPTEE VIII. 
 
 T^^rm of the assignment ...... 147 
 
 OHAPTEE IX. 
 
 Partial assignments . . . . . . .186 
 
Xn CONTENTS. 
 
 OHAPTEE X. PAGE. 
 
 ' Assignments with preferences . . . .191 
 
 OHAPTEE XI. 
 
 Assignments with special provisions ..... 229 
 
 1. Stipulations for the release of the debtor as a condition of the 
 
 assignment ...... 232 
 
 2. Reservations of benefit to the debtor .... 256 
 
 3. Appropriation of assets in assignments by firms and their 
 
 members ....... 274 
 
 4. Stipulations for continuance of assignor's business . ■ 281 
 
 5. Provisions respecting the time for executing the trust . 285 
 
 6. Limitation of time for creditors to become parties or assent . 289 
 
 7. Provisions respecting the sale of the assigned property . 291 
 
 8. Special powers and directions to assignees . . . 309 
 
 9. Stipulations for the benefit of assignees . . 313 
 10. Reservations of powers to assignors . . . 315 
 
 OHAPTEE XII. 
 
 Consideration of assignments ...... 319 
 
 OHAPTEE XIII. 
 
 Trusts of assignments ...... 323 
 
 OHAPTEE XIV. 
 
 Execution of the assignments ... . . 329 
 
 OHAPTEE XV. 
 
 Record or registry of the assignment . . . 337 
 
 OHAPTEE XVI. 
 
 Delivery of the assignment .... . 347 
 
 OHAPTEE XVII. 
 
 Amendments and additions to assignments . . . 350 
 
 OHAPTEE XVITI. 
 
 Acceptance by the assignee ... . . 355 
 
 OHAPTEE XIX. 
 
 Delivery of possession of the property assigned . 360 
 
 OHAPTEE XX, 
 
 Assent of creditors .... . 379 
 
CONTENTS. Xlll 
 
 CHAPTER XXI. PAGE. 
 
 Time when the assignment takes effect .... 396 
 
 CHAPTER XXII. 
 
 Operation of an assignment ...... Z9& 
 
 CHAPTER XXIII. 
 
 The lex loci, in its application to assignments .... 403- 
 
 CHAPTER XXIV. 
 
 Construction of assignments ...... 421 
 
 CHAPTER XXY. 
 
 Fraudulent and void assignments ..... 441 
 
 CHAPTER XXVI. 
 
 Assignments considered in connection with other transfers by the 
 
 assignor ........ 495 
 
 CHAPTER XXVII. 
 
 Eevocation and cancellation of assignments .... 505 
 
 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 ........ 509 
 
 CHAPTER XXIX. 
 
 Notice of the assignment ...... 512 
 
 CHAPTER XXX. 
 
 Taking possession of the property assigned . . . . 517 
 
 CHAPTER XXXI. 
 
 Inventory and appraisement of the property ; bond by the assignee . 526 
 
 CHAPTER XXXII. 
 
 Eights, duties, and powers of the assignee .... 538 
 
 CHAPTER XXXIII. 
 
 To what extent the assignor's business may be continued by the 
 
 assignee . . • • ■ ■ ■ . o'±i 
 
XIV CONTENTS. 
 
 OHAPTEE XXXIV. page. 
 
 Collection of debts and recovery of property ; actions by the as- 
 signee ....-•■• 550 
 
 OHAPTEE XXXV. 
 
 Sale of the assigned property ... • 560 
 
 CHAPTER XXXVI. 
 
 Expenses of the trust, and compensation to the assignee . . 575 
 
 OHAPTEE XXXVII. 
 
 Distribution among creditors .... ■ 586 
 
 OHAPTEE XXXVIII. 
 
 Disposition of the surplus remaining after distribution . . 613 
 
 OHAPTEE XXXIX. 
 
 Final accounting, and close of the trust by the assignee . 616 
 
 OHAPTEE XL. 
 
 Liability of assignees ....... 626 
 
 OHAPTEE XLI. 
 
 Proceedings in case of the death, removal, non-acceptance, resig- 
 nation, misconduct, insolvency, or incapacity of an assignee . 639 
 
 OHAPTEE XLII. 
 
 Proceedings of creditors ; coming in under the assignment . . 651 
 
 OHAPTEE XLIII. 
 
 Keleases by creditors ....... 658 
 
 OHAPTEE XLIV. 
 
 Proceedings by creditors to enforce the trust ; suits against assignee . 664 
 
 OHAPTEE XLV. 
 
 Proceedings of creditors in opposition to the assignment, and in avoid- 
 ance of it . . .... 671 
 
CONTENTS. XV 
 
 APPENDIX OF FOEMS. 
 
 PAGE. 
 
 I. Assignments by Indbntdhe Bipartite, .... 081 
 
 1. A general assignment of real and personal property for the benefit of 
 
 creditors ratably, ....... 681 
 
 2. Assignment bipartite with preferences, .... 683 
 
 3. A general assignment of real and personal property giving prefer- 
 
 ences, without schedules, ..... 688 
 
 4. A general assignment, with stipulations for release, . . 690 
 
 5. Copartnership assignment; assignment by copartners without prefer- 
 
 ence, ........ 692 
 
 6. Assignment by copartnership (shorter form), . . . 697 
 
 7. An assignment with special provisions as to the employment of 
 
 agents, hiring of store, insurance of property, and correction of 
 schedules, ........ 699 
 
 the 
 699 
 
 8. An assignment by a bank for the payment of its depositors and 
 
 holders of its notes, with special provisions as to dividend^, 
 
 II. Assignment by Deed Poll, ..... 
 
 9. A general assignment for the benefit of creditors, ratably, with 
 
 schedules, ....... 
 
 704 
 704 
 706 
 
 III. Assignments by Indenture Tripartite, 
 
 10. A general assignment for the benefit of creditors, with preferences 
 
 to such as become parties, and with covenant of release by creditors, 706 
 
 IV. Inventory, Bond and Notice to Creditors, . . . 709 
 
 11. Title to Inventory, ...... 709 
 
 13. Inventory, ....... 710 
 
 18. Schedule, 711 
 
 14. Classification of debts, . . . . . .713 
 
 15. Affidavit to inventory and schedules, .... 713 
 
 16. Indorsement by judge, ...... 713 
 
 17. Affidavit to obtain order fixing penalty of bond where schedules 
 have not been filed, ...... 713 
 
 18. Order fixing penalty of bond before schedules are filed, . 714 
 
 19. Assignee's bond on assignment, ..... 715 
 
 30. Affidavit to obtain order authorizing assignee to advertise for 
 
 claims, ........ 716 
 
 31. Order of publication of notice to creditors, . . . 717 
 33. Notice to creditors, . . . . . .718 
 
 ADDENDA, .719 
 
 INDEX, . . 733 
 
TABLE OF CASES CITED. 
 
 Abbott V. Am. Hard Rubber Co., 85, 
 
 568, 569. 
 Abbott V. Burbage, 49. 
 Abercrombie v. Bradford, 265, 396, 300, 
 
 371, 360, 383, 467. 
 Aberdeen R.R. Co. v.Blaklie Bros., 566. 
 Abraham v. Plestoro, 405. 
 Acton V. Woodgate, 153, 321, 887, 388, 
 
 654. 
 Adams v. Alexander, 217. 
 Adams v. Blodgett, 7, 33, 138, 331, 893. 
 Adams v. Bradey, 558. 
 Adams v. Davidson, 488, 518, 557. 
 Adams v. Houghton, 339, 336. 
 Adams v. Humes, 574. 
 Adams v. Lewis, 539. 
 Adams v. Woods, 158. 
 Addison v. Burckmyer, 538. 
 Adlum V. Yard, 354, 285, 395, 593, 625, 
 
 657, 674. 
 Agnew V. Dorr, 661. 
 Aiken v. Price, 235. 
 Ainslie v. Boynton, 538. 
 Alderson v. Temple, 47. 
 Aldred v. Constable, 49. 
 Alexander v. Cana, 558. 
 Allemand v. Russell, 176, 201, 587, 590. 
 Allen V. Gardner, 201, 306, 324, 239, 
 
 250. 
 Allen V. Montgomery, 73. 
 Allen V. Montgomery & W. P. R. R. 
 
 Co., 383. 
 Allen V. Wheeler, 864. 
 Alnutt V. Leper, 673. 
 Alsop, Ex parte, In re Eees, 52. 
 American Bank v. Doolittle, 337. 
 American Exchange Bank v. Inloes, 306, 
 
 310, 302, 549. 
 Am. Ice Machine Co. v. Patterson Steam 
 Fire Engine & Machine Co., 87, 
 
 331. 
 Ames V. Blunt, 489, 494, 631, 652, ,676. 
 Ames V. Downing, 569. 
 Anderson v. Puller, 327, 364. 
 Anderson v. Hook, 144, 490, 493. 
 
 B 
 
 Anderson v. Tompkins, 90, 93, 94, 98, 
 
 99, 108, 109, 111, 113, 130, 330, 401. 
 Anderson v. Ty dings, 195, 474. 
 Andress v. Miller, 379. 
 Andrews v. Carr, 3. 
 Andrews v. Herriot, 408. 
 Andrews v. His Creditors, 418. 
 Andrews v. Hobson's Admr.. 570. 
 Andrews v. Ludlow, 175, 237, 577, 584. 
 Angell V. Rosenbury, 80, 118, 119. 
 Anon. V. Gelpcke, 554, 590, 631. 
 Antignance v. Central Bank of Georgia, 
 
 673. 
 Archer v. O'Brien, 21, 194. 
 Arledge, Geo. H., In re, 73. 
 Armstrong v. Byrne, 342, 251, 252. 
 Armstrong v. Campbell, 570. 
 Armstrong v. Pahnestock, 114. 
 Armstrong v. Pratt, 666. 
 Arnold v. Brown, 90, 569. 
 Arnold v. Grimes, 538. 
 Arnold v. Maynard, 56. 
 Arthur v. Commercial and Railroad 
 
 Bank of Vicksburg, 85, 268, 285, 
 
 288, 461, 466. 
 Ash V. Savage, 365. 
 Ashley v. Robinson, 73, 384, 506. 
 Ashton V. The Atlantic Bank, 558. 
 Ashurst V. Martin, 178, 336, 255, 289, 
 
 290, 396, 300, 311, 383, 438. 
 Aspinall v. Jones, 672. 
 Association, &c.v.Beekman's Admr., 558. 
 Astor V. Lent, 135. 
 Atkinson v. Brindall, 49. 
 Atkinson v. Jordan, 193, 197, 199, 301, 
 
 344, 346, 347, 676. 
 Atkinson v. The Farmers' Bank, 193. 
 Atkinson v. Tomlingon, 37, 213. 
 Attorney General v. Lord Dudley, 566, 
 
 567. 
 Atwood V. Protection Ins. Co., 341, 418. 
 Austin V. Bell, 188, 233, 241, 273, 489. 
 Austin V. Johnson, 274. 
 Averill v. Loucks, 179, 184, 225, 226, 316, 
 
 324, 488, 631. 
 
XVlll 
 
 TABLE OF CASES CITED. 
 
 •Babb V. Clemson, 363. 
 
 Babcock v. Dill, 657. 
 
 Bailey v. Bergen, 637. 
 
 Bailey v. Mills, 301, 307, '269, 457. 
 
 Baker v. Crookshank, 363. 
 
 Balderston v. Manro. 374. 
 
 Baldwin v. Buckland, 80, 88, 120, 488. 
 
 Baldwin v. Ely, 131. 
 
 Baldwin v. Patton, 515, 533. 
 
 Baldwin v. Peet, 133, 136, 186, 245, 250, 
 
 314, 466, 467, 469. 
 Baldwin v. Tynes, 90, 109, 336. 
 Ball V. Dunsterville, 393. 
 Ball V. Loomis, 518. 
 Bait. & Ohio R. B. Co. v. Glenn, 368, 
 
 403. 
 Bamford v. Baron, 50, 71. 
 Bancroft v. Blizzard, 467. 
 Bancroft v. Snodgrass, 109, 114, 117, 
 
 395, 355, 356, 358, 641. 
 Bank of Bellows Falls v. Deming, 390, 
 
 657. 
 Bank of Beloit v. Beale, 534. 
 Bank of Marietta v. Pindall, 3. 
 Bank of Newberry v. Walker, 658. 
 Bank of New Brunswick v. Hassert, 365. 
 Bank of Pennsylvania v. Gratz, 660, 
 
 669. 
 Bank of Pennsylvania v. McCalmont, 
 . 437,611. 
 Bank of Silver Creek v. Talcott, 177, 
 
 487. 
 Bank of TJ. S. v. Huth, 84. 
 Banks v. Clapp, 138, 307, 359. 
 Banks v. Wilkes, 633. 
 Banning v. Sibley, 5, 11, 370. 
 Barbour v. Everson, 179, 531. 
 Barings v. Dabney, 71. 
 Barker v. Bean, 334. 
 Barker v. Hall, 7, 14, 197, 300, 311. 
 Barnard v. Duncan, 573. 
 Barnes v. Rettew, 44, 47, 59, 61, 63, 73. 
 Barney v. Griffin, 175, 308, 314, 330, 361, 
 
 369, 370, 397, 398, 299, 300,466,476, 
 
 484, 487, 563, 577, 583, 631, 633. 
 Barney v. Saunders, 583, 585. 
 JBarnitz v. Rice, 186, 188, 336, 355, 373. 
 Bamum v. Hempstead, 141, 333, 335, 
 
 310, 326, 436. 
 Barr v. Hatch, 365, 373. 
 Barrett v. Reids, 344, 676. 
 Bartholomew v. Leach, 569. 
 Bartlott V. Blake, 365, 473. 
 Bartlett v. Pearson, 130. 
 Bartlett v. Williams, 373. 
 Bateman v. Connor, 556. 
 Bates V. Alderman, 80, 84, 136, 180, 186. 
 
 488. 
 Bates V. Coe, 14, 15, 195, 197, 313, 497, 
 
 498. 
 
 Battles V. Fobes, 333, 653. 
 
 Baxter v. Wheeler, 364. 
 
 Bay V. Cook, 364. 
 
 Bayles v. Staats, 649. 
 
 Bayly v. Schofield, 81. 
 
 Bayne v. Wylie, 234, 355, 313, 335. 
 
 Beach v. Bestor, 5, 10. 
 
 Beach v. Fulton Bank, 591, 593. 
 
 Beamish v. Conant, 531. 
 
 Bean v. Amsink, 60, 73, 73. 
 
 Bean v. Brookmire, 73. 
 
 Beans v. Bullitt, 5, 10, 11. 
 
 Beard v. Kimball, 169. 
 
 Beaston v. Farmers' Bank of Del., 85, 
 
 401, 603. 
 Seattle v. Bobbins, 363. 
 Beatty v. Davis, 301, 303, 306, 309. 
 Bebb V. Preston, 10. 
 Bebee v. DeBaun, 563, 565. 
 Beck V. Burdett, 137, 138, 370, 371. 
 Beck V. Parker, 33, 59, 487, 488. 
 Beckwith v. Brown, 201, 306, 239, 436. 
 Beckwith v. Union Bank, 136, 516, 589, 
 
 555. 
 Becton v. Ferguson, 133. 
 Bedell v. Janney, 669. 
 Beers v. Lyon, 8, 156, 200, 203. 
 Beeson v. Beeson, 569. 
 Belk V. Massey, 473. 
 Bell V. Fleming's Ex'rs, 606. 
 Bell V. Holford, 354. 
 Bell V. Lond. & N. W. Railway Co., 130. 
 Bell V. Thompson, 301. 
 Bellamy v. Bellamy, 139, 151, 165. 
 Bellamy v. Bellamy's Adm'r, 301, 306, 
 
 423, 435, 453. 494, 543, 570. 
 Bellows V. Partridge, 334, 393, 305, 306, 
 
 311. 
 Belmont v. O'Brien, 689. 
 Benedict v. Huntington, 293, 807. 
 Benedict v. Morse, 173, 572. 
 Benedict v. Parmenter, 410. 
 Bennett, Ex parte, 566, 568. 
 Bennett v. Cocks, 345. 
 Bennett v. Union Bank, 385, 387. 
 Benning v. Nelson, 384. 
 Bentley v. Shreve, 580. 
 Bentley v. Thrasher, 34. 
 Bentley v. Whittemore, 415.' 
 Berry v. Cutts, 159, 203, 498. 
 Berry v. Hayden, 308. 
 Berry v. Matthews, 301. 
 Beri7 v. Riley, 188, 273, 384, 466. 
 Berryman v. Sullivan, 673. 
 Besley v. Lawrence, 333, 610, 658. 
 Bethune v. Doughty, 355, 356, 358, 643. 
 Betton V. Valentine, 675. 
 Bholen v. Cleveland, 373, 417, 533. 
 Bigelow V. Baldwin, 83, 441, 494. 
 Blgelow V. Stringer, 369, 476. 
 
TABLE OF CASES CITED. 
 
 XIX 
 
 Bigelow V. Wilson, 139, 131. 
 
 Billings V. Billings, 303, 473, 477. 
 
 Biilingsley's Adm'r v. Bunce, 267, 476. 
 
 Bills V. Smith, 49. 
 
 Billups V. Sears, 15, 492, 676. 
 
 Bingham v. Claflin, 73. 
 
 Birchell v. Strauss, 170, 173. 
 
 Birdseye v. Ray, 195. 
 
 Birdsey v. Vansands, 26. 
 
 Birdwell v. Cain, 129. 
 
 Biscoe V. Royston, 399. 
 
 Bishop V. Catlin, 304. 
 
 Bishop V. Halsey, 371. 
 
 Bishop V. Hart's Trustees, 148, 149, 576, 
 
 633, 672. 
 Bishop V. Houghton, 636, 665. 
 Bittenger v. R. R. Co., 158. 
 Black V. Weathers, 181, 183, 536. 
 Black V. Zacharie, 407. 
 Blackford v. Hurst, 343. 
 Blake v. Williams, 405, 409. 
 Blakey's Appeal, 158, 192. 
 Blanchard v. Russell, 405. 
 Blank v. German, 10, 15P. 
 Blauvelt v. Ackerman, 567, 569, 570, 
 
 639. 
 Blight V. Schenck, 571. 
 Bloom V. Nagle, 13, 37, 213. 
 Blount V. Dayis, 131. 
 Blow V. Gage, 81, 83, 174, 175, 207, 315, 
 
 473, 474, 531, 575. 
 Boardman v. Halliday, 308, 235. 
 Boardrnan v. Keller, 363. 
 Boardman t. Mosman, 656. 
 Bodley v. Goodrich, 154, 175, 389, 441, 
 
 462, 494, 584. 
 Bogert T. Haight, 269, 474, 503, 676. 
 Bohart v. Atkinson, 569. 
 Boker v. Cruikshank, 125, 174.] 
 Bolander v. Stevens, 89. 
 Bones v. Booth, 459. 
 Boone v. Hall, 73. 
 Booth V. McNair, 308. 
 Borden v. Sumner, 237. 
 Bostwick V. Berger, 631. 
 Boswell V. Green, 90. 
 Botcherly v. Lancaster, 45, 51. 
 Bothick V. Purdy, 130. 
 Bouohaud v. Bias, 149, 602, 605. 
 Boughton V. Bradley, 404. 
 Bdurdillon v. Dalton, 535. 
 Bourne, Ex parte, 50, 70. 
 Bowen t. Bramridge, 466. 
 Bowen v. Clark, 109. 
 Bowen v. Lease, 401. 
 Bowen v. Parkhurst, 300. 
 Bowery Bank Case, 89, 218. 
 Bowery Nat. Bank's Petition, 731. 
 Bowker v. Burdekin. 185, 330, 348. 
 Bowman v. Draughan, 460. 
 
 Bowman v. Raineteaux, 637, 640. 
 Boyd V. Boyd, 633. 
 Boyd v. Dunlop, 395. 
 Boyd V. Hawkins, 570, 581. 
 Boyd V. Rockford Mills, 409. 
 Boyden v. Moore, 154, 324, 364. 
 Boyden v. Partridge, 558. 
 Bradford v. Tappan, 494. 
 Bradley v. Norton, 139. 
 Bradshaw v. Klein, 72, 73. 
 Brahe v. Eldridge, 353, 507. 
 Brainerd v. Dunning, 141, 143. 
 Branch Bank at Mobile v. Robertson 
 
 306, 610. 
 Brandon v. Rogers, 216. 
 Brannock v. Brannock, 144, 146. 
 Brashear v. West, 23, 131, 148, 167, 180, 
 
 193, 301, 234, 348, 249, 350, 360, 379, 
 
 383, 394, 613. 
 Breck t. Cole, 338. 
 Breckenridge v. Holland, 570. 
 Breedlove v. Stump, 643. 
 Breneman, Ex pa/rte, 216. 
 Brent v. Shouse, 408. 
 Brent v. The Bank of Washington, 603. 
 Brevard t. Neely, 344, 348, 356, 357,385, 
 
 506. 
 Brice v. Stokes, 684, 635, 636. 
 Brichta v. New York Lafayette Ins. Co., 
 
 130. 
 Bridges v. Hindes, 159. 
 Bridges v. Wood, 188, 250, 273, 488. 
 Briggs V. Davis, 9, 13, 14,1368, 543, 544, 
 
 573, 613. 
 Briggs V. Palmer, 399. 544, 613. 
 Brigham v. Tillinghast, 163, 301, 208, 
 
 393, 297, 306, 311, 433, 474, 478, 
 
 487. 
 Brinley v. Spring, 365. 
 Britenbender v. Sunbury & Erie R. R. 
 
 Co., 136. 
 Brittlestone v. Cook, 49. 
 Britton v. Hughes, 237. 
 Britton v. Lorenz, 156, 157. 
 Broadbent v. Thornton, 391, 654. 
 Brock v. Headen, 296, 563. 
 Brodhead, In re, 63, 75. 
 Brooks V. Marbury, 151, 344, 356, 36&, 
 
 373, 381, 390, 396. 
 Brooks V. Nichols, 123, 124. 
 Brooks V. Peck, 666. 
 Brooks V. Wimer, 267, 476. 
 Broughton v. Broughton, 567. 
 Brown v. Agnew, 403. 
 Brown v. Bartel, 201, 207, 320, 474. 
 Brown v. Chamberlain, 151, 157, 506. 
 Brown v. Chambers, 139. 
 Brown v. Foster, 21, 197, 311, 498, 500. 
 Brown v. Holcomb, 157, 304. 
 Brown v. Kempton, 49, 193. 
 
XX 
 
 TABLE OF CASES CITED. 
 
 Brown v. Knox, 176, 183, 345. 
 
 Brown v. Lee, 313. 
 
 Brown v. Lyon, 167, 179, 180, 369, 373, 
 
 390, 383, 389, 391, 398. 
 • Brown v. Maine Bank, 130, 133. 
 Brown v. Minturn, 33, 357, 373, 390. 
 Brown v. Kickerts, 567. 
 Brown v. Warren, 389. 
 Brown v. Webb, 13, 37, 305. 
 Brown v. Wier, 176. 
 Browne v. Cavendish, 153. 
 Brownell v. Curtis, 130, 136, 400, 544. 
 Browning v. Hart, 119, 136, 368, 400, 
 
 487, 533. 
 Brace's Adm'rs v. Smith, 195. 
 Bruen v. Marqnand, 393. 
 Bryan v. Brisbin, 430. 
 Bryant v. Kelton, 365. 
 Bryant v. Russell, 613, 666. 
 Bryant t. Young, 337. 
 Buck T. Pennybacker, 666. 
 Buck V. Sherman, 461, 474, 475. 
 Buckner v. Sayre, 136. 
 Buell V. Buckingham, 84, 85, 314. 
 Buffum V. Green, 193, 301. 
 Bulger V. Roche, 405. 
 Bulkley v. Dayton, 393. 
 Bull V. Harris, 109. 
 Bull V. LoTeland, 384. 
 Bullis V. Borden, 365. 
 Bullis V. Montgomery, 375, 488, 557. 
 Bullit V. Methodist Ep. Church, 541. 
 Bump V. Van Arsdale, 3. 
 Bumpas v. Dobson, 130, 143. 
 Burckmyer v. Beach, 583. 
 Burd V. Fitzsimmons, 333. 
 Burd V. Smith, 117, 180, 199, 300, 301, 
 
 333, 347, 355, 370, 373, 319, 335, 
 
 347. 
 Burdick v. Huntting, 300. 
 Burdick v. Post, 314, 397, 399, 300, 301, 
 
 568. 
 Burgin v. Burgin, 183, 368, 369, 374, 
 
 396, 343, 397, 563. 
 Burke t. Murphy, 489. 
 Burkholder v. Stump, 63, 74, 75. 
 Burlingame v. Bell, 171. 
 Burlock V. Taylor, 31, 306, 417. 
 Burney v. Spear, 583. 
 Burrall v. Leslie, 344. 
 Burrows v. Alter, 593, 674. 
 Burrows v. LehndorfE, 6, 116, 149, 157, 
 
 161, 497. 
 Burr's Ex'r v. McDonald, 85, 306, 317, 
 
 343. 
 Burt, In re, 63. 
 Busby V. Firm, 145. 594. 
 Butcher v. Easto, 48. 
 Butler V. Haskell, 570. 
 Butler V. Jaffray, 345, 350, 633. 
 
 Butler V. N. Y. & Erie R. R. Co., 133. 
 Butler V. Stoddard, 137, 367, 518. 
 Butt V. Peck, 174, 176, 315. 
 Byrd v. Bradley, 357. 
 Byrne v. Becker, 467. 
 
 Cadogan v. Kennett, 4, 17, 18, 373, 443, 
 
 448. 458, 464. 
 Caldwell, Ex parte, 51. 
 Caldwell V. Bruggerman, 150. 
 Caldwell v. Rose, 119, 365, 376. 
 Caldwell v. Williams, 119, 337, 365, 376, 
 
 394, 489, 519, 541, 557. 
 Calhoun t. Richards, 546. 
 Calkins y. Packer, 3. 
 Callen v. Thompson, 365. 
 Cameron v. Montgomery, 301 . 
 Cameron v. Scudder, 301, 307, 313. 
 Camp V. Camp, 395. 
 Camp V. Marshall, 179, 531. 
 Camp V. Mayer, 388. 
 Campbell v. Bruen, 633. 
 Campbell v. Johnson, 569. 
 Campbell v. Penn. Life Ins. Co., 569. 
 Campbell v. Walker, 566, 567, 569, 571. 
 Campbell v. Woodworth, 175. 
 Canady v. Paschal!, 176. 
 Canal Bank v. Cox, 135, 140, 174, 301, 
 
 338. 
 Cannon v. Peebles, 330, 394, 395, 315, 
 
 316, 317, 318, 476. 
 Cardenay v. New England Furniture 
 
 Co., 34. 
 Carey v. Brown, 558. 
 Carlton v. Baldwin, 43, 345, 350, 301, 
 
 310, 311, 457. 
 Carnegie v. Morrison, 404. 
 Carpenter v. Mayer, 363, 373. 
 Carpenter v. Underwood, 136, 186, 315,. 
 
 330, 363, 303, 363, 373. 
 Carr v. Dole, 153. 
 Carr v. Gale, 73. 
 Carr v. Hilton, 56, 73, 73. 
 Carroll v. Boston Marine Ins. Co., 180. 
 Carter v. Cornell, 663. 
 Carter v. Hammett, 535. 
 Carter v. Sibley, 33. 
 Carter v. Stanfield, 365. 
 Caryl v. Russell, 316. 
 Case V. Edney, 574. 
 Case V. Gerrish, 338. 
 Casey v. Jones, 310, 531. 
 Caskie v. Webster, 133, 404, 409, 414. 
 Cason V. Murray, 195, 198, 301, 466. 
 Cassell, Ex parte, 616. 
 Caswell V. Caswell, 673, 674. 
 Catlin V. Hoifraan, 67. 
 Catlin V. The Eagle Bank of New Haren^ 
 
 84, 85. 
 Caton V. Mosely, 176, 334. 
 
TABLE OF CASES CITED. 
 
 XXI 
 
 Cawkwell, Ex parte, 71. 
 Chaffees v. Risk, 339. 
 Cheever v. Hays, 34. 
 Cheever v. Imlay, 234, 4315. 
 Chertsey Market, In «, 636. 
 •Chesley v. Chesley, 561. 
 Chesterfield v. Janssen, 327, 338. 
 Childs V. Mouseley, 117. 
 Chittenden v. Brewster, 630. 
 Chowning v. Cox, 14. 
 Christinas v. Mitchell, 573. 
 Christopher v. Covington, 387, 395, 365, 
 
 371, 458. 
 Church T. Drummond, 454. 
 Claflin V. Maglaughlin, 5, 10, 13. 
 Claflin V. Kosfenberg, 365. 
 €lap T. Smith, 166, 351. 
 Clark y. Craig, 521, 563, 638, 669. 
 Clark V. Mint, 540. 
 Clark V. Hoyt, 575, 583. 
 Clark V. Hume, 535. 
 Clark V. Iselin, 31. 
 Clark V. McClelland's Assignee, 114. 
 Clark T. Bobbins, 359, 317. 
 /Clark V. White, 193, 201. 338. 
 Clark V. "Wilson, 114. 
 Clarke v. Booth, 405. 
 Clarke y. PuUer, 396, 305, 437. 
 Clarke y. Mix, 166, 171, 179, 329. 
 Clayton v. Brown, 4. 
 Cleyeland v. Clap, 130. 
 Clow y. Woods, 303, 372. 
 Clnte V. Barron, 570. 
 Coate V. Williams, 262, 383. 
 Coates' Estate, 625. 
 Coates' Ex'rs y. Muse's Adm'rs, 132. 
 Coburn y. Pickering, 365. 
 Cochran y. Paris, 139, 386. 
 Cock V. Goodfellow, 193, 300. 
 •Cocke y. Chapman, 365. 
 Cockshott V. Bennett, 338. 
 Ooddington v. Davis, 439, 503. 
 Codwise v. Gelston, 589. 
 Cody y. Quarterman, 139. 
 Coe y. Hutton, 660. 
 €oggill y. Botsford, 36, 375. 
 Coggill y. Carrier, 341. 
 Cohen, J. S., In re, 74. 
 Colburn v. Morton, 569. 
 Cole V. Albers, 301. 
 Cole y. Dealman, 314, 315, 498. 
 Coles y. Trecothick, 568. 
 Colgin y. Redman, 184, 300, 431, 
 
 667. 
 Collateral Bank y. Fowler, 74. 
 Collins, In re, Bx parte Harvey, 16. 
 Collins V. Blantern, 491. 
 -Collins y. Brush, 377. 
 Oollins y. Knapp, 3. 
 OoUom V. Caldwell, 484, 486. 
 
 Collomb v. Caldwell, 113, 281, 369,276, 
 
 279. 
 Collumb v. Reid, 676. 
 Comegys y. Vasse, 131, 133. 
 Commercial Bank v. Cunningham, 657. 
 Oom'rs y. Bank of Brest, 85. 
 Compton V. Bedford, 48. 
 Compton v. Moore, 48. 
 Comstock y. Rayford, 365, 370. 
 Conard v. Atlantic Ins. Co., 190, 369, 
 
 373, 375, 601, 602. 
 Cones y. Wilson, 607. 
 Conkling v. Carson, 245, 250, 369, 373, 
 
 351, 507. 
 Conkling y. Conrad, 301, 311, 354, 507, 
 
 563, 564. 
 Connah v. Sedgwick, 119, 367, 518, 549, 
 
 648. 
 Connaughey v. Chambers, 538. 
 Constantine v. Twelves, 362, 365, 519. 
 Conway, Ex parte, 84, 301, 307. 
 Cook v. Fountain, 334. 
 Cook V. Kelly, 336, 530. 
 Cook V. Pritchard, 193. 
 Cook V. Rogers, 24, 59. 
 Cooke V. Smith, 356, 488, 500. 
 Coope V. Bowles, 107, 109, 110. 
 Cooper V. Day, 638. 
 Cooper v. Douglass, 131. 
 Cooper y. McClun, 195. 
 Copeland v. Mercantile Ins. Co., 569. 
 Copeland v. Stevens, 535. 
 Copeland v. Weld, 140, 389. 
 Copper Mining Co. v. IBeaoh, 573. 
 Corgan y. Frew, 364. 
 Corn V. Saus, 538, 539. 
 Corning v. White, 538. 
 Cornish v. Dews, 15, 399, 400. 
 Corprew v. Arthur, 460. 
 Oorser v. Craig, 130. 
 Coster V. Lorillard, 491. 
 Couch V. Delaplaine, 133, 135, 435. 
 Covanhovan v. Hart, 195. 
 Coverdale v. Aldrich, 219, 135. 
 Coverdale v. Wilder, 433, 431. 
 Cowles V. Rickets, 1, 5. 
 Cox y. Piatt, 376, 381, 408, 487. 
 Cragin v. Carmichael, 73. 
 Cragin v. Thompson, 74. 
 Cram v. Mitchell, 117, 118, 119, 308, 
 
 367, 368, 526. 
 Cranston v. Crane, 573. 
 Crocker v. Whitney, 129, 130. 
 Cropsey v. McKenney, 673. 
 Crosbie v. Leary, 552. 
 Crosby v. Hillyer, 355, 396. 
 Crosby v. Huston, 15. 
 Cross V. Bryant, 301, 207. 
 Croswell v. Allis, 546. 
 Crow y. Ruby, 164. 
 
xxu 
 
 TABLE OF CASES CITED. 
 
 Crowe V. Ballard, 566. 
 
 Orowninshield v. Kittredge, 633. 
 
 Cruger v. Halliday, 643. 
 
 Crutchfield v. Hudson, 657, 674. 
 
 Cullum T. Bloodgood, 90, 11 1. 
 
 CuUum V. Branch Bank at Mobile, 641. 
 
 Cumberland Bank v. Hann, 365. 
 
 Ctimmings v. McCullougli, 366, 843, 
 499, 518. 
 
 Cunningham v. Freeborn, 6, 148, 153, 
 179, 180, 181, 193, 197, 199, 232, 
 ^83, 387, 319, 331, 380, 383, 386, 
 S87, 389, 421, 461, 468, 469, 471, 
 479, 624, 676. 
 
 Cunningham v. Neville, 363, 376. 
 
 Curd V. Miller's Ex'rs, 365. 
 
 Ourrie V. Hart, 119, 141, 258, 518. 
 
 Curtias v. Leavitt, 11, 81, 83, 88. 89, 
 105, 214, 219, 260, 261, 268, 827, 
 368, 452, 461, 482, 488, 484, 485, 
 487, 492, 576. 
 
 Cushing V. Gore, 140. 
 
 Cushwa V. Cushwa, 494. 
 
 Cutten V. Sanger, 86. 
 
 Cutter V. Copeland, 365. 
 
 Cuyler v. McCartney, 487, 488, 557. 
 
 Da Costa v. Guien, 437. 
 
 Dakin v. Pomeroy, 408. 
 
 Dale V. Olmstead, 155. 
 
 Dallam v. Fitler, 363, 584. 
 
 Dalton V. Currier, 405, 466. 
 
 Dana v. The Bank of V. S., 84, 85, 286, 
 
 830, 488, 634. 
 Dana v. Lull, 4, 102, 109, 110, HI, 112, 
 
 186, 270, 325. 
 Dana t. Stamfords, 8, 12. 
 Dance v. Seaman, 129, 160, 201, 202, 
 
 306, 259, 363, 264, 369, 386, 295, 
 
 301, 379, 458. 
 Danforth v. Denny, 14, 197, 211. 
 Daniels v. Willard, 385, 417. 
 Danley v. Rector, 865. 
 Dargan v. Richardson, 307. 
 Darling r. Rogers, 150, 397, 399, 309, 
 
 826, 422, 490, 491. 
 Darrow v. Bruff, 115, 329, 836. 
 Darwin v. Hundley, 368, 365. 
 Davenport v. Gentry's Adm'r, 130. 
 Davenport v. McCole, 626. 
 Davenport v. Thornton, 411. 
 Davidson v. Cowan, 342. 
 Davidson v. Robinson, 49. 
 Davis & Desauque's Estate, 564. 
 Davis V. Anderson, 195, 213. 
 Davis V. Carter, 639. 
 Davis V. Gibson, 37, 189, 198, 214. 
 Davis V. Harman, 628. 
 Davis V. Simpson, 570. 
 Davis V. Turner, 68, 365. 
 
 Davoue v. Fanning, 509, 571. 
 Dawson v. Dawson, 357, 859, 362, 372,. 
 
 378, 375, 528. 
 Day V. Bardwell, 59. 
 D'lvernois v. Leavitt, 260, 288, 408^ 
 
 499, 500. 
 D'Wolf V. Harris, 373, 375. 
 DeBrodlebin v. Beekman, 364. 
 DeCaters v. LeRay De Chaumont, 391^ 
 
 393, 653, 654. 
 DeForrest V. Bacon, 20), 283, 389. 
 DePeyster v. Ferrers, 583. 
 De Rouge v. Elliott, 130. 
 DeRuyter v. The Trustees of St. Peter's- 
 
 Church, 10, 84, 120, 401. 
 DeSobry v. DeLaistre, 404, 405, 408. 
 De Tastet v. LeTavernier, 81. 
 Dearing v. Watkins, 365. 
 Dearman v. Radcliffe, 494. 
 Deaver v. Savage, 179, 180. 
 Deckard v. Case, 99, 100, 167, 109, 111,. 
 
 330, 531. 
 Deckert v. Filbert, 100. 
 Dedham Bank v. Richards, 177, 183, 
 
 390, 831, 832, 353, 652. 
 Deering v. Cox, 891. 
 Dell V. King, 53. 
 Demarest v. Willard, 129. 
 Deming v. Colt, 103, 104, 111. 
 Den V. McKnight, 569, 570. 
 Den V. Wright, 569, 570. 
 Dennistown v. Hubbell, 525. 
 Derry Bank v. Davis, 330, 881. 
 Devey v. Thornton, 576. 
 Dewey v. Adams, 368, 376. 
 Dewey v. Littlejohn, 141, 346, 365, 371, 
 
 562. 
 Dexter v. Parkins, 364. 
 Dey V. Dunham, 22, 319, 539. 
 Dias V. Bouchaud, 7, 14, 148, 190, 601. 
 Dick V. Pitchford, 358. 
 Dickerson v. Legare, 97. 
 Dickson v. Chorm, 606. 
 Dickson v. Rawson, 5, 6, 213, 269, 676. 
 Diefendorf V. Spraker, 358. 
 Diesbach v. Becker, 18. 
 Diflfenderfer v. Winder, 633. 
 Dimmock v. Bixby, 590, 631, 670. 
 Dimon v. Delmonico, 143, 146. 
 Dimond v. Hazzard, 381. 
 Dix V. Cobb, 130. 
 Dixon V. Doe, 845. 
 Dobbin v. Walton, 84. 
 Dobbs V. Prewett, 344. 
 Dobynsv. McGovem, 130. 
 Dockray v. Dockray, 201, 206, 339, 250. 
 Dodge V. Doub, 610. 
 Dodge V. Sheldon, 74. 
 Doe V. Pitcher, 492. 
 Doe V. Rutledge, 4. 
 
TABLE OF CASES CITEP. 
 
 xxm 
 
 le V. Scribner, 063. 
 
 lison V. Kerr, 133, 519. 
 
 melson's Adm'rs v. Posey, 577, 584. 
 
 lolittle V. Southworth, 439. 
 
 iremus v. Lewis, 371. 
 
 iremus v. O'Hara, 37, 305, 213. 
 
 irrance v. Jones, 525. 
 
 )ub V. Barnes, 657, 674. 
 
 )ugherty v. Bethune, 355. 
 
 )ugherty v. Darrach, 339. 
 
 )W V. Piatner, 133, 360. 
 
 )wdel V. Hamm, 433, 439. 
 
 )wnes T. Grazebrook, 561, 566. 
 
 )wning V. Kintzing, 160. 
 
 jyle V. Smith, 384, 548. 
 
 ■ain V. Mickel, 34, 535. 
 
 ■ake V. Rogers, 101, 109, 154, 345, 333. 
 
 •ake V. Rollo, 556. 
 
 •akely v. Deforest, 165, 180. 
 
 :ane v. Gunter, 644. 
 
 desback v. Becker, 305. 
 
 [tiscoll V. Fiske, 170. 
 
 puger V. Mundy, 345. 
 
 ibose V. Dubose, 394, .S35, 383, 563. 
 
 afify V. Duncan, 175, 549, 556, 576, 578, 
 
 583, 634. 
 ancan v. Stanton, 555. 
 andas v. Bowler, 406, 408, 419. 
 iinham v. Gates, 474, 676. 
 iinham v. Pettee, 375. 
 anham v. Waterman,188, 309,231,344, 
 
 383, 471, 500, 549. 
 mham v. Whitehead, 13, 14. 
 inkee v. Chambers, 488. 
 aniop V. Boumonville, 130, 363, 533. 
 mman, Ej; parte. 563. 
 inn V. Snell, 133. 
 irfee. In re, 639. 
 
 ivall V. Raisin, 154, 179, 333, 385. 
 itton V. MoiTison, 51. 
 ivight V. Overton, 9, 15, 399, 506. 
 ^er V. Burnham, 139. 
 
 igle V. Eichelberger, 373. 
 
 imes, Bx parte, 59. 
 
 u-le V. Millard, 539. 
 
 tstman v. McAlpine, 31, 195, 201, 307, 
 
 313. 
 istman v. Wright, 130. 
 ;khardt v. Wilson, 50. 
 igell V. Hart, 367. 
 lison V. Frazier, 3, 154. 
 iiington v. Rogers, 193, 195, 201,307, 
 
 338, 337. 
 iwards v. Glyn, 49. 
 iwards v. Mitchell, 32, 33, 153, 441. 
 rbert V. Brooks, 575, 580. 
 'berts V. Wood, 91, 97, 98, 111, 113, 
 
 114, 119, 316, 377. 
 liott V. Carter, 633. 
 
 Elliott V. Pool, riOO. 
 
 Elmes V. Sutherland, 15, 3S8, 386, 383, 
 
 384, 389. 
 Ely V. Cook, 80, 83, 308. 
 Ely V. Hair, 90, 109, 186, 369, 290. 
 Embersole v. Adams, 59. 
 Bmerick v. Coaklev, 130. 
 Emerson v. Knower, 165, 179, 180, 181^ 
 
 393. 
 Emmons v. Cairns, 139, 131. 
 England v. Reynolds, 176, 301, 384. 
 Bnglebert v. Blan.jot, 338, 544. 
 Ennis v. Leach, 572. 
 Ensign v. Kellogg, 139, 130. 
 Epperson v. Young, 494. 
 Eshelman v. Schuman, 134. 
 Estabrook v. Messersmith, 136. 
 Estwick V. Caillaud, 31, 185, 189, 200, 
 
 269, 388, 469. 
 Evans v. Chapin, 179, 531. 
 Evans v. Dunkelberger, 340. 
 Evans v. Greenhow, 320, 540. 
 Evans v. Lamar, 294, 296, 301, 383. 
 Everitt v. Stone, 56. 
 Everitt v. Strong, 90, 330. 
 Everitt v. Walcott, 31, 321, 3S1, 888, 
 
 393. 
 Everson v. Gehrmann, 104. 
 Evertson v. Tappen, 567. 
 Every v. Edgerton, 372. 
 Ewing V. Corgill, 572. 
 Exchange Bank v. Knox, 330, 540, 555. 
 Eyre v. Beebe, 175, 276, 380, 281, 310, 
 
 315. 
 Ezekiel v. Dixon, 213. 
 
 Fahnestock v. Bailey, 631. 
 Fair v. Brackett, 204. 
 Fairbanks v. Haynes, 211, 496.- 
 Pairchild v. Gwynne, 179, 335, 53 1 . 
 Pall River Iron Works Co. v. Croade, 31, 
 
 321, 386,391,393,409. 
 Fallon V. MoCunn, 551. 
 Fanshawe v. Lane, 115. 
 Farewell v. Howard, 37, 189, 198. 
 Farmers' Bank v. Douglass, 15, 385, 387, 
 
 453, 624. 
 Farnsworth v. Shepard, 363. 
 Farquharson v. Eichelber, ] 73, 236, 255, 
 
 380,395,396,301,844,515. 
 Farquharson v. McDonald, 133, 268, 
 
 395. 
 Farr v. Brackett, 40. 
 Farrall v. Howard, 314. 
 Farren v. Crawford, 43, 60, 61, 73. 
 Fassett v. Phillips, 334, 363. 
 Fassett v. Traber, 37, 196. 
 Faunce v. Lesley, 258. 
 Faxon v. Durant, 378. 
 Peimester v. McRorie, 319. 
 
XXIV 
 
 TABLE OF CASES CITED. 
 
 Feimster v. Smith, 3. 
 
 Fellows V. Greenleaf, 113, 137, 152, 381. 
 
 Fellows V. The Commercial and K. R. 
 
 Bank of Vicksbnrg, 268, 289. 
 Fellows V. The Vicksbnrg Bajlroad and 
 
 Banking Co., 385. 
 Ferebee v. Doxey, 132. 
 Fermor's Case, 459. 
 
 Ferris v. The American Insurance Com- 
 pany, 554. 
 Fiedler t. Day, 144, 489, 492, 500. 
 Field V. Arrowsmith, 357. 
 Field V. Flanders, 324, 542. 
 Field V. Simco, 365. 
 Finlay v. Dickerson,268,269,273.308,314. 
 First Congregational Society in Eayn- 
 
 ham V. Trustees, &c., 664. 
 Fisher v. Dinwiddle, 189. 
 Fisher v. Johnson, 129. 
 Fisher v. Murray, 104. 
 Fiske V. Carr, 139, 397. 898, 657. 
 Fitch V. Workman, 664, 669. 
 Filler t. Maitland, 363, 521. 
 Fitzherbert's Case, 459. 
 Flagg T. Mann, 585. 
 Flanagan v. Wetherill, 338, 854, 488, 519, 
 
 520. 
 Fleming v. Townsend, 865. 
 Fletcher v. Piatt, 130. 
 Fletcher t. Willard, 364. 
 Flint V. The ClintonCo., 84.150,031,-334. 
 Floyd V. Smith, 205, 269. 
 Foot V. Cobb, 459. 
 Forbes v. Limond, 232. 
 Forbes t. Scannell, 23,25,105,110, 116, 
 
 151, 158, 174, 180, 280, 325. 380, 413. 
 
 419, 487, 492. 
 Ford T. Williams, 193, 195. 
 Forepaugh v. Appold, 130, 315. 
 Forkner t. Stuart. 90. 
 Foster v. Beals, 557. 
 Foster v. Deming, 623. 
 Foster t. Libby, 125, 126. 
 Foster v. Lowell, 155. 
 Foster v. Saco Manulacturing Co., 8. 30, 
 
 128,161,201,284,327. 
 Foster v. TVoodfin, 470. 
 Fouke V. Fleming. 15. 
 Foumier t. Ingraham, 643. 646. 
 Fox V. Adams, 238, 255, 208. 397, 400. 
 Fox V. Hanbury, 90. 
 Fox y. Heath, 78, 276, 672. 
 Fox V. Mackreth, 566. 
 Fox V. Willis, G73. 
 
 Foy T. Troy & Boston R. R. Cu., 131. 
 Franco v. Franco, 636. 
 Frazer t. Thompson, 49. 
 Frazier v. Fredericks, 404. 
 Freeman v. Cook, 590, 627. 630. 
 Freeman v. Deming, 21, 55, 74. 
 
 ! French t. Lovejoy. 276. 
 ', French v. Townes, 160. 610. 
 ! Frierson v. Branch, 390, 607. 
 i Frink t. Buss, 216, 126. 
 
 Fromme v. Jones, 12, 27, 189, 198,214. 
 I Frost V. Hotchkiss, 720. 
 ! Frow V. Downman, 538, 540. 
 
 Fry T. Boyd, 129, 538. 
 iFurman v. Fisher, 284, 355, 356, 358, 
 385, 506, 641. 
 
 i Gadsen v. Carson, 276. 
 
 I Gteither v. Mmnford, 365. 
 
 ! Gale V. Mensing, 154, 831, 332, 385, 388. 
 
 I Gait V. Callaud, 114. 
 
 i Gait V. Dibrell, 207, 265, 357, 506. 
 
 ! Gardner t. Adams, 131. 
 
 j Gardner v. Diedricks, 607. 
 
 , Gardner v. Hoeg, 131. 
 
 j Gardner v. Rowland, 373. 374, 375, 523. 
 
 i Gardner v. Pike, 176. 
 
 Gamer t. Frederick, 123. 124. 
 ;Garr V.Hill, 195, 197, 212. 
 i Garrard v. Lord Lauderdale, 153, 387, 
 \ 388, 654. 
 
 : Garretson v. Brown, 35, 212. 
 '• Garwood, Ex parte, 193. 
 
 Gasper v. Bennett, 676. 
 i Gassett v. Wilson, 193, 195. 
 
 Gates V. Andrews, 300, 353. 
 
 Gates V. Labaume, 9, 274, 301, 313, 319, 
 i 4-57, 467, 487. 540, 552, 587. 
 j Gaynor's Case, 48. 
 
 j Gazzam t. Povntz, 225, 236, 257, 266, 
 I 383, 476. 
 
 Geisse v. BealU 894. 441, 494. 542, 560, 
 570. 582, 583. 594, 645, 651, 652, 
 I 664, 666, 667, 674. 
 I George t. Xorris, 365. 
 I George v. Williamson, 494. 
 i Gere v. ilurray, 467, 472. 
 
 GermantowE Pass. R. R. Co. v. Fitler, 
 401, 551. 
 
 Gibbs v. Cunningham, 610. 
 
 Gibbs T. Thompson. 143. 
 ' Gibson v. Boults, 49. 
 
 Gibson y. Chedic, 506. 
 I Gibson t. Cooke, 129. 
 1 Gibson v. Courthope, 525. 
 
 Gibson v. Jeyes, 567. 
 I Gibson v. LoVe, 462. 47-3. 
 ! Gibson t. Muskett. 49. 219. 
 I Gibson v. Rees, l.j2, 350. 880, 887, 394, 
 I 500, 624, 625. 
 
 I Giddings v. Eastman, 569. 
 ! Giddings v. Sears, 196. 
 i Gilbert v. Sutliffe, 580, 582, 585, 630. 
 , Gilchrist v. Gilmer, 428. 
 j Gilchrist v. Stevenson, 358. 
 
 Gill V. Johns, 22. 
 
TABLE OF CASES CITED. 
 
 XXV 
 
 Gillespie v. Smitli, 573. 
 
 Gillett V. Campbell, 89. 
 
 Gillett V. Moody, 86, 89. 
 
 Gillett V. Phillips, 89, 318, 319. 
 
 Gilmer v. Earnhardt, 395. 
 
 Givens v. Tajlor, 345. 
 
 Glen V. Glover, 195. 
 
 Glenn v. McKim, 683. 
 
 Glenn v. McNeal, 443. 
 
 Glenn t.. Randall, 443. 
 
 Globe Ins. Co. v. Cleveland Ins. Co., 54, 
 
 56, 59, 61, 63. 
 Gloucester Bank v. Worcester, 337, 435. 
 Goddard v. Hapgood, 370. 
 Goddard v. Winthrop, 410. 
 Godden, Ex parte, in re Shettle, 53. 
 Godding, Ex parte, 563. 
 Goldschmidt, la re, 63, 75. 
 Goncilier v. Foret, 665. 
 Goodell V. Williams, 303. 
 Goodrich v. Downes, 308, 314, 356, 359, 
 
 260, 261, 369, 398, 337, 431, 469, 
 
 471, 476, 483, 486, 489, 490. 
 Goodrich v. Proctor, 334, 560: 
 Goodwin v. Mix, 538, 638, S33. 
 Goodwin v. Sharkey, 73. 
 Googins V. Gilmore, 365. 
 Gordon v. Cannon, 106, 109, 180, 188, 
 
 301, 306, 235, 250, 355, 381, 314, 
 
 531. 
 Gordon v. Coolidge, 356. 
 Gordon v. Freeman, 403, 515. 
 Gordon v. Green, 154, 157. 
 Gore V. Clisby, 563. 
 Gorham v. Reeves, 540. 
 Goss V. Neal, 33, 189. 
 Gould V. Hays, 582, 584. 
 Gould V. Kerr, 608. 
 Gould V. Lamb, 324, 560. 
 Gom'don v. Ins. Co. of North America, 
 
 130. 
 Governor, use, &c., v. Campbell, 380, 
 
 383, 467,487. 
 Graham v. Candy, 49. 
 Graham v. Davidson, 635. 
 Graham v. Henry, 131. 
 Graham v. Lockhart, 163, 265, 295, 384. 
 Graham v. Newman, 129. 
 Grant v. Chapman, 143, 334, 330, 303. 
 Graser v. Still wagen, 90, 109. 
 Graves v. Alden, 314. 
 Graves v. Hull, 106, 109. 
 Graves v. McFarlane, 129. 
 Gray v. Bell, 665, 669. 
 Gray v. Hill, 15 1. 
 Gray v. Lynch, 639. 
 Gray v. Rollo, 556. 
 Gray v. Thompson, 669. 
 Gray's Estate, Matter of, 619, 630. 
 Grayson v. Sandford, 131. 
 
 Green v. Banks, 79, 385, 479. 
 
 Green v. Bradflold, 193. 
 
 Green v. Van Buskirk, 364, 410, 411,412 
 
 Green v. "Winter, 567, 570, 616. 
 
 Greene v. Brack, 115. 
 
 Greene v. Morse, 593, 594, 656, 674. 
 
 Greene v. Mo wry, 397. 
 
 Greene v. Trieber, 188, 336, 253, 355, 
 
 357, 359, 370, 373, 289, 391, 310, 
 
 315, 316, 477, 478. 
 Greenfield's Estate, Matter of, 438. 
 Greenleaf v. Edes, 300. 
 Greenleaf v. Mumford, 673. 
 Greenleaf V. Queen, 563. 
 Gregory v. Gregory, 568. 
 Grider v. Payne, 570. 
 Griffin v. Alsop, 533, 534. 
 Griffin v. Doe, 394. 
 Griffin v. Marquardt, 141, 143, 293, 467, 
 
 538, 540. 
 Griffin v. Rogers, 5, 11, 212. 
 Griffin's Ex'r v. Macaulay's Adm'r, 133, 
 
 138, 163, 595, 636. 
 Grimshaw v. Walker, 336, 366, 373. 
 Grimsley v. Hooker, 631. 
 Grocere' Nat'l Bank v. Clark, 130. 
 Groschen v. Page, 24. 
 Grover v. Grover, 443, 473. 
 Grover v. Wakeman, 5, 188, 193, 197, 
 
 301, 307, 309, 310, 314, 334, 335, 
 
 326, 337, 343, 346, 347, 251, 253, 
 
 354, 385, 310, 433, 442, 473, 47G, 
 
 484, 489. 
 Gruce v. Sanders, 365. 
 Guerin v. Hunt, 118, 169, 487. 
 Guilford v. Childs, 341, 345. 
 Guillander v. Howell, 133, 404, 410, 
 
 413, 413. 
 Gulick V. Lodor, 408. 
 Gundry v. Vivian, 587. 
 Gunnell v. Adams, 301. 
 Gutzweiler v. Lackman, 598. 
 Guy V. Mcllree, 158, 196, 198, 339. 
 
 Haas V. O'Brien, 720. 
 
 Hacker v. Perkins, 430. 
 
 Hafner v. Irwin, 15, 193, 195, 201, 203, 
 
 306, 209, 245, 254, 385, 395, 453, 
 
 466, 480, 489. 
 Haggerty v. Granger, 109, 113. 
 Haggerty v. Palmer, 533, 538, 539, 540. 
 Haile v. Brewster, 365. 
 Haines v. Campbell, 300, 353. 
 Halbert v. Deering, 139, 130. 
 Hale V. Allnutt, 193. 
 Hall V. Arnold, 195. 
 Hall V. Deuison, 33, 151, 153, 195, 301, 
 
 215, 338, 268, 319, 400, 508. 
 Hall V. Harris, 566, 664. 
 Hall V. Kellogg, 197. 
 
XXVI 
 
 TABLE OF CASES CITED. 
 
 Hall v. Marston, 157. 
 
 Hall V. Mullen, 404. 
 
 Hall V. Noyes, 566. 
 
 Hall V. Parsons, 363, 376. 
 
 Hall V. Eobinson, 131. 
 
 Hallv. Wheeler, 316, 365, 377, 521. 
 
 Halsev v. Whitney, 33, 31, 151, 176, 
 179, 180, 183, 186, 187, 197, 201, 
 237, 246, 247, 248, 249, 351, 355, 
 268, 273, 389, 290, 319, 331, 335, 
 353, 880, 381, 389, 390, 391, 393, 
 395, 489, 618. 634. ; 
 
 Halstead v. Gordon, 395, 315. 
 
 Hamilton v. Russell, 17, 18, 369, 370. I 
 
 Hamilton v. Wright, 543, 566. 
 
 Hammond v. Stanton, 668. 
 
 Hampton v. Morris, 79, 306. 
 
 Hanbury v. Kirkland, 634. 
 
 Hancock v. Horan, 195, 338. 
 
 Hanford v. Paine, 40, 364, 404, 413. 
 
 Hannah v. Carrington, 15, 368, 639. 
 
 Hanscomb v. BufEum, 720. 
 
 Hanson v. Stephenson, 525. 
 
 Hardcastle v. Fisher, 9, 144, 179, 537, 
 540, 672. 
 
 Harden v. Osborne, 245, 391, 293, 
 393. 
 
 Hardman v. Bowen, 156, 179, 335, 531, 
 533. 
 
 Hardy v. Clarke, 67. 
 
 Hardy v. Simpson, 79. 
 
 Hardy v. Skinner, 79, 265, 367, 385, 365. 
 
 Hargrooves v. Chambers, 637. 
 
 Hargrove v. Milliken, 488. 
 
 Harkins v. Bailey, 5, 195, 198. 
 
 Harkrader v. Leiby, 13, 37, 213. 
 
 Harman v. Fisher, 47. 
 
 Harrington v. Brown, 570. 
 
 Harris v. Becker, 357. 
 
 Harris v. De Graffenreid, 15, 144, 493. 
 
 Harris v. De Wolf, 373. 
 
 Harris v. Rickett, 49. 
 
 Harris v. Rucker, 375. 
 
 Harris v. Bnmner, 237,356,357,369, 395, 
 476, 489. 
 
 Harris v. Thompson, 86, 87. 
 
 Harrison v. Mock, 356, 543, 638, 668. 
 
 Harrison v. Sterry, 90, 93, 97, 98, 110, 
 111, 405, 408. 
 
 Harshman v. Lowe, 36. 
 
 Hart V. Acker, 368. 
 
 Hart V. Bulkley, 635, 639. 
 
 Hart T. Crane, 393, 390, 549, 562, 563, 
 
 565. 
 Hart V. McFarland, 317, 463. 
 Harvey, Mx parte, 1 6. 
 Harvey's Adm'r v. Steptoe's Adm'r, 144, 
 
 561, 613, 631. 
 Haskell v. Ingalls, 08. 
 
 Haskins v. Olcott, 139, 390, 657, 658. 
 
 Hastings v. Baldwin, 138, 171, 371,337, 
 
 388, 391. 
 Hastings v. Belknap, 344, 673, 674. 
 Hastings v. Spencer, 585. 
 Haswell v. Simpson, 48. 
 Hatch V. Smith, 165, 193, 301, 237, 892, 
 
 393. 
 Haven v. Law, 365. 
 
 Haven v. Richardson, 180, 201, 338,319. 
 Havens v. Hussey, 90, 98, 101, 103, 111, 
 
 113, 119, 330. 
 Hawey v. Mix, 156. 
 Hawkins, George A., In re, 62. 
 Hawkins v. Alston, 563. 
 Hawkins v. Bailey, 10. 
 Hawkins v. May, 143. 
 Hawley v. Cramer, 569. 
 Hawley v. James, 491, 573, 576, 631. 
 Hawley v. Mancius, 567. 
 Haxtun v. Bishop, 85, 86. 
 Haydock v. Stanhope, 195, 339, 350. 
 Hayes v. Doane, 133, 168, 565. 
 Hayes v. Heyer, 108. 104. 
 Hayner v. Fowler, 675. 
 Haynes v. Crutchford, 563, 566. 
 Haywood v. McNair, 538. 
 Heacock v. Durand, 815, 585, 673. 
 Heokert's Appeal, 580, 583. 
 Heckman v. Messenger, 133, 134, 125, 
 
 380, 534. 
 Hedges v. Sealy, 3. 
 HeflFner v. Metcalf, 458. 
 Hegeman v. Islop, 555. 
 Heilner v. Imbrie, 328, 428, 439. 
 Helfrich v. Obermyer, 134, 150. 
 Hempstead v. .Johnston, 144, 201, 307, 
 367, '368, 385, 360, 365, 370, 385, 
 473, 487. 
 Henckley v. Hendrickson, 473. 
 Henderson v. Bliss, 188, 345, 350, 253, 
 
 355, 391. 
 Henderson v. Dodd, 573. 
 Henderson v. Downing, 257, 359, 385, 
 387, 397, 476. 
 
 Henderson v. Hadden, 376. 
 
 Hendricks v. Mount, 365 
 
 Hendricks v. Robinson, 15, 141, 301, 
 
 833. 
 Hennessy v. Western Bank, 100, 109, 
 150, 188, 334, 354, 310, 313, 814. 
 
 Henriquez v. Hone, 673, 677. 
 
 Henry v. Hughes, 130. 
 
 Henshaw v. Sumner, 5, 13, 17, 31, 197, 
 311, 498. 
 
 Herrick v. Borst, 81, 83, 83, 86, 155. 
 
 Hertle v. McDonald, 155. 
 
 Hessing v. McCloskey, 21. 
 
 Hewitt V. HuUins, 13. 
 
 Hext V. Porcher, 627, 628, 629. 
 
 Heydock v. Stanhope, 195,339, 350,466. 
 
TABLE OF CASES CITED. 
 
 XXVU 
 
 Heye v. Bolles, 114, 276, 678. 
 
 Hickley v. The Farmers' & Merchants' 
 Bank, 195, 201. 
 
 Hickman v. Cox, 283. 
 
 Hickman v. Messenger, 263. 
 
 Hicks V. McGrrorty, 555. 
 
 Higginbottom v. Peyton, 154. 
 "Higgins V. Whitson, 629. 
 
 Hilly. Manser, 15. 
 
 Hill V. Morgan, 575. 
 
 Hill V. Reed, 85, 230. 
 
 Hills V. Elliott, 327. 
 
 Hindman V. Dill, 301, 266, 369,274, 387. 
 
 Hitchcock V. Cadmus, 383, 437, 543. 
 
 Hitchcock V. St. John, 90, 101, 103,109, 
 110, 111, 113, 875, 876, 522. 
 
 Hobson V. Markson, 63. 
 
 Hodges V. Blagrove, 572. 
 
 Hodges V. Bungay, 531. 
 
 Hodges V. Harris, 90, 111, 373. 
 
 Hodges V. Wyatt, 265, 383, 884. 
 
 Hodgman v. Western R. R. Co., 182. 
 
 Hodgson V. Macey, 542. 
 
 Hoff V. Roone, 301. 
 
 Hoflfinan v. Mackall, 16, 23, 269, 296, 
 303, 449, 454, 466. 
 
 Hogg's Appeal, 427. 
 
 Holbird v. Anderson, 21, 196. 
 
 Holbrook v. Allen, 201, 306. 
 
 Holbrook v. Baker, 365. 
 
 Holcomb's Ex'rs v. The Prest. & Man- 
 agers of The New Hope Delaware 
 Bridge Co., 221. 
 
 Holland v. Cruft, 674, 678. 
 
 HoUingsworth v. Napier, 375. 
 
 Hollins V. Mayer, 335, 336, 350, 400. 
 
 Hollister v. Loud, 8, 173, 193, 201, 202, 
 268, 283, 288, 293. 367, 453, 461, 
 466, 474, 475, 521, 534, 540. 
 
 Holmes v. Remsen, 183, 405. 
 
 HoMdge V. Gillespie, 5(57. 
 
 Holt V. Bancroft, 161, 187, 189, 206,499. 
 
 Hone V. Henriquea, 244, 441, 494. 
 
 Hone V. Woolsey, 505, 506, 507. 
 
 Hook V. Stone, 101, 109. 
 
 Hooper v. Smith, 48. 
 
 Hooper V. Tuckerman, 271, 825, 674. 
 
 Hopkins v. Beebe, 192, 194, 312. 
 
 Hopkins v. Gallatin Co., 84. 
 
 Hopkins v. Gray, 193. 
 
 Hopkins v. Lacontre, 15. 
 
 Hopkins v. Ray, 296, 563. 
 
 Hopkins v. Scott, 141, 371. 
 
 Hornbeck V. Van Metre, 365. 
 
 Horsely v. Fawcett, 558. 
 
 Hotop V. Durant, 487. 
 
 Hotop V. Neidig, 170, 179. 
 
 Houghton V. Dayis, 666. 
 
 Housatonic Bank v. Martin, 497. 
 
 Houston V. Newland, 844, 380, 406, 407. 
 
 Hovarty v. Davis, 535. 
 
 Hovey v. Home Ins. Co., 556. 
 
 How V. Camp, 301. 
 
 Howard v. Snelling, 488. 
 
 Howe V. Newbegin, 354. 
 
 Howell V. Bell, 365. 
 
 Howell V. Edgar, 201, 245, 290. 
 
 Hower y. Geesaman, 180, 287, 862, 551. 
 
 Howerton y. Holt, 365. 
 
 Hoyt V. Thompson, 88, 405. 
 
 Hubbard v. Fisher, 580. 
 
 Hudson y. Maize, 311, 319, 518. 
 
 Hudson y. Reyett, 176. 
 
 Huff y. Roone, 200, 307. 
 
 Huger y. Huger, 562. 
 
 Huggins y. Perrine, 460. 
 
 Hughes, Ex parte, 566. 
 
 Hughes y. EUison, 101, 109, 398. 
 
 Hulls V. Jeffrey, 36, 37, 198, 218. 
 
 Humphries v. Freeman, 327. 
 
 Hunt y. Bass, 561, 570. 
 
 Hunter y. Hubbard, 625. 
 
 Hunter y. The United States, 604. 
 
 Hurd-y. Silsby, 238. 
 
 Hurlbert y. Dean, 276, 280. 
 
 Hurlbut V. Carter, 85, 320, 401, 403. 
 
 Hurley, B-x parte, 562. 
 
 Hurtt y. Fisher, 627. 
 
 Hutcheson y. Peshine, 405, 406. 
 
 Hutchings y. Low, 154. 
 
 Hutchins y. Hutchins, 630. 
 
 Hutching y. Sprague, 683. 
 
 Hutchins y. Taylor, 55. 
 
 Hutchinson y. Lord, 800, 307, 808, 314, 
 
 440, 552, 672. 
 Hutchinson v. McClure, 198, 213. 
 Hutchinson y. Smith, 114, 277. 
 Hutchinson y. Watkins, 27. 
 Hutton V. Crutwell, 48, 49. 
 Hyde y. Olds, 885, 506. 
 Hyde y. Sontag, 60, 73. 
 Hyde y. Zacharie, 59. 
 Hyslop y. Clark, 301, 324,341,489, 490. 
 
 Iddings y. Bruen, 569. 
 Ingersoll y. Kendall, 370. 
 Inglehart y. Armiger, 129. 
 Inglis y. Grant, 23, 159, 185, 388. 
 lugraham y. Geyer, 31, 237, 386, 407, 
 
 409, 414, 415, 419. 
 Ingraham y. Grigg, 85, 125, 175, 186, 
 
 188, 356, 313, 348, 453, 584, 613. 
 Ingraham y. Wheeler, 201, 245, 852, 364, 
 
 374, 502. 
 Ingram y. Kirkpatrick, 151, 382. 387, 
 
 399, 400, 506, 581, 583, 652. 
 Inloes V. Am. Exch. Bank, 384, 302, 477, 
 
 562. 
 Insurance Co. y. Wallis, 255, 350. 
 
XXVUl 
 
 TABLE OF CASES CITED. 
 
 Irwin V. Keeu, 489, 550, 594, 673. 
 Irwin V. Tabb, 594. 
 laelin v. Dalrymple, 315. 
 Ivison V. Gassiot, 131, 426, 
 
 Jackman v. Mitchell, 337, 238. 
 
 Jackson v. Caldwell, 494. 
 
 Jackson v. Cornell, 117, 334, 344, 351, 
 
 376, 277, 378, 379, 373, 460,533,665. 
 Jackson v. Dean, 365. 
 Jackson v. Heath, 3. 
 Jackson v. Irvine, 71. 
 Jackson r. Lomas, 337, 338, 232. 
 Jackson v. Losee, 131, 133, 440. 
 Jackson v. McCuUough, 60, 67, 78. 
 Jackson v. Mather, 470. 
 Jackson v. Parker, 357. 
 Jackson v. Peek, 470. 
 Jackson v. Sheldon, 115. 
 Jackson v. Timmerman, 470. 
 Jacobs V. Allen, 314. 
 Jacobs V. Eemsen, 143, 144, 301, 309, 
 
 369, 315, 368. 
 Jacot V. Corbet, 335, 355, 373. 
 Jacques t. Greenwood, 467. 
 Jagoe V. Alleyn, 3. 
 James, Ex parte, 567. 
 James v. Pulerod, 156. 
 Jamison v. McNally, 37, 676. 
 Janes v. Whitbread, 32, 185, 333, 263, 
 
 383, 395, 397, 311, 461. 
 January v. Powell, 598. 
 Jayne v. Dillon, 365. 
 Jenkins v. Eldridge, 585. 
 Jenness v. Doe, 477. 
 Jermain v. Pattison, 535. 
 Jessup V. Hulse, 359, 398, 308, 334. 
 Jessup V. Johnson, 473, 477. 
 Jewett V. "Woodward, 437, 576, 577, 587, 
 
 593, 653, 654, 655. 
 Johns V. Bolton, 135. 
 Johns V. Erb, 591. 
 Johnson v. Baker, 348. 
 Johnson v. Bloodgood, 555. 
 Johnson V. Buck, 218. 
 Johnson v. Candage, 666. 
 Johnson v. Harney, 643. 
 Johnson v. Herring, 387. 
 Johnson v. McAllister's Assignee, 189, 
 
 198, 206, 369, 374, 301, 478. 
 Johnson v. McGraw, 5, 10, 314. 
 Johnson v. Ogilby, 398. 
 Johnson v. Osenton, 466. 
 Johnson v. Rogers, 656, 719. 
 Johnson y. Thweatt, 128, 149, 359, 286, 
 
 477, 478. 479. 
 Johnson v. "Whitwell, 156, 159, 187, 193, 
 
 195, 197, 341, 443, 503. 
 
 Johnston v. Easton, 561, 565. 
 Johnston v. Zane's Trustees, 116, 301, 
 
 330, 879. 
 Johnston's Heirs v. Harvey, 254, 357. 
 Jones, Matter of, 648. 
 Jones V. Dougherty, 151, 330, 380, 385, 
 
 889, 468, 508, 664. 
 Jones V. Hamlet, 438. 
 Jones V. Housman, 535. 
 Jones V. Jones, 405, 408. 
 Jones V. Kinney, 74. 
 Jones y. Sleeper, 21, 56. 
 Jones V. Stockett, 858, 680, 643. 
 Jones V. Taylor, 408. 
 Jones V. Yates, 136. 
 Jordan, Mc parte, 32. 
 Jordan v. Gillen, 133, 133. 
 Journeay v. Brackley, 535. 
 Judd V. Langdan, 363. 
 Juliand v. Rathbone, 179, 353, 531, 533, 
 
 533. 
 
 Kaine v. Weigley, 474. 
 
 Kalkman v. McEldeny, 33, 157, 385. 
 
 Kane v. Drake, 865. 
 
 Kane v. Roberts, 673. 
 
 Kavanagh v. Beckwith, 144, 477. 
 
 Kayser v. Heavenrich, 148, 359, 467. 
 
 Keen v. Preston, 5, 10. 
 
 Keep V. Lord, 555. 
 
 Keep V. Sanderson, 170, 300, 814, 673. 
 
 Keim's Appeal, 619. 
 
 Keith V. Fink, 376, 381. 
 
 Keller v. Blancbard, 365. 
 
 Kellogg V. Slauson, 79, 84, 163, 166,173, 
 
 179, 180, 181, 397, 308. 304, 306, 
 
 308, 319, 474. 
 Kelly V. Baker, 107, 109. 
 Kelly V. Crapo, 405, 406, 533. 
 Kemp & Buckey v. Porter, 384. 
 Kemp V. Carnley, 104, 107, 109, 279, 381. 
 Kendall v. Fitts, 365. 
 Kendall v. New England Carpet Co., 
 
 383, 57.8. 
 Kendall v. Rider, 556. 
 Kennear v. Johnson, 49. 
 Kennedy v. Rose, 364. 
 Kennedy v. Thorp, 553, 554. 
 Kercheis v. Schloss. 156, 170, 179, 180, 
 
 184, 325, 336, 310, 334. 
 Kerr v. Blodgett, 624. 
 Ketohum v. Watson, 364. 
 Keteltas v. Wilson, 175, 460, 578. 
 Kettle v. Hammond, 50. 
 Kettlewell v. Stewart, 285. 
 Kevan v. Branch, 167, 285, 264. 
 Keyes v. Brush, 171, 179, 181, 398, 552, 
 
 648, 669. 
 
TABLE OF CASES CITED. 
 
 XXIX 
 
 Kilbee v. Sneyd, 567. 
 
 Killick V. Flexney, 566. 
 
 Kimball v. Fire Ins. Co., 93. 
 
 Kindrick v. Glover, 130. 
 
 King V. Donnelly, 356, 357, 643. 
 
 King V. Kenan, 366, 384. 
 
 King V. Moore, 334, 356. 
 
 King V. Trice, 1 95. 
 
 King V. Watson, 333. 
 
 Kinnard v. Thompson, 151, 383, 399. 
 
 Kintzing, In re, 63. 
 
 Kirby v. Goodykoontz, 639. 
 
 Kirby v. Ingersoll, 90, 100, 109, 111, 113. 
 
 Kirby v. Sohoonmaker, 113, 374, 375, 
 
 376, 377, 379. 
 Kirtland v. Snow, 364. 
 Kissam v. Edmonston, 489. 
 Kitchen v. Reinsky, 430. 
 Kittell T. Osborne, 336. 
 Klapp's Assignees v. Shirk, 367, 347, 
 
 363, 371, 386, 396, 399, 487. 
 Knauth v. Bassett, 376, 380, 673. 
 Kneeland v. Cowles, 369. 
 Knight V. Hunt, 338. 
 Knight V. Packer, 367, 385. 
 Knight T. Waterman, 135, 186, 363. 
 Knighton v. Tufli, 130. 
 Knowles v. Lord, 540. 
 Knowlton v. Mosely, 73, 73. 
 Kohlsaat v. Hoguet, 81. 
 Koster v. Merritt, 413. 
 Kraft V. Dalles, 553. 
 Kuykendall t. McDonald, 193, 195, 865. 
 Kynaston v. Crouch, 193. 
 
 Lacey, Ex 'parte, 567. 
 
 Lad broke, Ex parte, 563. 
 
 Lafferty v. Rutherford, 130. 
 
 Lamb v. Durant, 90, 111. 
 
 Lamb 7. Goodwin, 566, 573. 
 
 Lamb v. Rad cliff, 307. 
 
 Lamer, In re, 71. 
 
 Lampson v. Arnold, 37, 194, 198, 314, 
 
 467, 498. 
 Lanahan v. Latrobe, 390, 593, 656, 674. 
 Lancaster v. Elce, 654, 656. 
 Land v. Jeffries, 370, 373. 
 Lane v. Bailey, 555. 
 Lane v. Coleman, 580. 
 Laney v. Laney, 494. 
 Lanfear v. Sumner, 405. 
 Langdon v. Horton, 378, 375. 
 Langley v. Perry, 60, 63. 
 Lanier v. Driver, 15, 366, 383. 
 Lansing v. Woodworth, 141, 158, 333, 
 
 369, 499. 
 Lassel v. Tucker, 381. 
 Latham's Trustee v. Simmons, 551. 
 Latimer's Estate, 630. 
 
 Latrobe v. Tiernan, 633. 
 
 Lavender v. Blackstone, 315. 
 
 Lavender v. Thomas, 14, 313. 
 
 Law V. Mills, 305. 
 
 Law V. Skinner, 49. 
 
 Law V. Wyman, 7, 197. 
 
 Lawrence v. Bank of Republic, 555. 
 
 Lawrence v. Bayard, 131. 
 
 Lawrence v. Davis, 195, 301, 303, 319,. 
 
 855, 383, 389; 390. 
 Lawrence v. Martin, 133, 133. 
 Lawrence v. Nuff, 13. 
 Lawson v. Rowan, 307. 
 Lawton v. Levy, 673. • 
 Lay V. Seago, 301, 307. 
 Layson v. Rowan, 116, 151, 176, 301, 334, 
 
 370. 
 Lazarus's Lessee v. Bi-yson, 509. 
 Lazarus v. Commonwealth Ins. Co., 130. 
 
 613. 
 Lea's Appeal, 334, 587. ' 
 Leach v. Halsey, 400. 
 Leach v. Kelsey, 186, 503. 
 Leadman v. Harris, 357. 
 Leavitt v. Blatchford, 89. 
 Leavitt v. Yates, 576. 
 Lee V. Brown, 313. 
 Lee V. Green, 406. 
 Lee V. Huntoon, 377. 
 Lee V. Tabor, 673. 
 Leger v. Bonaffe, 538. 
 Legg V. Willard, 876. • 
 Leicester v. Rose, 337. 
 Leitch V. HoUister, 7, 8, 11. 81, 183, 147,. 
 
 196, 369, 370, 374, 476, 484. 
 Lentilhon v. Moffatt, 174, 186, 188, 343, 
 
 675. 
 LePrince v. Guillemot, 189, 385, 355. 
 Lerry v. Bibeau, 594. 
 Lessees of McCuUough's Heirs v. Rod- 
 erick, 405. 
 Lester v. Abbott, 376, 380. 
 Leverenz v. Haines, 375. 
 Levy's Accounting, In re, 730, 731. 
 Lewis V. Bank of Penn Township, 663. 
 Lewis V. Caperton's Ex'rs, 180, 386. 
 Lewis V. Whittemore, 365. 
 Linden v. Shai'pe, 48, 51. 
 Liudsey v. Platner, 669. 
 Linn v. Wright, 180. 
 Lippincott v. Barker, 301, 333, 334, 346, 
 
 347, 348. 
 Lister v. Lister, 566, 567. 
 Litchfleld v. Cudworth, 569. 
 Litchfield v. White, 178, 330, 314, 438, 
 
 510, 543, 637, 638, 654. 
 Little V. Commonwealth, 638. 
 Little V. Eddy, 195. 
 Livermore v. Jenckes, 34S, 350, 405. 
 Livermore v. Northrup, 144, 145. 
 
XXX 
 
 TABLE OF CASES CITED. 
 
 Livingston v. Bel], 234, 269, 273. 
 
 Lloyd V. Williams, 195. 
 
 Loan Co. v. Turner, 404. 
 
 Looke V. Winning, 21. 
 
 Lockhard v. Browdie, 143, 164, 210. 
 
 Lockhart v. Stevenson, 7. 
 
 Lockhart v. Wyat^ 265, 383. 
 
 Lockwood V. Beckwith, 555. 
 
 Lockwood V. Canfield, 155. 
 
 Lockwood V. Nelson, 383, 384. 
 
 Lockwood V. Slevin, 631. 
 
 Loeschigk v. Addison, 115. 
 
 Loeachigk v. Baldwin, 500. 
 
 LoescHgk v. Hatfield, 115. 
 
 Loeschigk v. Jacobson, 142. 
 
 Loftin V.Lyon, 154. 
 
 Loller V. Croft, 583. 
 
 Lomax v. Buxton, 48, 49, 51. 
 
 Lomax v. Pendleton, 669. 
 
 London v. Parsley, 80. 
 
 Longmire v. Goode, 127, 206. 
 
 Lord V. Fisher, 490. 
 
 Lord V. The Brig Watchman, 246, 247. 
 
 Loring V. Pairo, 407, 673. 
 
 Loring v. U. 8. Vulcanized Gutta Percha 
 
 Co., 88. 
 Low V. Graydon, 224, 244. 
 Low V. Wyman, 14, 311. 
 Lowe V. Morris, 575, 583. 
 Lucas V. Sunbury & Erie E. R. Co., 5, 
 
 158, 159. 
 Luce V. Park, Bx'rs of, 131, 135. 
 Luckenbach v. Brickenatein, 538. 
 Luckes, Ex parte, in re Wood, 53, 53, 69. 
 Ludwig V. Highley, 138, 255, 663. 
 Lupton V. Cutter, 30, 31, 237. 
 Lyon V. McHvaine, 498. 
 Lyon T. Platner, 303. 
 Lyons V. Field, 15. 
 
 Maccubin v. Cromwell, 633, 637. 
 Macdenald v. Moore, 719, 720. 
 JVIackay v. Bloodgood, 393. 
 Mackie v. Cairns, 193, 195,201, 256,257, 
 
 359, 360, 476, 484, 499. 
 Macomber v. Weeks, 500. 
 Magee v. Carpenter, 15. 
 Maguire v. Pingree, 404. 
 Maitland v. Newton, 133. 
 Major V. Hill, 385, 394. 
 Maney v. Killough, 365. 
 Manhattan Co. v. Greenwich Bank, 438. 
 Mann v. Huston, 33, 375, 534. 
 Mann v. Whitbeck, 306, 310, 313. 
 Manning v. Manning, 577. 
 Manning v. Stern, 731. 
 Manufacturers' & Mechanics' Bank v. 
 
 Bank of Penn., 13. 
 Marbury v. Brooks, 8, 201, 338, 356, 
 
 516. 
 
 Marcum v. Hereford, 130. 
 
 Harden v. Babcock, 14. 
 
 Marsh v. Bennett, 114, 235, 345, 348, 
 
 \ 466, 476. 
 
 Marshall v. Hutchinson, 201. 
 
 Marshall v. Means, 132. 
 
 Marston v. Coburn, 185. 321, 347, 386. 
 
 Martin v. Hall, 146. 
 
 Martin v. Mathiot, 362. 
 
 Martin v. Price, 665. 
 
 Maryland, State of, v. Bank of Mary- 
 land, 201. 
 
 Mason v. Martin, 571. 
 
 Massey v. Allen, 73. 
 
 Mather v. Pratt, 659, 669. 
 
 Matlack's Appeal, 435, 663. 
 
 Maulden v. Armistead, 373, 383, 384. 
 
 Mawson v. Stock, 327. 
 
 Mayer v. Galluchat, 584. 
 
 McAllister v. Marshall, 254, 357, 260, 
 327. 
 
 McAllister v. Richards, 31, 55. 
 
 McArthurv. Chase, 81, 83, 115. 
 
 McBride v. Bohanan, 345, 385. 
 
 McBride v. Clelland, 362. 
 
 McBride v. Dorman, 557. 
 
 McBride v. Hagan, 393. 
 
 McBroom v. Turner, 500. ' 
 
 McCabe's Account, 619. 
 
 McCall V, Hinckley, 301, 235, 34/, 273. 
 
 McCallie v. Walton, 84, 306. 308. 
 
 McCarthy v. Bostwick, 665.' 
 
 McCartney v. Welsh, 146. 
 
 McClelland v. Remsen, 13, 14, 315, 261. 
 
 McClure V. Miller, 573. 
 
 McClurg V. Leoky, 254, 255, 358, 260, 
 489, 673. 
 
 MoColgan v. Hopkins, 201, 206, 216. 
 
 McConnaughey v. Chambers, 538, 556. 
 
 McCormick v. Sullivant, 406. 
 
 McOrea v. Purmort, 664, 669. 
 
 McCullough's Heirs v. Roderick, 406. 
 
 McCuUough V. Hutchinson, 374, 337. 
 
 McCullough V. Sommerville, 98, 109, 
 113, 301, 330, 614. 
 
 McDaniel v. Baca, 471, 474, 475. 
 
 McDonald v. McDonald, 131. 
 
 McDougal V. Dougherty, 666. 
 
 McDowell V. Caldwell, 576, 616. 
 
 McParland v. Birdsall, 245, 269, 274. 
 
 McGee v. Carpenter, 370. 
 
 McGready v. Harris, 72. 
 
 McGregor v. Ellis, 105, 109, 110. 
 
 McUuire v. Paber, 487. 
 
 Mclntyre v. Benson, 314, 441. 
 
 McKee v. Judd, 131, 133. 
 
 McKelvy v. Blair, 402. 
 
 McKenzie v. Garrison, 216. 
 
 McKinley v. Combe, 506. 
 
 McKinley v. Irvin, 570. 
 
TABLE OF CASES CITED. 
 
 XXXI 
 
 McKinney v. Rhoads, 347, 348, 397. 
 McKinnon v. Stuart, 153. 
 MoKlssick V. McKissick, 408. 
 McLean v. Brittou, 487. 
 McLean v. Johnson, 56, 60. 
 McLean v. Meline, 56, 60. 
 McLellan's Appeal, 541, 551, 576, 620. 
 McLemore v. Nuckolls, 669. 
 McLeod V. Latimer, 611. 
 McMalion v. Morrison, 31. 
 McMenomy v. Ferrers, 301. 
 McMillen v. Scott, 580. 
 McNeely v. Hart, 131. 
 McNutt V. Strayhow, 90. 
 McQuinney v. Hitchcock, 201, 207, 365. 
 McWhorter v. Wright, 313. 
 Meacham v. Stearns, 175, 398, 399, 302, 
 305, 437, 466, 549, 577, 578, 582, 591, 
 593, 627, 631. ^ ( 
 
 Mead v. Dayton, 413. 
 
 Mead v. Phillips, 312, 356, 367, 368, 466. 
 
 Means v. Hapgood, 404. 
 
 Mears v. Commonwealth, 534. 
 
 Mechanics' Bank v. Gorman, 334, 269. 
 
 Mechanics' and Traders' Bank v. Dakin, 
 673. 
 
 Mechanics' and Traders' Bank v. Eagle 
 Sugar Befinery, 33. 
 
 Meeker v. Saunders, 180, 182, 293, 308, 
 319, 344, 487. 
 
 Meeker v. Wilson, 18, 373, 533. 
 
 Mehaffey v. Share, 139. 
 
 Melick V. Voorhies,-561, 569, 639. 
 
 Mendelsohn, In re, 63, 65. 
 
 Meredith Manufacturing Co. v. Smith, 
 21, 197, 310. 
 
 Merrill v. Englesby, 304, 370, 352, 394, 
 441, 507. 
 
 Merrill v. Neill, 379. 
 
 Merrill v. Wilson, 135, 137, 168. 
 
 Merrills v. Swift, 397. 
 
 Mesaonier v. Kauman, 507. 
 
 Metcalf V. Van Brunt, 304, 353, 354. 
 
 Metzger, In re, 73. 
 
 Meux V. Anthony, 673. 
 
 Meux V. Howell, 33, 158, 450, 451, 452, 
 455, 456, 457. 
 
 Meyer v. Davis, 555. 
 
 Meyer v. Pulliam, 291. 
 
 Meyers, In re, 73. 
 
 Meyers v. Kinzie, 344. 
 
 Micboud V. Girod, 569, 570, 571. 
 
 Middleton v. Lord Onslow, 337. 
 
 Midgelev v. Slocomb, 606. 
 
 Mifflin V. Easey, 610. 
 
 Milbum V. Waugh, 365. 
 
 Miles V. Bacon, 177, 575, 580. 
 
 Millard v. Hall, 365. 
 
 Miller v. Cherry, 176, 556. 
 
 Miller v. Conklin, 313, 245, 347, 250, 253. 
 
 Miller v. Estell, 281. 
 
 Miller v. Halsey, 518. 
 
 Miller v. Holcombe's Ex'rs, 237, 633, 637. 
 
 Miller v. Lockwood, 368. 
 
 Miller y. Pancoast, 365. 
 
 Miller v. Sligh, 633. 
 
 Miller v. Stetson, 369,' 301. 
 
 Miller v. Whittier, 616. 
 
 Mills V. Argall, 115, 217, 494, 503, 505, 
 
 652. 
 Mills V. Barber, 90, 93, 98, 100, 109, 111, 
 
 113. 
 Mills V. Goodsell, 569. 
 Mills V. Haines, 385. 
 Mills V. Harris, 506. 
 Mills T. Levy, 243, 344. 
 Mills V. Warner, 363. 
 Milne v. Henry, 363. 
 Mims V. Armstrong, 169. 
 Minor v. Edwards, 130. 
 Minuse v. Cox, 565, 669. 
 Mitchell v. Beall, 335, 287, 365. 
 Mitchell V. Gazzam, 37, 86, 213. 
 Mitchell V. Gendell, 499. 
 Mitchell V. Kendall, 626. 
 Mitchell V. Stiles, 235, 318, 459,462, 478, 
 
 479, 673. 
 Mitchell V. WiHock, 363, 371. 
 Mitchell V. Winslow, 131. 
 Moddewell v. Keever, 137, 544. 
 Moffatt V. McDowell, 301. 
 Moffatt V. Ingham, 518. 
 Mohawk Bank v, Atwater, 678. 
 Moir V. Brown, 170, 173, 179, 180, 181, 
 
 303, 848, 349. 351, 356. 
 Monell V. Monell, 634, 635, 637. 
 Montgomery v. Commercial Bank of 
 
 Rodney, 85. 
 Montgomery v. Galbraith, 309. 
 Montgomery's Ex'rs v. Kirksey, 130, 129, 
 
 266. 
 Moody v. Litton, 538. 
 Moore v. Bonnell, 416. 
 Moore v. Collins, 301, 371, 397. 
 Moore v. Ireland, 133. 
 Moore v. Willett, 414, 523. 
 Morgan, ISx parte, in re Woodhouse, 46, 
 
 51, 53. 
 Morgan V. Brundrett, 49. 
 Morgantham v. Harris, 79, 84. 
 Morrill v. Richardson, 638. 
 Morris jr. Mowatt, 658. 
 Morris v. Olwine, 606. 
 Morris v. Parker, 608. 
 Morris v. Rexford, 554. 
 Morrison v. Atwell, 280, 281, 672. 
 Morrison v. Brand, 300, 624. 
 Morrison v. Morrison, 575. 
 Morrow v. Bright, 555. 
 Morse v. Cohannet Bank, 56. 
 
xxxu 
 
 TABLE OF CASES CITED. 
 
 Morse v. Royal, 566. 
 
 Morse v. Slason, 235, 326. 
 
 Moses V. Murgatroyd, 356. 
 
 Moses V. Thomas, 35, 134, 313. 
 
 Moss V. Humphrey, 136. 
 
 Mott V. Maris's Assignees, 603. 
 
 Mott V. McNeil, 363. 
 
 Moule V. Buchanan, 351, 390, 594, 657. 
 
 Mower v. Hanford, 800, 498. 
 
 Mowry v. Crocker, 413, 515. 
 
 Mowson V. Mendenhall, 90. 
 
 Muir V. Glinsman, 535, 
 
 Mulford V. Shirk, 133, 134. 
 
 Mumford y. Murray, 635. 
 
 Munsell v. Lewis, 131. 
 
 Murphy v. Bell, 303, 304, 311. 
 
 Murray v. DeRottenham, 607. 
 
 Murray v. Judson & Sands, 145. 
 
 Murray v. Riggs, 301, 341. 
 
 Murrill v. Weill, 433. 
 
 Mussey v. Noyes, 4, 40, 147, 148, 149, 
 159, 186, 195, 301, 303, 304, 393, 
 300, 303, 308, 489, 541, 548, 568, 
 564, 673. 
 
 Myers v. Kinzie, 457. 
 
 National Bank v. Sackett, 107, 109, 
 
 336. 
 National Mech. & Trad. Bank v. Eagle 
 
 Sugar Refinery, 386. 
 Neal V. Lea, 538, 556. 
 Neally v. Ambrose, 396, 305, 437, 563. 
 Needles v. Needles, 131. 
 Nelson v. Dunn, 383. 
 Nesbitt V. Digby, 120, 337. 
 Neuffer v. Pardue, 141, 164. 
 Neustadt y. Joel, 673. 
 New Albany & Sa'.em R. R. Co. v. Huflf, 
 
 387. 
 Newby v. Hill, 155. 
 New England Bank v. Lewis, 356, 389, 
 
 653. 
 Newman v. Bagley, 376, 277. 
 Newman v. Vickery, 130. 
 Newton v. Chandler, 48. 
 New York Ins. Co. v. Roulet, 664, 669. 
 Nicholls v. McEwen, 300, 259, 305, 315, 
 
 491, 585. 
 Nichols V. Kribs, 544. 
 Nicholson v. Leavitt, 187, 303, 308, 378, 
 
 379, 293, 395, 398, 300, 301, 453, 
 
 456, 460, 466, 470, 472, 473, 478, 
 
 532, 568. 
 Nicholson V. Tutin, 391, 394, 654. 
 NicoU V. Mumford, 22, 151, 356, 880, 
 
 383, 389. 
 Nightingale v. Harris, 301, 306, 334, 
 
 339, 350, 255. 
 Mmmo V. Davis, 131. 
 Niolon V. Douglass, 201, 335. 
 
 Noble V. Coleman, 360, 365. 
 
 Noble V. Smith, 413. 
 
 Norris r. Douglass, 130. 
 
 Norris v. Norris' Adm'r, 494. 
 
 North V. Turner, 133, 381, 389. 
 
 Northrup v. Livermore, 80. 
 
 Norton v. Cobb, 307. 
 
 Norton v. Kearney, 159, 308, 488. 
 
 Norton v. Simmes, 493. 
 
 Nostrand v. Atwood, 193, 195, 196, 301, 
 
 237, 258. 
 Noyes v. Blakeman, 575, 576. 
 Noyes v. Hickok, 40, 149, 304. 
 Nunn V. Wilsmore, 4, 33, 300, 383. 
 Nutter V. Harris, 319. 
 Nye V. Van Husan, 179, 381, 310, 474. 
 
 Oakley, Matter of, 157. 
 
 Oakley v. Patterson Bank, 86. 
 
 Oberholser v. Keefer, 678. 
 
 Ocean Nat. Bank v. Olcott, 665. 
 
 Ockerman v. Cross, 85, 413. 
 
 O'Fallon v. Tucker, 314. 
 
 Ogden V. Jackson, 31, 193. 
 
 Ogden V. Peters, 5, 80, 83, 83, 331, 393, 
 
 834, 503, 531. 
 Ogden V. Prentice, 550, 553, 556, 558, 
 
 673. 
 Ogden V. Saunders, 59, 405. 
 Ogden V. Stone, 193. 
 O'Hara v. Jones, 538. 
 Ohio Life Ins. & Trust Co. v. Merchants' 
 
 Ins. & Trust Co., 85, 401, 551. 
 O'Kie V. Kelly, 578, 633. 
 Oliver v. Court, 636. 
 Oliver v. King, 71. 
 Oliver Lee & Co.'s Bank v. Talcott, 
 
 370, 478. 
 Olivier v. Townes, 409, 419. 
 Olmstead v. Herrick, 814, 638, 656. 
 O'Neill V. Salmon, 375, 276, 380. 
 Onslow V. Londesborough, 573. 
 Ontario Bank v. Root, 674. 
 Ord V. Noel, 561. 
 
 Oriental Banking Co. v. Coleman, 48. 
 Osborn v. Puller, 864. 
 Osborne v. Adams, 405, 406, 407. 
 Osborne's Estate, 608. 
 Osgood v. Franklin, 561. 
 O'Shea v. The Collier White Lead & 
 
 Oil Co., 228. 
 Outcalt V. Van Winkle, 129, 134. 
 Owen V. Body, 383. 
 Owen V. Foul'kes, 567. 
 Ownby v. Ely, 570. 
 
 Page V. Olcott, 800, 308, 541, 543, 560, 
 
 564, 616, 639, 638, 664, 666, 667. 
 Page V. Smith, 6. 
 Page V. Weymouth, 156. 
 
TABLE OF CASES CITED. 
 
 XXXlll 
 
 Paige V. Brown, 388, 572. 
 
 Paige V. Cagwin, 557. 
 
 Painter v. Henderson, 569, 570. 
 
 Palmer v. Cross, 344. 
 
 Palmer y. Giles, 334. 
 
 Palmer v. Myers, 104, 109. 
 
 Palmer v. Thayer, 137, 546. 
 
 Palmer v. Woo>dward, 539. 
 
 Palmer v. Yarborough, 508. 
 
 Park v. Glover, 116. 
 
 Parker v. Gossage, 86. 
 
 Parker v. Grout, 130. 
 
 Parker v. Jervis, 518. 
 
 Parkhurst t. McGraw, 478, 474, 475. 
 
 Parkist v. Alexander, 567. 
 
 Parks V. Parks, 491. 
 
 Parmelee t. Bgan, 658. 
 
 Parrot v. Wells, 393. 
 
 Parsons v. Gloucester Bank, 383. 
 
 Parsons v. Powder, 401. 
 
 Passmore v. Eldridge, 167, 354, 337. 
 
 Passumpsic Bank v. Strong, 40, 304. 
 
 Paton V. Wright, 109. 
 
 Patten v. Wilson, 133, 133. 
 
 Patterson v. Jencks, 491. 
 
 Patton V. Bencini, 666. 
 
 Patton V. Thompson, 570. 
 
 Patton's Estate, 347, 348. 
 
 Payne v. Matthews, 377. 
 
 Peacock v. Tompkins, 143, 676. 
 
 Pearce v. Jackson, 136, 186, 189, 306, 
 
 334, 487. 
 Pearpoint v. Graham, 97, 103, 110, 111, 
 
 113, 180, 391, 338, 384, 335, 246, 
 
 348, 249, 255, 289, 391, 484, 660, 
 
 661. 
 Pearpoint v. Lord, 93, 108. " 
 Pearsall v. Kingsland, 593. 
 Pearson v. Crosby. 238, 657. 
 Pearson v. Rookhill, 201, 356, 531, 658. 
 Pearson v. Talbot, 132. 
 Pechell V. Fowler, 561. 
 Peck V. Ingraham, 640. 
 Peck V. Mei-rill, 14, 39, 149, 196, 300. 
 Peck y. Whiting, 523. 
 Peck & Co. V. Merrill and Trustees, 7, 8, 
 
 159, 308. 
 Peirce v. Jackson, 126, 186, 189, 201, 
 
 306, 224, 487. 
 Pennell v. Headding, 49. 
 Pennington v. Woodall, 146, 177, 673, 
 
 676. 
 People V. Chalmers, 633, 638. 
 People T. Hudson R. E. R. Co., 131. 
 People T. Norton, 645. 
 People V. Soper, 590. 
 Perit V. Pittfleld, 611. 
 Perkes, Me parte, 571. 
 Perry t. Dixon, 570. 
 Perry t. Holden, 31, 495. 
 
 . C 
 
 Peters v. Cunningham, 335. 
 
 Peters v. Glen, 607. 
 
 Petriken v. Davis, 506, 563. 
 
 Pettie V. Orser, 106, 109, 110. 
 
 Pettit v. Johnson, 15, 399. 
 
 PhettiplaceT. Sayles, 360,372. 
 
 Phillips V. Bustard, 580. 
 
 Phillips V. Evarard, 572. 
 
 Phillips V. Wooster, 719. 
 
 Phillips V. Zerbe Run & Sham. Imp. 
 
 Co., 287. 
 Philson T. Barnes, 340. 
 Phippen v. Durham, 201, 235, 263, 369, 
 
 271, 373, 390, 879. 
 Phoenix Bank v. Ingraham's Assignees, 
 
 193. 
 Phoenix Bank v. Sullivan, 331, 333, 390, 
 
 391, 393, 653. 
 Pickett V. King, 611. 
 Pickett V. Leonard, 611. 
 
 Pickstock V. Leyster, 23, 43, 53, 450, 
 
 456,, 466. 
 Pierce v. Brewster, 396, 300. 350. 
 Pierce Holbrook, In re, 72, 74, 76. 
 Pierpont v. Lord, 246, 247. 
 Pierson v. Hooker, 893. 
 Pjerson v. Manning, 9, 300, 307, 270, 
 
 392, 818, 855, 461, 473, 477, 478, 
 489, 540. 
 
 Pigott's Case, 492. 
 
 Pike V. Bacon, 29, 303, 877, 434, 466, 
 
 552 
 Pine V. Rickert, 180, 368, 474, 618, 519, 
 
 573. 
 Pingree v. Comstock, 31, 151, 165, 199, 
 
 356, 628, 652. 
 Pinkston v. Brewster, 680. 
 Pinneo v. Hart, 143, 594, 645, 646. 
 Piper's Appeal, 646. 
 Pitkin V. Thompson, 405, 408. 
 Pitt V. Petway, 570. 
 Pitts V. Steubenville R. E. Co., 594. 
 Pitts V. Viley, 314, 506. 
 Place V. Miller, 466. 
 Planck v. Schermerhorn, 79, 130, 389, 
 
 312, 317, 335, 359, 466, 645. 
 Planters' & Merchants' Bank of Mobile 
 
 v. Clark, 363, 366, 284, 292. 
 Piatt V. Hodge, 176. 
 Piatt V. Lott, 179. 
 Piatt T. Sheriffs of London, 459. 
 Plunkett V. Carew, 538. 
 Poland T. Glyn, 49. 
 Pomeroy v. Ainsworth, 405. 
 Pomeroy v. Manin, 195, 197. 
 Pond V. Williams, 661. 
 Pope V. Brandon, 84, 85, 118, 167. 
 Porter v. Walker, 51. 
 Porter v. Williams, 297, 800, 358, 503, 
 
 67S. 
 
XXXIV 
 
 TABLE OF CASES CITED. 
 
 Portland Bank v. Stacy, 373. 
 
 Posey V. Decatur Bank, 176, 591. 
 
 Potter, In re, 10. 
 
 Potter V. McDowell, 457. 
 
 Potter & Paige, Estate of, 268, 335. 
 
 Potts, ExparU, 193. 
 
 Potts & Garwood, Bx parte, 56. 
 
 Potts V. The Thames Haven & Dock 
 
 Co., 558. 
 Power V. Alger, 588. 
 Power V. Kirk, 114. 
 
 Powers V. Graydon, 334, 344, 487, 504. 
 Powers V. Green, 195, 532. 
 Powles V. Dilley, 193, 195, 306. 
 Pratt V. Adams, 144, 439, 489, 589, 591, 
 
 593, 593, 631, 656, 674. 
 Pratt V. Ourtiss, 73. 
 Pratt V. Levan, 135, 535, 548, 609. 
 Pratt V. Eathbun, 658. 
 Pratt V. Thornton, 569. 
 Presley v. Bogers, 344. 
 Prevost v. Gratz, 543, 570, 580. 
 Prewett v. Dobbs, 344. 
 Price V. Ford, 114, 315, 381, 311. 
 Price V. Mazange, 306. 
 Price V. Moses, 140. 
 Price V. Parker, 356, 381, 535. 
 Prince v. Shepard, 494. 
 Prindle y. Carruthers, 130. 
 Produce Bank v. Baldwin, 530. 
 Produce Bank v. Morton, 730. 
 PuUiam v. Newberry, 195, 198, 460. 
 Pulling V. Tucker, 48. 
 Purdie t. Whitney, 334, 560. 
 Pusey V. Clemson, 580. 
 Putnam v. Hubbell, 301. 
 
 Quackenboss, John M., In re, 75. 
 Quackenbush v. Leonard, 561. 
 Quarles v. Kerr, 395. 
 Quinnebaug Bank v. Brewster, 84. 
 
 Bagan v. Kennedy, 365. 
 Rahn v. McElrath, 371, 374. 
 Eamsdell v. Edgerton, 333. 
 Ramsdell V. Sigerson, 301,. 245, 333, 353, 
 
 673. 
 Randall v. Cook, 877. 
 Randall v. Dusenbury, 335. 
 Randall v. Errington, 566, 567. 
 Randall & Sunderland, In re, 60, 62, 73, 
 
 81. 
 Rankin r. HoUoway, 365. 
 Rankin v. Loder, 301, 206, 310, 314, 
 
 336, 314, 880, 383, 384, 392. 
 Ransom v. Jones, 130. 
 Rapalee t. Stewart, 300, 305, 307, 674. 
 Rapley y. Cummins, 391. 
 Ratcliflfe v. Sangston, 641. 
 Rathbun v. Platner, 79, 214, 467. 
 
 Ravisies v. Alston. 284, 370. 
 
 Rawlings, Ex parte, 53. 
 
 Raworth v. Parker, 391, 393, 654. 
 
 Read r. Baylis, 381. 
 
 Read v. Robinson, 340, 348, 357, 396, 
 
 397, 643. 
 Read v. Worthington, 142, 179, 531. 
 Eeade v. Pellatier, 476. 
 Reamer v. Lamberton, 116. 
 Reavis v. Garner, 250. 
 Redmond v. Wemple, 576,676. 
 Reed v. Bigelow, 139. 
 Reed v. Emery, 119, 648. 
 Reed v. Jewett, 365. 
 Reed v. Noxen, 474. 
 Reed v. Pellestier, 267. 
 Reed v. Sands, 538. 
 Reigart's Appeal, 156. 
 Reinhard v. Bank of Kentucky, 163, 205, 
 
 379, 389, 488. 
 Renard v. Graydon, 244, 504. 
 Eengo V. Real EstateBank, 84. 
 Renton v. Kelly, 383. 
 Rettew V. Barnes, 63. 
 Reubens v. Joel, 673. 
 Reves v. Walthal, 460. 
 Reynolds, In re, 59. 
 Reynolds v. Cook, 360. 
 Reynolds v. The Bank of Va., 15, 150, 
 
 306, 357, 358. 
 Rhines v. Phelps, 364. 
 Rice V. Courtis, 364, 413. 
 Richards v. Hazard, 301, 356. 
 Richards v. Levin, 193, 193, 301, 368, 
 
 269, 370. 
 Richards v. White, 674. 
 Richardson, Ex parte, 51. 
 Richardson v. Cole, 358. 
 Richardson v. Jones, 570. 
 Richardson v. Leavitt, 417. 
 Richardville v. Cummins, 133. 
 Riches v. Evans, 466. 
 Ridgway v. Stewart, 13, 339. 
 Ried r. Sands, 540. 
 Riggs V. Murray, 181, 199, 200, 315, 
 
 317. 
 Rindskoff V. Guggenheim, 207, 263, 284, 
 
 395,458. 
 Ringer v. Cann, 134. 
 Ringgold V. Ringgold, 561, 580. 
 Ringo V. Real Estate Bank, 85. 
 Roane v. Bank of Nashville, 146. 
 Roberts v. Corbin, 638. 
 Roberts v. Guernsey, 473. 
 Roberts v. Shepherd, 105, 109. 
 Robertson v. Bumell. 411. 
 Robertson v. Sublettj 151, 356, 506, 653. 
 Robertson v. Todd, 137, 546. 
 Robins v. Embry, 33, 85, 167, 179, 180, 
 
 246, 268, 385, 286, 289. 
 
TABLE OF CASES CITED. 
 
 XXXV 
 
 Robinson v. Bank of Attica, 88, 89. 
 Robinson v. Crowder, 93, 96, 97, 109, 
 
 111,330. 
 Robinson v. Gregory, 106, 109, 110. 
 Robinson v. Maulden, 139. 
 Robinson v. McDonnell, 131. 
 Robinson v. Mcintosh, 105, 115. 
 Robinson t. Rapelye, 167, 301, 336, 383. 
 Robinson v. Richards, 483, 484. 
 Robinson v. Robards, 483. 
 Rogers v. Allen, 405, 406. 
 Rogers t. De Forrest, 397, 398, 399, 300, 
 
 309, 836, 490, 493. 
 Rogers v. Rogers, 666, 675. 
 Rogers v. Spence, 133, 133. 
 Rogers v. Vail, 363. 
 Rohrer v. Turrell, 553. 
 Rokenbaugh v. Hubbell, 83. 
 Rome Ex. Bank v. Eames, 486, 493, 588. 
 RooseTclt V. Mark, 611. 
 Root V. Stuyvesant, 491. 
 Rosenberg v. Moore, 186, 188, 336, 355, 
 
 669. 
 Rossett 7. Fisher, 173. 
 Rossman t. McFarland, 331, 494. 
 Rowland v. Coleman, 37, 301, 307. 
 Royall's Adm'r t. McKenzie, 550, 638, 
 
 689, 637. 
 Ruble T. McDonald, 467. 
 Rugely Y. Harrison, 366. 
 Rundlett v. Dole, 169, 179, 385, 497. 
 Rush V. Good, 636, 669. 
 Russell V. Fillmore, 131. 
 Russell V. Lasher, 675, 676. 
 Russell V. Rogers, 338. 
 Russell V. Woodward, 30, 31, 138, 301, 
 
 364, 331, 337, 386, 388, 393. 
 Rust V. Cooper, 47. 
 Ryerson v. Eldred, 165, 336. 
 
 Sackett v. Mansfield, 395, 308. 
 Sadler & Jackson, Ux parte, 337, 338. 
 Sadlier v. Fallon, 334, 339, 380, 385. 
 Sale T. Dishman's Ex'ra, 330. 
 Salmon V. Davis, 393. 
 Salmon v. Stuyvesant, 491. 
 Saltmarsh v. Beene, 570. 
 Sampson v. Arnold, 189. 
 Sanderson v. Bradford, 418. 
 Sanderson v. Stockdale, 15, 673. 
 Sandford v. Conant, 167. 
 Sands v. Hildreth, 18. 
 Sangston V. Gaither, 188, 301, 314, 350, 
 
 353, 355. 
 Sargent v. Webster, 7. 
 Saunders v. Williams, 405. 
 Savery v. Spaulding, 88, 487, 488, 534, 
 
 557. 
 Savings Bank v. Ela, 183. 
 Sawyer v. Hoag, 556. 
 
 Schieffelin v. Stewart, 567. 
 Schlussel V. Willett, 383. 
 Scholefleld v. Hull, 368. 
 Schufeldt V. Abernethy, 304. 
 Schuylkill Bank v. Reigart, 156, 337, 
 
 338. 
 Schwartz v. Wendell, 580. 
 Scott V. Edes, 890, 594, 657, 674. 
 Scott V. Freeland, 570. 
 Scott V. Guthrie, 376,380, 345,487, 530. 
 Scott V. Morris, 613. 
 Seal V. Duffy, 38, 334, 340, 356, 357, 359, 
 
 396, 399, 493, 503, 644, 673. 
 Seaman v. Stoughton, 74, 667. 
 Sears v. Conover, 130. 
 Seaver v. Spink, 73, 73. 
 Seaving v. BrinkerhoflF, 186, 188, 341, 
 
 353 
 Sedgwick V. Place, 63,63,66. 
 Selden v. VermUyea, 635. 
 Seuter v. Turner, 360. 
 Sevier v. McWhorter, 399, 506. 
 Sewall V. Henry, 144. 
 Seward v. Jackson, 464. 
 Sexton V. Wheaton, 17, 453. 
 Seymour v. Wilson, 31, 675. 
 Shackelford v. P. & M. Bank of Mobile, 
 
 83, 163, 179, 314, 366, 391, 396, 301, 
 
 477, 479. 
 Shafer v. Alden, 673. 
 Shafi'er v. Watkins, 359. 
 Shanks v. Lancaster, 343. 
 Sbapleigh v. Baird, 189, 306. 
 Shattuck V. Freeman, 333, 386, 487, 
 
 531. 
 Shaw V. Lowry, 139, 365. 
 Shawhan v. Wherritt, 60. 
 Shearer v. Loftin, 149, 331, 333, 384, 389, 
 
 393. 
 Sheepshanks v. Cohen, 334, 436, 660. 
 Sheerer v. Lautzerheizer, 386, 395, 318. 
 Sheldon v. Dodge, 137, 335, 336, 310, 
 
 334, 431, 463, 476. 
 Sheldon v. Smith, 506, 588. 
 Shepherd v. Mclvera, 356, 643, 653. 
 Shepherd's Case, 193. 
 Sheppards v. Turpin, 357, 550. 
 Sherrill v. Hopkins, 405. 
 Sherrill v. Shuford, 175, 581. 
 Shipman v. Mtna, Ins. Co., 187, 546. 
 Shirley v. Shattuck, 585. 
 Shober v. Hauser, 145. 
 Shone v. Lucas, 81. 
 Shook V. Shook, 639. 
 Shotwell V. Webb, 133. 
 Shryock v. Waggoner, 119. 
 Shubar v. Winding, 157, 397. 
 Shunos V. Caig, 141. 
 Shyrock v. Bashore, 59. 
 Sibbald's Estate, 132, 133, 434. 
 
XXXVl 
 
 TABLE OF CASES CITED. 
 
 Sibell V. Remsen, 88. 
 
 Sibley v. Hood, 193, 301. 
 
 Siebert v. Spooner, 45, 48. 
 
 Siggers v. Evans, 153, 355, 388. 
 
 Silverman, In re, 67. 
 
 Simmons v. Curtis, 137. 
 
 Simon v. Kaliske, 345, 515. 
 
 Simpson, De G., Ex parte, 49. 
 
 Simpson v. Gowdy, 638. 
 
 Simpson v. Roberts, 133. 
 
 Simpson v. Warren, 545. 
 
 Sipe T. Earman, 364, 367, 317, 818, 467. 
 
 Sirlott V. Tandy, 130. 
 
 Sisson V. Roath, 137. 
 
 Sixth Ward Bank v. Wilson, 5, 544, 
 
 594. 
 Skinner's Appeal, 138. 
 Skipwith's Ex'r v. Cunningham, 188, 
 
 301, 335, 350, 353, 363, 363, 369, 
 
 371, 373, 379, 397. 
 Slade V. Van Vechten, 539, 541,569. 
 Slatter v. Carroll, 408. 
 Sloane v. Moore, 109. 
 Small v. Dudley, 43, 300. 
 Small V. Ludlow, 543. 
 Small V. Marwood, 357. 
 Small V. Sproat, 505, 508. 
 Smith, Ex parte, 51. 
 Smith V. Atwood, 408. 
 Smith T. Brinkerhoflf, 555. 
 Smith T. Buchanan, 67. 
 Smith V. Campbell, 301, 306. 
 Smith v. Cannan, 51. 
 Smith T. Ely, 73, 76. 
 Smith V. Henry, 209, 364. 
 Smith V. Howard, 114, 375, 376, 380. 381 
 
 676. 
 Smith V. Hurst, 153. 
 Smith V. Isaac, 570. 
 Smith V. Keating, 331, 387. 
 Smith V. Leavitts, 336, 363, 384, 518. 
 Smith V. Lowell, 374. 
 Smith V. Mitchell, 133, 134, 315, 488, 
 
 619. 
 Smith V. Mobile Bank, 475. 
 Smith V. N. T. Consolidated Stage Co., 
 
 85. 
 Smith V. N. Y. & N. H. R. R., 130. 
 Smith V. N. W. R. R. Co., 413. 
 Smith V. Smith, 374. 
 Smith V. Spinola, 408. 
 Smith V. Stone, 338. 
 Smith V. Teutonia Ins. Co., 63. 
 Smith V. Timms, 49, 51. 
 Smith V. Turrentine, 151, 666. 
 Smith V. Welch, 365. 
 Smith V. Wheeler, 357. 
 Smith V. WoodruS, 4. 
 Solomon v. Sparks, 8, 14. 
 Spangler's Estate, 580. 
 
 Spaulding v. Strong, 344, 504. 
 
 Spear v. Wardell. 197, 317, 673. 
 
 Speed V. May, 133. 408, 413. 
 
 Spence v. Bagwell, 359, 364, 318, 466. 
 
 Sperritt v. Willows, 51. 
 
 Spicer v. Ayres, 665. 
 
 Spicer & Peckham, In re, 63. 
 
 Spies V. Boyd, 487. 
 
 Spies V. Joel, 271. 
 
 Spindler v. Atkinson, 570. 
 
 Spinney v. Portsmouth Co., 389. 
 
 Spring v. S. Carolina Ins. Co.. 130, 301, 
 
 249. 
 Spring V. Strauss, 180. 
 Spurritt v. Spiller, 237, 238. 
 Spyer, Ex parte, 53. 
 St. Helens Mills Co., In re, 73. 
 St. Louis v. Clemens, 130. 
 Stanley v. Bunce, 367, 476. 
 Stanley v. Robbins, 40. 
 Starr v. Dugan, 594. 
 State V. Bank of Maryland, 33. 84, 85, 
 
 301. 
 State V. Benoist, 13, 186, 189, 198, 457, 
 
 477. 
 State V. Evans, 865. 
 State V. Grover, 607. 
 State V. Guilford, 633, 036. 
 State V. Hart, 638. 
 State V. Keeler, 164, 467. 
 State V. Piatt, 580. 
 State V. Real Estate Bank, 403. 
 State V. Rogers, 580. 
 State V. Smith, 365. 
 State V. Tasker, 365. 
 Steel V. Brown, 378, 719. 
 Steel V. Tuttle, 663. 
 Stehman's Appeal, 585. 
 Stein V. La Dow, 107, 109, 110. 
 Stell's Appeal, 619, 633. 
 Stephens v. Frotham, 572. 
 Stephenson v. Haywood, 319. 
 Sterling v. Van Oleve, 365. 
 Stern v. Fisher, 143, 302. 
 Stetson T. Miller, 127, 189, 206. 
 Stevens v. Bell, 31, 153, 179, 180, 195, 
 
 196, 287, 386, 634. 
 Stevenson's Assignee, Case of, 688. 
 Stewart v. English, 466. 
 Stewart v. Hall, 385. 
 Stewart v. Isador, 73. 
 Stewart v. McMinn, 337, 576, 633. 
 Stewart v. Moody, 51, 53. 
 Stewart v. Pettus, 639. 
 Stewart v. Spencer, 187, 189, 301, 339, 
 
 348, 253, 356, 395, 396, 475, 478. 
 Stickney v. Crane, 467. 
 Stimpson v. Fries, 15, 147, 151, 153, 
 
 157, 160, 310, 317, 387. 
 Stine V. Wilkinson, 16. 
 
TABLE OF CASES CITED, 
 
 XXXVll 
 
 Stobaugb V. Mills, 60, 74. 
 
 Stokes V. Jones, 257. 
 
 Stone V. Waggoner, 365. 
 
 Storm T. Davenport, 395, 313, 466. 
 
 Stout V. Higbee's Ex'rs, 676. 
 
 Stover V. Herrington, 198, 195. 
 
 Stow V. Tarwood, 538. 
 
 Strachan v. Barton, 49. 
 
 Strang, Ex parte, 71. 
 
 Strang v. Spaulding, 244. 
 
 Strawn v. Jones, 411. i 
 
 Stray, Ex parte, 71. 
 
 Streatfield v. Streatfield. 593. 
 
 Strieker v. Tinkham, 420. 
 
 Strong v. Carrier, 161, 166, 364, 373, 
 
 520. 
 Strong V. Skinner, 142, 223, 225, 269, 
 
 810, 610, 658. 
 Strong V. "Willis, 358, 674. 
 Stubbs, In re, 75. 
 Stuckert v. Harvey, 135, 424. 
 Sturgis V. Crowninshield, 59. 
 Sturtevant v. Ballard, 470. 
 Suarez v. Pumpelly, 649. 
 Sugg V. TiUman, 123, 124. 
 Summers v. Roos, 365. 
 Summer's Appeal, 198. 
 Supervisors of Niagara v. The People, 
 
 89. 
 Sutton V. Hanford, 300. 
 Suydiim v. Dequindre, 385. 
 Swan V. Dent, 673. 
 Swanson v. Turkington, 594. 
 Swearingen v. Slicer, 154, 333, 389. 
 Sweeny v. Sheridan, 665. 
 Swift et al. v. Stebbins, 558. 
 Swoyer's Appeal, 135, 539, 564. 
 Syracuse E. R. Co. v. Collins, 532. 
 
 Talmage v. Pell, 89. 
 
 Tapley v. Butterfield, 90, 113, 330, 
 
 Tappenden v. Burgess, 50. 
 
 Tarbuck v. Marbury, 816. 
 
 Tarver v. Roflfe, 167, 293. 
 
 Tatum V. Hunter, 144, 460. 
 
 Taylor v. Bonham, 633. 
 
 Taylor v. Palmer, 130. 
 
 Taylor v. Roberts, 633. 
 
 Teed v. Johnson, 333. 
 
 Telford t. Barney, 573. 
 
 Tempest, Ex parte, 193. 
 
 Tennant v. Stoney, 333. 
 
 Terrell v. Green, 460. 
 
 Terry v. Belcher, 364. 
 
 Terry v. Butler, 143, 179, 181, 868, 676. 
 
 Tetley v. Taylor, 45. « 
 
 Thatcher v. Candee, 358. 
 
 Thelluson v. Smith, 601. 
 
 Therasson v. Hickok, 370, 631, 674. 
 
 Thomas v. Beck, 187, 546. 
 
 Thomas v. Goodwin, 683. 
 
 Thomas v. Jenks, 33, 186, 187, 188, 189, 
 
 310, 334, 334, 353, 354. 
 Thomas v. Talmadge, 13, 37, 205, 295, 
 
 467, 553, 647. 
 Thompson v. Blanohard, 368. 
 Thompson v. Bowman, 113. 
 Thompson v. Dougherty, 544. 
 Thompson v. Hooker, 655. 
 Thompson v. Ketchum, 405. 
 Thornton v. Davenport, 364. 
 Thornton v. Hook, 473. 
 Thorp V. McCuUum, 570. 
 Thorpe v. Dunlap, 588, 539. 
 Thrasher v. Bentley, 59, 532, 533, 720. 
 Thurber v. Blanck, 673. 
 Thurmond v. Andrews, 74. 
 Thurston v. Rosenfleld, 418, 420. 
 Tibbetts v. Weaver, 515, 538. 
 Ticknor v. Wiswell, 489. 
 Tillou V. Britton, 31, 192, 193, 196, 197, 
 
 201, 304, 213. 
 Todd V. Buckman, 238, 389. 
 Tomlinson v. Smallwood, 638. 
 Tompkins v. Wheeler, 7, 8, 119, 193, 
 
 201, 348, 360, 368, 373. 373, 383, 
 
 531. 
 Toof V. Martin, 81. 
 Towle V. Mack, 576. 
 Town V. Bank of River Raisin, 85, 401. 
 Townsend v. Harwell, 383, 484. 
 Townsend v. Stearns, 393, 307. 
 Towsley v. McDonald, 31. 
 Trapp V. Moore, 351. 
 Treadwell v. Sackett, 336. 
 Trenton Bank v. Woodruff, 567. 
 Trott V. Dawson, 575. 
 Trotter v. Blocker, 631. 
 True V. Congdon, 203, 314, 457. 
 Truitt V. Caldwell, 6, 8, 9, 157,270,300, 
 
 303. 
 Tucker v. Clesby, 188. 
 Tucker v. Tucker, 633. 
 Turner v. Hardcastle, 51. 
 Turner v. Jaycox, 170, 179, 380. 
 Turner v. Richardson, 535. 
 Twelves v. Williams, 539. 
 Twyne's Case, 448, 480. 
 Tyson v. Dorr, 661. 
 
 Uhler V. Maulfair, 193, 195, 198, 213. 
 
 Ulmer v. Hills, 365. 
 
 Union Bank v. Bell, 593. 
 
 Union Bank of Tenn. v. EUicott, 84, 
 85. 
 
 Union Pacific R. R. Co., In re, 63, 66. 
 
 United States v. The Bank of the U. 8., 
 18, 22, 29, 84, 149, 187, 190, 194, 
 311, 319, 374, 880, 386, 390, 419, 
 443, 453, 474, 479, 599, 601, 603. 
 
XXXVlll 
 
 TABLE OF CASES CITED. 
 
 United States v. Clark, 148, 149, 182, 
 
 190,601,603. 
 United States v. Fisher, 600, 603. 
 United States v. Hooe, 149, 190, 367, 
 
 443, 464, 601, 603, 603. 
 United States v. Howe, 141. 
 United States v. Howland, 168, 601, 
 
 603. 
 United States v. Hoyt, 834, 387, 390. 
 United States v. Hunter, 133, 601, 604. 
 United States v. King, 195, 203. 
 United States v. Lanfton, 168, 603. 
 United States v. McLellan, 4, 6, 8, 147, 
 
 190, 601, 602. 
 United States v. Monroe, 601. 
 United States v. Mott, 148, 601, 604. 
 United States v. The State Bank of North 
 
 Carolina, 600, 601. 
 U. S. Bank v. Huth, 116, 176, 391, 311, 
 
 819. 
 
 Vail V. Pecks, 40. 
 
 Valentine v. Decker, 880, 665, 674. 
 
 Vallance v. Miners' Life Ins. Co., 12, 13. 
 
 Van Alstyne t. Cook, 115. 
 
 Van Arsdale v. Richards, 665, 669. 
 
 VanBuskirk v. Warren, 13, 14, 368, 
 
 411. 
 Van Dine v. Willett, 130, 810, 607. 
 Van Dyke v. Christ, 136. 
 Van Hein v. Elkus, 648. 
 Van Heusen v. Radcliffe, 186, 538, 539, 
 
 544. 
 Van Hook v. Walton, 176, 368, 345, 347, 
 
 365, 531. 
 Van Horn v. Elkins, 532, 569. 
 Van Home v. Fonda, 569. 
 Van Keuren v. McLaughlin, 136, 845, 
 
 595 615 
 Van Nest v. Yoe, 79, 84, 163, 180, 225, 
 
 380, 809, 311, 813, 314, 867, 460, 
 
 466, 518, 674. 
 Van Rossum r. Walker, 330, 368, 276, 
 
 278, 303. 
 Van Vleet v. Slauson, 159, 161, 179, 
 
 531. 
 Van Waggoner v. Moses, 35, 134, 313. 
 Van Winkle t. McKee, 494. 
 Vance v. Phillips, 366, 469. 
 Vanderveer v. Conover, 340, 653, 656. 
 Vanhouten v. Reilly, 133. 
 Vansands v. Miller, 36, 317. 
 Vamum v. Camp, 304, 404. 
 Varnum v. Evans, 658. 
 Vaughan v. Evans, 250. 
 Vernon v. Morton, 22, 129, 133, 168, 
 
 175, 301, 305, 810, 812, 320, 348, 
 
 365, 371, 393, 460, 466, 473, 502, 
 
 505, 531, 544, 577, 584, 613, 676. 
 Verplanck v. Sterry, 470. 
 
 Voorhees v. Frisbie, 73. 
 Vose V. Holcomb, 339, 657. 
 
 Waddingham t. Loker, 473. 
 Wade Y. Pettibone, 569. 
 Wakefield v. Martin, 130. 
 Wakeman v. Dalley, 472. 
 Wakemanv. Grover, 192, 233, 343,344, 
 
 347, 353, 310, 389, 489, 631, 666, 
 
 675, 676. 
 Walker v. Crowder, 506. 
 Walker v. Miller, 400, 538, 540, 558. 
 Walker v. Symonds, 636. 
 Wall V. Lakin, 33, 194. 
 Wallis V. Rhea, 343. 
 Wallis V. Thornton, 634. 
 Wallwyn v. Coutts, 387. 
 Walters v. Whitlock, 180, 306, 405, 515. 
 Walworth t. Readsboro, 368. 
 Ward V. Davis, 151. 
 Ward v. Lewis, 151, 323, 348, 349, 356, 
 
 389, 397, 428, 505, 506, 587, 636, 
 
 684, 653, 664, 669. 
 Ward V. Morrison, 513. 
 Ward V. Tingley, 177, 224, 237, 312,487. 
 Ward v. Trotter, 163, 286. 
 Warner v. Beers, 89. 
 Warner v. Mower, 84. 
 Warren v. Fenn, 538. 
 Warren v. Lee, 15. 
 Warren v. Tenth Nat'l Bank, 67. 
 Washer v. Everhart, 404, 570. 
 Wasson v. English, 570. 
 Waterbury v. Westervelt, 582. 
 Waters v. Comly, 195. 
 Watkins v. Jenkins, 137, 138. 
 Watkins v. Wal.ace, 311, 475. 
 Watson T. Bagaley, 11, 157, 338. 
 Watson v. Bailey, 3. 
 Watson V. Brewster, 405. 
 Watson V. Hanking, 130. 
 Waugh V. Wyche, 358. 
 Webb V. Daggett, 117, 192, 301,303,308, 
 
 461, 471. 
 Webb V. Dean, 348, 357. 
 Weber v. Samuel, 189, 339, 840, 657. 
 Webster v. Vanderventer, 358. 
 Weeks v. Maillardet, 181. 
 Weeks v. Wead, 363. 
 Weir V. Tannehille, 151, 856, 666; 
 Welch V. Mandeville, 130. 
 Welch v. Myers, 535. 
 Welles v. March, 90, 104, 105, 106, 109. 
 Wells, Jr., In re, 64. 
 Wells V. Treadwell, 4. 
 West V. Snodgrass, 306, 336, 370. 
 West V. Steward, 134, 171, 176, 181, 
 
 185. . . ) , 
 
 West V. Tupper, 397. 
 Westbrook t. McDowell, 130. 
 
TABLE OF CASES CITED. 
 
 XXXIX 
 
 Westcott V. Potter, 130. 
 
 Weston V. Barker, 357. 
 
 Wetter v. Schlieper, 109. 
 
 Whallon v. Scott, 141, 330, 318, 549. 
 
 Wharton v. Fisher, 433. 
 
 Wharton v. Hopkins, 538. 
 
 Wharton v. Toone, 566. 
 
 Whedbee v. Stewart, 188, 336, 350, 373, 
 
 460. 
 Wheeler v. Erans, 338. 
 Wheeler v. Perry, 590. 
 Wheeler v. Sumner, 349, 873, 389, 390, 
 
 533. 
 Wheeler v. Wheeler, 130. 
 Whelpdale v. Cookson, 566. 
 Whichcote v. Lawrence, 566, 567, 569. 
 Whipple V. Thayer, 814, 417. 
 Whitaker v. Gavit, 131, 134, 156, 353. 
 Whitaker v. Lindley, 314. 
 Whitcomb v. Minchin, 568. 
 White V. Banks, 894, 441, 494. 
 White V. Buck. 130. 
 White V. Folcombe, 573. 
 White V. Monsarrat, 311. 
 White V. Union Insurance Co., 114. 
 White V. Winn, 347, 351. 
 Whiteley v. May, 377. 
 Whitney v. Brunette, 365. 
 Whitnev t. Freeland, 494. 
 Whitney v. Krows, 330, 399, 804, 306, 
 
 310, 543. 
 Whitney's Appeal, 534, 619. 
 Whiton V. Smith, 90. 
 Whittaker v. Williams, 161, 353. 
 Whittemore v. Gibbs, 139. 
 Whitwell V. Thompson, 48, 49. 
 Wickham v. Martin, 330, 540, 553. 
 Wicklifife v. The City of Lexington, 635. 
 Widgery y. Haskell, 31, 153, 193, 195, 
 
 301, 337, 353. 386. 
 Wiener v. Dayis, 3, 188, 305. 
 Wilbur T. Fradenburgh, 531. 
 Wilcox V. Kellogg, 31, 198, 318. 
 Wilcoxson V. Annesley, 10. 
 Wilde V. Bowlings, 345, 350. 
 Wilder t. Fondey,- 453. 
 Wilder v. Keeler, 377, 658. 
 Wilder t. Winne, 196, 453, 454, 456. 
 Wiley T. Collins, 390. 
 Wiley V. Knight, 196. 
 Wilkes V. Ferris, 169, 170, 171, 301, 368, 
 
 370, 335. 
 Wilkinson v. Wilkinson, 574. 
 Willard v. Tillman, 139. 
 WiUetts V. Waite, 405. 
 Williams v. Brown, 196. 
 Williams v. Jones, 301, 479, 480. 
 Williams v. Lowndes, 365. 
 Williams v. Otey, 178, 560, 637. 
 Williamson v. Aldrich, 135. 
 
 Williamson v. Berry, 9. 
 
 Williamson v. Richardson, 135. 
 
 Williamson v. Wilkins, 583. 
 
 Willis V. Farley, 557. 
 
 Willis V. Henderson, 538, 540. 
 
 Willis V. Stewart, 555. 
 
 Wilson, In re, 118, 188, 333, 334, 347, 
 
 354, 839, 576, 619, 633, 673. 
 Wilson V. Brown, 631. 
 Wilson V. Carson, 407. 
 Wilson V. City Bank, 67, 198. 
 Wilson Y. Day, 48. 
 Wilson V. Biaer, 467. 
 Wilson V. FergusoQ, 518. 
 Wilson V. Forsyth, 315, 877, 467, 673. 
 Wilson V. Hanson, 436. 
 Wilson V. Hooper, 363. 
 Wilson V. Kneppley, 334, 435. 
 Wilson v. Lott, 473. 
 Wilson V. Pearson, 344, 350, 364, 896. 
 Wilson V. Robertson, 275, 376,380, 381, 
 
 393, 306, 487. 
 Wilson V. Russell, 15. 
 Wilt V. Franklin, 116, 117, 118, 180, 
 
 181, 301, 333, 387, 319, 863, 374, 
 
 897, 466, 480. 
 Wimbish v. Tailbois, 459. 
 Winder v. DiflFenderfer, 580. 
 Winn V. Crosby, 550, 577, 585, 637, 638. 
 Winslow V. Assignees of Ancrum, 184. 
 Wintringham v. Lafoy, 301, 368. 
 Wise V. Wimer, 9, 540. 
 Wiswall V. Potts, 306. 
 Wiswall V. Boss, 388. 
 Wiswall V. Ticknor, 336, 366. 
 Wolverhampton Bank v. Marston, 466. 
 Wood V. Bolard, 197, 317. 
 Wood V. Radcliffe, 169, 170. 
 Wood V. White, 560. 
 Woodbridge v. Perkins, 180. 
 Woodbum v. Mosher, 393, 303, 304, 
 
 311. 
 Woodruff V. Robb, 16. 
 Woods V. Timmerman, 189. 
 Woodward v. Braiuard, 140. 
 Woodward v. Marshall, 171, 181, 384, 
 
 500, 510, 535, 543, 544, 547. 
 Woodworth t. Sweet, 146. 
 Woolsey v. Urner, 344. 
 Wooster v. Stanfield, 116, 393. 
 Wooten V. Clark, 360. 
 Work V. Ellis, 330, 395, 460, 475. 
 Worley v. Frompton, 573. 
 Worman v. Wolfersberger's Ex'rs, 158, 
 
 198, 313. 
 Worseley v. De Mattos, 47, 48. 
 Worth V. McAden, 633. 
 Worthington t. Greer, 138. 
 Wright V. Bundy, 543. 
 Wright V. Henderson, 664, 
 
xl 
 
 TABLE OF CASES CITED. 
 
 Wright V. Linn, 195, 201, 307, 259, 337, 
 
 443, 474, 519. 
 Wright V. McOoi-mick, 551. 
 Wright V. Williamson, 130. 
 Wurtz V. Hari;, 143, 606. 
 Wyckoffv. Carr, 488. 
 Wyles V. Beals, 33, 83, 136. 
 Wynkoop v. Shardlow, 175, 499, 583. 
 Wynne v. G-lidewell, 557. 
 
 Yargan v. Shriner, 563. 
 Yates V. Lyon, 78. 
 Yelverton v. Sheldon, 426. 
 
 York Co. Bank v. Carter, 31, 194, 198, 
 
 212. 
 Young V. Booe, 395. 
 Young y. Dumas, 195, 198. 
 Young V. Harris, 405. 
 Young V. Keighley, 90. 
 Young V. McOlure, 362, 376. 
 
 Zacharie v. Kirk, 365. 
 Zergenfuss, John, M; parte, 59. 
 Zipcey v. Thompson, 32, 419. 
 Zwelchenbart, Mc parte, 51. 
 
VOLUNTARY ASSIGNMENTS. 
 
 CHAPTER I. 
 
 ASSIGNMENTS IN GENERAL ; VOLUNTARY ASSIGNMENTS FOR THE 
 BENEFIT OF CREDITORS DEFINED AND DISTINGUISHED 
 FROM OTHER MODES AND INSTRUMENTS OF TRANSFER. 
 
 § I. Assignments in General. — An assignment is a trans- 
 fer 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 transfer, 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 prop- 
 erly a transfer, or making over to another, of one's whole 
 interest in lands or tenements, whatever that interest may 
 be ; 3 but in England it is usually applied to express the 
 
 ' These appear to be secondary senses of the term, the primary meanings 
 beirig 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. cc. 34, 83, 103. 
 
 ° 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, c. 9, p. 227. 
 
 The common-law definition of an assignment 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." i Bac. Abr. 329. See 
 Mr. Justice Isbell, in Cowles v. Ricketts, 1 Iowa, 582. 
 
 " The introduction of the word assigns into the old instruments of feodal con- 
 veyance, had the effect of conferring on the purchaser the power of alienation. 
 Britt. c. 35 ; Mirr. c. i, § 3 ; 2 Bl. Com. 289. Hence, the proper sense of assign- 
 ment, in ancient conveyancing, seems to have been alienation by virtue of a 
 previous 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 
 assignment, 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. 
 
2 ASSIGNMENTS IN GENERAL. [CHAP. I. 
 
 transfer 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 char- 
 acter, which also presupposes a conveyance precedent.^ As 
 applied to personal estate, the term assignment has 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 sale, and 
 the instrument used to express and authenticate it, a bill 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 foi'm 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 mere indorsement of the 
 assignor's name.'' In many cases, however, no instrument 
 
 ' I Steph. Com. 485. Sir William Blackstone defines an assignment to be, 
 " properly 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. 
 Wooddesson restricts the proper meaning of the term to " the transfer of the in- 
 terest 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 " prop- 
 erly a transfer of some particular estate or interest in lands, but it is usually 
 applied to the transfer of a term for years." Cruise Dig. tit. xxxii (Deed), c. vii, 
 s. 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 con- 
 veyed 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 rever- 
 sion 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 
 established 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 
 particular sense. 
 
 " See 2 Bl. Com. 310, 324, 326. 
 
 = See 2 Steph. Com. 104 ; i Tucker's Com. (Laws of Virginia), [333] 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, 
 
 or 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 sale, but rather in contradis- 
 tinction from it ; being confined in its application either to 
 transfers of a special kind, auxiliary to sales, or in comple- 
 tion 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 applica- 
 tions, 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 Cred- 
 itors defined. — Voluntary assignments for the benefit of cred- 
 itors are transfers, without compulsion of law, by debtors, 
 of some or all of their property to an assignee or as- 
 signees, 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.'' 
 
 dorsement of negotiable paper. Shankland, J., in Bump v. Van Orsdale, 11 Barb. 
 634, 639. In the case of the Bank of Marietta v. Pindall (2 Rand. 465), it was, 
 said, " The term indorsement, when applied to bills of exchange negotiable by the 
 custom of merchants, or to paper made negotiable by our statutes, may, ex vi 
 termini, import a legal transfer of the title. But as to bonds and notes not nego- 
 tiable, the legal title to them passes by assignment only ; and as to them, in- 
 dorsement is not equivalent to assignment ; as to them, assignment means more 
 than indorsement — it means indorsement by one party with intent to assign, 
 and an acceptance of that assignment by the other party." Cabell, J., Id. 
 475 ; see also, on this point, Jagoe v. Alleyn, 16 Barb. 580 ; Watson v. Bailey, 2 
 Duer, 509. 
 
 ' The term assignment is frequently used in the books to express the transfer 
 of a promissory note by delivery. Edison v. Frazier, 4 Eng. (Ark.) 219, 220 ; 
 Jackson v. Heath, i 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, i8 Id. 532 ; but see Calkins v. Packer, 21 Id. 275 ; and see 
 Andrews v. Carr, 26 Miss. (4 Cush.) 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, fn Andrews, v. Carr {ub. sup.) it was held that the words transfer and 
 assign mean, in legal proceedings, 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 assignment, unless he qualifies the meaning of the words. 
 
 ^ Under the Pennsylvania statute an assignment has been defined to be " a 
 transfer by a debtor of the whole or a part of his effects to some person in trust 
 to pay all of his creditors in like proportion, and to return the surplus, if any, to 
 the debtor." Mr. Justice Lowrie, in Wiener v. Davis, 18 Penn. (6 Harris), 333. 
 
4 ASSIGNMENTS IN GENERAL. [CHAP. I. 
 
 Assignments, in this restricted sense, are distinguished 
 Avith reference to their subject-matter, as being of part or 
 of all the debtor's property.' The former are known as 
 general'' assignments, in distinction from partial assign- 
 ments, by which term the latter are defined. 
 
 Such assignments are termed voluntary ,3 to distinguish 
 them from such as are made by compulsion of law, as under 
 statutes of bankruptcy and insolvency (the latter being 
 sometimes termed statutory assignments), or by order of 
 some competent court. Assignments in the sense in which 
 they are here employed are usually resorted to by debtors 
 who find themselves unable to pay their creditors in full, or 
 the embarrassed state of whose affairs has compelled them 
 to discontinue the transaction of business, and, in some in- 
 stances, the provisions of the statutes* which have been 
 passed by the State Legislatures, regulating and restricting 
 the operation of such assignments, are confined exclusively 
 to assignments made by insolvents or by persons in con- 
 templation of insolvency ; but the solvency of the debtor, 
 in his own estimation or in fact, will not, apart from stat- 
 
 ' This division of the subject will be found more precisely stated in Chap. VIII. 
 ■" An assignment of all one's property for the benefit of all one's creditors is 
 ■clearly a general assignment." Mr. Justice Bennett, in Dana v. Lull, 17 Vt. 390. 
 " A general assignment must include substantially all a man's property ; and a 
 partial assignment must omit some substantial portion of the property, and can- 
 not be made to rest upon a mere colorable omission." Mr. Chief Justice Redfield, 
 in Mussey v. Noyes, 27 Vt. 474 ; Longmire v. Goode, 38 Ala. 577. 
 
 ^ In the case of The United States v. M'Lellan (3 Sum. 345), the designation 
 of voluntary assignments, 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 of some other creditors than the immediate grantees. Id. 354, 355 ; and see 
 Smith V. Woodruff, i Hilt. 469. 
 
 = Manny y. Logan, 27 Mo. 528. This is quite a different application of the 
 word voluntary from the technical sense in which it is frequently employed, 
 viz., that of being without consideration, or without valuable consideration. In 
 the latter sense, voluntary is sometimes used as synonymous with fraudulent, 
 though in other instances it is distinguished. See Nunn v. Wilsmore, 8 Term R. 
 521, 528, 529. Lord Mansfield, in Cadogan v. Kennett, Cowp. 432, 434, and in 
 Doe v. Routledge, Id. 705, 711; 4 Kent's Com. [463] 510; i Story's Eq. Jur. 
 •§ 353 ; 3 N. Y. Rev. Stat. (6th ed.) p. 145, § 4 ; and see Wells v. Treadwell, 28 
 Miss. (6 Cush.) 717 ; Lumpkin, J., in Clayton v. Brown, 17 Geo. (Cobb), 217, 222. 
 Mr. Roberts has alluded to the unsettled meaning of the term voluntary in this 
 application. Roberts on Fraud. Conv. 63, 65, 70, 71, 72, 400. 
 
 * See these statutes referred to in Chapter II. 
 
§ 3-] ASSIGNMENTS DISTINGUISHED. 5 
 
 utory provisions, unless connected with other evidence of 
 fraud, invalidate an assignment' 
 
 Voluntary assignments for the benefit of creditors are in 
 many respects peculiar to American law and practice,'' and 
 have in this country acquired a technical signification- 
 They are frequently refeired to by name in statutory enact- 
 ments as well as in judicial discussions, and a somewhat 
 more careful illustration of their characteristic features may 
 be necessary to distinguish them from other instruments 
 and modes of transfer to which they are in some respects 
 analogous. 
 
 § 3. Assignments Distinguished — Conveyances directly 
 to Creditors. — A voluntary assignment for the benefit of cred- 
 itors implies a trust and contemplates the intervention of a 
 trustee.3 Assignments directly to creditors, and not upon 
 trust, are not voluntary assignments for the benefit of cred- 
 itors.'' Assignments may be made either to the whole body 
 of the creditors or to particular creditors, or they may be of 
 all or of a part of the debtor's property ; but unless a trust 
 is thereby created by the assignor in favor of creditors, such 
 conveyances are not within the class of instruments known 
 as assignments for creditors.^ 
 
 ' Ogden V. Peters, 21 N. Y. 23 ; see Livermore v. Northrop, 44 N. Y. 107. 
 As to what constitutes insolvency, and the effect of solvency upon the right to 
 make assignments, see Chapter IV. 
 
 ^ Grover v. Wakeman, 11 Wend. 187. 
 
 ^ Cowles V. Rickett, i Iowa, 382 ; Dickson v. Rawson, 5 Ohio St. 218. And 
 where a railroad company executed a lease of its property for a term of years, 
 providing that the net earnings should be apportioned one half to the lessee and 
 the other half to the payment of certain debts of the lessor, this was regarded as 
 an assignment for creditors within the Pennsylvania statute. Mr. Justice Read, 
 in delivering the opinion of the court, said : " We have here property, a trustee, a 
 trust, and creditors of an insolvent company, who are to take under it." Mr. 
 Justice Hare, in the same case, said : " The means employed would seem to me 
 immaterial if the result were a transfer in trust, or a trust bottomed on a trans- 
 fer ; if, in short, the property ceased to be the debtor's without vesting directly 
 and absolutely in his creditors, and remained outstanding in the hands of a third 
 person who could not be compelled to render an account or to fulfill the duties 
 imposed on him without a recourse to the aid of equity." Lucas v. The Sunbury 
 & Erie Railroad Co. 32 Penn. St. 458. 
 
 ■* Claflin v. Maglaughin, 65 Penn. 492 ; Beach v. Beston, 47 III. 521 ; Keen v. 
 Preston, 24 Ind. 395 ; Harkins v. Bailey, 48 Ala. 377 ; Johnson v. McGraw, 1 1 
 Iowa, 151 ; Beans v. BuUett, 57 Penn. 221 ; Henderson's Appeal, 31 Penn. 502 ; 
 Banning v. Sibley, 3 Minn. 389 ; Griffin v. Rogers, 38 Penn. 382. 
 
 ° Whether it is so in trust, and the assignee or grantee such trustee, depends 
 
6 ASSIGNMENTS IN GENERAL. [cHAP. I. 
 
 It is not essential, however, that a trustee should be 
 named as such in the instrument' And when the creditor 
 undertakes, under an agreement with the assignor, to sell 
 the property and apply the proceeds to the payment of his 
 own and other debts of the assignor, and refund the surplus, 
 he becomes a trustee,and the transaction amounts to a vol- 
 untary assignment.'' 
 
 Assignments of the whole of a debtor's property di- 
 rectly to the whole body of the creditors are rare in practice, 
 although mentioned with approval in some judicial opin- 
 ions.3 The acts of taking possession of the property as- 
 signed, and applying it in satisfaction of the debts provided 
 for, are such as cannot always be performed by the cred- 
 itors personally, where they are at all numerous, but requires 
 the intervention of an agent who thereby becomes, in most 
 
 upon the question whether, by the terms of the instrument or by necessary impli- 
 cation, he is liable to account to the creditors for the property in his hands and for 
 the manner in which he disposes of it. If a Court of Chancery at the instance 
 of the creditor would compel him thus to account, the character of the transfer 
 and his own position are thereby determined. Dickson v. Rawson, 5 Ohio St. 
 218. 
 
 ' Burrows v. Lehndorff, 8 Iowa, 96. Mr. Ch. Justice Wright, in that case, re- 
 marked: "The fact that he (the debtor) appoints a trustee seems perhaps, in 
 most instances, to fix conclusively the character of the transaction as a general as- 
 signment." In that case, the instruments by which the assignments were made 
 were all mortgages, and therefore there was no trustee named ; but this was not 
 taken to be reason why the instruments should not be regarded as an assignment ; 
 and see Dickson v. Rawson, 5 Ohio St. 218. 
 
 ^ Truitt V. Caldwell, 3 Minn. 364 ; Page v. Smith, 24 Wis. 368. 
 
 ' This is the form of assignment for which Mr. "Justice Nelson expressed his 
 preference, in the case of Cunningham v. Freeborn (11 Wend. 240, 256, 257), in 
 the following language : " I would hold a debtor in failing circumstances to pay 
 or give security to his creditor or creditors directly, without the intervention of a 
 trustee who is often the creature of the debtor, without interest or sympathy on 
 behalf of the creditor. In this way the creditors would obtain the control of the 
 fund the moment the debtor parted with it ; and if favored creditors were pre- 
 ferred, they would be obliged to see to it that they took no more than was a fair 
 security for their debts. They should not be permitted to justify their possession 
 under the cover of trusteeship for others. Each creditor should be his own 
 trustee. If inconvenient for creditors personally to execute the trust, they could 
 appoint g. trustee in their place. This modification would have the effect to give 
 the possession and control of the fund, in the first instance, to the creditors, or to 
 a person appointed by them." In the case of Mussey v. Noyes, in the Supreme 
 Court of Vermont (26 Vt. 3 Deane, 462, 471), it was said by Chief Judge Red- 
 field, that " assignments made directly to the creditors, so as to require them to 
 name the trustee, and thus make him their man, instead of his being, as is too 
 often the case, the mere creature of the assignor are certainly entitled to the most 
 favorable consideration of the courts." 
 
§ 3-J ASSIGNMENTS DISTINGUISHED. 7 
 
 instances, a trustee for the creditors. In some cases the 
 assignment itself expressly directs or authorizes the appoint- 
 ment of such agent or trustee by the creditors.' In others, 
 the creditors agree among themselves that one of their 
 number shall act for the others.^' A trust also would result 
 for the debtor in the event of a surplus remaining after full 
 satisfaction of the debts. 
 
 ■ But provision by the method of direct transfer is more 
 commonly made in favor either of a single creditor, or of a 
 few selected creditors ; and a debtor may, in this way, trans- 
 fer all his property,^ or a specific portion of it, or some 
 single article or item.* Where the assignment is to a single 
 creditor, or to a few selected creditors, and is made abso- 
 lutely, and by way of full payment or satisfaction, it is, of 
 course, wholly divested of the character of a trust, and is in 
 the nature of an ordinary conveyance or sale for valuable 
 consideration.' But where it is made by way of security 
 
 ' This was the case in Tompkins v. Wheeler (i6 Pet. io6), the assignment giv- 
 ing to the creditors, or a majority of them, power to nominate and appoint an 
 agent, attorney, or trustee, to carry the purposes of the instrument into full effect. 
 It is to be observed, however, that the assignment in this case, though made di- 
 rectly to the creditors of certain specified classes, was expressly declared to be in 
 trust for the payment of the debts. 
 
 " This was the case in Adams v. Blodgett, 2 Woodb. & Min. 233. The cred- 
 itors agreed that one of them, in behalf of all, should go and take possession of 
 the property which the debtor had agreed to assign. O. L. was selected for that 
 purpose, and received from the debtor a written order to have the charge of all 
 his property, books and notes, &c., and to dispose of them for the benefit of all 
 his creditors. O. L. went accordingly and took possession. The court treated 
 O. L. as a trustee for the creditors. In Lockhart v. Stevenson (61 Penn. St. 64), 
 where a debtor in failing circumstances transferred his stock of goods to certain 
 of his creditors who had previously made an arrangement to divide the proceeds 
 among themselves, this was not regarded as an assignment for the benefit of cred- 
 itors. The fact that there may have been a trust created among the creditors as 
 to the distribution of the proceeds was not deemed material ; the trust was not 
 ■constituted by the assignor. 
 
 " Law v. Wyman, 8 N. H. 536; Barker v. Hall, 13 Id. 298; Henshaw v. 
 Sumner, 23 Pick. 446; Sargent v. Webster, 13 Mete. 497; Peck & Co. v. 
 Merrill, 26 Vt. (3 Deane), 686. 
 
 " Leitch v. Hollister, 4 N. Y. 211. 
 
 ' In the case of Dias v. Bouchaud (10 Paige, 445, 448, 461) the words "volun- 
 tary assignment" in the act of Congress of March 2, 1799, § 65, giving priorities 
 to the United States in cases of insolvency, were held by the chancellor to mean 
 an assignment of all the debtor's property, in trust, to pay debts, as contradistin- 
 guished from a mere sale of the property to a creditor, in payment of his debt, or 
 the pledge or hypothecation of the property to a particular, creditor, as a mere 
 security in the nature of a mortgage. In the same case on appeal (Bouchaud v. 
 
8 ASSIGNMENTS IN GENERAL. [CHAP. I. 
 
 only, or where a larger amount of property is assigned than 
 is supposed necessary to satisfy the debts to which it is 
 applied, a trust as to any remaining surplus results from the 
 nature of the security,' although no express provision to 
 that effect is contained in the transfer. Indeed, the trans- 
 action in such case is regarded by the courts, whatever may 
 be its form, as in legal effect only a mortgage, creating but 
 a specific lien on the property assigned. ^ 
 
 § 4. Distingtushed from Sales. — A sale, as we have seen,* 
 is in law a species of assignment (taking the latter word 
 in its broadest sense), and the affinity between the two 
 modes of conveyance is shown by the circumstance that 
 the instruments by which both are evidenced have usually 
 the same formal words of transfer, "assign, transfer, and 
 set over." In some cases, assignments have been drawn 
 in nearly the exact form of a bill of sale, with the feature 
 of a trust superadded.* Assignments have been spoken 
 of in judicial opinions as sales, the assignors as vendors,^ 
 and the assignees as purchasers ; * and the terms sale and 
 
 Dias, I N. Y. 201, 204), the act was further held to have intended an assign- 
 ment for the benefit of creditors in general, as distinguished from an assignment 
 for the benefit of a single creditor. In the case of the United States v. M'Lellan 
 (3 Sum. 345), it had been previously held by Mr. Justice Story, that a convey- 
 ance by a debtor known to be insolvent, of all his property, to one or more cred- 
 itors, in discharge of their own debts and liabilities, not exceeding the amount due 
 to and payable by them, and not for the benefit of the creditors at large, or of any 
 other creditors than the immediate grantees, is not a "voluntary assignment" for 
 the benefit of creditors within the purview of the act of 1799, so as to be affected 
 by the priority of the United States, unless it appear that it was made with the 
 intent to evade the priority given by the act. 
 
 ' Gardiner, J., in Leitch v. HoUister, 4 N. Y. 211, 216. 
 
 ^ Leitch v. Hollister, 4 N. Y. 211 ; Tompkins v. Wheeler, 16 Pet. 106; Peck 
 & Co. V. Merrill, 26 Vt. (3 Deane), 686, 691, where the cases are reviewed; 
 Solomon v. Sparks, 27 Ga. 385 ; Potter v. McDowell, 31 Mo. 62 ; Dana v. Stam- 
 fords, 10 Cal. 269. 
 
 " Ante, p. 2. 
 
 ' See Marbury v. Brooks, 7 Wheat. 556. An absolute bill of sale was called 
 and treated as an assignment, in Beers v. Lyon, 21 Conn. 604 ; so also, in Truitt 
 V. Caldwell, 3 Minn. 364. 
 
 ' See Foster v. Saco Manufacturing Co. 12 Pick. 451, 453. 
 
 " See the opinion of Story, J., in United States v. M'Lellan, 3 Sum. 345, 355 r 
 and see Hollister v. Loud, 2 Mich. (Gibbs), 309. In this case, an assignee was 
 considered by the court as a purchaser for a valuable consideration. See also. 
 
§ 4-] DISTINGUISHED FROM SALES. "9 
 
 assignment are frequently applied indifferently to the trans- 
 fer of choses in action.' But assignments, in the sense 
 in which they will be considered in the present work, are 
 clearly distinguishable from sales, not only in their occa- 
 sion and object, but in their essential legal qualities and 
 operation. Sales are transfers in the ordinary course of 
 business ; assignments commonly grow out of the embar- 
 rassments or suspension of business. A sale is usually for a 
 consideration actually paid, or agreed to be paid, and 
 created or passing simultaneously;'' an assignment is in 
 most cases for a consideration already executed, as for a 
 precedent or subsisting debt. An important distinction 
 between the two modes of transfer arises out of the char- 
 acter of a trust, which belongs to an assignment. A sale 
 (in cases free from fraud) is, on delivery of the thing sold 
 and receipt of the consideration, 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 the uses and trusts in favor of the 
 creditors,^ and upon their satisfaction a trust results in favor 
 of the assignor in the residue of the unappropriated prop- 
 
 Gates V. Lebaume, 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. 
 
 ' Hilliard on Sales, 338, 339. 
 
 '' A sale is a transferring of property from on person to another in consid- 
 eration of a sum of money to be paid by the vendee to the vendor. Long on 
 Sales, I. 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, S 
 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 (ist Am. ed.) p. i. But the fact 
 that a consideration is paid will not necessarily change the character of the trans- 
 action. Truitt v. Caldwell, 3 Minn., 364. 
 
 ' Dwight v. Overton, 35 Tex. 390. 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. Davis, 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. I, note I. 
 
lO ASSIGNMENTS IN GENERAL. [cHAP. I. 
 
 erty 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 covenants 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 pur- 
 chaser. The distinction between a sale and an assignment, 
 in this particular, has been judicially declared in Pennsyl- 
 vania. Thus, a conveyance of property by a debtor to two 
 of his creditors, for the use of them and others, in consid- 
 eration 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 subsist- 
 ing encumbrance beyond the amount realized from the 
 property assigned.-* In a case in the Court of Appeals of 
 New York,5 an assignment of real estate by a religious cor- 
 poration was construed to signify a sale, within the meaning 
 of the charter, although the court seem to have been willing 
 to concede that the assignment was not, strictly speaking, a 
 sale, in consequence of the equitable interest which the 
 assignors still retained in the application of the avails of the 
 lands. 
 
 ' In re Potter, 54 Penn. St. 465. 
 
 ' Johnson v. McGraw, 11 Iowa, 151 ; Hawkins v. Bailey, 48 Ala. 377; Claflin 
 V. Maglaughlin, 65 Penn. 492 ; Lockhart v. Stevenson, 61 Penn. 64 ; Keen v. Pres- 
 ton, 24 Ind. 395 ; and see Beach v. Bestor, 47 111. 521. 
 
 The fact that the consideration of the sale is to be applied in part to the pay- 
 ment of other debts than those of the vendee does not render the transaction an 
 assignment for the benefit of creditors. Johnson v. McGraw, supra ; Beach v. 
 Bestor, supra ; Beans v. Bullitt, 57 Penn. 221 ; Wilcoxson v. Annesley, 23 Ind. 
 285. 
 
 ^ Bebb V. Preston, i Iowa, 460. 
 
 ■■ 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 written 
 agreement on the part of the debtor to convey the property, subject to a full 
 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 
 cine transaction, and as amounting to a trust for creditors. 
 
 ^ De Ruyter v. St. Peter's Church, 3 N. Y. 238, 242. 
 
§§5,6.] DISTINGUISHED FROM AGENCIES. II 
 
 § 5. Distingtiished from Agencies. — 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 custody 
 and management of the assigned property is essential to 
 constitute such an assignment. Thus where a railroad com- 
 pany, having received certain State aid bonds, transferred 
 them to a trustee to be distributed among such of its cred- 
 itors as would accept them in payment at 95 cents on the 
 dollar, and provided 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. — 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. 
 And this affinity has been noticed and acted upon in several 
 judicial decisions. In the case of Tompkins v. Wheeler,^ 
 in the Supreme Court of the United States, the conveyance, 
 which was directly to creditors of certain classes, in trust to 
 pay debts, is called a general " assignment or mortgage? In 
 the case of Leitch v. HoUister,'' in the Court of Appeals of 
 New York, an assignment of a chose in action to certain 
 creditors for the purpose of securing their demands, was 
 considered as, in legal effect, a mortgage. In the later case 
 of Curtis V. Leavitt,5 in the same court, deeds of trust exe- 
 
 ■ Beans v. Bullitt, 57 Penn. St. 221 ; Henderson's Appeal, 31 Penn. St. 502 ; 
 Griffin v. Rogers, 38 Penn. St. 382 ; but see Watson v. Bagley, 12 Penn. St. 164. 
 
 '^ Banning v. Sibley, 3 Minn. 389. ' 16 Pet. 106. 
 
 * 4 N. Y. 211. Gardiner, 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. The 
 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. 
 
 ' 15 N. Y. (I Smith), 9. 
 
12 ASSIGNMENTS IN GENERAL. [CHAP. I. 
 
 cuted by a banking company to trustees for the purpose of 
 obtaining money upon certain bonds issued by the com- 
 pany, were considered by the court as, in fact, mortgages 
 given to secure the payment of money/ The vital distinc- 
 tion 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. An assignment is more than a 
 security for the payment of debts ; it is an absolute appro- 
 priation 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 Ohio, a mortgage given to a creditor to secure the 
 debt of any other creditor besides himself, has been held to 
 be an assignment within the provisions of the act of 1838, 
 relating to assignments by insolvent debtors, and the mort- 
 gagee to be a trustee for all the creditors.^ In the same 
 State, a chattel mortgage executed in contemplation of in- 
 solvency to a particular creditor, for the purpose of pre- 
 
 ' Brown, J., Id. 143. Paige, J., Id. 206, 207. Comstock, J., seems to have 
 taken a different view. Id. 1 26. 
 
 ' 21 N. Y. 574; s. C. 20 N. Y. 15. 
 
 ' State V. Benoist, 37 Mo. 500; Fromme v. Jones, 13 Iowa, 480; Vallance v. 
 Miners' Life Ins. Co. 42 Penn. 441 ; McBroom & Wood's Appeal, 44 Penn. 92 ; 
 Lawrence v. Nuff, 41 Cal. 566; Dana v. Standfords, 10 Cal. 269; Dunham v. 
 Whitehead, 21 N. Y. 131 ; McClelland v. Remsen, 3 Abb. Dec. N. Y. 74; Van 
 Buskirkv. Warren, 4 Id. 457. 
 
 • " If this were otherwise, and if the estate of the trustees were regarded as in 
 the nature of a lien, and subsequent conveyances, mortgages or judgments against 
 the assignor were considered analogous to conveyances of or liens upon an equity 
 of redemption, it would follow that the trustees could not convey an irredeemable 
 title to the lands assigned until they had foreclosed the rights of subsequent par- 
 ties. This is not the effect of a valid trust to sell lands. For the purposes of 
 sale in execution of the trust, the grantor of the trust and those holding derivative 
 titles under him are entirely disregarded, and their interests are subject to the exe- 
 cution of the trust, not in the sense in which a junior mortgage is subject to a 
 prior one, but absolutely. These parties have no rights, legal or equitable, until 
 the purposes of the trust are satisfied." Mr. Justice Denio, in Briggs v. Davis, 
 21 N. Y. 576. 
 
 ' Bloom V. Noggle, 4 Ohio St. (Ward.) 45 ; Harkrader v. Leiby, Id. 602. 
 
§ 7-] DISTINGUISHED FROM MORTGAGES. 1 3 
 
 ferring 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 — Illustrations. — 
 The distinction between voluntary assignments in trust for 
 creditors and mortgages 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 assignment 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 re- 
 corded 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 conveyances in trust for creditors under the stat- 
 ute of 1836, c. 238.'* In the same State a mortgage, in the 
 form of a deed with a defeasance, has been held not to be 
 
 ' Brown v. Webb, 20 Ohio (Lawr.) 389. Under the act of 1853 (i Rev. Stat. 
 of Ohio [S. & C], p. 713), all transfers, conveyances or assignments, made with 
 intent to hinder, delay and defraud creditors, inure to the equal benefit of all cred- 
 itors, and having been adjudged fraudulent, the property so conveyed is admin- 
 istered by the court, by an assignee appointed by it, " as in other cases of assign- 
 ments to trustees for the benefit of creditors." See Thomas v. Talmadge, 16 
 Ohio St. 433. 
 
 ' Ridgway 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 181 8 to be recorded were 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 
 appUed by the trustee to the payment of the debts owing by the assignors. 
 
 ^ Manufacturers' and Mechanics' Bank v. Bank of Pennsylvania, 7 Watts & 
 Serg. 335. 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 stat- 
 ute 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." Gibson, 
 Ch. J., Id. 343. A mortgage was distinguished from a trust deed in the case of 
 Hewitt V. Hullins, 11 Penn. St. (i Jones), 27 ; see also McBroom & Wood's Ap- 
 peal, 44 Penn. St. 92 ; Vallance v. Miners' Life Ins. Co. 42 Penn. St. 441 ; Dies- 
 bach V. Becker, 34 Penn. St. 152 ; Claflin v. Maglaughlin, 65 Penn. St. 492. 
 
 * Henshaw v. Sumner, 23 Pick. 446. 
 
14 ASSIGNMENTS IN GENERAL. [CHAP. I. 
 
 an assignment in trust for creditors/ 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 beriefit of 
 creditors." =■ In Connecticut, a mortgage by a debtor, of 
 real estate, to certain creditors to secure them for indorse- 
 ments, was held to be neither an assignment nor a convey- 
 ance nor in trust for creditors, within the meaning of the 
 statute of 1828.3 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 i, 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 1818, 
 " to prevent assignments," &c.5 In Virginia, where a con- 
 veyance of real estate was made to a creditor in trust to 
 satisfy his own demand, it was held that such conveyance 
 was not to be considered as a deed of trust, but as a mort- 
 gage, to which the right of redemption was incident.* And 
 in a case in the Court of Chancery of New York,' a vol- 
 untary assignment was distinguished both from a sale to a 
 creditor, and a pledge of property in the nature of a mort- 
 gage. 
 
 § 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 instru- 
 
 ' Harden v. Babcock, 2 Mete. 99. 
 
 - Barker v. Hall, 13 N. H. 298. And see Low v. Wyman, 8 Id. 536; and 
 see Danforth v. Denny, 25 N. H. 155. 
 
 ^ Bates V. Coe, 10 Conn. 280. 
 
 ' Peck V. Merrill, 26 Vt. (3 Deane), 686 ; McGregor v. Chase, 37 Vt. 225. 
 
 ° Lavender v. Thomas, 18 Ga. (Cobb), 668, 675, and cases cited ibid. ; Solo- 
 mon V. Sparks, 27 Ga. 385. See Code of Ga. (1873), § 1953. 
 
 ■ Chowning v. Cox, i Rand. 306. 
 
 ' 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. 131 ; McClelland 
 V. Remsen, 3 Abb. Dec. (N. Y.) 74 ; Van Buskirk v. Warren, 4 Abb. Dec. 457. 
 
 " Perry on Trusts, §§ 602 a et seq. 
 
§ 8.] DISTINGUISHED FROM DEEDS OF TRUST. 1 5 
 
 ments are both in law and equity substantially the same as 
 mortgages, and the radical distinction between them and 
 assignments for the benefit of creditors exists, as in the case 
 of mortgages, in the equitable interest which the grantor 
 still retains in the assigned property.' Frequently, especially 
 in the Southern States, assignments for the benefit of cred- 
 itors 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 inter- 
 mediately, as instruments of security against default of pay- 
 ment 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 ,3 or that the deed shall thereupon be void ; " or 
 e 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 special 
 deeds of trust with such conditions are frequently made 
 directly and exclusively to particular creditors, which gives 
 them still more of the character of a mortgage.' They are^ 
 in fact, mortgages with the qualities of an assignment in 
 trust superadded, or assignments to take effect at a future 
 day.^ 
 
 ' Wilson V. Russell, 13 Md. 495 ; Fouke v. Fleming, 13 Md. 392 ; Sander- 
 son V. Stockdale, 1 1 Md. 573 ; Pettil v. Johnson, 1 5 Ark. 60 ; but see Hannah v. 
 Carrington, 18 Ark. 85 ; Lyons v. Field, 17 B. Mon. (Ky.) 543. 
 
 ^ They are called " deeds to secure the payment of money," in Stine v. Wilk- 
 son, 10 Miss. 75. 
 
 ^ Hafner v. Irwin, i Ired. L. 490. 
 
 * Billups V. Sears, 5 Gratt. 31 ; Reynolds v. The Bank of Virginia, 6 Id. 174; 
 Cornish v. Dews, 18 Ark. 172. 
 
 " Lanier v. Driver, 24 Ala. 149 ; see Bates v. Coe, 10 Conn. 280. 
 
 " Hill V. Manser, 1 1 Gratt. 522 ; Farmers' _Bank v. Douglas, 1 1 Smed. & M. 
 469; Hopkins v. Lacontre, 4 La. 64; Elmes v. Sutherland, 7 Ala. 262 ; and see 
 Warren v. Lee, 32 Ala, 440 ; Magee v. Carpenter, 4 Ala. 469. Hamphill, J., in 
 Crosby v. Huston, i Tex. 203, 241, 242 ; but see Dwight v. Overton, 35 Tex. 39. 
 
 ' Burgin v. Burgin, i Ired. L. 453 ; Harris v. DeGraffenreid, ii Id. 89. 
 
 " See the observations of Pearson, J., in Stimpson v. Fries, 2 Jones' Eq. 1 56. 
 These instruments, however, are not exclusively peculiar to the Southern States. 
 In Hendricks v. Robinson (2 Johns. Ch. 283), the assignments, which were directly 
 to certain creditors, had a proviso that, if the debts and engagements secured by 
 
1 6 ASSIGNMENTS IN GENERAL. [cHAP. I. 
 
 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 stipula- 
 tion that, until default in payment, the assignor should retain 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 ten- 
 dency " directly opposed to the spirit and policy of the bankrupt laws." Ex parte 
 Harvey in re Collins, i Bankr. & Insolv. R. 194, 197. In the Ohio case of Hoff- 
 man V. Mackall (5 Ohio St. 124), an assignment or unconditional deed of trust 
 was distinguished from a deed of trust in the nature of a mortgage, in the follow- 
 ing terms : " There is a manifest and well-settled distinction between an uncondi 
 tional deed of trust and a jndrtgage or deed of trust in the nature of a mortgage. 
 The former is an absolute and indefeasible conveyance of the subject-matter 
 thereof, for the purpose expressed ; whereas the latter is conditional and defeas- 
 ible. A mortgage is the conveyance of an estate, or pledge of property, as secu- 
 rity for the payment of money or the performance of some other act, and condi- 
 tioned to become void upon such payment or performance. A deed of trust in 
 the nature of a inortgage 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 prop- 
 erty. A deed conveying land to a trustee as mere collateral security for the pay- 
 ment of a debt, with the condition that it shall become 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 unconditionally, 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, 216; 
 I 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 in- 
 solvency, and authorizes the grantee, after paying the expenses of the trust, to 
 make a pro rata distribution of the proceeds of the trust property among the 
 grantor's creditors, such deed is absolute, 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 mortgage to secure debts." 
 
CHAPTER II. 
 
 THE RIGHT TO ASSIGN; STATUTORY PROVISIONS RESTRICTING 
 THE RIGHT TO ASSIGN AND REGULATING THE OPERATION 
 OF ASSIGNMENTS. 
 
 § 9. Debtor's Right to Assign. — '' It would seem," ob- 
 serves Mr. Chief Justice Marsliall,' " 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 existing rights of others ; and 
 such disposition, if it be fair and real, will be valid. The 
 limitations on this power are those only which are pre- 
 scribed by law." The right to transfer is a necessary inci- 
 dent 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 rela- 
 tion of debtor and creditor has been created, it becomes 
 just and reasonable that the general power of disposition 
 should be so far restricted and qualified as that conveyances 
 and assignments by the debtor, especially of the whole or 
 greater part of his property, should not be employed as 
 means of preserving it for his own use or benefit, or of un- 
 duly protecting it from the remedies of his creditors. 
 
 § 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 
 
 ' Sexton V. Wheaton, 8 Wheat, 229, 242. 
 " 2 Kent's Com. [326] 377 ; Id. [328] 379 ; i Bl. Com. 138. 
 3 
 
i8 
 
 THE RIGHT TO ASSIGN. [CHAP. II. 
 
 into the jurisprudence of the United States. The first con- 
 sists of statutory provisions which simply declare convey- 
 ances by debtors in certain cases to be fraudulent and void, 
 and subject the property conveyed to the claims and rem- 
 edies 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 property is, on the commission of certain defined 
 acts, taken at once out of his hands by the law, and dis- 
 posed of for the general and equal benefit of the creditors. 
 The first of these comprises the provisions of those statutes 
 which are generally known as the statutes of fraudulent 
 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 as- 
 sign property for the benefit of creditors will be considered 
 in a subsequent chapter. 
 
 § II. Fraudulent Conveyances. — The statutory provis- 
 ions against fraudulent conveyances commenced in England 
 as early as the reign of Edward III," but were not fully 
 matured until the time of Queen Elizabeth, in whose reign 
 two statutes were passed — the 13 Eliz. c. 5, and 27 Eliz. c. 4 
 — the former relating to creditors only, the latter to pur- 
 chasers. The provisions of the 13 Eliz. c. 5, to which we 
 shall confine ourselves, and which is still in force in England, 
 have been generally adopted throughout the United States.^ 
 The preamble to this statute formally expresses its object to 
 be — " For the avoiding and abolishing of feigned, covinous, 
 and fraudulent feoffments, gifts, grants, alienations, convey- 
 
 ' Sometimes, though not with strict accuracy, called statutes of frauds. 
 
 ^ Stat. 50 Edw. Ill, c. 6; Crabb's Hist. Eng. Law (Am. ed. 1831), 274; Stat. 
 3 Hen. VII, c. 4 ; Crabb's Hist. 440 ; 2 Kent's Com. [440] 547 ; and see post. 
 Chapter XXV. 
 
 ^2 Kent's Com. [440] 548; 4 Id. [463] 510; i Story's Eq. Jur. § 353 ; see 
 Hamilton v. Russell, I Cranch, 309. 
 
§ 12.] CLASSIFICATION OF ASSIGNMENTS. 1 9 
 
 ances, bonds, suits, judgments, and executions, as well of 
 lands and tenements as of goods and chattels," &c. ; " which 
 feoffmefits, gifts, grants," &c., "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," &c. And the statute itself pro- 
 ceeds to declare that " every feoffment, gift, grant, alienation, 
 bargain, and conveyance of lands, tenements, hereditaments, 
 goods and chattels, or of any of them," &c., made with such 
 intent or purpose, shall be from thenceforth deemed and 
 taken (as against that person or persons, their heirs, &c., 
 whose actions, debts, &c., were or should be in anywise 
 disturbed, hindered, delayed or defrauded) " to be clearly 
 and utterly void, frustrate, and of none effect." ' These pro- 
 visions have been considered by the highest authority ' to 
 be only declaratory of the common law, which, in the opin- 
 ion of Lord Mansfield,^ was so strong against fraud, that it 
 alone would have attained every end proposed by the stat- 
 utes themselves. More will be said on this subject in an- 
 other place. 
 
 § 12. Classification of Assignments — Special or Par- 
 tial Assignments. — In tracing the history of the practice 
 of assignments by debtors, we find that they are, for the 
 most part, reducible under three principle divisions : first, 
 transfers of some specific article, or one or more descrip- 
 tions of property, directly to some favored creditor, and 
 for his exclusive benefit ; secondly, transfers of all or the 
 greater part of the debtor's property to one or more pre- 
 
 ' For the statute in full, and also the statutes of the various States, see Bump 
 on Fraudulent Conveyances, Appendix, pp. 583 et seq. ; Roberts on Fraudulent 
 Conveyances, pp. 2, 3 ; and see post, Chapter XXV. 
 
 " Co. Litt. 76 a, 290 b ; Lord Mansfield, in Cadogan v. Kennett, Cowp. 432, 
 434; Marshall, C. J., in Hamilton v. Russell, i Cranch, 309, 316; Story, J., in 
 Meeker v. Wilson, i Gall. 419, 423 ; Spencer, J., in Sands v. Hildreth, 14 Johns. 
 493. 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. 
 
 ° Cadogan v. Kennett, Cov^rp. 434. 
 
20 
 
 THE RIGHT TO ASSIGN. [cHAP. II. 
 
 f erred 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 all 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 ques- 
 tions of any kind. Where, however, the obligations of the 
 debtor are large, and the portion of his means thus specially 
 appropriated is considerable, and the rights of other cred- 
 itors become thereby affected, and especially where the 
 transaction is inconsistent with the prosecution of his busi- 
 ness, or is expressly done with reference to or in contem- 
 plation of suspension, failure, or bankruptcy, questions 
 frequently arise as to the validity of these special 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." 
 
 ' Under the present bankrupt law (§ 5128), in order to render a transfer void, 
 certain facts must concur. The debtor must be insolvent, the transfer 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 insolvent, and 
 that it was in fraud of the bankrupt act, and the transfer must be made within 
 four (in cases of involuntary or compulsory bankruptcy, two [§ 5 1 30 a] ) months before 
 the filing of the petition by or against the bankrupt. Bump on Bankruptcy (8th ed.) 
 
§ I3-J GENERAL ASSIGNMENTS. 21 
 
 In cases not within the bankrupt laws, these special .ox 
 partial assignments have been construed by the English 
 courts with reference to the common law, or the statute of 
 fraudulent conveyances ; and under these they have been 
 more frequently sustained/ And in the United States, 
 assignments of this class, made directly to particular cred- 
 itors, 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 ex- 
 pressly prohibited 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.3 
 
 § 13. General Assignments. — Assignments of the second 
 and third descriptions above mentioned (and which may 
 be distinguished 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 
 
 792 et seq. and cases cited ; Clark v. Iselin, 1 1 N, B. R. 337 ; Kohlsaat v. Hoguet, 5 
 N. B. R. 1 59 ; see Mays v. Fritton, 1 1 N. B. R. 229 ; s. c. 20 Wall. 414. As to pref- 
 erences under the bankrupt acts of 1800 and 1841, see Ogden v, Jackson, i Johns. 
 370, 373 ; Locke v. Winning, 3 Mass. 325 ; Freeman v. Darning, 3 Sandf. Ch. 327 ; 
 McAllister v. Richards, 6 Barr, 133 ; 2 Kent's Com. [532] 688 ; Jones v. Sleeper, 
 2 N. Y. Leg. Obs. 131. 
 
 ' Holbird v. Anderson, 5 Term R. 235 ; Estwick v. Caillaud, Id. 420. 
 
 "Seymour v. Wilson, 19 N. Y. 417; Towsiey v. McDonald, 32 Barb. 604; 
 McMahon v. Morrison, 16 Ind. 172; Hessing v. McCloskey, 37 111. 341. In the 
 late case of Archer v. O'Brien (Sup. Ct. Rep. [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. 
 Sucli a course is not only consistent with honesty, but is a duty which he owes 
 to himself, the observation of which is sanctioned by the rules of law author- 
 izing the preference which he obtains." 
 
 " To constitute a valid transfer by a debtor to his creditor, it is only necessary 
 that three things should concur : 
 
 " I. 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." 
 
 ' The York County Bank v. Carter, 38 Penn. St. 446 ; Tillou v. Britton, 4 Halst. 
 120 ; Meredith Man. Co. v. Smith, 8 N. H. 347 ; Brown v. Foster, 2 Mete. 152 ; 
 Eastman v. McAlpin, i Kelly, 1 57 ; Blakey's Appeal, 7. Barr, 449 ; Wilcox v. Kel- 
 logg, II Ohio (Stanton), 394 ; se.epost. Chapter XI. 
 
 * As to what are general assignments, see^osi, Chapter VIII. 
 
22 THE RIGHT TO ASSIGN. [CHAP. IT 
 
 creditors at large, comprise such as are made by debtors in 
 declining or insolvent circumstances ; and whenever brought 
 within the application of the bankrupt 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, assign- 
 ments of all a debtor's property, whether in favor of par- 
 ticular creditors, or of all the creditors, have frequently been 
 held valid.'' 
 
 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.^ The only checks and restrictions for a long time 
 
 ' Se.e.post, Chapter III. 
 
 ^ Inglis V. Grant, 5 Term R. 530 ; Nunn v. Wilsmore, 8 Id. 521 ; Goss v. Neale, 
 5 J. B. Moore, 19 ; Meux v. Howell, 4 East, i ; Pickstock v. Lyster, 3 M. & S. 371 ; 
 approved in Janes v. Whitbread, 20 L. J. Rep. (N. S.) C. P. 217. 
 
 ' " Eveiy 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. " 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, i8g. " It is settled that an insolvent debtor 
 may at any time before his property becomes bound by any lien, assign it over to 
 trustees for the benefit of all his creditors by an act made bona fide. The assign- 
 ment is to be referred to an act of duty, attached to his character of debtor, to 
 make the fund «ivailable for the whole body of the creditors." Kent, C, in 
 NicoU 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 question, provided it be bona fide." 2 Tucker's 
 Com. [443] 432. " The right to make a general assignment of all a man's p'rop- 
 erty results from that absolute ownership which every man claims over that 
 which is his own." Marshall, C.J., in Brashear v. W^est, 7 Pet. 608, 614. Gar- 
 land, J., in The United States v. The Bank of the United States, 8 Rob. (La.) 
 262, 404. " I think that where an assignment is for the benefit of all the cred- 
 itors of the assignor equally and ratably, it must command the sanction of every 
 enlightened tribunal. It is a practical enforcement of the maxim that equality is 
 equity." Buckner, C, in Robins v. Embry, i 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. (2 Wash.) 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 proceeding." Mr. 
 Justice Buchanan, in The State v. The Bank of Maryland, 6 Gill & Johns. 217. 
 
I4-] STATE STATUTES. 
 
 23:. 
 
 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 rigor- 
 ously applied 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 
 non-preferred creditors, was universally recognized ; and the 
 debtor was usually allowed a large discretion in prescribing 
 the terms upon which such preference, or indeed any benefit 
 of the assignme^nt 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 his 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 occasion- 
 ally noticed by the courts, and the increasing 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 stat- 
 utory regulations limiting, 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 inspec- 
 tion and control over the acts and proceedings of both. It 
 
 " 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, 124; Forbes v. Scannell, 13 Cal. 
 242. 
 
 ' Gibson, C. J,, in Thomas v. Jenks, 5 Rawle, 221. 
 
24 
 
 THE RIGHT TO ASSIGN. [CHAP. II. 
 
 is obvious, from what has been said, that the power to make 
 ■such assignments is not dependent upon these statutory- 
 provisions.' 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 en- 
 tirely from the grantor, and the appointment carries with 
 it an actual and not merely a theoretical trust and con- 
 fidence. 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 legislature to go further than to regulate, direct 
 and secure a performance of the trust.^ A general reference 
 to the statutes of the several States may be found con- 
 venient, reserving a consideration of the details for their 
 appropriate place in the course of the work. 
 
 § 15. Arkansas and Alabama. — In the former of these 
 States the legislation has been confined to provisions requir- 
 ing the filing of an inventory and bond,^ the presenting of an 
 account by the assignee,* and the regulation of the time and 
 mode of sale of the assigned property .= In the latter State, 
 every general assignment by which a preference or priority 
 of payment is given to one or more creditors over the 
 remaining creditors of the grantor is declared to inure to 
 the benefit of all the creditors of the grantor ratably,® and 
 such instruments are rendered fraudulent and void as to the 
 creditors of the grantor, when any creditor provided for 
 thereby is required to make any release or to do any other 
 act impairing his existing rights before participating in, or 
 receiving the securities therein provided him.' 
 
 ' Mr. Justice Sharswood, in Beck v. Parker, 65 Penn. St. 262 ; Cook v. Rogers, 
 13 N. B. R. 97 ; Bentley v. Thrasher, 59 N. Y. 649 ; S. C. 2 Sup'm Ct. (T. & C.) 309. 
 
 '' Drain v. Mickel, 8 Iowa, 438. 
 
 = Rev. Stat, of Ark. (ed. 1874), c. lo, § 385, p. 207; Act of Feb. 15th, 
 1859. 
 
 * Rev. Stat, of Ark. (ed. 1874), c. 10, § 386. " Ibid. § 387. 
 
 ' Rev. Code of Ala. (1867) § 1867. ' Ibid. § 1866. 
 
§§ l6, 17.] CALIFORNIA. — CONNECTICUT. 25 
 
 § 16. California. — Previous to the enactment of the civil 
 code of California,' all voluntary assignments by insolvent 
 debtors for the benefit of creditors, were deemed void, as 
 being included in the prohibition of the 39th section 
 of the insolvent laws of that State.'' Under the civil code, 
 however, insolvent debtors are expressly authorized to exe- 
 cute assignments of property to assignees ^ for the satisfac- 
 tion of their creditors, in conformity to the provisions there- 
 in contained, and subject to the requirements of the code 
 relative to trusts, to fraudulent transfers, and to the restric- 
 tions imposed by law upon assignments by special partner- 
 ships, by corporations and by other specific classes or 
 persons. The assignment is void against creditors not 
 assenting if it gives a preference or tends to coerce a 
 release or compromise, or if it provides 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, or if it reserves any interest in the assigned 
 property, or any part thereof, to the assignor or for his 
 benefit, before all his existing debts are paid, or if it confers 
 upon the assignee any power which, if exercised, might pre- 
 vent or delay the immediate conversion of the assigned 
 property for the purposes of the trust, or if it exempt him 
 from liability for neglect of duty or misconduct.-* The 
 statute likewise provides for the manner of executing the 
 assignment, for the filing of an inventory and bond, and 
 contains numerous provisions for the execution of the trust. 
 
 § 1 7. Connecticut. — In Connecticut, the assignment law 
 of the State, as embodied in the revision of 1849,= ^^^ only 
 prohibited preferences in assignments, by debtors in failing 
 
 ' Approved March 21st, 1872. y 
 
 "" Act of May 4th, 1852, General Laws of Cal. (ed. 1870) § 3848 ; Forbes 
 V. Scannell, 13 Cal. 242 ; Cheever v. Hays, 3 Cal. 471 (1853) ; Groschen v. Page, 
 6 Cal. 138 (1856). 
 
 ' Title 3, part 2, § 3449, p. 541 ; as amended by acts of 1873-4; see acts 
 amendatory of codes (1874). 
 
 ' Ibid. § 3457. 
 
 ' Rev. Stat. (ed. 1849;, p. 363, tit. 14, c. 4. 
 
26 THE RIGHT TO ASSIGN. [cHAP. II. 
 
 circumstances, in trust for the benefit of their creditors, but 
 contained a variety of provisions regulating the manner of 
 making such assignments, and of executing the trusts 
 created by them. The act of 1853, entitled "An act for 
 the relief of insolvent debtors, and for the more equal dis- 
 tribution of their effects among their creditors," as amended 
 and contained in the revision of 1875,' has gone much 
 farther, and has established a system resembling in principle 
 the insolvent system of Massachusetts ; under which, while 
 insolvent debtors are still allowed to make assignments to 
 trustees, as before the act, the execution of the trusts thus 
 created is placed under the supervision of the court of pro- 
 bate having jurisdiction of the case ; and the estates of such 
 debtors are required to be administered upon, and settled in 
 the manner provided by law for the settlement of insolvent 
 estates.^ 
 
 § 18. Delaware — Florida. — In the former of these States,' 
 any preference made in contemplation of insolvency in any 
 assignment for the benefit of creditors, either under its pro- 
 visions or otherwise, renders the assignment fraudulent and 
 absolutely void, and the estate and effects embraced therein 
 are liable to be taken on execution or attachment as fully 
 as if no such assignment had been made, and the person 
 making such assignment is deprived of the benefit of any 
 insolvent law of the State. Frauds and concealments in 
 reference to the assigned property subject the assignor to 
 punishment by fine and imprisonment.'' The general stat- 
 utes of Florida contain no provisions relating specially to 
 assignments for the benefit of creditors.^ 
 
 § 19. Georgia. — In Georgia, preferences by general 
 assignments to trustees were prohibited (the assignments 
 
 ' Gen. Stat. (rev. of 1875), p. 378. 
 
 'See Birdsey v. Vansands, 24 Conn. 176; Vansands v. Miller, Id. 180; 
 Coggill V. Botsford, 29 Conn. 439. 
 
 ° Revised Code of Delaware (ed. 1874), c. 132, § 4, p. 785. 
 
 ' Ibid. § 2. 
 
 ' Florida Digest (ed. 1872). 
 
§§ 20, 21.] IOWA. ILLINOIS. INDIANA. 2/ 
 
 containing them being declared null and void, and fraud- 
 ulent as against creditors), by the act of December 19, 
 1 8 18,' entitled " An act to prevent assignments or transfers 
 of property to a portion of creditors, to the exclusion and 
 injury of the other creditors, of persons who fail in trade, or 
 are indebted at the time of such assignment or transfer." 
 
 Under the code of Georgia, ° preferences are not now 
 invalid, nor do they invalidate the assignment. Sec. 1953 
 provides that a debtor may prefer one creditor to another, 
 and to that end he may bona fide give a lien by mortgage or 
 other legal means, or he may sell in payment of the debt, or 
 he may transfer negotiable papers as collateral security, the 
 surplus in such cases not being reserved for his own benefit 
 or that of any other favored creditor, to the exclusion of 
 other creditors. 
 
 § 20. Iowa. — The provisions of the act of 1857, c. 254, 
 incorporated into the code,^ render any general'' assign- 
 ment by an insolvent, or in contemplation of insolvency for 
 the benefit- of creditors, invalid, unless made for the benefit 
 of all creditors in proportion to the amount of their respect- 
 ive claims. The act also provides for the filing of an inven- 
 tory of the assigned property and the giving of a bond by the 
 assignee, and subjects him to the orders of the court. It 
 also provides for the determination of disputed claims, and 
 contains other provisions in reference to the powers and 
 duties of the assignee. 
 
 § 21. Illinois — Indiana. — In the State of Illinois no 
 special restrictions or regulations governing the making and 
 
 ' Prince's Digest (ed. 1837), p. 164. 
 
 " Code of Ga. (ed. 1873), p. 339 ; Act of 1865-6, p. 29 ; Rowland v. Coleman, 
 45' Ga. 204. 
 
 = Iowa Code (1873), tit. xiv, c. 7, §§ 2115-2128. 
 
 * A debtor may still pay or secure the claims of part of his creditors to the 
 exclusion of others. Davis v. Gibbon, 24 Iowa, 257. He may make a partial 
 assignment to certain creditors, with or without preferences. Lampson v. Arnold, 
 19 Iowa, 480 ; and see Farewell v. Howard, 26 Iowa, 381 ; Hutchinson v. Wat- 
 kins, 17 Iowa, 475 ; Fromme v. Jones, 13 Iowa, 474, 480. 
 
28 THE RIGHT TO ASSIGN. [CHAP. II. 
 
 operation of assignments have been adopted by the legis- 
 lature, except in the cases of special partnerships.' In the 
 State of Indiana/ however, an elaborate system prevails, in 
 compliance with the provisions of which every general as- 
 signment must be made, or it will be deemed fraudulent and 
 void. The assignment must be by indenture, signed, ac- 
 knowledged and recorded, and must contain a full descrip- 
 tion of all real estate thus assigned, and be accompanied by 
 a schedule containing a particular enumeration and descrip- 
 tion of all the personal property assigned, verified under the 
 oath of the assignor. The assignee is required to file a copy 
 of the assignment and inventory with the clerk of the 
 Court of Common Pleas and make oath that he will faith- 
 fully execute the trust, and that the assigned property has 
 been actually delivered into his possession. He is also 
 required to give bonds. The act prescribes in detail the 
 duties of the assignee in the administration of the estate, 
 the sale of the property, and its distribution, and also pro- 
 vides for the removal and discharge of the assignee. 
 
 § 2 2. Kansas — Kentucky. — In the State of Kansas, every 
 voluntary assignment must be made for the equal benefit of 
 creditors. An inventory and bond are required to be given 
 and filed, and the proceedings on the collection and distribu- 
 tion of the estate are fully prescribed. ^ By a recent act, au- 
 thority is given to the creditors to select an assignee to take 
 the place of the assignee named in the instrument, and if the 
 creditors fail to make choice of an assignee, or the assignee 
 chosen fails to accept, the judge of the District Court, or in 
 his absence the judge of probate, makes the appointment.* 
 The assignee named in the assignment has no other power 
 thereunder than the safe keeping and control of the property 
 
 ' Rev. Stat. 111. (ed.'i874), c. 84, § 22, p. 680. 
 
 "" Stat. Ind. (2d ed. 1870), vol. i, p. 114; Laws of 1859, p. 239. 
 
 = General Stat, of Kansas, 1868, c. 6, §§ 1-39, p. 93. 
 
 * Laws of 1876, c. loi. 
 
§ 23.] LOUISIANA. — MAINE. 29 
 
 coming into his hands and the delivery of the same to the 
 assignee selected by the creditors. Under the general stat- 
 utes of Kentucky, incorporating the provisions of the acts 
 of 1856 and 1862,' assignments made in contemplation of 
 insolvency, with the intent to give a preference, inure equally 
 to the benefit of all creditors in proportion to the amount of 
 their respective demands, including those which are future 
 and contingent. The proceedings under the assignment are 
 subject to the control of a Court of Equity, and are con- 
 ducted as proceedings for the settlement of the estates of de- 
 ceased persons. Judgments and any act or device resorted 
 to by debtors in contemplation of insolvency are included in 
 the operation of the act. 
 
 § 23. Louisiana — Maine. — In Louisiana the laws in re- 
 lation to the cession of property afford to debtors such 
 facilities in giving up their property for the benefit of cred- 
 itors, 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.^ In Maine, prefer- 
 ences in assignments were prohibited by the act of April i, 
 1836.3 By the act of March 21, 1844,'* assignments were 
 declared to inure equally to the benefit of all creditors who, 
 upon notice, should become parties to them. In 1846 and 
 1849, additional acts. were passed on the subject. All these 
 are now superseded by later provisions, embodied in the re- 
 vised statutes, regulating the manner of making assignments 
 by debtors, and the course of proceedings under them,= 
 under which every assignment, in whatever form or how- 
 ever expressed, shall inure to the equal benefit of all cred- 
 
 ' General Stat. Ky. (ed. 1873), c. 44, art. 2, p. 490. 
 
 ' Garland, J., The United States v. The Bank of the United States, 8 Rob. (La.) 
 262, 404. 
 
 'Laws of Maine, 550, c: 761. Rev. Stat. (ed. 1841.) p. 804, appendix; 
 Pike V. Bacon, 21 Me. 280. This act has no force since the enactments of 1844, 
 1846 and 1849. 
 
 * Laws of 1844, p. 100. 
 
 " Rev. Stat. (ed. 1871), p. 543. 
 
30 THE RIGHT TO ASSIGN. [cHAP. II. 
 
 itors, and shall be construed to pass all the estate of the as- 
 signor not exempt from attachment. 
 
 § 24. Massachusetts.— Ivl Massachusetts, the practice of 
 making voluntary assignments appears to have grown out of 
 the operation of the old system of attachment, under which 
 the creditor was allowed to attach the personal property of 
 his debtor, on mesne process, and hold it as security for such 
 judgment as he might recover.' This right- of attachment 
 was founded upon early colonial laws, and its exercise be- 
 came reduced to a system which has long been firmly estab- 
 lished in that State.^ It was partial and exclusive, however, 
 in its operation, giving to any single creditor whose demand 
 was sufficiently large, without regard to the origin of his 
 debt, the privilege of seizing and appropriating to his sole 
 use all the effects of the insolvent, leaving all other creditors 
 entirely without remedy. ^ To remedy the evils of this sys- 
 tem, the practice of voluntary assignments was resorted" to, 
 with a professed view to make a fair distribution of all the 
 effects and credits of the insolvent among all his creditors, in 
 proportion to their several demands.-* This practice, at first 
 questioned, was, however, tolerated, and finally became sanc- 
 tioned by a course of judicial decisions, which extended the 
 right of assignment, as in other States, to the giving of pref- 
 erences to one or more creditors over others.^ Had it not 
 been for this allowed feature of preference, the system of as- 
 signment might have entirely superseded that of attachment, 
 and, in the language of Mr. Chief Justice Parker, there could 
 have been no reasonable complaint if it had.* As it was, 
 both systems were maintained, though in constant antago- 
 
 ' Parker, C. J., in Lupton v. Cutter, 8 Pick. 298, 301 ; Shaw, C. J., in Russell 
 V. Woodward, 10 Id. 407, 411. 
 
 ^ Id. ibid. 
 
 ' Parker, C. J.-, in Lupton v. Cutter, ub. sup. 
 
 ' Id. ibid. 
 
 ° Id. ibid.; Russell v. Woodward, 10 Pick. 407 ; Shaw, C. J., in Foster v. Saco 
 Manufacturing Co. 12 Id. 451, 453 ; Dewey, J., in Nostrand v. Atwood, 19 Id. 281, 
 284. 
 
 " Lupton V. Cutter, 8 Pick. 298, 301, 302. 
 
§ 24-] MASSACHUSETTS. 3 1 
 
 nism to each other ; creditors striving by their attachments to 
 gain preferences for themselves, and debtors constantly en- 
 deavoring, by assignments, to give such preferences to others. 
 A very material check, however, was given to the exercise 
 of the right of assignment, by the uniform course of judicial 
 decisions, which made the assent of creditors a necessary re- 
 quisite to the validity of an assignment as against subse- 
 quently attaching creditors.' This state of things contin- 
 ued — the attachment system on the whole maintaining its 
 ascendancy, thoughthe evils and abuses of both were fully 
 acknowledged'' — until the year 1836; when a statute was 
 passed,^ the object of which was to restrict the right of as- 
 signment on the one hand, by prohibiting preferences by 
 debtors, and to limit the right of attachment on the other, 
 by making assignments for the general benefit of creditors, 
 executed in a certain form, valid as against all subsequent at- 
 tachments and executions by individual creditors.'' This 
 statute dispensed with the necessity of the assent of creditors, 
 as a prerequisite to the vesting of the property in the as- 
 signee, and the placing of it beyond liability to future attach- 
 ments.^ It did not, however, wholly proscribe the principle 
 of preference, as it allowed to exist in full force the right to 
 secure a lien or preference in favor of any creditor, by an at- 
 tachment made before the execution of the assignment.^ But 
 
 ' See Widgery v. Haskell, 5 Mass. 144, 154; Stevens v. Bell, 6 Id. 339, 342 ; 
 Ingraham v. Geyer, 13 Id. 146 ; Marston v. Coburn, 17 Id. 454 ; Russell v. Wood- 
 ward, 10 Pick. 408 ; Morton, J., in Fall River Iron Works Co. v. Croade, 15 Id. 
 II, 15, 16 ; and in Everett v. Walcott, Id. 94, 97 ; Shaw, C. J., in Burlock v. Tay- 
 lor, 16 Id. 335, 339. In the United States Circuit Court for Massachusetts, dif- 
 ferent views were held by Mr. Justice Story, and were ably illustrated and en- 
 forced in the leading case of Halsey v. Whitney ; but the State courts continued 
 to sustain what was regarded as the local policy of the State, down to the passage 
 of the statute of 1836. 
 
 ' Parker, C. J., in Lupton v. Cutter, 8 Pick. 298, 301 ; Wilde, J., in Pingree v. 
 Comstock, 18 Id. 46, 51. 
 
 ' " An act to regulate the assignment and distribution of the property of in- 
 solvent debtors," passed April 15, 1836. Stat, of 1836, c. 238 ; Supplements to 
 Rev. Stat. 1844 and 1854, p. 6. 
 
 * See observations of Shaw, C. J., in Perry v. Holden, 22 Pick. 269, 275 ; and 
 of Dewey, J., in Henshaw v. Sumner, 23 Id. 446, 452. 
 
 ^ Dewey, J., in Shattuck v. Freeman, i Mete. 10, 13. 
 
 " Dewey, J., in Henshaw v. Sumner, 23 Pick. 452. 
 
32 
 
 THE RIGHT TO ASSIGN. [cHAP. 11. 
 
 in 1838 the principle of entire equality in distribution was 
 more effectually carried out by the " act for the relief of in- 
 solvent debtors, and for the more equal distribution of their 
 effects." ' This statute in fact established a complete system 
 of insolvency, with many of the features of a bankrupt 
 law, and is considered to have abolished all voluntary pay- 
 ments, assignments, and preferences, made in contempla- 
 tion of insolvency." In Carter v. Sibley,^ the Supreme 
 Court of Massachusetts held that it repealed the statute of 
 1836, so far as the two statutes affected the same class of per- 
 sons ; but the court, in delivering their opinion, intimate that 
 an assignment at common law, or in the form in use before 
 the statute of 1836, if upon adequate consideration and 
 legally assented to by creditors, might still be valid. ■* The 
 same opinion was maintained by Mr. Justice Woodbury, in 
 the case of Adams v. Blodgett,^ in the Circuit Court. In 
 the case of Edwards v. Mitchell,^ it was expressly held by 
 the Supreme Court of the State, that the assignment law of 
 1836 was repealed by the insolvent law of 1838, only so far 
 as the provisions of the two statutes were inconsistent with 
 each other. In the case of Zipcey v. Thompson,' it was held 
 
 " Passed April 23, 1838. Stat, of 1838, c. 163; Supplements to Rev. Stat. 
 1844 and 1854, pp. 83, 99. There have since been passed on the same subject, 
 the acts of March 18, 1841 (Stat, of 1841, c. 124; Supplements, p. 203), and of 
 March 16, 1844 (Stat, of 1844, c. 178 ; Supplements, p. 316) ; and these three are 
 now taken as constituting one system. Ex parte Jordan, 9 Met. 292, 394 ; see 
 Wall V. Lakin, 13 Id. 167. More recently there have been passed on the same 
 subject, the acts of March 30, 1846 (Stat, of 1846, c. 168; Supplements to Rev. 
 Stat. 1854, p. 381) ; of May 20, 1851 (Stat, of 1851, c. 189 ; Supplements, p. 674) ; 
 of May 24, 1851 (Stat, of 1851, c. 349; Supplements, p. 783) ; of May7,i852 
 (Stat, of 1852, c. 189; Supplements, p. 833) ; of April i, 1853 (Stat, of 1853,0. 116 ; 
 Supplements, p. 938) ; of April 15, 1854 (Stat, of 1854, c. 329 ; New Supplements, 
 p. 53) ; and of May 17, 1855 (Stat, of 1855, c. 363 ; New Supplements, p. 202). 
 See also the important acts of May 13, 1856, and of June 6, 1856, referred to 
 post p. 33. 
 
 '^ Kent's Com. [532] 690, note. 
 
 ' 4 Mete. 298. • Id. 300, Shaw, C. J. 
 
 ' 2 Woodb. & M. 233, 243. 
 
 ° Decided, March Term, 1854 ; i Gray, 239 ; see also the opinion of Shaw, C. 
 J., in Wyles v. Beals, Id. 233, 236. 
 
 ' Decided at the same term ; \ Gray, 243. 
 
§ 24.] MASSACHUSETTS. 
 
 33 
 
 as against a New York assignment giving preferences, that the 
 eleventh section of the statute of 1836, requiring assignments 
 to be so made as to allow all the creditors to become parties 
 to it, if they should see fit, w^s not repealed by the statute of 
 1838. In Edwards v. Mitchell it was further held that an as- 
 signment by a debtor of all his property to a trustee for the 
 benefit of his creditors was inconsistent with the spirit and 
 provisions of both statutes, and was voidable by any cred- 
 itor who did not assent to it. In Wyles v. Beals,' the same 
 doctrine was maintained in regard to an assignment by part- 
 ners. But in Bigelow v. Baldwin,^ an assignment of prop- 
 erty by a debtor to a trustee for the benefit of creditors was 
 held to be valid as between the parties executing it, notwith- 
 standing both statutes. The chief justice, in delivering the 
 opinion of the court in this case, said it had "repeatedly 
 been decided that such assignments are voidable only, not 
 void ; " that the assignment could be avoided only by a 
 creditor or other person not a party to it ; and that, as no 
 act had been done in the case having a tendency to avoid it, 
 the parties were bound by it. Since these decisions, the as- 
 signment law of 1836 has been expressly repealed by the 
 adoption of the general statutes in 1860.^ That statute hav- 
 ing been repealed,* an assignment, even if voidable by an 
 assignee in insolvency or bankruptcy, cannot be avoided by 
 a creditor for his individual benefit withput proof of that 
 which would constitute fraud at the comn^n law.' 
 
 , ' Decided at the same term ; Id. 233. In this case clauses were introduced 
 into the assignment for the express purpose of avoiding the effect of the insolvent 
 lavirs, but they were held to be inoperative. See also Mann v. Huston, Id. 250. 
 ' Decided at the same term ; i Gray, 245. 
 
 * Stat, of 1856, c. 163 ; Nevv Supplements to Rev. Stat. p. 309; The Mechan- 
 ics' & Traders' Bank v. Eagle Sugar Refinery, 109 Mass. 38. 
 
 * Stat, of 1856, c. 284; New Supplements, p. 355. In Curtis' American 
 Conveyancer (ed. 1847), p. 39, note, it seems to be assumed that there are no 
 forms of assignment in use in Massachusetts, except those prescribed by the stat- 
 ute of 1838, where the assignment is the act of the court or commissioner charged 
 with the jurisdiction of the case. See the statute, §.5 ; but see the cases of 
 Wyles V. Beals, Edwards v. Mitchell, and Bigelow v. Baldwin, referred to supra ; 
 and see May v. Wannemacker, 1 1 1 Mass. 202. 
 
 ' National Mechanics' & Traders' Bank v. Eagle Sugar Refinery, 109 Mass. 38 ; 
 
 3 
 
34 THE RIGHT TO ASSIGN. [CHAP. II. 
 
 § 25. Maryland— Michigan— Minnesota— Mississippi. — 
 In Maryland it is expressly provided that no assignment 
 shall be deemed fraudulent because of a condition requiring 
 the creditors to release the dejjtor, and depriving any cred- 
 itor who refuses to release of all benefit from property so 
 conveyed.' The assignee is required to file a bond before any 
 title passes to him, and his failure to do so will empower the 
 court, upon notice to creditors, to appoint another trustee. = 
 It is the duty of the assignee also, within six months after 
 giving the bond, to make a report of the whole amount of 
 the trust estate, and of the disposition made of the same.^ 
 In Michigan, Minnesota, and Mississippi, no special legis- 
 lation regarding assignments, as to their execution and 
 mode of operation, has been had. 
 
 § 26. Missouri— North Carolina. — In Missouri,-* every 
 voluntary assignment made by -a debtor to any person, in 
 trust for his creditors, must be for the benefit of all the 
 creditors, in proportion to their respective claims. An in- 
 ventory and bond are required to be filed, and very full 
 provision is made for the accounting by the assignee, and 
 for his discharge from the trust. In North Carolina, assign- 
 ments for creditors are regulated only by the rules of com- 
 mon law and the special statutes of the State respecting 
 conveyances. 
 
 § 27. New Hampshire — New Jersey. — In New Hamp- 
 shire,^ every assignment is required to provide for a pro- 
 portional distribution of the assignor's estate, and passes all 
 the debtor's estate to the assignee. In New Jersey,* assign- 
 ments are, in like manner, required to be for the equal 
 benefit of creditors, and all preferences are declared fraud- 
 
 Cardenay v. New England Furniture Co. 107 Mass. 116 ; May v. Wannemacker, 
 III Mass. 202. 
 
 ' Maryland Code (i860), art. 48, § 13, p. 346. 
 
 ' Laws of 1874, c. 483, §§ 107 et seq. = Id. § in. 
 
 * Stat, of Mo. (Wagner), c. 9, p. 150. 
 
 ° General Statutes of New Hampshire (ed. 1867), c. 126, p. 262. 
 
 • Rev. Stat. (1874), p. 8 ; see Laws of 1876, c. 60. 
 
§ 28.] NEW YORK. 35 
 
 ulent and void.' The statutes in each of these States con- 
 tain a variety of provisions regulating the manner of 
 executing the trusts on the part of the assignees or trustees, 
 and defining their duties and powers. 
 
 § 28. New York. — Previous to the act of 1860,^ there 
 were no restrictions placed upon the general power to assign 
 property for the benefit of creditors, except in the cases of 
 corporations and limited partnerships, and these conveyances 
 were governed by the statute of fraudulent conveyances, as 
 applied and construed by the courts, and certain general 
 provisions of the revised statutes relative to the creation of 
 trusts. The act of i860 has been frequently amended.' It 
 requires that the assignment shall be in writing, shall be 
 acknowledged, and a certificate of such acknowledgment 
 indorsed upon it before its delivery to the assignee or 
 assignees therein named. The debtor is required to deliver 
 to the county judge, within twenty days after the date of 
 the assignment, a verified inventory and schedule of his 
 assets and liabilities. His failure to do so, however, will 
 not invalidate the assignment ; but the assignee may, within 
 six months, file an inventory of such property of the debtor 
 as he may be able to find. Within ten days after the de- 
 livery of the inventory, " and before he shall have power or 
 
 ' But preferences not declared in the assignment, and not made in contempla- 
 tion of it, are not prohibited by the act. Moses v. Thomas, 26 N. J. L, 124; 
 Van Waggoner v. Moses, Id. 570 ; Garretson v. Brown, 26 Id. 425. 
 
 = Laws of i860, c. 348 ; Rev. Stat. (6th ed.) vol. Ill, pp. 32, 33 ; Fay's Dig. 
 vol. I, p. 394. Two treatises on this statute have recently been published — 
 Hawes on Assignments and Keiley on Insolvent Assignments. 
 
 ' Laws of 1867, c. 860 ; Laws of 1870, c. 92 ; Laws of 1872, c. 838 ; Laws of 
 1873, c. 363 ; Laws of 1874, c. 600 ; Laws of 1875, c. 56. 
 
 This statute and its amendments do not make any alteration in the common- 
 law rules of law governing assignments. " Its main object and purpose," says 
 Mr. Justice Daniels, in People v. Chalmers (8 Sup. Ct. R. [l Hun], 683), appears 
 to have been to render general assignments by insolvent debtors more efficient 
 and certain in the execution of the design for which the common law permitted 
 them to be made, and to secure the full and faithful application of the debtor's 
 property to the discharge of the creditors' demands according to the directions 
 contained in the assignment." 
 
 It is not necessary that an assignment executed in compliance with the law of 
 a foreign country, by non-residents, should conform to the requirements of the 
 act, in order to sustain the title of the assignee to property which has come into 
 his possession in this State. Ockerman v. Cross, 54 N. Y. 29. 
 
36 THE RIGHT TO ASSIGN. [CHAP. II. 
 
 authority to sell, dispose of, or convert to the purposes of 
 the trust any of the assigned property," the assignee is 
 required to enter into a bond, in an amount to be directed 
 by the county judge, to the people of the State, with suffi- 
 cient sureties for the faithful performance of the trust and 
 due accounting for the assigned property. And after the lapse 
 of one year, upon the petition of any creditor of the assignor, 
 the assignee may be required to show cause before the county 
 judge why an account of the trust fund created by the 
 assignment should not be made ; and that officer, on the 
 hearing, is authorized to decree payment of such creditor's 
 proportional part of such fund. The act also provides for 
 the prosecution of the- assignee's bond, and for the record- 
 ing of the assignment and the fihng of the inventory and 
 bond. 
 
 § 29. Ohio. — In Ohio, by the act of February 23, iSss,"- 
 all assignments of property thereafter made by debtors to 
 trustees, in contemplation of insolvency, and with the de- 
 sign to secure one class of creditors and defraud others, were 
 declared to inure to the benefit of all the creditors of the 
 assignor, in proportion to their demands.'' ' This act was 
 directed only against fraudulent conveyances to trustees, 
 and did not affect conveyances made to a creditor, nor con- 
 veyances made to trustees without fraud.' The act of March 
 14, 1838,* went farther, and provided that all assignments of 
 property in trust (whether fraudulent or not), which should 
 be made by debtors to trustees, in contemplation of insolv- 
 . ency, with the design to prefer one or more creditors to the 
 exclusion of others, should be held to inure to the benefit 
 of all the creditors, in proportion to their respective de- 
 mands. It was further provided by this statute, that such 
 
 ' 33 Ohio Stat. 13 ; Cunven, i6i. 
 
 '^ Under this statute the conveyance was void, as to the preference created,, 
 although the fraudulent intent was confined exclusively to the assignor. Harsh- 
 man V. Lowe, 9 Ohio (Hammond), 92. 
 
 " Hulls V. Jeffrey, 8 Ohio (Hammond), 390 ; Lane, J., Id. 391. 
 
 * Swan's Stat. (ed. 1841), pp. 717, 718, § 68 ; Curwen, 424. 
 
§ 29-] OHIO. 37 
 
 trusts should be subject to the control of chancery, as in 
 other cases ; and the court, if need be, might require security 
 of the trustees for the faithful execution of the trusts, or remove 
 them and appoint others, as justice might require.' But 
 ■conveyances by debtors, other than those made to trustees, 
 were not affected by either of the above-mentioned statutes.'' 
 A creditor still retained the right to receive from his 
 debtor, in good faith, an assignment or conveyance of prop- 
 erty to pay the debt or to secure it,^ and it was still possible, 
 when fraudulent conveyances were made not upon trust, for 
 the judgment creditor whose superior diligence entitled him 
 to that reward to secure the lien of his judgment by filing 
 ^is bill in equity to set aside such conveyances, and thus a 
 preferential distribution of the estate of an insolvent who 
 had assigned the whole or a part of his estate in fraud of 
 his creditors, might be obtained. This inequality was re- 
 moved by the act of 1853,'* by which all fraudulent convey- 
 ances are made to inure to the equal benefit of all creditors 
 and create a trust to be administered by the court as in case 
 of assignments to trustees for the benefit of creditors. By 
 the act of February 12, 1863,= the common-law rights of 
 creditors were so far restored as to give to the creditor insti- 
 tuting the proceedings to set aside the fraudulent convey- 
 ance, and to such other creditors as should become parties, a 
 preference over other creditors ; but before such preference 
 can be obtained, the opportunity must be presented to all 
 the creditors of becoming parties by giving them the re- 
 quired notice of the pendency and object of the suit.^ 
 
 ' See also, to the same effect, the act of March 14, 1853 ; 51 Ohio Stat. 463 ; 
 Swan's Stat. (ed. 1854), p. 468 (69), § i ; Curwen, 2239. 
 
 " Hulls V. Jeffrey, 8 Ohio (Hammond), 390; Lane, J., Id. 391. See Mitchell 
 V. Gazzam,"l2 Ohio (Stanton), 315. 
 
 ' Brown v. M^ebb, 20 Ohio, 389 ; Fasset v. Traber, lb. 545 ; Doremus v. 
 O'Hara, i Ohio St. 45, disapproving Mitchell v. Gazzam, 12 Ohio, 315 ; Atkinson 
 V. Tomlinson, i Ohio St. 237 ; Bloom v. Nogle, 4 Ohio St. 46 ; Harkrader v. Liby, 
 Jb. 206. 
 
 * I Rev. Stat. (S. & C.) p. 713- 
 
 " Stat, of Ohio (Sayler), vol. i, p. 354, c. 337. 
 
 ' Jameson v. McNally, 21 Ohio St. 295 ; and see Thomas v. Talmadge, 16 
 
38 THE RIGHT TO ASSIGN. [CHAP. II. 
 
 In 1859, an act entitled "An act regulating the mode of 
 administering assignments in trust for the benefit of credit- 
 ors," ' was enacted, which has been several times amended.'* 
 This act, with its several amendments, prescribes in detail 
 the dutie's of the assignee, and confers upon creditors 
 powers and privileges resembling that obtained under the 
 bankrupt act in the selection of the assignee ^ and the ex- 
 amination of the debtor.* 
 
 § 30. Pennsylvania. — In Pennsylvania, the earliest stat- 
 ute expressly affecting assignments for creditors, was the act 
 of March 24, 1818,^ which required them to be recorded in 
 the county in which the debtor resided, within thirty days 
 after execution. By the same act, assignees for the benefit 
 of creditors were brought more directly within the jurisdic- 
 tion of the courts ; the act conferring on these tribunals the 
 power of a chancellor, to compel the performance of such a. 
 trust, by calling for security, or dismissal of a defaulting or 
 negligent assignee, and the substitution of another.^ The 
 system thus commenced was more fully developed and per- 
 fected by the act of June 14, 1836,' which provided addi- 
 tional safeguards for the interests of creditors, by requiring 
 the making of inventories and the giving of bonds by 
 assignees, and the appraisement of the property assigned, 
 by sworn appraisers. The same statute contains a variety of 
 provisions defining and regulating the powers of the courts 
 of Common Pleas over assignees, and their accounts. A 
 
 Ohio St. 433. By act of April i6, 1874 (Sayler, vol. 4, p. 3250, § 2), the credit- 
 ors are empowered to elect an assignee, and the proceedings for such election are 
 provided in detail. 
 
 ' Act of April 6, 1859 (Curwen, c. 2040). 
 
 " Amended by act of January 9, 1861 (Sayler, c. i) ; act of April 18, l86r 
 (Sayler, c. 114) ; act of March 18, 1871 (Sayler, c. 1970) ; act of April 27, 1872 
 (Sayler, c. 2232J ; act of March 16, 1874 (Sayler, c. 2739) ; act of April 16^ 
 1874 (Sayler, c. 2784). 
 
 ' Act of April 16, 1874 (Sayler, c. 2739). 
 
 * Act of April 27, 1872 (Sayler, c. 2232). 
 
 ' Purdon's Digest (Brightley, loth ed.) p. 90. 
 
 ' Bell, J., in Seal v. Duffy, 4 Barr, 274, 277. 
 
 ' Laws of 1836, p. 630 ; Dunlop's Laws (ed. 1847), p. 683 ; Purdon's Digest 
 (Brightley, loth ed.) p. 90. 
 
§§ 31' 32-] SOUTH CAROLINA. VERMONT. 
 
 39 
 
 more important statute was that of April 17, 1843,' which 
 took from debtors the power of making assignments 
 with preferences, by declaring that such assignments should 
 in future inure to the benefit of all the creditors ratably. 
 The provisions of this act were afterwards extended by 
 that of April r6, 1849,° ^^^ modified by the acts of April 
 2, 1849,3 April 14, i85i,t April 22, 1854,= and May 4, 
 1864,^ May 17, 1 871, 7 February 7, 1876,^ April 20, 1876.9 
 
 §31. South Carolina — Tennessee — Texas. — In South 
 Carolina,'" the creditors are empowered to name and appoint 
 an agent or agents equal in number to the assignees, to act 
 in their behalf jointly with the assignee or assignees named 
 and appointed by the assignor. Provision is made for carry- 
 ing out this authority, and unless the creditors fail to avail 
 themselves of this privilege, sales and transfers made by the 
 assignee prior to the appointment of the agent of the cred- 
 itors are declared null and void. In Tennessee," when the 
 assigned property exceeds five hundred dollars in value, the 
 assignee is required to give bonds for the faithful perform- 
 ance of his trust. His failure to do so empowers any person 
 interested to apply for a receiver. In Texas no enactments 
 peculiar to voluntary assignments appear to have been made. 
 
 § 32. Vermont. — By the statute of November i, 1843,''' 
 all general assignment's thereafter made by debtors for the 
 benefit of creditors were declared to be, as against such 
 
 ' Laws of 1843,- p. 273 ; Dunlop's Laws, p. 896 ; Purdon's Digest (Brightley), 
 p. 90. 
 
 " Laws of 1849, p. 664 ; Purdon's Digest (Brightley), p. 90. 
 ° Laws of 1849, P- 337 I Purdon's Digest (Brightley), p. 90. 
 ' Laws of 1851, p. 542 ; Purdon's Digest (Brightley), p. 90 ; and see the act 
 of May 6, 1850 ; Laws of 1850, p. 699 ; Purdon's Digest (Brightley), p. .90. 
 ° Laws of 1854, p. 480 ; Purdon's Digest (Brightley), p. 90. 
 ° Laws of 1864, p. 762 ; Purdon's Digest (Brightley), p. 93. 
 ' Laws of 1871, p. 269. ° Laws of 1876, p. 4. " Ibid. p. 43. 
 
 " Rev. Stat, of South Carolina (ed. 1873), c. 97, p. 477. 
 " Stat, of Tennessee (ed. 1871), vol. i, p. 921. 
 
 '= Act of 1843, p. 7 ; Compiled Stat. (ed. 1851), p. 390, § 6. For the reasons 
 which led to the enactment of this statute, see the opinion of Isham, J., in Peck 
 V. Merrill, 26 Vt. 686, 692. 
 
40 
 
 THE RIGHT TO ASSIGN. [CHAP. II. 
 
 creditors, null and void. This statute was repealed ' by act 
 of November 19, 1852,= which declares that all ^ assignments 
 for the benefit of creditors shall be in writing and signed by 
 the debtor ; and in case real estate is assigned, it shall be by 
 deed executed and recorded conformably to the laws relat- 
 ing to the conveyance of real estate. * By a subsequent act," 
 all assignments were required to be for the equal benefit of 
 all the creditors of the assignor, in proportion to their re- 
 spective claims. These acts, as amended = and now incor- 
 porated into the general statutes,^ contain a variety of pro- 
 visions requiring the assignment to contain a specific descrip- 
 tion of the property, and to be accompanied by an inventory 
 of the assigned property and list of creditors, regulating the 
 proceedings under the assignment, and giving to creditors 
 the power of enforcing a settlement of the trust in a court 
 of chancery. 
 
 The assignors are also confined in the selection of as- 
 signees to persons not creditors and not interested in the 
 assignment. 
 
 §33. Virginia — Wisconsin. — In the former of these 
 States there has been no special legislation on the subject of 
 voluntary assignments by debtors, and these conveyances 
 are governed by the statute of fraudulent conveyances as 
 applied and construed by the courts, and certain general 
 provisions of the statutes relative to trusts. 
 
 In Wisconsin,^ voluntary assignments are declared void 
 
 ' Farr v. Brackett, 30 Vt. 344. 
 
 " Laws of 1852, p. 14. See the history of the legislation on this subject dis- 
 cussed 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 1843 was confined 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. 
 
 * Laws of 1855, p. 15. 
 
 ° See Act of Nov. 10, 1857 ; Laws of 1857, p, 13. 
 
 ' Gen. Stat. (2d ed. 1870), tit. 21, c. 67, p. 453. 
 
 ' Stat, of Wisconsin (ed". 1871), c. 63, vol. i, p. 843. 
 
§ 33-^ VIRGINIA. — WISCONSIN. 4 1 
 
 unless made to a resident assignee, who shall give a bond for 
 the faithful performance of the trust, in amount equal to the 
 value of the property, to be ascertained by the oath of one 
 or more witnesses of the assignor ; the bond to be given to 
 the clerk of the Circuit Court for the benefit of the cred- 
 itors. The assignee is also required to accept the assign- 
 ment in writing, indorsed on the assignment and attested by 
 the clerk. 
 
CHAPTER III. 
 
 VOLUNTARY ASSIGNMENTS CONSIDERED IN CONNECTION WITH 
 THE BANKRUPT LAW. 
 
 § 34. The bankruptcy system introduced by statute into 
 the jurisprudence of England, and derived from the civil 
 law,' proceeds upon principles and methods in many respects 
 dissimilai- 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 obtain in the pursuit of it, the bankruptcy 
 system regards the property of the debtor as of right be- 
 longing to the whole body of his creditors, to be distributed 
 ratably among them towards the satisfaction 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 occa- 
 sion of certain acts, termed acts of bankruptcy, at once 
 sequestrates the entire estate of the debtor, and places it be- 
 yond his control and under a course of distribution in the 
 hands of its own officers. At common law, the debtor must 
 satisfy the claims of his creditors or obtain their voluntary 
 releases, if he would be rid of the burden of his liabilities. 
 The humane policy of the bankrupt law discharges the hon- 
 est debtor from all his obligations, upon compliance with the 
 conditions prescribed by the law for his discharge. 
 
 ' 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 326 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 Caesar established the cessio bonorum, as an available 
 remedy for all honest insolvents. See Institutes Justinian, 4, 6, 40 ; Sanders* 
 Justinian (Hammond), 541. 
 
 ' Robson's Law of Bankruptcy (2d ed.) p. I. 
 
§ 35-] ENGLISH STATUTES. 43 
 
 Voluntary assignments for the benefit of the creditors, 
 manifestly interfere with the operation of each of these sys- 
 tems. Apart from statutory regulations they may be said to 
 be the creatures of courts of equity.' But although they 
 withdraw 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 
 payment 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, when- 
 ever brought within the jurisdiction of that system, "sub- 
 jected to the sharpest scrutiny," ' and they have not unfre- 
 quently been regarded, even when made for the equal benefit 
 of all creditors, as wholly repugnant to the spirit and pro- 
 visions of the bankrupt act. A brief review of the bank- 
 ruptcy legislation as affecting voluntary assignments is essen- 
 tial to a clear apprehension of the question's which have 
 arisen under the administration of the bankrupt law. 
 
 § 35. English Statutes. — The first introduction of a 
 bankrupt law in England was by the statutes of 34 and 
 35 Hen. VIII, c. 4.* This statute was very imperfect. 
 It empowered the lord chancellor and other high officers, 
 upon petition of a creditor, to seize and distribute the estate 
 of bankrupts ratably among their creditors. But the 
 grounds of the application were confined within no definite 
 limits. 5 This statute was enlarged ^ and almost totally altered 
 by 13 Eliz. c. 7. By the statute of Elizabeth, the law of 
 
 ' Carlton v. Baldwin, 22 Tex. 724. 
 
 " See ante, p. 22. Lord EUenborough, in Pickstock v. Lyster, 3 M. & S. 372, 
 
 ° Mr. Justice Swajme, in Farren v. Crawford, 2 N. B. R. 602. 
 
 ^ 2 Bl. Com. 474. 
 
 ' This 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." 
 
 " Sir J. Jekyll, in Small v. Dudley, 2 P. Wms. 427. 
 
44^ 
 
 BANKRUPT LAW. [CHAP. III. 
 
 bankruptcy 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 conveyances, such as those included within 
 the statute of fraudulent conveyances ' enacted in the same 
 year, were regarded as acts of bankruptcy. The statute of i 
 Jac. I, c. 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 creditors, 
 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 there- 
 after, from time to time, enacted, the most important of 
 which were 21 Jac. I, c. 19, and 5 Geo. II, c. 30. By the 
 latter statute the creditors were empowered for the first 
 time to make choice of an assignee. 
 
 § 36. All these statutes were repealed by that of 6 Geo. 
 IV, c. 16, which consolidated the different 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 substan- 
 tially unaltered in the English bankrupt acts down to 1869, 
 when the words "with intent to defeat and delay," &c., 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 of all his creditors. By the fourth sec- 
 
 ' 13 Eliz. c. 5. 
 
 '' Mr. Justice Cadwalader, in Barnes v. Rettew, 8 Phila. 135. 
 ° Bl. Com. 474. No provision was made for the discharge of the bankrupt 
 from his debts until 4 Anne, c. 17, § 10; Ibid. c. 15. 
 
 ' Mr. Justice Cadwalader, in Barnes v. Rettew, 8 Phila. 135. 
 
36.J ENGLISH STATUTES. 
 
 45 
 
 tion of this act, such a conveyance executed in the manner 
 prescribed, by the trustee, duly attested and given publicity 
 by published notice, was declared not to be an act of bank- 
 ruptcy unless a commission issued within six months there- 
 after' This act was followed by numerous others,^ to 
 which no particular allusion is here required. 
 
 In the year 1849, ^ "^ost important statute, known as 
 "the bankrupt law consoHdation act, 1849," ^ was passed 
 for the amendment and consoHdation of the bankruptcy 
 laws. 
 
 By the 68th 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 ef- 
 fects to a trustee or trustees, for the benefit of all his cred- 
 itors, 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 executed by the 
 assignee, attested, and notice thereof given as prescribed.'* 
 
 It was further provided by the 224th section of the act„ 
 and the sections immediately following, that deeds of ar- 
 rangement 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 expected to result from deeds of arrangement, by 
 requiring in every case a complete surrender of the entire es- 
 tate of the debtor, thus destroying one important element in 
 
 ' Botcherly v. Lancaster, 3 N. & M. 384 ; Lord Abinger, in Siebert v. Spooner, 
 I'M. & W. 714. 
 
 •' I & 2 Wm. IV, c. 56 ; 2 & 3 Wm. IV, c. 1 14 ; 5 & 6 Wm. IV, c. 29 ; 7 & 8 
 Vict. c. 70 ; 7 & 8 Vict, c. 96 ; 10 & 11 Vict. c. 102. 
 
 " 12 & 13 Vict. c. 106. 
 
 ' 12 & 13 Vict. c. 106, s. 68, Chitty's Stat. vol. i, p. 277. 
 
 - I El. & Bl. 521 ; S. C. 21 L. J. Rep. (N. S.) Q. B. 346. 
 
46 BANKRUPT LAW. [CHAP. III. 
 
 such arrangements, namely, the continuance of the debtor's 
 
 business.' 
 
 By the bankrupt act of i86i,^ the bankruptcy system 
 was extended to non-traders as well as traders, and still more 
 liberal provision was made for carrying out amicable arrange- 
 ments and settlements between debtors and their creditors. 
 
 Under the i92d section of that act, deeds of trust en- 
 tered into between a debtor and his creditors, or any of 
 them, or a trustee on their behalf, were declared valid, ef- 
 fectual and binding on all the creditors of such debtor, as if 
 they were parties to it, providing a majority in number, rep- 
 resenting three-fourths in value of the creditors of such debt- 
 ors whose debts, respectively, amounted to ;^io and upwards, 
 should assent to or approve of such deed, and provided such 
 deed should be accepted by the assignee, be attested, regis- 
 tered, stamped, and notice thereof given in compliance with 
 the requirements of the act. 
 
 § 37. No material changes were thereafter made in the 
 English bankruptcy laws as affecting voluntary assign- 
 ments for the benefit of creditors previous to the date of 
 the passage by Congress of the bankrupt act of March 2d, 
 1867. Very important alterations, however, have been 
 effected in the English system by the bankruptcy act of 
 1869.3 By the sixth section of that act it is expressly de- 
 clared to be an act of bankruptcy, "that the debtor has, 
 in England or elsewhere, made a conveyance or assign- 
 ment of his property to a trustee or trustees for the benefit 
 of his creditors generally ; and by the 92d section pref- 
 erences fraudulent in bankruptcy may be avoided by the 
 assignee. Inasmuch as the existing bankrupt law in this 
 country was modeled largely upon the English statutes of 
 
 ' See Lord Chan. Westbury, in Ex parte Morgan in re Woodhouse, 32 L. J. 
 Rep. Bank. 15. 
 
 ' 24 & 25 Vict. c. 134. 
 
 ' 32 & 33 Vict. c. 71. This act is said to have been modeled upon the Scotch 
 system as contained in the 19 & 20 Vict. c. 79. See Robson's Law of Bank. (2d 
 ed.) p. 10. 
 
§§ 38, s'q-] assignments with preferences. 47 
 
 1849 ^^^ 1 86 1, in connection with the insolvent law of 
 Massachusetts,' an examination of the construction placed 
 upon the English statutes as affecting voluntary assignments 
 for creditors will not be out of place. 
 
 § 38. Tke English Doctrine. — It should, in the first 
 place, be observed that at no time previous to the act of 
 1 869 ^ has any 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 fraudulent conveyances introduced into i Jac. I, 
 c. i5,+ and retained in a somewhat modified form in 6 Geo. 
 IV, c. 1 6,= 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. c. 5, and, as construed in 
 the bankruptcy acts, have always been understood as com- 
 prehending conveyances void at common law or under the 
 statute of 13 Eliz. c. 5.* Their interpretation in the bank- 
 rupt law has, however, been greatly extended by the courts. 
 
 § 39. 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 as settled law, 
 that a conveyance by an insolvent debtor of his entire estate 
 
 ' Mr. Justice Cadwalader, in Barnes v. Rettew, 8 Phila. 135. 
 
 " 32 & 33 Vict. c. 71, ss. 6, 92. 
 
 ' The 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. I 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. 
 
 * See ante, § 35. ° See ante, § 36. 
 
 ' Eden on Bankruptcy, p. 17. ' i Burr. 567. 
 
48 BANKRUPT LAW. [CHAP. III. 
 
 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, c. 19." 
 
 The same opinion was expressed by him in the cases of 
 Wilson V. Day/ Compton v. 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." ' 
 
 And the same conclusion is reached where the convey- 
 ance is of all a debtor's property, except some specified.* 
 These decisions appear to have been placed upon two dis- 
 tinct 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 con- 
 veyance 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 as- 
 signment of his solvency." ^ But, clearly, a man may be insolv- 
 ent 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. 
 
 ' I Burr. 827. - I Wm. Bl. 361. = i Wm. Bl. 441. 
 
 ' 7 East, 143 (1806) ; and see Lord Abinger, in Siebert v. Spooner, i M. & W. 
 714 ; The Oriental Banking Co. v. Coleman, 3 Gif. 11. 
 
 ' See also Linden v. Sharpe, 6 M. & G. 895 ; Siebert v. Spooner, i M. & W. 
 714 ; Whitwell v. Tonnpson, i Esp. 72 ; Hutton v. Crutwell, i E1.& Bl. 15 ; Lomax 
 V. Buxton, L. R. 6 C. P. 107. 
 
 " Pulling V. Tucker, 4 B. & A. 382 ; Gaynor's Case, cited in Worseley v. De 
 Mattos, I Burr. 479 ; and also in Butcher v. Easto, i Doug. 294 ; and see 2 Cowp. 
 633- 
 
 ' Worseley v. De Mattos, i Burr. 827 ; Haswell v. Simpson, i Doug. 91. 
 
 ' Hooper v. Smith, i W. Bl. 441 ; Compton v. Bedford, Id. 362. 
 
40.] ASSIGNMENTS WITH PREFERENCES. 
 
 49 
 
 And Lord Mansfield, subsequently admitting this to be the 
 rule of law, observed that the remark above quoted was in- 
 correctly reported, and " that the reason why a man becomes 
 a bankrupt, who conveys away all of his property, is that he 
 thereby becomes totally incapable of trading."' We shall 
 have occasion to refer to this topic again. 
 
 § 40. 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 convey- 
 
 ' ance 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 antecedent debt, but 
 
 ^ also for a present advance of which the debtor really has the 
 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 .3 It should be further remarked, under 
 the law, as it existed previous to 1869, two things were held 
 necessary to constitute a fraudulent preference, first, the 
 transaction was required to be the voluntary and spontaneous 
 act of the debtor from which the desire to prefer was in- 
 ferred ; " * and secondly, it was required to be done in con- 
 templation of bankruptcy. 5 It is, therefore, clear that a 
 
 ' See Reporter's Note to Law v. Skinner, 2 W. Bl. 996. 
 
 ^ Lomax v. Buxton, L. R. 6 C. P. 107 ; see Robson's Law of Bankr. (2d ed.) 
 p. 124, and cases cited. 
 
 ' Whitwell V. Thompson, i Esp. 72 ; Huttan v. Crutwell, i El & Bl. 1 5 ; Brittle- 
 stone V. Cook, 6 Id. 296; S. C. 2 Jur. N. S. 758; Harris v. Rickett, 4 H. & W. i ; 
 S. C. 28 L. J. Exch. .197; see also Frazer v. Thompson, 5 Jur. N. S. 669; also s. C. 
 on appeal, 4 De G. & J. 659. 
 
 "• Brown v. Kempton, 19 L. J. C. P. 169; Edwards v. Glyn, 2 El. & EI. 20; s. 
 C. 5 Jur. N. S. 1397; see also Smith v. Timms, i H. & C. 849; S. C. 9 Jur. N. S. 
 1285 ; 32 L. J. Exch. 215 ; Morgan v. Brundrett, 5 B. & Ad. 296 ; Pennell v. Head- 
 ing, 2 F. & F. 744 ; Graham v. Candy, 3 Id. 206 ; Kennear v. Johnson, 2 F. & F. 
 753; 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. 
 
 " 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; Gibson 
 V. Boutts, 4 M. & G. 169; S. C. 3 Scott, 229; Gibson v. Muskett, 4 M. & G. 160; 
 S. 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. 674; S. C. 7 Jur. 509; Robson's Law of Bank- 
 ruptcy (2d ed.) p. 128. 
 
50 
 
 BANKRUPT LAW. [CHAP. III. 
 
 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 cred- 
 itors. 
 
 § 41. 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 doctrine," says Lord Henley, "has 
 occasionally met with disapprobation, and the reasons upon 
 which it is founded are by no means satisfactory." ' 
 
 The first case in which the point was judicially deter- 
 mined, was Kettle v. Hammond,' before Lord Mansfield at 
 nisi prius, which was an assignment by a trader, to two of 
 his creditors in trust for all the rest. A few years later, in 
 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 deliver- 
 ing 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 Elden, in Ex parte Bourne,* went somewhat more into 
 the question. He said, " I recollect cases in which it was 
 settled upon a singular 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 satisfy 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 or- 
 dained by the bankrupt law, and it was carried to this 
 extravagant length, that though the assignment was intended 
 
 ' Eden on Bankruptcy, p. 28. 
 
 ' Cooke Bank. Law, 100 ; Eden on Bankruptcy, 29. 
 
 ' 8 Term R. 140. ' 4 East, 220 (1803). 
 
 ° 2 Term R. 594. « 16 Ves. 148 (1809). 
 
•'§ 42-] ASSIGNMENTS FOR CREDITORS. 51 
 
 for the benefit of all the creditors, including that one, yet it 
 was an act of bankruptcy." In a previous case, Ex parte 
 Richardson,' Lord Elden, without passing upon the question, 
 directly assumed the assignment 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,* none have fully succeeded,^ 
 and it has now become an integral part of the English bank- 
 rupt law.* The reasons adduced in support of this doctrine 
 are substantially as follows : 
 
 First, that announced by Lord Elden, that a debtor has 
 no right to place his property under a distribution different 
 from that ordained by the bankrupt law. This objection lies 
 not against the ultimate distribution effected by the assign- 
 ment, but against the means employed in effecting it, assum- 
 ing that the creditors have a legal right in cases of insolv- 
 ency, to the privileges and methods provided by the bank- 
 rupt act, and to the assistance and protection of the bank- 
 rupt 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 him- 
 self of the power of carrying on his trade. 
 
 § 42. This doctrine, as we have seen, arose from judicial 
 construction of the language of the statute i Jac. I, c. 17.' 
 
 ' 14 Ves. 184 (1807). 
 
 ' Ex parte Smith, i Ves. & B. 518 (1813) ; Dutton v. Morrison, 17 Ves. 199; 
 Ex parte Cawlcwell, 19 Ves. 234. 
 
 = Linden v. Sharpe, 6 M. & G. 895 ; Stewart v. Moody, i C. M. & R. 777 ; 
 Ex parte Wensley, i De G, J. & S. 273 ; Turner v. Hardcastle, 11 C. B. 704 ; 
 Botcherly v. Lancaster, 3 N. & M. 383; Smith v. Timms, 7 Jur. N. S. 1015 ; 
 Sperritt v. Willows, 13 W. R. 329; Ex parte Zwelchenbart, 3 M. D. & D. 671 ; 
 Porter V. Walker, i M. & G. 686 ; Smith v. Cannan, 2 El. & Bl. 35. 
 
 * See Lord Henley, Eden on Bankruptcy, p. 31. 
 
 ' Lord Chan. Westbury, in Ex parte Morgan in re Woodhouse, 32 L. J. Bank. 
 IS- 
 
 ' Bankrupt Act, 1869, 32 & 33 Vic. 71, § 6. 
 
 ' Mr. Justice Montague Smith, in Lomax v. Baxton, L. R. 6 C. P. 115. 
 
52 
 
 BANKRUPT LAW. [CHAP. Ill- 
 
 When the words of that statute were altered by 6 Geo. IV, c, 
 1 6, from these, "with intent,' or whereby his creditors may 
 be defeated, &c.," to these, "with intent to defeat or delay 
 his creditors, &c.," making the phraseology of the statute 
 conform more nearly to that of 1 3 Eliz. c. 5, it was contended,, 
 in the case of Stewart v. Moody,' that though the former 
 act might warrant the construction 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 bankruptcy. 
 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 conse- 
 quence 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 had been well settled under 13 Eliz. c. 5, that a gen- 
 eral assignment for the equal benefit of all creditors, honestly 
 made, does not delay or defraud 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 exe- 
 cution of such a conveyance. When the language of the 
 bankrupt act, therefore, was made to conform to that of 13 
 Eliz. c. 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. ^ 
 
 ' I C. M. & R. 777. 
 
 " Pickstock V. Lyster, 3 M. & S. 375 ; and see ante, p. 22. 
 
 " Lord Justice Mellish, in Ex parte Luckes in re Wood, 36 L. T. Chan. 117, in 
 commenting upon the express reference to voluntary assignments contained in 
 the 6th section of the act of 1869, observes : " Now I agree that the reason why 
 that 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 iranAnXtTA, yet it was really absurd 
 
-§§43. 44'] GENERAL GROUNDS OF ENGLISH RULE. 53 
 
 § 43. Exemption of Assignments from Operation of Act. 
 — The provisions of the acts of 1849 ^'^d 1861, protecting 
 general assignments 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 fraudulent within the policy of the 
 bankruptcy system, except upon strict compliance with the 
 terms imposed.' 
 
 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 be- 
 cause it prevented him from carrying on his trade, was ap- 
 plicable 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 un- 
 doubtedly intended to relax the severity of the rule in refer- 
 ence to the execution of assignments by creditors ratably. 
 
 Lord Westbury, in commenting upon these provisions, 
 remarked, " it was the object of the legislature in passing the 
 i92d 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."^ 
 
 § 44. General Grounds of English Rtde. — At the time 
 of the passage by Congress of the bankrupt act of March 2, 
 
 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 ra- 
 tional, and not for the sake of altering the law — for it left the law exactly as it 
 was — that the act of bankruptcy comprised in the first subsection of the 6th sec- 
 tion has been separated from the other acts of bankruptcy with which it was 
 formerly joined, namely, from the fraudulent conveyances and transfers, and there- 
 fore the words 'with intent to defeat or delay his creditors ' have been left out." 
 
 ' Ex parte Alsop in re Rees, i De G. J. & J. 289 ; Ex parte Morgan in re 
 Woodhouse, 32 L. J. Bank. 1 5 ; Ex parte Rawlings, lb. 27 ; Ex parte Godden 
 in re Shettle, lb. 37 ; Ex parte Spyer, lb. 63 ; Dell v. King, 33 L. J. Exch. 47. 
 
 « See Ex parte Luckes, 26 L. T. N. S. 113 ; In re Wood, 7 L- J- Chan. 302. 
 
 ' Ex parte Morgan in re Woodhouse, supra. 
 
54 
 
 BANKRUPT LAW. [CHAP. Ill- 
 
 1867, the making 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, uncertain at first, had not 
 been strengthened by the lapse of time. The rule so estab- 
 lished rested upon an extended construction of the words 
 of the statute 13 Eliz. c. 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 ta 
 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 previous to the commission of an. 
 act of bankruptcy, and that an interference 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 gen- 
 eral assignment, rather than to wait for creditors to secure 
 their preferences by law, or to break him up by an adjudica- 
 tion 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 eflfected 
 by the acts of 1849 ^'^d 1861, and the intent of those altera- 
 tions, 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 established under the general bankruptcy system. 
 
 ' See ante, § 42 and note; see Globe Ins. Co. v. Cleveland Ins. Co. 14 N. B. 
 R. 322 ; and see p. 324. 
 
§ 45-] UNITED STATES BANKRUPT ACTS. 55 
 
 § 45. 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, 
 1803;^ one under the act of August 19, 1 84 1,^ which was 
 repealed by the act of March 3, 1843 \'' ^"d one under the 
 act of March 2, 1867,^ which is still in force. 
 
 The two statutes first referred to were modeled, to a 
 large degree, upon the English statutes existing at the time 
 of their enactment respectively, but neither of them re- 
 mained upon the statute book for a sufficient length of 
 time to acquire a settled interpretation 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 enactment making "any fraudulent con- 
 veyance, 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, de- 
 clared void and a fraud upon the act, and the assignee was 
 empowered to claim the property so conveyed.^ In accord- 
 ance with established principle, a general assignment for the 
 benefit of preferred creditors was under this statute deemed 
 an act of bankruptcy, even if made without moral fraud and 
 under the importunity of creditors.* 
 
 ' U. S. Stat, at Large, vol. 2, c. 19, p. 19. " Ibid. p. 248. 
 
 ' U. S. Stat, at Large, vol. 5, p. 440. * Ibid. p. 614. 
 
 ' Rev. Stat. U. S. title LXI, p. 969. 
 
 " U. S. Stat, at Large, vol. 2, c. 19, p. 19, § 2. ' Ibid. 
 
 ° Ex parte Brenneman, Crabbe, 456 ; Freeman v. Deming, 3 Sandf. Ch. 327 ; 
 McAllister v. Richards, 6 Penn. St. 133 ; Cornwell's Appeal, 7 W. & S. 305. 
 For an able note on the bankruptcy acts of 1800 and 1 841, and the effect of the 
 latter on voluntary assignments for benefit of creditors with preferences, see Philips 
 on Evidence (4th ed.) vol. 3, p. 628, note ni8 ; see also Hutchiris v. Taylor, 5 Law 
 
56 BANKRUPT LAW. [CHAP. III. 
 
 Where, however, the assignments were free from objec- 
 tionable 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 a petition for an adjudication was based 
 on an alleged act of bankruptcy in the making of an assign- 
 ment of property, and it was shown that the assignment was 
 made on a parol trust for the benefit 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 com- 
 mon 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 reported decisions on this point were few, and remained 
 in conflict at the time of the repeal of the act* 
 
 § 46. Provisions of the Act of 1%6'j applicable to General 
 Assignments. — The provisions of the act of 1867, to which 
 it is necessary 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 bank- 
 Rep. 289, Story, J. ; Jones v. Sleeper, 2 N. Y. Leg. Obs. 131 ; Arnold v. Maynard, 
 2 Story, 349 ; Morse v. Cohannet Bank, 3 Id. 364 ; Everett v. Stone, Id. 446. 
 
 ' Crabbe, 469. = 3 McLean, 202. 
 
 ' 3 McLean, 199 ; and see Carr v. Hilton, i Curtis C. C. R. 230. 
 
 * Mr. 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 
 acquiesced in than that general assignments for the benefit of creditors had be- 
 come unlawful." He cites, however, only the cases referred to in the text. 
 
§46.] PROVISIONS OF THE ACT OF 1867. 57 
 
 ruptcy. Section 5021 Rev. Stat. U. S. recites all the acts 
 which subject a person to involuntary bankruptcy. Among 
 the acts which constitute a man a bankrupt, are those of 
 giving preference to creditors in contemplation of bank- 
 ruptcy, or the making of any assignment, gift, sale, conveyr 
 ance, 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 
 bankrupt or insolvent, or in contemplation of bankruptcy 
 or insolvency, of any gift, grant, sale, conveyance, or trans- 
 fer of money, or other property, estate, rights, or credits, 
 with the intent, by such disposition of his property, to defeat 
 ot delay the operation of the act. 
 
 By a recent amendment to this section ' it is provided : 
 " That no voluntary assignment by a debtor or debtors of 
 all his or their property, heretofore or hereafter made in 
 good faith for the benefit of all his or their creditors, ratably 
 and without creating any preference, 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 dis- 
 charge of such debtor or debtors." 
 
 By section 51 10 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 fraudu- 
 lent preference contrary to the provisions of the bankrupt 
 act, or has made any fraudulent payment, gift, transfer, con- 
 veyance 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 
 conditionally, for the purpose of preferring any creditor or 
 person having a claim against him, or who is or may be 
 
 '■ Approved July 26, 1876. This is an amendment to section twelve (corre- 
 sponding to § 5021 R. S. U. S.) of the amendatory act of June 22, 1874. The 
 words quoted in the text are inserted after the word " committed," in line 
 forty-four. 
 
58 
 
 BANKRUPT LAW. [cHAP. III. 
 
 under liability for him, or for the purpose of preventing the 
 property from coming into the hands of the assignee, or oi 
 being distributed in satisfaction of his debts. 
 
 By sections 5128 and 5129, certain transfers are prohib- 
 ited and declared void, and the assignee is empowered to 
 recover the property 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 01 
 
 against him, to any a creditor or person having a claim 
 
 against the bankrupt, or who is under any liability for him, and 
 
 who has reasonable cause to believe that such disposition o: 
 
 property is made by an insolvent and in fraud of the provis 
 
 ions of the bankrupt act, is declared void. By the latter sec 
 
 tion it is provided that, if any person being insolvent, or in con 
 
 templation of insolvency or bankruptcy, within six months 
 
 before the filing of the petition by or against him, make; 
 
 any payment, sale, assignment, transfer, conveyance or othe: 
 
 disposition of any part of his property to any person who thei 
 
 has reasonable cause to believe him to be insolvent, or to b( 
 
 acting in contemplation of insolvency, and knowing tha 
 
 such payment, sale, assignment, transfer or other conveyanc 
 
 is made with a view to prevent his property from cominj 
 
 to his assignee in bankruptcy, or to prevent the same froE 
 
 being distributed under this title, or to defeat the object o) 
 
 or in any way impair, hinder, impede or delay the operatioi 
 
 and effect of, or to evade any of the provisions of this title 
 
 the sale, assignment, transfer or conveyance shall be voic 
 
 and the assignee may recover the property, or the valu 
 
 thereof, as assets of the bankrupt. 
 
 By section 5128 is provided that the fact that such 
 payment, pledge, sale, assignment, conveyance or other di 
 position of a debtor's property as is described in the tw 
 preceding sections, is not made in the usual and ordinal 
 
 ' Rev. Stat. U. S. § 5130 a. In cases of involuntary bankruptcy the time 
 limited to two months. 
 
 ' In cases of involuntary bankroptcy four months. Ibid. 
 
§§ 47. 48.J FRAUDULENT ASSIGNMENTS. 59 
 
 course of business of the debtor, shall be prima facie evi- 
 dence of fraud. 
 
 § 47. The Power to Assign not Suspended by Bankrupt 
 Law. — 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 in- 
 solvent laws,' in so far at least as they are in conflict with such 
 laws,^ yet this principle has no apphcation to general voluntary 
 assignments for the benefit of creditors. ^ The right to make 
 such assignments exists independent of any statute/ and the 
 various State statutes regulating the execution of such assign- 
 ments, and the procedure under them are in no sense insolv- 
 ent laws. There is no proper analogy between insolvent, 
 law, correctly so called, and those principles of the common 
 law, which allow and sanction the conveyance of his property 
 by a debtor for the equal benefit of all his creditors, and no 
 such resemblance or relation as to warrant the conclusion 
 that, if the existence of a bankrupt law suspends the first, it 
 must also suspend the last.^ 
 
 § 48. Assignments fraudulent at Common Law, or under 
 1 3 Eliz., or giving Preferences. — Where an assignment is 
 
 ' Sturgis V. Crowninshield, 4 Wheat. 122 ; Ogden v. Saunders, 12 Wheat. 213 ; 
 Hyde v. Zacharie, 6 Pet. 638 ; Ex parte Eames, 2 Story, 322 ; In re Reynolds, 9 
 N. B. R. 50 ; Day v. Bardwell, 97 Mass. 246. 
 
 '^ Ex parte John Zergenfuss, 24 N. C. 463 ; Shyrock v. Bashore, 13 N. B. R. 
 481 ; Maltbie t. Hotchkiss, 38 Conn. 80 ; Beck v. Parker, 65 Penn. St. 262 ; Barber 
 Rogers, 71 Id. 362. 
 
 ' Cook V. Rogers, 31 Mich. 391 ; 13 N. B. R. 97 ; Thrasher v. Bentley, 59 N.. 
 Y. 649 ; S. C. below, 2 Sup. Ct. R. 309; Embersole v. Adams, 13 N. B. R. 141 ; 
 Hawkins' Appeal, 34 Conn. 548 ; s. C. 2 N. B. R. 378 ; Maltbie v. Hotchkiss, 38 
 Conn. 80 ; Barnes v. Rettew, 8 Phila. 133 ; Mayer v. Hellman, 13 N. B. R. 440. 
 
 * Cook V. Rogers, su;pra ; Thrasher v. Bentley, supra. 
 
 ' Mr. Ch. 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 be- 
 fore 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 statutes of other States on the same subject, remarked : 
 "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. 
 
6o BANKRUPT LAW. [cHAP. III. 
 
 fraudulent at common law,' or under the statutes of the State 
 where it is made," or where it attempts to create a prefer- 
 ence 3 among creditors, it is clearly repugnant to the bank- 
 rupt act. The execution of such an assignment is unques- 
 tionably an act of bankruptcy, and it may be avoided by the 
 assignee in bankruptcy. 
 
 § 49. Is the Making of a bona fide Assignment for 
 Creditors ratably an Act of Bankruptcy. — Among the 
 earliest cases in which the question whether the execution 
 of an assignment honestly made for the equal benefit of 
 all creditors is an act of bankruptcy, was that of In re 
 Wm. H. Langley,* in the Southern District of Ohio. The 
 facts were, that Langley being in failing circumstances, and 
 judgments being about to be recovered against him, ex- 
 ecuted 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 assign- 
 ments. Within a month thereafter, Perry filed a petition 
 against him in the District Court, setting forth the assign- 
 ment, 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 op- 
 eration 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 to be made in good 
 faith, and rested its decisions 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 col- 
 
 ' Farrin v. Crawford, ^ N. B. R. 602. 
 
 " Hyde v. Sontag, 8 N. B. R. 225 ; Bean v. Amsink, Blatchford, J., Id. 235 ; 
 In re Randall & Sunderland, 3 N. B. R. 26. 
 
 = Jackson V. McCuUough, 13 N. B. R.283 ; Stobaugh v. Mills, 8 N. B. R. 361. 
 
 * I N. B. R. 559 ; S. C. on appeal, 2 N. B. R. 596. 
 
 ■' 3 McLean, 190. ° 3 McLean, 202. ' 7 How. 627. 
 
§ 49- J BONA FIDE ASSIGNMENT. 6 1 
 
 lection of his debt. The case was taken to the Circuit 
 Court, where Mr. Justice Swayne deHvered an opinion, 
 which unfortunately is not reported in full.' From the ab- 
 stract 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 cred- 
 itors before the judgment is rendered, such conveyance is 
 not necessarily a conveyance with the intent to hinder, de- 
 fraud 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 assignment an act of bankruptcy, it must be 
 made with intent to delay, defraud or hinder creditors within 
 the meaning of 1 3 Elizabeth, or with intent to defeat or de- 
 lay the operation of the bankrupt act. It becomes a ques- 
 tion of fact. The innocence or guilt of the act depends 
 upon the mind of him who did it, and it is not a fraud with- 
 in the meaning of the bankrupt law, unless it was meant to 
 be so." ' 
 
 The opinion thus expressed was subsequently reviewed 
 and approved by the same learned judge, in the case of 
 Farrin v. Crawford,^ where he said : " Now, while I have 
 held, and still emphatically hold, that an assignment, such as 
 this purports to be (made for the equal benefit of all cred- 
 itors), is valid and proper when made in good faith, it is 
 yet to be subjected to the sharpest scrutiny, and any badge 
 of fraud that attaches itself in the light of extraneous cir- 
 
 ' Reported sub nom. Langley v. Perry, 2 N. B. R. 596. 
 
 " This opinion has been criticised as not having been necessary to the deter- 
 mination of the case (see Emmons, J., in Globe Ins. Co. v. Cleveland Ins. Co. 14. 
 N. B. R. 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. 
 
 • 2 N. B. R. 602 . 
 
52 BANKRUPT LAW. [CHAP. HI. 
 
 :umstances will, unless fully and satisfactorily explained, 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 m 
 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 opm- 
 ions is that expressed by Mr. Justice Nelson, in the case of 
 Sedgwick V. Place,' in the Circuit Court for the Southern 
 District of New York. In that case, where an assignment 
 untainted with fraud had been duly executed, and the re- 
 quirements of the statute of the State of New York regulat- 
 ing such assignments had been complied with, and the as- 
 signees in bankruptcy, under a subsequent voluntary assign- 
 ment, filed their bill in equity seeking to have such assign- 
 ment set aside, and, in the mean time, applied for an injunc- 
 tion 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 assign- 
 ment 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 hands of the assignee under the State law, and turn it 
 over to the assignee in bankruptcy." 
 
 § 50. While these cases have in some instances been fol- 
 lowed and approved,^ yet their authority has been frequently 
 questioned, and in the majority of instances entirely dis- 
 sented from. 3 The question, however, may still be regarded 
 as open and undetermined. 
 
 ' I N. B. R. 673. 
 
 ' In 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. 130; and see In re George H. Arledge, I 
 N. B. R. 648 ; In re George A. Hawkins, 2 N. B. R. 378 ; In re Alfred L. Wells, 
 Jr. I N. B. R. 171 ; see also, Mayer v. Hellman, 13 N. B. R. 440. 
 
 ° In re Randall & Sunderland, 3 N. B. R. 18 ; S. C. Deady, 527 ; In re Smith, 
 
§ 50-] BONA FIDE ASSIGNMENT. 63 
 
 The leading cases which uphold the doctrine that such 
 assignments 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. Advancing 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, 
 modelling it to a large degree upon the English bankruptcy 
 law, adopted the approved construction of that law in its re- 
 lation to general assignments,'' he proceeds to show that 
 under the English system general assignments, though made 
 for the equal benefit of all creditors, were regarded as acts of 
 bankruptcy, and that the reason for that rule was that by such 
 an act the debtor attempted to put his estate into a course of 
 distribution different from that prescribed by the bankrupt 
 act, which had been the substance of the language of Lords 
 Mansfield, Elden and Wensleydale, and which are words of 
 like import of those employed in the statute, 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 to be made pari passu with the bankrupt 
 act, and attempts to distinguish the cases of Langley v. 
 Perry 5 and Sedgwick v. Place.^ 
 
 In the case of Globe Ins. Co. v. Cleveland Ins. Co.,'' in 
 
 3 N. B. R. 377 ; S. C. 4 Ben. i ; S. C. i L. T. R. 147 ; In re Spicer & Peckham, 3 
 N. B. R. 512 ; Rettew v. Barnes, 8 Phila. 133 ; In re Burt, i Dillon, 439 ; Hob- 
 son V. Markson, Id. 421 ; and see In re Goldschmidt, 3 N. B. R. 164 ; Burk- 
 holder v. Stump, 8 Phila. 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. 
 311- 
 
 ' Supra. ^ Supra. 
 
 ' Concurred in by Mr. Justice McKennan. 
 
 « See Globe Ins. Co. v. Cleveland Ins. Co. 14 N. B. R. 324. 
 
 - 2 N. B. R. 596. "2N. B. R. 28. ' 14N. B. R. 311. 
 
64 BANKRUPT LAW. [CHAP. III. 
 
 the Circuit Court for the Northern District of Ohio, Mr. 
 Justice Emmons considered the question very fully. In ad- 
 dition 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' The opin- 
 ion reviews the English and American cases, and is an im- 
 portant and instructive discussion of the question, reversing 
 the rule formerly 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 pre- 
 sumed to intend the natural and probable consequences 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.,^ 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 bank- 
 rupt court the supervision of the assignee and the adminis- 
 tration of the estate. In Goldschmidt's = case, in the 
 Southern District of New York, where a debtor who was 
 insolvent, and while actions were pending against him, and 
 
 See ante, § 47 and notes. " 3 N. B. R. 18. 
 
 ' I Id. 171. ' 3 Id. 377. " 3 Id. 164. 
 
"§ 50.J BONA FIDE ASSIGNMENT. 65 
 
 more than six months before the commencement of pro- 
 ceedings 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 was raised in the case of the Union Pacific Rail- 
 road Company,' in the District of Massachusetts, and although 
 the decision turned upon another point, yet Mr. Justice 
 Lowell made these observations : "I consider the better 
 opinion under our bankrupt law to be the same (as the En- 
 glish doctrine), that it forbids such a distribution by means 
 of a private trust created by the debtor unless all his cred- 
 itors 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 in- 
 solvent, but who undertakes to make a final distribution of 
 his assets, must do it through the bankrupt court." And in 
 a late 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 bank- 
 ruptcy, because it necessarily defeats the operation of the act, 
 and hinders and delays creditors. 
 
 Quite recently the question was discussed before the Su- 
 preme 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 argu- 
 ment to show that assignments for the benefit of creditors gen-" 
 
 ' 10 N. B. R. 178. ^ In re Mendelsohn, 12 N. B. R. S33- 
 
 ' Mayer v. Hellman, 13 N. B. R. 440. 
 
66 BANKRUPT LAW. [CHAP. III. 
 
 erally are not opposed to the bankrupt act, though made with- 
 in six months previous to the fihng of the petition. Their 
 argument is that such an assignment is only a voluntary execu- 
 tion 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 another, it con- 
 flicts 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, i 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 voidable 
 it must be because it may be deemed perhaps necessary, for 
 the efficiency of the bankrupt act, that the administration of 
 an insolvent's estate shall be intrusted to the direction of the 
 District Court, and not left under the control of the ap- 
 pointee of the insolvent. It is unnecessary to express any 
 decided opinion upon this head, for the decision of the- ques- 
 tion 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 dis- 
 tribution of his assets, must do it through the bankrupt 
 courts," ' a rule which is adduced from no affirmative man- 
 date of the statute, but which arises, if at all, by implica- 
 tion from judicial determination, that every other method-fbf 
 distribution must necessarily either delay and defraud cred- 
 itors or hinder and defeat the operation of the bankrupt 
 act. 
 
 § 51. It is proper here to refer to a proposition which 
 has. been frequently maintained and applied, to wit, that 
 there is a legal duty imposed upon an insolvent by the 
 existence of the bankrupt act to avail himself of its pro- 
 
 ' Mr. Justice Lowell, In re The Union Pacific R. R. Co. lo N. B. R. 178. 
 
§ 5I-] BONA FIDE ASSIGNMENT. 67 
 
 visions 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 discussion in a very im- 
 portant class of cases. 
 
 Thus, it has been said, " strictly and truthfully speakings 
 an insolvent has no property, and therefore, he has no nat- 
 ural right to dispose of his property in his possession other- 
 wise 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 bank- 
 ruptcy ;" " 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 invoking the 
 protecting shield of the bankrupt act, in permitting a cred- 
 itor 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. 5 
 
 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 judgment and 
 seizure of property, to file himself a voluntary bankruptcy,, 
 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 admin- 
 
 ' Mr. Justice Deady, In re Silverman, i Saw. 416. 
 
 ^ Mr. Justice Woods, in Jackson v. McCuUoch, 13 N. B. R. 285 ; and see 
 remarks of Mr. Justice Blatchford, in Hardy v. Clarke, 3 N. B. R. 392. 
 
 " 5 N. B. R. 270. 
 
 ' Warren v. Tenth Nat. Bk. 7 N. B. R. 481 ; Smith v. Buchanan, 8 Blatch. 153 ; 
 Haskell v. Ingalls, 5 N. B. R. 205 ; Catlin v. Hoffman, 2 Saw. 486. 
 
 " Wilson V. City Bank, 17 Wall. 473. ° Ibid. 484, 485. 
 
58 BANKRUPT LAW. [CHAP. III. 
 
 istration 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 
 ict in express terms. It is, therefore, an argument solely of 
 implication. This implication is said to arise from the sup- 
 posed purpose of the statute to secure equality of distribu- 
 tion in all cases of insolvency, and to make the argument 
 complete, it is further necessary to hold that this can only 
 be done in bankruptcy proceedings under that statute. Does 
 the statute justify so broad a proposition ? Does it, in 
 eflFect, forbid all proceedings to collect debts in cases of in- 
 solvency 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." 
 
 § 52. 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 debtors' 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 assign- 
 ment for the benefit of all his creditors equally is not pro- 
 hibited by law ; on the contrary, " whenever such a disposi- 
 tion has been voluntarily made by the debtor, the courts in 
 this country have uniformly expressed their approbation of 
 the proceeding." = 
 
 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 bank- 
 ruptcy, are the clauses of section 5021, respecting fraud- 
 ulent conveyances, to wit, assignments, &c., made by a 
 debtor, with the intent to delay, defraud, or hinder his cred- 
 
 " Mr. Justice Baldwin, in Davis v. Turner, 4 Gratt. 426. 
 " Mr. Justice Field, in Mayer v. Hellman, 13 N. B. R. 442. 
 
§ 52. J BONA FIDE ASSIGNMENT. 69 
 
 itors, and the subsequent clause of the same section in ref- 
 erence to conveyances by an insolvent made with the intent 
 to defeat or delay the operation of the act' For the bank- 
 ruptcy courts to declare such an assignment as has been de- 
 scribed a fraudulent conveyance, under the former of these 
 clauses, would be to disregard 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 bank- 
 rupt 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 defeat or delay the 
 operation of a law in the abstract. The words have or- 
 dinarily been regarded as referring to the rights of cred- 
 itors secured under or by the operation of the act. But 
 to say that an assignment honestly made for equal benefit 
 of all creditors is an act of bankruptcy, because it de- 
 feats or delays the operation of the act by depriving 
 creditors of the right to administer the estate of an in- 
 solvent, is to say that it is an act of bankruptcy, because 
 it deprives them of a right which they have not yet ac- 
 quired, and which they cannot acquire, except by an appeal 
 to the court in certain numbers and under peculiar circum- 
 stances, and the mere insolvency 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, 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 insolvency is equally an act of bank- 
 
 ■ See ante, § 46. 
 
 ^ See remarks of Mellish, L. J., in Ex parte Luckes in re Wood, 36 L. T. Chan. 
 117, quoted ante, § 42, nete ; Field, J., in Mayer v. Hellman, 13 N. B. R. 443. 
 
70 
 
 BANKRUPT LAW. [CHAP. III. 
 
 ruptcy, 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 con- 
 veyance 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 inserted into the act from the English decisions, and is 
 equivalent to the language of Lord Eldon, " puts his prop- 
 erty under a course of distribution different from that or- 
 dained 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 had been materially affected 
 by the amendments to the bankrupt acts in existence at the 
 time of the passage of the act of 1867, was incorporated 
 into that law without more pointed reference to it either in 
 the act itself or in the extended discussion which the pas- 
 sage of the act provoked. 
 
 If assignments honestly made for the equal benefit of all 
 creditors, and carrying out the beneficial design of the bank- 
 rupt law, were regarded by Congress as antagonistic to that 
 law, it is somewhat surprising that conveyances so familiar 
 to the law of this country should have been referred to only 
 under the indirect phraseology employed. 
 
 § 53. 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 assign- 
 
 ' See ante, § 42. 
 
 '^ Lord Eldon, in Ex parte Bourne, 16 Ves. 148. 
 
^ 54. j ASSIGNMENT VOIDABLE. 7 1 
 
 ment, cannot afterwards 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, 
 <;annot afterwards rely on its execution as an act of bank- 
 ruptcy.^ 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 pre- 
 ferred under an assignment will be deemed to assent to its 
 •provisions, and cannot prove their claims without surrender- 
 ing the preference.^ 
 
 But where an application for an adjudication of bank- 
 ruptcy was made against the debtor, and the acts of bank- 
 ruptcy alleged were that the debtor, being a merchant, had 
 suspended payment of his commercial paper, and had not 
 resumed within a period of fourteen days, and it appeared 
 that, before the expiration of the fourteen 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 
 debtor's estate did not prevent the bankrupt court from ipro- 
 ceeding under the bankrupt law, no fraud having been 
 shown in the assignment.'* 
 
 § 54. Assignment not Void but avoidable in Bank- 
 ruptcy. — In the absence of actual fraud, the assignment, even 
 
 ' Bamford v. Baron, 2 Term R. 594, note; Ex parte Cawkwell, i Rose, 313. 
 
 "^ Ex parte Stray, L. R. 2 Chan. 374 ; Marshall v. Barkworth, 4 B. & Adol. 
 508; Jackson v. Irvine, 2 Camp. 49; Oliver v. King, 25 L.J. Chan. 427; Ex 
 parte Strang, L. R. 2 Ch. Ap. 374 ; see Bradley, J., Barings v. Dabney, 19 Wall. 9. 
 
 ' In re W. A. Sanders, 13 N. B. R. 164. And where the petitioning creditor 
 -applied to the State court to have the security of the voluntary assignee increased, 
 this vifas 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. Langley, i N. B. 
 Jl. SS9- 
 
 * In re Laner, 9 N. B. R. 494. ' 
 
 f 
 
 \ ■It 
 
72 BANKRUPT LAW. [CHAP. III. 
 
 though constructively fraudulent, is not void, but voidable,, 
 in bankruptcy, and is voidable only at the suit of the as- 
 signee,' but transfers void under the law of the State where 
 the transfer is made, or fraudulent at common law, may 
 be avoided by the assignee in bankruptcy, though made 
 more than six months prior to proceedings in bank- 
 ruptcy.' Conveyances and transfers, however, which are 
 fraudulent by virtue of sections 5128 and 5129, can be im- 
 peached only when proceedings in bankruptcy are com- 
 menced within the time limited by section 5 1 30 a.^ 
 
 The pleadings may be so framed as to assail the instru- 
 ment, both because fraudulent under the bankrupt act and 
 under the common law, or under the statute of the State.-* 
 
 • 
 
 § 55. Avoiding Assignment by Assignee. — The bank- 
 rupt law, section 5046, Rev. Stat. 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 ap- 
 pointment 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 liabilities of the bankrupt, but he also represents the 
 rights of the creditors, and as such representative, may 
 maintain and defend proceedings which, on grounds of pub- 
 lic policy or otherwise, the latter would not be allowed to.^ 
 He has the rights which an attaching creditor would have.* 
 
 ' In re George H. Arledge, i N.B. R. 644; McGready v. Harris, 9 N. B. R. 135 ; 
 Mayer v. Hellman, 13 N. B. R. 440 ; Cadwalader, J., In re Pierce & Holbroolc, 3 N.- 
 B. R. 258 ; and see Barnes v. Rettew, 8 Pliila. 133. 
 
 = Massey V. Allen, 17 Wall. 351 ; 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 r 
 S. C. 4 N. B. R. 57 ; Knowlton v. Mosely, 105 Mass. 136 ; Bradshaw v. Klein, i 
 N. B. R. 542 ; s. C. I L. T. R. 72 ; s. C. 7 A. L. Reg. 505 ; Cragin v. Carmichael, 
 II N. B. R. 511. 
 
 ^ Mayer v. Hellman, 13 N. B. R. 440 ; In re George H. Arledge, i N. B. R.. 
 644 ; Seaver v. Spink, 8 N. B. R. 218. 
 
 * Cragin ^. Carmichael, 11 N. B. R. 511. 
 
 " In re The St. Helen's Mills Co. 10 N. B. R. 418 ; In re Wynne, 4 N. B. R. 
 23 ; Allen v. Massey, 7 N. B. R. 4pi ; s. C. on appeal, 17 Wall. 351 ; Carr v. Hil- 
 ton, 2 Story, 231 ; Black v. Terrin, 2 N. B. R. 643. 
 
 " Cragin v. Carmichael, 11 N. B. R. 511. 
 
§ 56.] ASSIGNEE ONLY CAN PROCEED. ']T, 
 
 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 con- 
 veyance 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 con- 
 veyed, or transferred, to defraud them.^" 
 
 But he may also attack an assignment upon grounds 
 upon which a judgment creditor could not, as giving a pref- 
 erence or being fraudulent under the provisions of the bank- 
 rupt act.3 But in that event he is restricted in his right of 
 maintaining his action by the time in which the proceed- 
 ings in bankruptcy were commenced after the fraudulent 
 act complained of, and if the proceedings were not instituted 
 within the time limited, his right of action is lost.* And 
 when the action is brought to avoid a transaction as fraudu- 
 lent under the provisions of the bankrupt act, it should be 
 brought in the bankruptcy court. 
 
 State courts will not exert their jurisdiction to enforce 
 these provisions of the bankrupt law.= 
 
 § 56. Right of Action i^i Assignee Exclusive. — After 
 the commencement of proceedings in bankruptcy, no one 
 but the assignee can bring or maintain an action to set aside 
 a fraudulent conveyance made by the bankrupt* The right 
 of action to set aside such a conveyance is, after an adjudi- 
 
 ' Farrin v. Crawford, 2 N. B. R. 602 ; In re Randall & Sunderland, 3 N. B. R. 
 18 ; Massey v. Allen, 17 Wall. 351 ; Bean v. Amsinck, 8 N. B. R. 235 ; Knowl- 
 ton V. Moseley, 105 Mass. 136 ; In re Wynne, 4 N. B. R. 23 ; S. C. 9 A. L. Reg. 
 627 ; Bradshaw v. Kline, i N. B. R. 542 ; S. C. 2 Biss. 20 ; In re Metzger, 2 N. B. 
 R. 353 ; In re Meyers, i N. B. R. 581 ; S. C. 2 Ben. 424; Boone v. Hall, 7 Bush, 
 66 ; Pratt v. Curtiss, 6 N. B. R. 139 ; Carr v. Gale, 3 W. & M. 38 ; s. C. 2 Ware, 
 330 ; Carr v. Hilton, i Curt. 230 ; Ashley v. Robinson, 29 Ala. 112. 
 
 = Smith V. Ely, 10 N. B. R. 554. 
 
 ' Jackson v. McCulloch, 3 N. B. R. 283 ; see ante, § 48. 
 
 ' Seaver v. Spink, 8 N. B. R. 218. 
 
 " Bingham v. Claflin, 7 N. B. R. 412 ; see Voorhees v. Frisbie, 8 N. B. R. 152 ; 
 see, also, Cornwell's Appeal, 7 W. & S. 305. 
 
 ° In re Meyers, i N. B. R. 581 ; S. C. 2 Ben. 424 ; Stewart v. Isidor, i N. B. R. 
 485 ; S. C. 5 Abb. Pr. N. S. 68; Goodwin v. Sharkey, 3 N. B. R. 485 ! S. C. 5 
 Abb. Pr. N. S. 64; Allen v. Montgomery, 10 N. B. R. 503. 
 
74 bankrTupt law. [chap. hi. 
 
 cation in bankruptcy, exclusively in the assignee, and the 
 judgment creditor cannot maintain an action thereon ; and 
 this is true even when the creditor had no notice of the pro- 
 ceedings in bankruptcy, and when his debt was not in- 
 cluded in the schedules.' And when a trustee, claiming un- 
 der an assignment, filed a bill to recover assets belonging to 
 the estate, the assignee in bankruptcy was permitted to in- 
 tervene by supplemental bill.^ 
 
 And a creditor cannot disregard the assignment and 
 levy upon the property transferred by it, although it is void 
 tinder the bankrupt 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 assign- 
 ment is void under the bankrupt law, without showing that 
 the property has been recovered from him by the assignee 
 • in bankruptcy.* 
 
 § 57. Proceedings under Voluntary Assignments when 
 Avoided — Protection of Vohmtary Assignee. — Where the 
 assignment is set aside the bankrupt court will sometimes, 
 to facilitate the administration of the estate, recognize the 
 voluntary assignee, and refuse to interfere with him pending 
 certain transactions which are deemed to be of advantage to 
 the estate.^ In the case of In re Pierce & Holbrook,^ Mr. 
 Justice Cadwalader, referring 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 work- 
 
 ■' Thurmond v. Andrews, 13 N. B. R. 157. 
 
 ' Collateral Bank v. Fowler, 12 N. B. R. 289; see Freeman v. Deering, 3 
 Sandf. Ch. 327. 
 
 ' Dodge V. Sheldon, 6 Hill, 9. ' Seaman v. Stoughton, 3 Barb. Ch. 344. 
 
 ' Burkholder v. Stump, 8 Phila. 172; s. C. 4 N. B. R. 597. 
 " 3 N. B. R. 258. 
 
§ 58.J ALLOWANCE OF EXPENSES. 75 
 
 ing 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 as- 
 signee under a previous deed. In a 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 as- 
 signee was of unquestionable 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 possession of the as- 
 signed property, the voluntary assignee sold the property 
 assigned to him, and distributed the proceeds under the or- 
 ders of the State court, acting in good faith and deriving no 
 interest or benefit therefrom himself, the United States Cir- 
 cuit Court for Iowa held the voluntary assignee free from 
 liability in an action subsequently brought by the assignee 
 in bankruptcy to recover the value of the assigned property.' 
 
 § 58. Allowance of Expenses to Voluntary Assignee. — 
 The assignee claiming under 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 bank- 
 ruptcy were instituted ; but he is liable for the balance 
 which shall appear to be in his hands upon a proper ac- 
 counting 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 assignmexit,^ and in 
 
 ' Cragin 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 un- 
 der the assignment, there could, as it now seems to me, be little or no doubt as to 
 their liability." 
 
 " Jones V. Kinney, 4 N. B. R. 649. 
 
 = In re J. S. Cohen, 6 N. B. R. 379 ; Stobaugh v. Mills, 8 N. B R. 361 ; S. C. 
 5 C. L. N. 526. 
 
76 BANKRUPT LAW. [CHAP. 
 
 III. 
 
 the case of Burkholder v. Stump,' the court directed an al- 
 lowance to be made to the voluntary assignee for his neces- 
 sary 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 commissions 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 proceedings under the State law were in fraud of 
 the bankrupt act, and that the bankrupt court would not al- 
 low the expenses incurred in an attempt to defeat the oper- 
 ation of the act.3 It is usual and proper when the assign- 
 ment is set aside for the decree to contain a direction for a 
 reconveyance by the trustees to the assignee in bankruptcy.* 
 
 § 59. Bar to Discharge. — Previous to the recent amend- 
 ment to the bankrupt act, the authorities were in conflict as 
 to whether 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 adjudication 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 bankrupt in a 
 
 ' 4 N. B. R. 597 ; S. C. 8 Phila. 172. 
 
 ^ Burkholder v. Stump, supra. 
 
 ' In re Stubbs, 4 N. B. R. 376"; see Clark v. Marx, 6 Ben. 275. 
 
 ' Burkholder v. Stump, supra. 
 
 " An assignment was regarded as a bar to a discharge in the cases of In re 
 Goldschmidt, 3 N. B. R. 165 ; S. C. 3 Ben. 379 ; In re Brodhead, 2 N. B. R. 278 ; 
 S. C. 3 Ben. 106 ; but the contrary doctrine was sustained in In re Pierce & Hol- 
 brook, '3 N. B. R. 258; S. C. 16 Pitts. L. J. 204; In re John M. Quackenboss, I 
 N. Y. Leg. Obs. 146 ; Smith v. Ely, i Id. 343. 
 
§ 59-] BAR TO DISCHARGE. ']'^ 
 
 proceeding of involuntary bankruptcy, no voluntary assign- 
 ment for the benefit of all creditors ratably and without pref- 
 erence, and valid according to the laws of the State where 
 made, will be a bar to a discharge, and this applies to as- 
 signments heretofore or hereafter made.' 
 
 ' See ante, p. 57. 
 
CHAPTER IV. 
 
 WHO MAY MAKE AN ASSIGNMENT. 
 
 § 60. Assignments for the benefit of creditors are most 
 commonly made by persons engaged in business, as mer- 
 chants, 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. The power 
 of corporations to- assign their property for the benefit of 
 creditors has frequently been discussed, and important re- 
 strictions 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 chapter. 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 affairs in which assignments usually originate, 
 but as a test of the validity of the instruments themselves, 
 namely, insolvency. 
 
 § 61. Insolvency^ when iinportant. — As we have already 
 seen, many of the State statutes, which have been enacted 
 for the purpose of restraining the right of making assign- 
 
 ' It was held, in the case of Fox v. Heath (21 How. Pr. 384), that an assign- 
 ment 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 him- 
 self ; and it seems that the most he could claim would be that he should not be 
 held personally for debts beyond what the assets of the firm are able to pay. 
 
§ 6l,] ■ INSOLVENCY. 79 
 
 ments and regulating their operation, are confined by their 
 terms to assignments made by debtors who are insolvent or 
 acting in contemplation of insolvency.' When, therefore, 
 the attempt is made to bring an assignment 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 accord- 
 ance 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 estab- 
 lished, 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 ex- 
 ecuted by corporations, the restrictions upon their right to 
 make such conveyances depending in some instances upon 
 their financial condition and outlook at the time of the ex- 
 ecution of the instrument. 5 
 
 Independent of statutory regulations, it has been thought 
 that the right to make an assignment for the benefit of 
 creditors belonged exclusively to debtors who were insolv- 
 ent, or who honestly believed themselves to be so, and that 
 the execution of such an instrument by a solvent debtor 
 was conclusive evidence of an intent to hinder, delay and 
 defraud creditors.* This doctrine no longer prevails to the 
 
 ' See ante, Chapter II. ^ Hampton v. Morris, 2 Mete. (Ky.) 336. 
 
 ' Morgantham v. Harris, 12 Cal. 245. 
 
 ■" Hardy v. Skinner, 9 Ind. 191 ; Hardy v. Simpson, 13 Ind. 132; Green v. 
 Banks, 24 Tex. 508. 
 
 =■ Set post, §65. 
 
 » " Where a man," it was said, in the case of Planck v. Schermerhorn (3 Barb. 
 Ch. 344), " 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 prefer- 
 ences, except for the purpose of delaying the creditors in the assertion of their 
 legal rights." See Van Nest v. Yoe, i Sandf Ch. 4, 9; Kellogg v. Slawson, 15 
 Barb. 56 ; Mason, J., in Rathbun T. Platner, 18 Id. 272, 275. " Some 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 assign- 
 
Bo WHO MAY MAKE AN ASSIGNMENT. [CHAP. IV. 
 
 same extent' "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 cred- 
 itors, which will invalidate the assignment.' 
 
 § 62. Insolvency, what. — Insolvency literally imports 
 inability 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 satis- 
 fying his existing engagements, and cannot, by any possi- 
 bility, or in any event, be made adequate to their entire 
 liquidation. There can be no question as to the compe- 
 tency 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 engagements 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 be- 
 
 ment 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 in S. 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- 
 
 ' Ogden V. Peters, 21 N. Y. 23 ; Angell v. Rosenbury, 12 Mich. 241 ; but see 
 Bates v. Ableman, 13 Wis. 644. 
 
 " 21 N. Y. 23. 
 
 ° Baldwin v. Buckland, 1 1 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." 
 
^ 62.] INSOLVENCY. 8 1 
 
 tween 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 corre- 
 sponding variety of expressions in daily use ; such as "in- 
 volved," and "embarrassed circumstances," "declining" and 
 " failing circumstances." How far the conditions thus 
 described amount to insolvency now remains to be con- 
 sidered. 
 
 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 payment of his debts."" Other defini- 
 tions are given in the books,' but these describe insolvency 
 in the primary and ordinary sense of the term,* arid 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 ex- 
 tensive sense), for the payment of all his debts.^ Debts are 
 
 ' Cowen, J., in Herrick v. Borst, 4 Hill (N. Y.) 650, 652 ; Paige, J., in Curtis v. 
 Leavitt, 1 5 N. Y. 200. 
 
 ' 2 Bell's Com. 162, cited by Brown, J., in Curtis v. Leavitt, 15 N. Y. 141. 
 
 ^ Bayly v. Schofield, i M. & S. 338 ; Shone v. Lucas, 3 D. & R. 218, cited by 
 Cowen, J., in Herrick v. Borst, 4 Hill, 653 ; De Tastet v. Le Tavernier, i Keen, 
 161, 171 ; Ingraham on Insolvency (ed. 1827), 9; Brown, J., in Curtis v. Leavitt, 
 15 N. Y. 141 ; Paige, J., Id. 201. 
 
 * Cowen, J., in Herrick v. Borst, 4 Hill, 652. 
 
 ' Gardner, J., in Leitch v. HoUister, 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 property 
 and assets of an individual to pay his debts. This is 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.), 397, 793 
 £i seq., and cases cited'. 
 
 ■Phe term has been construed variously in its application to debtors making 
 assignments^ Thus, in the case of Mc Arthur v. Chase (13 Gratt. 683), Mr. Jus- 
 tice Daniel, in discussing the construction of the term insolvency, as employed in 
 
82 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV, 
 
 paid with property,' and so long as a 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 
 insolvent in the sense now under consideration.^ However 
 deficient in cash resources, if he can, without any doubt, 
 satisfy all his creditors 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.^ 
 
 § 63. In addition to the circumstance of the mode of pay- 
 ment (including the character of the means employed by the 
 debtor), that of the time of payment constitutes an important 
 element in the idea and definition of insolvency. 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 a clear matter of fact, may 
 be consistent with ability to pay at a future day. Owing to 
 
 the statutes prohibiting preferences by Hmited partnerships when insolvent, re- 
 marks: " 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 assignments of most of its 
 property, made to insure those ends, before such bankruptcy would occur. To 
 say, on the other hand, that the firm shall be held to be insolvent 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 discourage the formation of 
 such partnerships." And he applied as a test the question whether the partner- 
 ship property at the time of the assignment was sufficient to pay its debts. 
 
 But in the case of Blow v. Gage (44 111. 208), where the solvency of the debt- 
 ors 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 evidence of in- 
 solvency. 
 
 ' Cowen, J., in Herrick v. Borst, 4 Hill, 652. 
 
 '^ Id. ibid. Under the provisions of the Civil Code of California relating to- 
 voluntary assignments, a debtor is insolvent when he is unable to pay his debts- 
 from his own means as they become due. Title 3, part II, 'p. 54, § 3450. 
 
 ' McArthur v. Chase, 13 Gratt. 683 ; see Rokenbaugh v. Hubbell, 5 Law Rep. 
 (N. S.) 95, 96 ; cited by Strong, J., in Ogden v. Peters, 15 Barb. 563, 564 ; and see 
 Shackelford v. P. & M. Bank of Mobile, 22 Ala. 238, 242, arg. 
 
§ 63.] INSOLVENCY. 83 
 
 peculiar circumstances, the debtor's assets, though in ordi- 
 nary times ample, may prove unavailable, because incon- 
 ■ vertible 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, according to a 
 writer of high authority,' whose definition of insolvency has 
 been adopted by the courts,' " a person in this state is truly 
 insolvent ; and it does not follow that he is not insolvent, 
 because in the end his affairs may come round, and he may 
 ultimately have a surplus on winding them up."^ 
 
 In what has just been said, the present inadequacy of 
 the debtor'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 dependent upon contingencies 
 of various kinds which cannot be foreseen or estimated. 
 This state of things frequently occurs in the affairs of em- 
 barrassed debtors ; and it is a condition which justifies, 
 equally with the one last mentioned, the course of making a 
 general assignment. " Where the property of the debtor," 
 it has been said, " is of a doubtful 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. 
 
 ' 2 Bell's Com. 162. 
 
 ■■' Cowen, J., in Herrick v. Borst, 4 Hill, 652 ; Brown, J., in Curtis v. Leavitt, 15 
 N. Y. (i Smith), 141 ; Paige, J., Id. 201. 
 
 ' Blow V. Gage, 44 111. 208 ; Savery v. Spaulding, 8 Iowa, 239 ; Baldwin v. 
 Buckland, 11 Mich. 389. 
 
 ' 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. 
 
^4 "WHO MAY MAKE AN ASSIGNMENT. [CHAP. IV. 
 
 It seems reasonable, therefore, to distinguish between 
 mere supposition or even belief, on the part of a debtor, at 
 the time of making 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 making an assignment to secure preferred creditors, that 
 he is solvent, is not necessarily a badge of fraud ; and an- as- 
 signment 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.'' 
 
 § 64. 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 redeem 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." ^ " It appears to be set- 
 tled," remarked Chancellor Walworth in a case before him,* 
 "by a weight of authority which is irresistible, that a cor- 
 poration 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 charter or some statutory provision." ^ A corporation 
 
 ' Kellogg V. Slawson, 15 Barb. 56 (Onondaga General Term, October 4, 1852). 
 This was decided on the authority of Van Nest v. Yoe (i 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. 
 
 ' Morgentham V. Harris, 12 Cal. 245 ; Quinnebaug Bank v. Brewster, 30 Conn. 
 539 ; but see Bates v. Ableman, 13 Wis. 644. 
 
 ' 2 Kent's Com. (loth ed.) p. 398 and note. 
 
 " De Ruyter v. The Trustees of St. Peter's Church, 3 Barb. Ch. 119, 124; 
 af&'d on appeal, 3 N. Y. 238. 
 
 ' See Catlin v. The Eagle Bank of New Haven, 6 Conn. 233 ; Pope v. Brandon, 
 2 Stew. (Ala.) 401 ; State v. Bank of Mainland, 6 Gill & J. 205 ; Union Bank of 
 Tenn. v. Ellicott, Id. 363; Warner v. Mower, 11 Vt. 385; FUnt v. The Clinton 
 Co. 12N. H. 431; Buell V. Buckingham, 16 Iowa, 285; McCaUie v. Walton, 
 37Ga. 611; Dobbin V. Walton, Id. 614; Rengo v. Real Estate Bank, 13 Ark. 
 J63 ; Dana v. The Bank of U. S. 5 Watts & Serg. 223 ; United States v. Bank 
 ■of U. S. 8 Rob. I La.) 262; Ex parte Conway, 4 Ark. yS\; Hopkins v. Gallatin 
 Co. 4 Humph. (Tenn.) 403 ; Bank of U. S. v. Huth, 4 B. Mon. 423, 429 ; Robins 
 
§ 64.] CORPORATION. 85 
 
 may consequently make an assignment with preferences to 
 particular creditors 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 cred- 
 itors, 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 
 individual and a corporation in regard to the exercise of the 
 power of conferring preferences. ^ 
 
 It has also been contended, and in some instances suc- 
 cessfully, that a general assignment of corporate property, 
 since it practically 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 corpo- 
 rate property does not affect the corporate franchises, and 
 does not dissolve the corporation. = 
 
 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 meet- 
 ing at which a bare quorum is present' 
 
 V. Embry, I S. & M, Ch. 207 ; Montgomery v. Commercial Bank of Rodney„ 
 . Id 632, 644 ; Arthur v. Commercial Bank of Vicksburg, 9 Id. 394 ; Ingraham v. 
 Grigg, 13 Id. 22; Town v. Bank of River Raisin, 2 Doug. (Mich.) 520; but-sea- 
 Coners v. Bank of Brest, Harr. (Mich.) 106; Haxtun v. Bishop, 3 Wend. 13 ; Hill 
 V. Reed, 16 Barb. 280; A. & Ames on Corp. (loth ed.) § 191; Bun's Ex'r v. 
 MacDonald, 3 Gratt. 215; Hurlbut v. Carter, 21 Barb. 221. 
 
 ' Ringo V. Real Estate Bank, 13 Ark. 563; Dana v. Bank of U. S. 5 Watts & 
 Serg. 223 ; State v. Bank of Maryland, 6 Gill & J. 205 ; Union Bank of Tenn. v. 
 Ellicott, 6 Id. 363. 
 
 " Catlin V. Eagle Bank of New Haven, 6 Conn. 233. ' lb. 242. 
 
 ' Smith V. N. Y. 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. Bucl<ingham, 16 Iowa, 284; Mr. Justice Story dissenting 
 in Beaston v. Farmers' Bank of Del. 12 Pet. 138. 
 
 * State V. Bank of Maryland, 6 Gill & J. 205 ; Union Bank of Tenn. v. Ellicott, 
 Id. 363; Hurlbut v. Carter, 21 Barb. 221, 224; Ringo v. Real Estate Bank, 13 
 Ark. 563 ; Ohio Life and Trust Co. v. Merchants' Ins. & Trust Co. 1 1 Humph, i ; 
 A. & Ames on Corp. (loth ed.) § 191 ; see post. Chap. XXII. 
 
 ° Pope v. Brandon, 2 Stew. 401. ' Buell v. Buckingham, 16 Iowa, 284. 
 
86 WHO MAY MAKE AN ASSIGNMENT. [CHAP. IV. 
 
 § 65. Restrictions on the Right. — In some cases, the gen- 
 eral power of alienation is restrained either by the particular 
 act creating the corporation, or by general statute. In New 
 York, it was provided by the sixth section of the " Act to 
 prevent fraudulent bankruptcies by incorporated companies," 
 &c.,' that whenever any incorporated company should hav^ 
 refused the payment of any of its notes, or other evidences 
 of debt, in specie or lawful money of the United States, it 
 should not be lawful for such company, or any of its officers, 
 to assign or transfer any of the property or choses in action 
 of such company to any officer or stockholder of such com- 
 pany, directly or indirectly, for the payment of any debt ; 
 and it should not be lawful to make any transfer or assign- 
 ment in contemplation of the insolvency of such company 
 to any person or persons whatever ; and every such transfer 
 and assignment to such officer, stockholder, or other person, 
 or in trust for them or their benefit, was declared to be ut- 
 terly void. The assignment in Haxtun v. Bishop '^ was as- 
 sailed as being void under this statute. But the Supreme 
 Court held that, as it was not an assignment " to any officer 
 or stockholder for the payment of any debt " of theirs, nor 
 an assignment to any one " in Contemplation of insolvency," 
 within the purview of the act, it was valid. And it was 
 remarked by Savage, C. J., who delivered the opinion of 
 the court,3 that the legislature did not, by the act, intend to 
 prohibit assignments by corporations in all cases, but only 
 in the two instances designated : one, before insolvency and 
 in anticipation or contemplation of that event ; thie other, 
 after insolvency, to officers or stockholders for the payment 
 of any debt.* 
 
 The provision of the act above referred to was incor- 
 
 ' Passed April 21, 1825 ; Session Laws of 1825, pp. 448, 450. 
 
 ■' 3 Vifend. 13. 3 j|j_ j^_ 
 
 * But see Harris v. Thompson, 15 Barb. 62, 65, 66. As to the signification of 
 
 the term insolvency, see Gillet v. Moody, 3 N. Y. 479 ; Herrick v. Borst, 4 Hill, 
 
 650; Oakley v. Paterson Bank, i Green's Ch. (N. J.) 173, 176, 177; Mitchell v! 
 
 Gazzam, 12 Ohio (Stanton), 315 ; Read, J., lb. 336 ; Parker v. Gossage, 2 Cr. M. 
 
 & R. 617 ; Cutten v. Sanger, 2 Y. & J. 459. 
 
'§ 65. J RESTRICTIONS ON THE RIGHT. 87 
 
 porated without change into the fourth title of the eighteenth 
 chapter of the first part of the Revised Statutes of this 
 State ; ' it being declared, however, that the provisions of 
 that title should not apply to any incorporated library or 
 religious society, nor to any moneyed corporation which 
 shall have been or shall be created, or whose charter shall be 
 renewed or extended, after the first day of January, 1828 ; 
 which were declared to be subject to the provisions of the 
 second title of the same chapter.'' 
 
 In the case of Bowen v. Lease,^ which came before the 
 Supreme Court of this State, in 1843, it was held that 
 this provision applied to the New York and Erie Railroad 
 Company, notwithstanding the language of the i8th section 
 of the act incorporating that company,* in which special 
 reference was made to the third title of the eighteenth chap- 
 ter of the first part of the Revised Statutes, without any 
 allusion to the fourth title ; and that an assignment by such 
 company of any of its property, in contemplation of insolv- 
 ency, was void.5 
 
 In the case of Harris v. Thompson,^ which came before 
 the Supreme Court of this State, in 1853, the court, in con- 
 struing the language of the fourth section of the fourth title 
 of the Revised Statutes, re-enacting the provision of the 
 act of 1825, already referred to, held that the second clause 
 of that section, which declares it to be unlawful " to make 
 any transfer or assignment in contemplation of the insolv- 
 ency of such company, to any person or persons whatever," 
 was not, like the first clause, confined in its application 
 to assignments by incorporated companies who had " re- 
 
 ' 2 Rev. Stat. (6th ed.) p. 399. " lb. § n, p. 400. = 5 Hill, 221. 
 
 * Laws of 1832, p. 408. 
 
 ' See the opinion of Chief Justice Nelson in this case, in which the object and 
 operation of the several titles of the eighteenth chapter of the first part of the 
 Revised Statutes are explained, and the rules of their construction laid down. 5 
 Hill, 223-227. 
 
 "15 Barb. 62, Oneida General Term, January 3, 1853. In New Jersey it has 
 been held that, under the second section of the act relating to insolvent corpora- 
 tions, assignments for the benefit of creditors, executed by insolvent companies, 
 are invalid. Am. Ice Machine Co. v. Paterson Steam Fire Engine and Machine 
 Co. 22 N. J. Eq. 72. 
 
88 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV. 
 
 fused the payment of any of their notes or other evi- 
 dences of debt in specie or lawful money of the United 
 States," but applied to all assignments and transfers by 
 corporations, in contemplation of insolvency, to any person 
 or persons whatever. And they accordingly held that an 
 assignment by a manufacturing company, of all its prop- 
 erty to a trustee, in trust for the payment of its cred- 
 itors ratably, made in contemplation of insolvency, was ab- 
 solutely void by statute. And this position has since been 
 approved by the Court of Appeals in this State.' 
 
 § 66. Moneyed Corporations. — Another special restric- 
 tion = imposed on the right of corporations to make assign- 
 ments, in the State of New York, is contained in that pro- 
 vision of the Revised Statutes which, under the general 
 head of regulations to prevent the insolvency of moneyed 
 corporations, declares that " No conveyance, assignment 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." ^ But it is further declared 
 that " this section shall not apply to the issuing of promis- 
 sory notes or other evidences of debt, by the officers of the 
 company, in the transaction of its ordinary business ; nor to 
 payments in specie or other current money, or in bank bills,, 
 made by such officers ; nor shall it be construed to render 
 void any conveyance, assignment, or transfer, in the hands 
 of a purchaser for a valuable consideration and without, 
 notice." ■* In the important case of Curtis v. Leavitt,' in the 
 Court of Appeals, the construction of this section of the 
 statute was made the subject of much discussion. It was 
 held by three of the judges who delivered opinions,® that 
 
 ' Sibell V. Remsen, 33 N. Y. 95 ; Robinson v. Bank of Attica, 21 N. Y. 406 ; 
 Loring v. U. S. Vulcanized Gutta Percha Co. 36 Barb. 329. 
 
 "^ As to restrictions on the right of corporations to give preferences, see post^ 
 Chap. X. 
 
 " 2 Rev. Stat. (6th ed.) p. 298, § 8 ; see Hoyt v. Thompson, I Seld. 320. 
 
 ' 2 Rev. Stat, ubi supra. ' 15 N. Y. 9. 
 
 ' Shankland, J., Id. 174 ; Paige, J., Id. 189, 190; Selden, J., Id. 249, 250. 
 
§ 66.] . MONEYED CORPORATIONS. 89 
 
 the language of the statute must be strictly pursued, and 
 that there must actually be a formal resolution of the board 
 of directors, adopted previous to the transfer and expressly 
 authorizing it. It was maintained on the other hand, by 
 two of the judges/ that it was sufficient if the requisition 
 of the statute be substantially complied with, that the trans- 
 fer might be approved at the time or ratified afterwards, and 
 that the ratification need not be declared in express terms. 
 The conclusion finally arrived at by the court seems to have' 
 been that the transfers in the case before the court were 
 void, as not being authorized by a previous resolution ; but 
 that the purchasers and pledgees of the company's bonds 
 secured by such transfers, were " purchasers for a valuable 
 consideration and without notice," and therefore within the 
 saving clause of the eighth section already cited." 
 
 It was further held in the case just cited, in accordance 
 with previous decisions in this State, that banking associa- 
 tions organized under the general banking law of 1838,* 
 are corporations, and therefore within the provisions of the 
 Revised Statutes relating to moneyed corporations.'' 
 
 ' Comstock, ]:, 15 N. Y. 47-50 ; Brown, J., Id. 134-138. 
 
 " See 15 N. Y. II, reporter's abstract. Compare the case in the court below, 
 17 Barb. 309 ; and see Gillet v. Phillips, 13 N. Y. 114. 
 
 ' See this act, with all the amendments noted, and other convenient references, 
 in Cleaveland on the Banking System of the State of New York, Appendix, pp. 
 211-223. / 
 
 * Comstock, J., 15 N. Y.47 ; Brown, J., Id. 133 ; Shankland, J., Id. 171 ; Paige, 
 J., Id. 183, 184. This has been a vexed question in the courts of this State. Cases 
 may be found in the reports, in which it has been held that associations organized 
 under the general banking law are not corporations. Warner v. Beers and Bo- 
 lander V. Stevens, in the Court of Errors, 23 Wend. 103 ; see Gillett v. Campbell, 
 in the Supreme Court, i Den. 520. But the contrary may now be considered as 
 settled by the express decisions of the Court of Errors and the Court of Appeals. 
 Supervisors of Niagara v. The People, 7 Hill, 504 ; Gillet v. Moody, 3 N. Y. 479 ; 
 Talmage v. Pell, 7 N. Y. 328 ; Leavitt v. Blatchford, 5 Barb. 9, and cases there 
 cited ; s. C. on appeal, 17 N. Y. 521 ; Robinson v. The Bank of Attica, 21 N. Y. 
 406 ; The Bowery Bank Case, 5 Abb. Pr. 415 ; S. C. 16 How. Pr. 56 ; and see 
 Matter of Empire City Bank, 10 How, Pr..498. In the case of Gillet v. Moody, 
 Bronson, C. J., in delivering the opinion of the court, observed : " That these 
 associations are corporations and moneyed corporations, has been directly and 
 expressly adjudged by the highest courts in the State. They are not corporations 
 in a qualified sense, as within the intent and meaning of some particular statute ; 
 but are corporations to all intents and purposes. If anything can be settled by 
 judicial decisions, this is settled." 3 N. Y. 485. The adjudged cases on this 
 point may be found fully collected and conveniently digested in the appendix to 
 Cleaveland on the Banking System of the State of New York, pp. 297-325. It 
 will be seen on reference to the case of Curtis v. Leavitt, already cited, that 
 
^O WHO MAY MAKE AN ASSIGNMENT.. [CHAP. IV. 
 
 § 67. Power of Partners to Assign. — In cases of co- 
 partnership, an assignment for the benefit of creditors may 
 be made in the name of the firm by a single partner, by 
 the authority or with the consent of his copartners, with 
 the same eff'ect as if made by all.' But to what extent one 
 partner may bind the firm by an assignment of the part- 
 nership property, in the name of the firm, without the 
 knowledge or consent of his copartners, does not seem to be 
 settled. It is clear that he may so assign portions of the 
 partnership effects, in payment 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.' As- 
 signments 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 partner- 
 ship. ■* So a single partner may sell^ or mortgage^ all the 
 
 several of the judges who delivered opinions, while admitting the question to be 
 :settled by authority, distinctly intimate that, if it were res integra, their opinions 
 -would be given on the other side. Comstock, J., 15 N. Y. 47 ; Shankland, J., Id. 
 171 ; Paige, J., Id. 183, 188. 
 
 ' Baldwin v. Tynes, 19 Abb. Pr. 32 ; Welles v. March, 30 N. Y. 344 ; Ely v. 
 Hair, 16 B. iVIon. 230. 
 
 ^ Harrison v. Sterry, 5 Cranch, 589 ; Anderson v. Tompkins, i Brock. 456 ; 
 Parker, C. J., in Hodges v. Harris, 6 Pick. 360, 361, 362 ; Tapley v. Butterfield, i 
 Mete. 515, 518; Walworth, C, in Havens v. Hussey, 5 Paige, 30, 31 ; Farns' 
 -worth, C, in Kirby v. Ingersoll, i Harr. (Mich.) 172, 187, 191 ; Hoffman, A. V.C., 
 in Hitchcock v. St. John, Hoff. Ch. 511 ; Story on Partn. § loi ; Collyer on Partn. 
 ■§ 395 (Perkins' ed. 1848). In Fox v. Hanbury (Cowp. 445), Lord Mansfield de- 
 cided that even after an act of bankruptcy committed by one partner, an assign- 
 ment bona fide of partnership effects, by the solvent partner, to a creditor 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 partner- 
 ship 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 of them. See 5 Hill, 163. The power of one partner to j^//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, i Brock. 
 456 ; Forkner v. Stuart, 6 Graft. 197 ; McClelland v. Remsen, 3 Abb. Dec. (N. Y.) 
 74 ; Mowson v. Mendenhall, 18 Minn. 232 ; Young v. Keighley, 1 5 Yes. 557. 
 
 " Story on Partn. §101. * Harrison v. Sterry, 5 Cranch, 289. 
 
 ' Anderson v. Tompkins, i Brock. 456 ; Arnold v. Brown, 24 Pick. 89 ; Whit- 
 ton V. Smith, I Freem. (Miss.) 231 ; Mabbett v. White, 12 N. Y. 442 ; Graser v. 
 Stellwagen, 25 N. Y. 315 ; CoUumb v. Bloodgood, 15 Ala. 34; Boswell v. Green, 
 I Dutch. (N. J.) 390 ; see McNutt v. Strayhow, 39 Penn. 269. 
 
 ° Tapley v. Butterfield, i Mete. 518. 
 
§ 68.] POWER OF PARTNERS TO ASSIGN. 
 
 91 
 
 partnership effects — his power to bind the firm to the 
 extent being an impHed 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 knowl- 
 edge 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. 
 
 § 68. 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 Chancery 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 invalid, on the general 
 ground of the want of power in one partner to assign the 
 partnership property in this manner, without the consent 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 mate- 
 rially 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 Egberts v. Wood,* that "although the decision was 
 put upon the general ground that one partner had not the 
 
 ' Story on Partn. § loi ; 3 Kent's Com. [44, 46] 47, 49 ; Parsons on Partner- 
 ship, 167. 
 
 ' Story on Partn. ubi sup. ; 3 Kent's Com. ubi sup. 
 
 ° I Desaus. 537. ' 3 Paige, 517. 
 
92 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV. 
 
 right to assign the partnership 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 assignment 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 mer- 
 cantile 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 men- 
 tioned on a succeeding page. 
 
 § 69. 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 
 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 itself, 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 making it had a power of 
 attorney from the others, whichf however, did not authorize 
 him to execute deeds in their names generally. It was ob- 
 jected 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 
 
 ' 4 McCord's Law, 519; see Parsons on Partnership, p. 167,11; see Kimball 
 V. Hamilton Fire Ins. Co. 8 Bosw. (N. Y.) 495. 
 
 " 5 Cranch, 289. = It does not appear to have been of all. 
 
§ 70-J POWER OF PARTNERS TO ASSIGN. 93 
 
 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 com- 
 mand of their funds in America, and could collect or 
 transfer the debts due to them. The assignment under 
 consideration is an act of this character, and is within the 
 power usually exercised 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. 
 
 § 70. 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 assignment, recognized the general principle 
 that one partner has the absolute 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 per- 
 sonal property, both in possession and in action, each part- 
 ner 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 for the District of Pennsylvania, the assignment was 
 a general one, of all the partnership estate, and was exe- 
 cuted by one of two partners to a trustee, for the benefit of 
 such of the creditors as should, within a specified time, exe- 
 cute in favor of the partners a full release of all demands. 
 The executing partper resided in Philadelphia, the others in 
 
 ' 4 Day, 428. ° lb. 430, Brainerd, J. 
 
 » 4 Wash. C. C. 232; sometimes inaccurately cited as " Pearpoint v. Lord." 
 Usually cited as "Pierpont v. Graham." 
 
94 
 
 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV. 
 
 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 association, 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: "It may 
 admit of serious doubt whether one partner can, without 
 the consent of his associates, assign the whole of the part- 
 nership 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 creditors of the concern, would seem 
 emphatically to be of this character. 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. 
 
 § 71. 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 knowledge 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 pay- 
 ment, first of certain creditors named in the deed, and then 
 of those who should exhibit their claims within certain speci- 
 fied periods. The general doctrine as to the power of each 
 
 • 4 Wash. C. C. 234. ' I Brock. 456. 
 
§ 7I-] POWER OF PARTNERS TO ASSIGN. 95 
 
 partner of a firm to dispose of the whole of the partnership 
 effects, 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 other partner 
 ought to be consulted. The court, however (after consider- 
 ing these objections at length), was of opinion that the 
 assignment, 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 distinction 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 part- 
 nership, though it might suspend the operations of the 
 company. " 
 
 It is evident, from a perusal of this important case, that 
 the decision 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 exercised a controlling influence upon 
 the mind of the court. Throughout his opinion, the chief 
 justice seems to place the power to assign on the same foot- 
 ing with the power to sell ; the latter being conceded to be- 
 long absolutely to each partner, to the extent of the whole 
 effects, " though the others be within reach. " = The situa- 
 
 " I Brock. 460, 461. " Id. ibid. ^ Id. 461. 
 
 ' Id. ibid. Md. 459, 461. 
 
^6 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV. 
 
 tion of the partners, in the case before the court, is referred 
 to as giving " increased force " to the reasoning by which 
 the assignment was sustained as an act within the course of 
 trade, but not as constituting the main ground of the opin- 
 ion.' And it is only on the point of giving dLpreference 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 consideration. 
 From these expressions, it might be inferred to have been 
 the opinion of the court (though not expressed in terms), 
 that an assignment by one partner to trustees for the benefit 
 of creditors, without preferences, would be valid, though 
 the non-assenting partner were present, or within reach. On 
 the other hand, there are expressions in the opinion whicji 
 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 preliminary to its 
 exercise. Thus, it is said of the power of sale, that " it 
 would certainly not be exercised in the presence of a part- 
 ner without consulting him ; and if it were so exercised, 
 slight circumstances would be sufficient to render the trans- 
 action suspicious, and perhaps to fix on it the imputation of 
 fraud." 3 And again, " In the absence of one of the partners, 
 in a case of admitted and urgent necessity, the power to sell 
 may be exercised by the partner who is present, and who 
 must act alone, in such manner as the case requires, provided 
 it be exercised fairly." + 
 
 § 72. In the case of Robinson v. Crowder.s in the Court 
 of Appeals of South Carolina, the assignment was of all 
 the partnership property to a trustee, for the benefit of all 
 the creditors ratably, and was executed by two of three part- 
 
 ' I Brock. 460. ' Id. 462. ' Id. 460. 
 
 ' Id- 463- ' 4 McCord's Law, 519. 
 
§ 72-] POWER OF PARTNERS TO ASSIGN. 97 
 
 ners, who resided in Liverpool, the remaining partner resid- 
 ing in Charleston, South Carolina, and having the partner- 
 ship effects conveyed in his possession. The court consid- 
 ered it to be no objection to the assignment, that it was not 
 executed by the partner in this country ; and Mr. Justice 
 Johnson, who delivered the opinion, after referring to the 
 case of Harrison v. Sterry, as having decided " on very 
 sound principles," that an assignment of funds for the pay- 
 ment 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 gen- 
 eral assignment becomes necessary, there can be no reason 
 why it should not be equally binding. The principle is the 
 same whether it be partial or total, and it follows that, in 
 either case, one may bind the whole." ' The decision, how- 
 ever, was against the assignment on other grounds. 
 
 In the case of Egberts v. Wood,° in the Court of Chan- 
 cery of New York, an assignment of all the partnership 
 effects had been made by one of two surviving copartners, 
 to trustees, to pay certain preferred creditors, without the 
 assent of the other, or of the representative of the deceased 
 partner (though this was denied). The non-executing part- 
 ner 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 ex- 
 istence 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 Dick- 
 inson V. Legare, Robinson v. Crowder, Pearpoint v. Graham, 
 
 ' 4 McCord's Law, 537. " 3 Paige, 517. 
 
 '' 3 Paige, 523. 
 
98 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV. 
 
 Mills V. Barber, and Harrison v. Steriy,' were reviewed, and 
 considered as authorizing this conclusion. The chancellor 
 declined, however, expressing any opinion " in favor of the 
 Validity of such an assignment of the partnership effects to a 
 h'usiee, by one partner, against the known wishes of his co- 
 partner, and in fraud of his right to participate in the distri- 
 bution of the partnership funds among the creditors ; or in 
 the decision of the question which of the creditors should 
 have a preference in payment out of the effects of an insolv- 
 ent concern."^ 
 
 § JT)- I" the case of Havens v. Hussey,^ in the same 
 court, an assignment of all the partnership property and ef- 
 fects 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 certained 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 chancellor explained his con- 
 clusion 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 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 included all the private property of 
 the assignor, and all the property of the firm. It appeared 
 that the partner executing the assignment had the whole 
 
 ' The case of Anderson v. Tompkins was not noticed. 
 
 ■' 3 Paige, 525. = 5 Paige, >. - 5 Paige, 31. » 8 Leigh, 415. 
 
§ 74-] POWER OF PARTNERS TO ASSIGN. 99 
 
 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 part- 
 ner, and that the purpose for which the effects were con- 
 veyed was the payment of bona fide creditors. The case 
 of Anderson v. Tompkins was considered as fully in point 
 and as decisive of the case. " Following this high author- 
 ity," 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 partners residing 
 out of the State), has the power to deliver over and assign 
 the goods and choses in action of the company to the cred- 
 itors of the company, in discharge of the partnership debts, 
 is a position too clear, in my opinion, to require either ar- 
 gument or authority. If he can do this directly, I think it 
 equally clear that he may indirectly, by delivering or assign- 
 ing 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 particular creditor, or to 
 a class of creditors, although the consequence of such pref- 
 erence may, in case of a deficiency of funds, defeat the claims 
 of the postponed creditors." "" 
 
 § 74. In the case of Deckard v. Case,^ in the Supreme 
 Court of Pennsylvania, the assignment was of the whole 
 stock in trade of the firm directly to certain creditors in 
 payment of debts. It was made by one of two partners, 
 
 ' 8 Leigh, 415, 433. ' Id. 436. 
 
 ^ 5 Watts, 22. Sometimes inaccurately cited as " Decliard's Case." 
 
lOO 
 
 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV". 
 
 without the assent of the other ; but it appeared that the 
 non-assenting partner had left the country. The court sus- 
 tained the assignment on the general ground of the implied 
 power of a partner to dispose of the whole partnership in- 
 terest, as held in Mills v. Barber, and other cases ; though 
 the peculiar facts of the case were also urged as strengthen- 
 ing 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 partner- 
 ship effects to trustees executed 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, in- 
 volved 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 preferences, and the other 
 shortly after by the other partner, without preferences. The 
 court below was of opinion that the facts in evidence 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 af&rmed. 
 
 § 75. 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, with- 
 out 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 prefer- 
 erences), without the knowledge or consent of his copart- 
 
 ' 6 Watts & Serg. 300 ; Rogers, J., Id. 310. " 3 Id. 454. 
 
 ' I Harr. (Mich.) 172 ; s. C. on appeal, i Doug. 477. 
 
■§ 76.] POWER OF PARTNERS TO ASSIGN. lOI 
 
 ner, where the latter is on the spot, and might be consulted. 
 The chancellor, in the course of delivering his opinion, ob- 
 served that " a partner may transfer a portion of the assets 
 or obligations, for the purpose of paying or securing debts, 
 or to raise means to carry on the concern ; but that the 
 power of divesting entirely one partner of his interest, ap- 
 pointing a trustee for both, and breaking up the concern, is 
 not one of the powers either contemplated or implied by the 
 contract of copartnership." ' 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 distribution of 
 them among the creditors.^ 
 
 In the Missouri cases of Hughes v. Ellison,' Drake v. 
 Rogers,-* and Hook v. Stone.s it has also been decided that 
 one partner has not authority to make a general assignment 
 to a trustee for creditors. 
 
 § 76. In the case of Hitchcock v. St. John,^ in the Court 
 of Chancery of New York for the first circuit, the facts 
 were these. One of two partners resided in the city of New 
 York, carrying on the business there ; and the other in Au- 
 gusta, Georgia, conducting the business there, under the 
 same firm. The partner residing in New York made an as- 
 signment 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 in- 
 solvency, 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 ob- 
 serving that " the rule seems well established that this court 
 
 ' I Harr. 187. '' i Harr. 191. = 5 Mo. 463. 
 
 ' 6 Id. 317. ° 34 Id. 329. " Hoff. Ch. 511. 
 
I02 WHO MAY MAKE AN ASSIGNMENT. [CHAP. IV. 
 
 will sustain an assignment of the whole of the partnership 
 funds by one partner, where all the creditors are admitted to 
 an equal participation." ' It was further held, that although 
 partnership funds might be exhausted by an immediate pay- 
 ment to a creditor, by one partner, yet there was no implied 
 authority, arising from the partnership relation, in one part- 
 ner to appoint a trustee of all the funds, to collect and dis- 
 tribute them as that partner shall determine. The appoint- 
 ment of a trustee was regarded as an extraordinary act, in 
 which all the members of the firm were entitled to have a 
 voice and share.'' 
 
 The facts in this case resemble, to a considerable extent,, 
 those in Pearpoint v. Graham, already noticed,^ which, how- 
 ever, was not cited. The effect of the absence of a non- 
 assenting partner, as qualifying the rule 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 preferences. 
 
 § ^'j. In the case of Dana v. Lull,* in the Supreme Court 
 of Vermont, the assignment was of all the partnership ef- 
 fects to a trustee, for the benefit of preferred creditors, and 
 was made by one of two partners, without the authority or 
 assent of the other. It appeared that the partners resided in 
 different parts of the State, and that the partner who made 
 the assignment had the superintendence and care of the busi- 
 ness. 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 busi- 
 ness, and distribute the proceeds of the partnership effects 
 in unequal proportions among the creditors, and thereby 
 exclude the other partners from participating in the distri- 
 bution, or in the decision of the question in regard to what 
 
 ' HofF. Ch. 514, 515. = Hoff. Ch. 518. 
 
 ' Ante, p. 93. * 17 Vt. (2 Wash.) 390. 
 
§§ 7^. 79-] POWER OF PARTNERS TO ASSIGN. 103 
 
 creditors should have a preference, if any/ The cases princi- 
 pally relied on by the court were those of Hitchcock v. St. 
 John, and Havens v. Hussey. 
 
 § 78. In the case of Hayes v. Heyer,^ in the Court of 
 Chancery of New York, for the first circuit, the question 
 whether one partner could make a general assignment of the 
 partnership effects, even without preferences, where his co- 
 partner was present, attending to business as usual, came 
 up incidentally, and was noticed by the court, as being one 
 of importance and difficulty, but was not further considered, 
 the point not being before the court for decision. The case 
 was subsequently transferred 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. 
 
 § 79. 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 with- 
 out the consent or assent of the other partner, and without 
 consulting him, although he was at the time actively en- 
 gaged 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 
 partnership effects in behalf of all the copartners ; and that 
 it is not incident to the right of one partner thus to select 
 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 benefit 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 
 
 ' Id. 394. •' 4 Sandf. Ch. 485. 
 
 ' 3 Sandf. S, C. 284. ' Id. 292. ' Id. 284, 293. 
 
I04 WHO MAY MAKE AN ASSIGNMENT. [CHAP. IV. 
 
 reported with the last case, the same question arose under 
 somewhat different 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 part- 
 ner, who was present, and might have been consulted. The 
 assignment was a general one, of all the partnership eflFects, 
 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 without the knowledge or con- 
 sent of the others.' 
 
 § 80. In the case of Kemp v. Camley," in the same 
 court, an assignment had been made by one of two partners, 
 of all the partnership property, to a trustee, giving a prefer- 
 ence 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 Common 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 authority. 
 
 ' In 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 judg- 
 ment 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. 
 
 ' 3 Duer, I. = I E. D. Smith (N. Y.) 341. 
 
§§ 81-83.] POWER OF PARTNERS TO ASSIGN. IO5 
 
 § 81. In the case of Forbes v. Scannell,' in the Dis- 
 trict 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 Shanghae, 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 previously withdrawn from the firm. 
 The other partner was a salaried 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. 
 
 § 82. In the case of Robinson v. Mcintosh,^ in the New 
 York Common Pleas, a copartnership assignment to trustees 
 for the benefit of creditors, in all respects equitable and just 
 to all parties, made in a condition of insolvency by the gen- 
 eral 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 members of a firm to make such a disposition of the 
 property, while other members are present and equally en- 
 titled to a voice in the disposition, I do not doubt that we 
 ought to sustain an assignment in all respects equitable and 
 just to all parties, made in a condition of hopeless insolv- 
 ency by all of those who, by the terms of the actual arrange- 
 ment between the members, are the active managing part- 
 ners in the business." 
 
 § 83. In the case of McGregor v. Ellis,^ in the Superior 
 Court of Cincinnati, where the non-assigning 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 
 
 ' 13 Cal. 242. '^ 4 E. D. Smith, 221. ' 2 Disn. (Ohio), 386. 
 
I06 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV. 
 
 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. 
 
 § 84. Robinson v. Gregory ,= in the Supreme Court of 
 New York, and af&rmed at the Court of Appeals, is an im- 
 portant case. The firm consisted of three partners, one of 
 whom was resident 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 impliedly granted a 
 power, in cases of emergency, to the remaining partners to 
 act for him. This view of the law was regarded as incor- 
 rect 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. 
 
 § 85. In the case of Welles v. March,'' one of the partners 
 had absconded, leaving a letter addressed to his copartner, 
 saying among other things, "Take charge of everything in 
 our business — close it up speedily," &c. The remaining part- 
 ner thereupon executed a general assignment of the part- 
 nership 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 absconding partner were such as to empower his co- 
 
 ' 32 Tex. 665. 
 
 '' 29 Barb. 560, referred to in Welles v. March, 30 N. Y. 344. Wright, J., 
 observed : " 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 gen- 
 eral assignment of the partnership property of a trustee. Our opinion was that 
 no such power could be implied from the partnership relation." 
 
 ' 6 Bosw. (N. Y.) 123 ; affi'd in Court of Appeals ; see Ingraham, J., in Palmer 
 V. Myers, 43 Barb. 509 (i860). 
 
 * 30 N. Y. 344. 
 
§ 85.] POWER OF PARTNERS TO ASSIGN. 107 
 
 partner 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 exercise of a 
 power without the scope of the partnership enterprise, and 
 amounts of itself to a suspension or dissolution of the part- 
 nership itself. It is no part of the ordinary business of the 
 copartnership, but outside and subversive of it. No such 
 authority as that can be implied from the partnership rela- 
 tion.' The assignment in the present case was without pref- 
 erence, but the principle of law to be applied to it is not 
 affected by that circumstance." The case of Kelly v. Baker, 
 where the facts were very similar, was rested on substan- 
 tially 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. 
 Camley,3 Deckard v. Case,'' and Kelly v. Baker ,= and with this 
 agrees the case of National Bank v. Sackett* 
 
 The case of Coope y. 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 failure of the other partner to con- 
 tribute his proportion of the capital, this was deemed a suffi- 
 cient authority to enable one partner to execute a general 
 assignment without the consent of his copartner.' 
 
 In the case of Stein v. La Dow," in the Supreme Court 
 
 ' Johnson, J., concurred upon the ground of an express authority, see p. 353. 
 
 ' 43 Barb. 509. ^ 3 Duer, i. "5 Watts, 22. 
 
 " 2 Hilt. 536. "2 Daly, 395. 
 
 ' 42 Barb. 87 ; S. C. 18 Abb. Pr. 442 ; 28 How. Pr. 10. 
 
 " 29 Barb. 560 ; rev'd in Court of Appeals, see Welles v. March, 30 N. Y. 344. 
 
 • Roberts v. Shepherd, 2 Daly, no. " 13 Minn. 412. 
 
I08 WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV. 
 
 Df Minnesota, 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 partnership, and the non-assign- 
 ing partner cannot be consulted on account of his absence 
 under circumstances which furnish reasonable ground for 
 inferring that he intended to confer upon the assigning 
 partner 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 sufficient to empower 
 the remaining partner to execute an assignment of firm 
 property. 
 
 § 86. 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 following : that such an assignment works a 
 dissolution of the copartnership ; ^ that it is an act out of the 
 course of trade, not contemplated by the contract of part- 
 nership, 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 de- 
 cision of the question which of the creditors, if any, should 
 have a preference 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 
 
 ' On this point, the opinions of Mr. Justice Washington, in Pearpoint v. 
 Graham, and of Chief Justice Marshall, in Anderson v. Tompkins, are in conflict. 
 See ante, pp. 93, 94. 
 
§ 86.] POWER OF PARTNERS TO ASSIGN. 109 
 
 the copartners, owing to their absence or other cause. The 
 following propositions' appear to be deducible from the 
 adjudged 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 creditors in payment of partnership debts.'' 
 
 II. One partner cannot make a general assignment of 
 the partnership effects to a trustee for the benefit of cred- 
 itors, even ratably, without the consent ^ or against the 
 known wishes of the other partners, for the reason that no 
 such authority can be implied from the partnership relation."^ 
 
 III. Where a partner has relinquished all control of the 
 partnership 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. ^ 
 
 ' It will be observed that the pfDpositions laid down in the text differ from 
 those contained in the previous edition. The cases in which assignments by one 
 partner of partnership property, have been sustained, are here regarded not so 
 much as exceptions and innovations upon the prevailing rule, as depending upon 
 the evidence more or less conclusive of an express authority. 
 
 ^ Mills V. Barber, 4 Day, 428; Egberts v. Wood, 3 Paige, 517; Havens v. 
 Hussey, 5 Id. 30; Deckard v. Case, 5 Watts, 22; Mabbett v. White, 12 N. Y. 
 442; Graser v. Stillwagen, 25 N. Y. 315. 
 
 ' But he may, with the express consent of the other partners. Ely v. Hair, 16 
 B. IVIon. 230 ; Baldwin v. Tynes, 19 Abb. Pr. (N. Y.) 32 ; Roberts v. Shepherd, 
 2 Daly, no. 
 
 * Robinson v. Gregory, cited in Welles v. March, 30 N. Y. 344 ; reversing 
 S. C. 29 Barb. 560 ; Palmer v. Myers, 43 Barb. 509 ; Pettie v. Orser, 6 Bosw. 
 123; atB'd in Ct. of App. 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; Nat. Bk. v. Sackett, 2 Abb. Pr. N. S. 
 280; Stein v. La Dow, 13 Minn. 412; Bull v. Harris, 18 B. Mon. (Ky.) 195; 
 Wetter v. Schlieper, 4 E. D. Smith (N. Y.) 917 ; Sloan v. Moore, 37 Penn. St. 
 217; Dana v. Lull, 17 Vt. (2 Wash.) 390; Hook v. Stone, 34 Mo. 329; 
 Hughes V, Ellison, 5 Mo. 463 ; Drake v. Rogers, 6 Mo. 317 ; Kirby v. Ingersoll, . 
 Harr. Ch. (Mich.) 172 ; S. C. i Doug. 477 ; Bowen v. Clark, i Biss. 128. Contra, 
 Ch. J. Marshall, in Anderson v. Tompkins, i Brock. 456 ; Hitchcock v. St. John, 
 Hoff Ch. 511 ; Robinson v. Crowder, 4 McCord, 519; McGregor v. Ellis, 2 
 Disn. (Ohio), 286 ; McCuUough v. Sommerville, 8 Leigh, 415 ; Graves v. Hall, 32 
 Tex. 665 ; Gordon v. Canjion, 18 Gratt. 387 ; and see Deckard v. Case, 5 Watts, 
 22 ; Hennessy v. Western Bank, 6 Watts & Serg. 300 ; Egbert v. Woods, 3 Paige, 
 517 ; Lassell . Tucker, 5 Sneed (Tenn.) i ; but see Bancroft v. Snodgrass, i Cold. 
 (Tenn.) 430. 
 
 ' Welles V. March, 30 N. Y. 344 ; Kemp v. Carnley, 3 Duer, i ; Palmer v. 
 Myers, 43 Barb. 509 ; S. C. 29 How. Pr. 8 ; Deckard v. Case, 5 Watts, 22 ; Kelly 
 V. Baker, 2 Hilt. 531 ; Nat. Bank v. Sackett, 2 Daly, 395. 
 
no WHO MAY MAKE AN ASSIGNMENT. [cHAP. IV. 
 
 IV. But the mere absence of a partner from the country, 
 will not be regarded as confeiTing such a power upon the 
 remaining partners.' 
 
 V. But where the absence or non-residence of the part- 
 ner is coupled with other circumstances tending to show 
 such an authority, especially where the assignment is made 
 without preferences," and in an extraordinary emergency, or 
 where a subsequent ratification can be inferred,^ the assign- 
 ment 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. Sommerville, 
 where both facts appeared. But where the partners are 
 equally active in the business, a«d especially where the busi- 
 ness is transacted in different States, under the same firm or 
 different firms, by partners resident at each place, the right 
 of one to .assign on the mere ground of the absence of the 
 other, would be much less readily conceded.^ 
 
 § 87. It remains to notice the opinions of several eminent 
 American jurists 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 all the 
 
 ' Robinson v. Gregory, cited in Welles v. March, 30 N. Y. 344 ; rev'g S. C. 29 
 Barb. 560; Coope v. Bowles, 42 Barb. 87 ; s. C. 18 Abb. Pr. 442 ; Pettee v. Orser, 
 6 Bosw. 123 ; Stein v. La Dow, 13 Minn. 412. 
 
 = Pearpoint v. Graham, 4 Vi^ash. C. C. 232 ; Hitchcock v. St. John, Hoff. Ch. 
 511 ; Dana v. Lull, 17 Vt. 390. 
 
 " Forbes v. Scannell, 13 Cal. 242 ; Stein v. La Dow, 13 Minn. 412 ; McGregor v. 
 Ellis, 2 Disn. (Ohio), 286 ; Pearpoint v. Graham, 4 Wash. C. C. 232 ; McNulty v. 
 Strayhorn, 39 Penn. 269. 
 
 * Forbes v. Scannell, 13 Cal. 242 ; Stein v. La Dow, 13 Minn. 412 ; McCullough 
 V. Somerville, 8 Leigh, 41 5 ; McGregor v. Ellis, 2 Disn. (Ohio), 286 ; Pearpoint v. 
 Graham, 4 Wash. C. C. 232 ; Harrison v. Sterry, 5 Cranch, 289. 
 
 ' See Pearpoint v. Graham, 4 Wash. C. C. 232 ; and Hitchcock v. St. John, 
 Hoff. Ch. 511, in which the facts were as above stated. 
 
§ 8;.] POWER OF PARTNERS TO ASSIGN. Ill 
 
 property of the partnership undecany circumstances. In his 
 Treatise on Partnership he observes : " It may well admit of 
 some doubt whether this power extends to a general assign- 
 ment 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 dissolu- 
 tion of the partnership itself." ' In a note to this passage, he 
 cites Pearpoint v. Graham, Dana v. Lull, CuUum v. Blood- 
 good,'' Deming v. Colt, Kirby v. Ingersoll, and Deckert v. 
 Filbert.3 He then extracts 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 partner may make a general assignment of all the 
 partnership property." * Chancellor Kent in his Com- 
 mentaries,^ remarks : " It is a point not quite settled, 
 whether one partner, without the knowledge or consent 
 of his copartner, though under circumstances, may not as- 
 sign over all the partnership effects and credits, in the name 
 of the firm, to pay the debts of the firm ; and where all the 
 creditors are admitted to an equal participation, the conclu- 
 sion is ika^ 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 
 
 ' Story on Partn. § loi. 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. 
 
 " 1 5 Ala. 42. " 3 Watts & Serg. 454. 
 
 * Story on Partn. § loi, n. 4. " 3 Kent's Com. [44] 47, n. 
 
 ' " Harrison v. Sterry, 5 Cranch, 289 ; Mills v. Barber, 4 Day, 428 ; 
 Lamb v. Durant, 12 Mass. 54; Pothier, Traite 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, I Brock. 456." 
 
112 WHO MAY MAKE AN ASSIGNMENT. [CHAP. IV. 
 
 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 
 concludes 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 assign- 
 ment of all the partnership property, so as to break up its 
 operations.3 This I consider to be the soundest conclusion 
 to be drawn from the conflicting authorities." * 
 
 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 insolvent, has 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 contracted, is not doubted ; 
 and we think the weight of authority sanctions his assigning 
 the whole property in trust for all the creditors, especially if 
 this be done without preferences of any kind ; although this 
 has been questioned on the ground that such a transfer 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 trustees, all the partners, special as well as 
 
 ' "3 Paige, 517. Same doubt expressed in Pearpoint v. Graham, 4 Wash. C. 
 C. 232." 
 
 ^ " Hitchcocli V. St. John, Hoff. Ch. 516 ; Kirby v. IngersoU, Harr. Ch. (Mich.) 
 174 ; Dana v. Lull, 17 Vt. 390 ; Gibson, Ch. J., 8 Watts & Serg. 63, S. P." 
 
 ' " Stoiy on Partn. pp. 145-150." 
 
 * Mr. 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 it^ 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 estab- 
 lished by the authority of the highest judicial tribunals in South Carolina, Con- 
 necticut, Massachusetts, and the United States as a federal body." Law of 
 Comniandatary and Limited partnership in the United States, p. 390, § 393, 
 (Phila. ed. 1853). 
 
 '' Parsons on Partnership, p. 166. 
 
§ 88.J POWER OF PARTNER TO ASSIGN INTEREST. II 3 
 
 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 con- 
 sent or concurrence of those who do not actually execute it, 
 or subject to ratification on their part 
 
 It is clear, however, that the right of one partner to dis- 
 pose of partnership property is confined strictly to personal 
 eflFects, and does not extend to real estate owned by the 
 partnership/ One partner cannot convey away the real es- 
 tate of the firm, without special authority.^ 
 
 § 88. Power of each Partner to assign his Interest. — 
 The power of each partner over his own share or interest 
 of the partnership property stands upon an entirely differ- 
 ent footing from his power over the partnership property 
 generally. No partner owns absolutely any part of the 
 property. His interest is an interest subject to the interest 
 of his copartners.3 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 
 creditors.* But such an assignment will pass only so much 
 as may remain 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 
 
 ' Anderson v. Tompkins, i Brock. 456 ; Brainerd, J., in Mills v. Barber, 4 
 Day, 428, 430; Shaw, C. J., in Tapley v. Butterfield, i Mete. 518 ; Carr, J., in 
 McCuUough V. Sommerville, 8 Leigh, 415, 433; CoUyer on Partn. § 394; Story 
 on Partn. § loi ; Thompson v. Bowman, 6 Wall. 316; see CoUumb v. Coldwell, 
 16 N. Y. 484 ; S. C. 24 N. Y. 505. 
 
 '^ CoUyer on Partn. § 394 ; Story on Partn. § loi. 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. 
 
 " Parsons on Part. p. 168. 
 
 " Fellows V. Greenleaf, 43 N. H. 421 ; Horton's Appeal, 13 Penn. St. (>•] ; 
 Kirby v. Schoonmaker, 3 Barb. Ch. 46 ; but see Haggerty v. Granger, 1 5 How. 
 Pr. 243. 
 
 ° Fellows V. Greenleaf, 43 N. H. 421. 
 
114 WHO MAY MAKE AN ASSIGNMENT. [CHAP. IV. 
 
 dissolution of the firm,' and the remaining partner may there- 
 upon execute an assignment of all his property, whether 
 belonging to the previous firm or not, in trust for the pay- 
 ment of his individual creditors." 
 
 § 89. Surviving Partners. — As to the power of surviv- 
 ing partners, it has been held, in South Carolina, that a 
 surviving partner, especially in case of insolvency, may 
 assign the firm effects to a trustee for payment of debts. ^ 
 But in New York it has been held, that after the dissolu- 
 tion of* a copartnership, one of two surviving partners can- 
 not, without the consent of the other, assign the partnership 
 eflfects to trustees for the benefit of preferred creditors.'' And 
 it seems that in this State, 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 cred- 
 itors 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 de- 
 ceased partner, is invalid.^ 
 
 But an assignment by a surviving partner, in all respects 
 
 ' Horton's Appeal, 13 Penn. St. 617; Armstrong v. Fahnestock, 19 Md. 59; 
 Power V. Kirk, i Pitts. R. 510 ; Clark v. Wilson, 19 Penn. 414 ; Parsons on Part. 
 p. 400. 
 
 '' Clark V. McClelland's Assignee, 2 Grant (Pa.) 31 ; Clark v. Wilson, 19 Penn. 
 St. 414 ; Power v. Kirk, i Pitts. R. 510 ; Marsh v. Bennett, 5 McLean, 117 ; Price 
 V. De Ford, 18 Md. 489 ; Smith v. Howard, 20 How. Pr. 266. Contra, Heye v. 
 Bolles, 33 How. Pr. 266 ; s. c. 2 Daly, 231. 
 
 » White V. Union Insurance Co. i Nott & McCord, 556 ; and see, in Virginia, 
 Gait V. Callaud, 7 Leigh, 594. But the rule is otherwise in Tennessee, see Ban- 
 ■croft V. Snodgrass, i Cold. (Tenn.) 430. 
 
 * Egberts v. Wood, 3 Paige, 517. 
 
 ' Hutchinson v. Smith, 7 Paige, 26 ; Walworth, C, Id. 35, 36. In the case of 
 Marsh v. Bennett, 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 partner who purchases the interest of the retiring partner and 
 continues the business, such partner is a ti-ustee for the creditors of the firm ; and 
 a subsequent assignment by such partner of the partnership effects, preferring 
 certam creditors to others, and contrary to the stipulation in the articles of disso- 
 lution, is fraudulent and void. 5 McLean, 117. 
 
§ gO-.J LIMITED PARTNERSHIP. II5 
 
 equitable and just, and made for the equal, benefit of all 
 creditors, is valid.' 
 
 § 90. 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 assign- 
 ments. These restrictions in general prevent such partner- 
 ships 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 con- 
 templation of insolvency, nor can any member of such 
 partnership make such assignment 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 of those who, by the terms of 
 the actual arrangement between the members, are the active 
 managing partners in the business, will be sustained.* 
 
 And such assignment is valid when made by the general 
 partner only.' But this has been doubted, unless the ex- 
 press consent of the special partner is contained in the 
 partnership agreement, or can be inferred from the circum- 
 stances of the case.^ 
 
 ' Loeschigk v. Hatfield, 5 Robt. 26 ; S. C. as Loeschigk v. Addison, 4 Abb. Pr. 
 N. S. 210 ; affi'd 51 N. Y. 660. 
 
 ' See/w/, Chap. X. 
 
 ^ See, on this subject, Troubat on Limited Partnership, c. 13. 
 
 ' Robinson v. Mcintosh, 3 E. D. Smith, 221 ; Jackson v. Sheldon, 9 Abb. 133 ; 
 Greene v. Breck, lo Abb. 43 ; Darrow v. Bruff, 36 How. 479 ; Mills v. Argall, 6 
 Paige, 582 ; S. C. 7 Paige, 586 ; 4 Sandf. Ch. 485 ; 3 Sandf. Sup. Ct. 293 ; 2 Barb. 
 379 ; Van Alstyne v. Cook, 25 N. Y. 489. 
 
 ° Robinson v. Mcintosh, supra. 
 
 ' Mills V. Argall, 6 Paige, 582 ; see Crary's Sped 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 distribution 
 of the partnership funds, without first obtaining a judgment at law. Innes v. 
 Lansing, 7 Paige, 583 ; see Jackson v. Sheldon, 9 Abb. Pr. 127 ; Darrow v. Bruff, 
 36 How. 479 ; Mc Arthur v. Chase, 13 Gratt. 683. 
 
 An assignment by a general partnership in which a member of a limited part- 
 nership 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 partnership of his indi- 
 vidual property. Fanshawe v. Lane, 16 Abb. 71. 
 
CHAPTER V. 
 
 TO WHOM AN ASSIGNMENT MAY BE MADE; QUALIFICATIONS OF 
 
 ASSIGNEES. 
 
 §91. Who may be Assignee. — A voluntary assignment 
 for the benefit of creditors may be made either to a person 
 who is a creditor of the assignor, or to one who is not a 
 creditor,' and it may be made to a single individual or to 
 several. The persons to whom it is made are, from the 
 usual form of the transfer, called trustees, as well as as- 
 signees ; 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 ma- 
 terial whether they are designated by the firm name or their 
 individual names, if the language used is such as to indicate 
 with certainty the persons who are nominated as assignees.'' 
 Where it is intended to make the transfer to an assignee, he 
 must be named in the instrument.^ But where the convey- 
 
 ' Yates, J., in Wilt v. Franklin, I Binn. 502, 520 ; Lee, J., in Johnston v. Zane's 
 Trustees, 11 Gratt. 552, 564; United States Bank v. Huth, 4 B. Mon. (Ky.) 423 ; 
 Wooster v. Stanfield, II Iowa, 128 ; Frink v. Buss, 45 N. H. 325 ; see Layson v. 
 Rowan, 7 Rob. (La.) I. In Vermont, it has been provided by statute, that, in or- 
 der to render an assignment operative against the creditors of the assignor, he 
 shall be confined in the selection of an assignee to some one who is not at the 
 time a creditor or interested in the provisions of the assignment. Act of Novem- 
 ber 19, 1852 ; Laws of 1852, p. 15, § 8. But in Virginia, in the case of Gordon 
 V. Cannon (18 Gratt. 388), 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. 
 
 ^ Forbes v. Scannell, 13 Cal. 242. 
 
 ' In the case of Reamer v. Lamberton (59 Penn. St. 462), where an assign- 
 ment for the benefit of creditors, leaving a blank for the assignee's name, was ex- 
 ecuted 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 inserted and the assignment recorded, it was held that the title to the prop- 
 erty remained in the assignor till the assignee's name had been inserted and the 
 assignment delivered to him, and the assignor's goods were not protected from 
 the execution. See Park v. Glover, 23 Tex. 469. 
 
§ gi.] WHO MAY BE ASSIGNEE. II 7 
 
 ance is declared by the court to be an assignment for cred- 
 itors, and no trustee is fiamed, 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 prop- 
 erty ; 3 and he is not bound to consult his creditors, or any 
 of them,, and obtain their previous consent to the appoint- 
 ment,+ but may make his selection even against their will.^ 
 But this power is not to be exercised arbitrarily and without 
 a proper reference to the interests of the creditors.^ 
 
 In Wisconsin ' and Kansas,^ the assignees must be resi- 
 dents, otherwise the assignment will be void. In South 
 Carolina,' the creditors are empowered to name an agent 
 or, agents to act jointly with the assignee named in the as- 
 signment. 
 
 In Kansas '° and Ohio," the creditors are empowered to 
 select an assignee, ^ho is substituted by the court in the 
 place of the assignee named in the assignment ; and to this 
 end, methods are provided for convening the creditors and 
 ascertaining who are entitled to participate in the choice. 
 An officer of the court, before whom the trustee is required 
 to qualify, cannot himself be assignee and qualify before his 
 deputy.'^ 
 
 In New York, it is provided that, whenever any incor- 
 
 " See Burrows v. Lehndorff, 8 Iowa, 96. 
 
 ' So under statutes of Ohio (i Rev. Stat, of Ohio [S. & C] p. 713) and Ken- 
 tucky (Rev. Stat, of Kentucky, vol. i, p. 553). 
 
 ^ Tilghman, C. J., in Wilt v. Franklin, i Binn. 502, 516 ; Sandford, A. V. C, 
 in Cram v. Mitchell, i Sandf Ch. 251, 253 ; and in Jackson v. Cornell, Id. 354. 
 In Burd v. Smith (4 Dall. 76), this right was denied. But in all the subsequent 
 Pennsylvania cases, it has been conceded. ^ 
 
 * Harris, J., in Webb v. Daggett, 2 Barb. 9, 11. 
 
 ' Id. Ibid. 
 
 ° Sandford, A. V. C, in Cram v. Mitchell, i Sandf. Ch. 254 ; Roosevelt, J., in 
 Childs V. Mouseley, N. Y. Supreme Ct. Sp. Term, Nov. 1854. 
 
 ' Stat, of Wis. (ed. 1871), c. 63, vol. i, p. 843. 
 
 ° Gen. Stat, of Kan; c. 6, p. 93. 
 
 ' Rev. Stat, of S. C. (ed. 1873), c. 97, p. 477. 
 
 " Laws of 1876, c. loi. " Stat, of Ohio (Sayler), vol. 4, p. 3250, § 2. 
 
 -' Bancroft v. Snodgrass, i Cold. (Tenn.) 430. 
 
Il8 TO WHOM ASSIGNMENT MAY BE MADE. [CHAP. V. 
 
 porated company shall have refused the payment of any of 
 its notes or other evidences of debt in specie or lawful 
 money of the United States, it shall not be lawful for such 
 company, or any of its officers, to assign or transfer any of 
 the property or choses in action of such company to any 
 officer or stockholder of such company, directly or indi- 
 rectly, for the payment of any debt/ But apart from the stat- 
 ute, a corporation may select one of its officers as assignee/ 
 
 § 92. 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 cred- 
 itors that the fund will be safe in his hands, and that the 
 trust will be properly administered ; ^ and the selection of 
 incompetent assignees will have the eflFect of rendering, the 
 assignment void.^ Thus, where the debtor selected for 
 assignees, three relatives, one of whom was incapacitated by 
 his residence, one by blindness, and the third by his want of 
 education, from executing the trust ; it was held to be evi- 
 dence of an intent, on the part of the assignor, to keep the 
 control of the property 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 disease which the 
 
 ' Rev. Stat. (6th ed.) vol. 2, p. 399. ° Pope v. Brandon, 2 Stew. 401. 
 
 'See observations of Tilghman, C. J., in Wilt v. Franklin, i Binn. 502, 516 ? 
 Christiancy, J., in Angell v. Rosenbury, 12 Mich. 241 ; Flandrau, J., in Guerin v. 
 Hunt, 6 Minn. 375. 
 
 * 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 assignee 
 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 estate, and a 
 proper person would be substituted by the court to carry out the trust." 
 
 '• Cram v. Mitchell, i Sandf. Ch. 251. 
 
§93-] QUALIFICATIONS OF ASSIGNEE. II9 
 
 assignor himself believed was incurable, and of which he 
 died, the assignment was held for that cause to be fraudulent 
 and void as against creditors ; and it was considered by the 
 court that the selection of such an assignee furnished strong 
 presumption of an intent, on the part of the assignor, to 
 keep the control and disposal of the property.' 
 
 § 93. The selection of a person as assignee, who is known 
 to the assignor to be insolvent, has been repeatedly pro- 
 nounced by the courts to be a fraud upon the rights of cred- 
 itors, as evincing an intention on the part of the assignor to 
 place his property beyond their reach, or, in the language of 
 the statute of fraudulent conveyances, " to delay or hinder 
 them " in the collection of their debts. ^ But where the cred- 
 ditors are consulted, and consent to the assignment to a 
 particular individual, such consent will rebut the presump- 
 tion that there was any intention to commit a fraud, al. 
 though the assignee was known to be destitute of property, 
 as the creditors would have the right to repose themselves 
 upon his honesty only.^ 
 
 The selection of members of the assignor's family, and 
 of doubtful competency (such as a clerk and a journeyman 
 boarding in his family, and both young men), as assignees, 
 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, 
 especially where they are placed before all other creditors 
 in the schedule of preferred debts, is a circumstance against 
 the assignment.^ But the relationship of the parties, though 
 
 ' Currie v. Hart, 2 Sandf. Ch. 353. 
 
 " Reed v. Emery, 8 Paige, 417; Walworth, C, Id. 418; Connah v. Sedgwick, i 
 Barb. 210; Browning v. Hart, 6 Id. 91. But see Shryocii v. Waggoner, 28 
 Penn. St. (4 Casey), 430; Angell v. Rosenbury, 12 Mich. 241.' 
 
 = 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. 
 
 ' Perkins, J., in Caldwell v. Rose, Smith (Ind.) 190; Caldwell v. Williams, i 
 Ind. (Carter), 405 ; Perkins, J., Id. 408. 
 
 ' Sandford, A. V. C , in Cram v. Mitchell, i Sandf. Ch. 251, 255. In this case 
 as well as in Currie v. Hart, and in Connah v. Sedgwick, the assignees were rela- 
 tives of the assignors. 
 
I20 TO WHOM ASSIGNMENT MAY BE MADE. [cHAP. V. 
 
 calculated to awaken suspicion, is of itself no evidence of 
 fraud in a conveyance of property.' 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 relationship 
 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 responsible assignee is • provided for by statutory en- 
 actments, and in most of them he is required to execute 
 bonds with sureties for the faithful performance of the 
 trust.3 
 
 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 appointment and undertake the trust ; as 
 his refusal to act, after the execution and delivery of the 
 instrument, might impair its eflFect or interfere with its 
 operation.^ 
 
 A debtor, having once appointed his assignee, cannot 
 by the assignment, reserve the right to name another per- 
 son as successor of the assignee, in case the latter wishes to 
 resign the trust.^ 
 
 ' Bumpas v. Dotson, 7 Humph. 310; Nesbitt v. Dig'oy, 13 111. 33; Baldwin v. 
 Buckland, 1 1 Mich. 389. 
 
 ^ Montgomery's Ex'rs v. Kirksey, 26 Ala. 172. And see, on this point, Dun- 
 lap V. Bournonville, 26 Penn. St. (2 Casey), 72. 
 
 ° This branch of the subject will be particularly consid ered hereafter, under a 
 distinct head. See Chap. XXXI. 
 
 ' De Ruyter v. St. Peter's Church, 3 N. Y. 238. 
 
 'See post. Chap. XVIII. 
 
 " Planck V. Schermerhorn, 3 Barb. Ch. 644. 
 
CHAPTER VI. 
 
 THE ASSIGNED PROPERTY ; THE AMOUNT ASSIGNED ; WHAT MAY 
 BE ASSIGNED ; WHAT PASSES BY THE ASSIGNMENT. 
 
 § 94. The Amount of Property Assigned. — The amount 
 of property embraced in, or intended to be conveyed by an 
 assignment, determines its character as being general or par- 
 tial. A general assignment is understood to import, in its 
 nature, a transfer of ail the debtor's property for the benefit 
 of his creditors. The nature of the relation created by in- 
 solvency usually requires that the transfer should be of this 
 comprehensive character. " Creditors," observes Chief Jus- 
 tice Marshall,' "have an equitable claim on «//the property 
 of their debtor, and it is his duty, as well as his right, to de- 
 vote the whole of it to the satisfaction of their claims." 
 Partial assignments, however, when not within the prohibi- 
 tion of any statute, and where they leave the unassigned 
 residue open to creditors, are, as we have seen, valid con- 
 veyances." 
 
 In some of the States an assignment of all 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. Thus, in Connecticut,^ an assignment for the benefit 
 of creditors is void unless it embraces all the property of 
 the assignor, except such as is exempt from execution, real 
 estate situated out of the State, and in the case of sole 
 assignors, one hundred dollars in cash. 
 
 In Indiana,'* the assignment must be accompanied by a 
 
 " In Brashear v. West, 7 Pet. 608. ■' See post, Chap. IX. 
 
 ' Gen. Stat, of Conn. (rev. of 1875), p. 378; Act of 1853. 
 * Stat, of Ind. (2d ed. 1870), vol. i, p. 114; Act of 1859. 
 
122 THE ASSIGNED PROPERTY [CHAP. VI. 
 
 schedule " containing a particular enumeration and descrip- 
 tion of all the personal property assigned," and the assignor 
 is required to make oath that the assignment and schedule 
 "contain a statement of all the property, rights and credits 
 belonging to him, or of which he has any knowledge, and 
 that he has not, directly or indirectly transferred or reserved 
 any sum of money or article of property for his own use or 
 the benefit of any other person." And in Kentucky,' every 
 assignment made in contemplation of insolvency, with the 
 design to give a preference, operates as an assignment and 
 transfer of all property and effects of such debtor. In 
 Maine,^ assignments for the benefit of creditors are construed 
 to pass all the estate of the debtor, whether specified therein 
 or not. The assignor is also required to make oath to the 
 truth of the assignment.^ A similar provision is contained 
 in the statute of New Hampshire.-* In New Jersey also, the 
 debtor is required to annex to his assignment an inventory, 
 under oath or affirmation, of his estate, real and personal, 
 according to the best of his knowledge.^ In New York,* 
 the assignor is required, at the date of making the assign- 
 ment, or within twenty days thereafter, to file a verified in- 
 ventory of all his estate at the date of the assignment, both 
 real and personal, in law and equity, and the incumbrances 
 existing thereon, and of all vouchers and securities relating 
 thereto, and the value of such estate according to the best 
 knowledge of the assignor. 
 
 § 95. Apart from all statutory provisions, it may be said 
 that if there be nothing in the instrument or schedules an- 
 nexed to it to limit or qualify its operation, a general assign- 
 ment by a debtor, of all his estate and effects, will pass to 
 the assignee everything which is in its nature assignable, ex- 
 cept such property as may be specially exempted by law, or 
 
 ' Rev. Stat, of Ky. (Stanton), vol. i, p. 553, 
 
 = Rev. Stat, of Me. (ed. 1871), p. 543, § i. •'' Id. § 2. 
 
 * Gen. Stat, of N. H. (ed. 1867), p. 262. 
 
 ' Rev. Stat. (ed. 1874), p. 8 ; see Hays v. Doane, 11 N. J. Eq. 84. 
 
 ° Laws of i860, chap. 348; Rev. Stat, of N. Y. (6th ed.) vol. 3, p. 32. 
 
§ g6.] EXEMPTIONS. 123 
 
 excepted by the terms of the deed itself, where such excep- 
 tion is allowed. 
 
 It is, however, a leading rule in the construction of assign- 
 ments by debtors, that no more property will pass to the 
 assignee than is embraced in the terms of the instrument ; 
 and even where a// the debtor's property is assigned, in 
 terms, if there be subsequent words of description, or a ref- 
 erence to a schedule, as setting it forth particularly, the con- 
 tents 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.' 
 
 § 96. 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.'' Provis- 
 ion is frequently made by statute for these exemptions. 
 Thus, as we have seen in Connecticut,^ the assignment is 
 not required to embrace property exempt from execution, or 
 real estate situated out of the State, or in cases of sole as- 
 signors one hundred dollars in cash. But where the debtor 
 made no reservation in the instrument of the one hundred 
 dollars so exempt, he was held to have waived his right to 
 reserve the money.* In California, property exempt from 
 execution, and insurance upon the life of the assignor do not 
 pass to the assignee by a general assignment for the benefit 
 of creditors, unless the instrument especially mentions them, 
 and declares an intention that they shall pass thereby. ^ In 
 Indiana, appraisers may set off to a resident householder 
 property not exceeding three hundred dollars in value,* but 
 
 ' Stefiost, Chap. VIII. 
 
 ' Heckman v. Messenger, 49 Penn. St. 465 ; Mulford v. Shirk, 26 Penn. St. 
 473 ; Dow V. Platner, 16 N. Y. 562 ; Baldwin v. Peet, 22 Tex. 708 ; Garnor v. 
 Frederick, 18 Ind. 507; Smith v. Mitchell, 12 Mich. 180; Brooks v. Nichols, 17 
 Mich. 38 ; Farquharson v. McDonald, 2 Heisk. (Tenn.) 404 ; Sugg v. Tillman, 2 
 Swan, 208 ; see Simpson v. Roberts, 35 Ga. 180 ; Dolson v. Kerr, 12 Sup. Ct. R> 
 (5 Hun), 643. 
 
 ' Gen. Stat, of Conn. (rev. 1875), p. 378, § i. 
 
 * Raymond's Appeal, 28 Conn. 47. ' Civ. Code Cal. § 2470. 
 
 » Stat, of Ind. (ed. 1870) vol. I, p. 116, § 9. 
 
124 "^^E ASSIGNED PROPERTY. [CHAP. VI. 
 
 this does not prevent the assignor from reserving in the 
 assignment property exempt from execution.' 
 
 So in Michigan, an assignment is not void on its face for 
 excepting property exempt from execution without specify- 
 ing it,^ and the assignor may select property exempt from 
 execution after the execution of the instrument, and the as- 
 signee takes the property subject to this right of selection. ^ 
 So in Maine* and New Hampshire,^ exempt property does 
 not pass to the assignee under the assignment ; and in Penn- 
 sylvania,^ where the assignor has included exempt property 
 in the assignment, an appraisal will be made and the prop- 
 erty will be set off to the debtor ; and where the assignor 
 expressly reserved the benefit of any and all exemption laws, 
 this did not invalidate the assignment.' But in New Jersey 
 an assignment of all his property 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.' But in 
 Tennessee, where an assignment in trust by a debtor, for the 
 benefit of a portion of his creditors, conveyed all his prop- 
 erty of every description, consisting of real and personal 
 estate, &c., but reserved out of the personal effects so much 
 as he was by law allowed to retain free from execution, it 
 was held to be fraudulent and void in law, whether so in- 
 tended or not' 
 
 § 97. Exception of Property not Exempt. — It has some- 
 times been the practice to except, in addition to such ar- 
 ticles as were exempted 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 assign- 
 
 ' Garner v. Frederick, 18 Ind. 407. 
 
 = Smith V. Mitchell, 12 Mich. 180; Hollister v. Loud, 2 Mich. 309, 310, 322. 
 ' Brooks V. Nichols, 17 Mich. 38. 
 ' Rev. Stat, of Maine (ed. 1871), p. 543, § i. 
 " Gen. Stat, of N. H. c. 126, § i, p. 262. 
 
 » Act of May 4th, 1864; Purden's Dig. (Brightley), vol. i, p. 93, § 17. 
 ' Heckman v. Messenger, 49 Penn. St. 465 ; see Mulford v. Shirk, 26 Penn. St. 
 473 ; Peterman's Appeal, 76 Penn. St. 279. 
 
 » Moses v. Thomas, 26 N. J. L. 124 ; Van Waggoner v. Moses, Id. 570. 
 " Sugg V. Tillman, 2 Swan. 208. 
 
§97-] EXCEPTION OF PROPERTY NOT EXEMPT.' 1 25 
 
 ment. Thus, in Maine, previous to the statute of April i, 
 1836, concerning assignments, where the assignor excepted 
 from the general conveyance of his property, " necessary and 
 proper household furniture, and means of paying his small 
 debts under fifty dollars, and ordinarily family expenses," it 
 was held that, as the excepted property did not pass to the 
 assignee, but was left open to attachment as it was before, 
 the exception 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 property, real and personal, whether 
 specified in the assignment or not, which is not by law ex- 
 empt from attachment. 3 In Mississippi, a deed of assign- 
 ment by a bank for the benefit of its creditors, which con- 
 veys all its assets and property, except certain specified por- 
 tions, to trustees, has been held not void because of the 
 reservation.'' In Pennsylvania an assignment (stipulating 
 for a release), excepting the household furniture of the as- 
 signors, and property exempt from execution, is voidable ; 
 but until an election by creditors to avoid it, conveyances by 
 the assignees for value received by them, are valid. ^ But in 
 other cases in that State it has been held that the reservation 
 from a general assignment for the benefit of creditors of cer- 
 tain specified property, without any stipulation, 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 enact- 
 ment, the fact that a foreign tribunal will not give efficacy 
 to the assignment, and that certain real property of the 
 
 ' Canal Bank v. Cox, 6 Greenl. 395. 
 
 " Foster v. Libby, 24 Me. (11 Shep.) 448. 
 
 ' See Act of March 21, 1844 ; Merrill v. Wilson, 29 Me. (16 Shep.) 58. 
 
 * Ingraham v. Grigg, 13 Sm. & M. 22. 
 
 ^ Johns ■?. Bolton, 12 Penn. St. (2 Jones), 339 ; Boker v. Crookshank, i Phila. 
 
 '93- 
 
 ° Knight V. Waterman, 36 Penn. 258 ; Heckman v. Messengei;, 49 Penn. St. 
 465. 
 
126 THE ASSIGNED PROPERTY. [CHAP. VI. 
 
 debtor situated elsewhere may not pass, owing to such con- 
 struction, will not invalidate the assignment' And an ex- 
 press exception from the 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 as- 
 signment.'' 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. 
 
 § 98. When the Assignment must Embrace all. — As- 
 signments 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 
 all 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 creditors ; but if it does 
 not so purport, it is valid, notwithstanding 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 partnership 
 property, and not purporting to transfer their separate 
 property, nor alleging that they had no separate property 
 (and it not appearing elsewhere that they had no separate' 
 property), and providing for a discharge from their entire 
 partnership debts, was held to be repugnant to the insolvent 
 laws of the State. ^ 
 
 ' Frink V. Buss, 45 N. H. 325. 
 
 'Carpenter v. Underwood, 9 N. Y. 520; see Bates v. Ableman, 13 Wis. 
 644 ; Baldwin v. Peet, 22 Tex. 702 ; Foster v. Libby, 24 Me. 448 : Moss v. Hum- 
 phrey, 4 Greene (Iowa), 443. 
 
 = See/M^ Chap. XI. « Sttfiost, Chap. XI. 
 
 ° Pierce v. -Jackson, 2 R. I. 35. 
 
 ° Shaw, C. J., in Wyles v. Beals, i Gray, 233, 236. 
 
§ 99- J PROPORTION ASSIGNED TO DEBT. 1 27 
 
 But in Maine, the provisions of the act of 1844, that an 
 assignment shall be construed to pass all property not ex- 
 empt from attachment, whether specified in' such assign- 
 ment or not, will not bring the private property of partners 
 within an assignment of property belonging to the copart- 
 nership.' 
 
 § 99. Proportion of Amount assigned to Debts. — Where 
 an assignment is made for the benefit of particular cred- 
 itors, the proportion which the amount of property assigned 
 bears to the amount of debts provided for is frequently an 
 important consideration. If a debtor in failing circum- 
 stances makes an assignment of this character, and the value 
 of the property assigned is more than the parties could have 
 reasonably supposed necessary to satisfy the claims of the 
 creditors provided for, fraud may be inferred from that cir- 
 cumstance 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 assigned 
 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 jus- 
 tify 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 
 
 " Simmons v. Curtis, 41 Me. 373. 
 
 ' Beck V. Burdett, i Paige, 305 ; Stetson v. Miller, 36 Ala. 642 ; see Longmire 
 V. Goode, 38 Ala. 577 ; Watkins v. Jenkins, 24 Ga. 431. 
 
 * Butler V. Stoddard, 7 Paige, 163 ; Walworth, C, Id. 165. 
 
128 THE ASSIGNED PROPERTY. [cHAP. VI, 
 
 collection and of executing the trust' The same principle 
 has been applied to deeds of trust for the security of partic- 
 ular creditors; which are so common in the Southern States.^ 
 The proportion between the amount assigned and the 
 debts provided 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 assignor ; 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. ^ 
 
 § loo. What May be Assigned. — An assignment for the 
 benefit of creditors may embrace every description of prop- 
 
 ' Beck V. Burdett, i Paige, 305 ; Walworth, C , Id. 309. 
 
 ° Burgin v. Burgin, i Ired. L. 453. In this case it was remarlced 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 perish- 
 able part of it, or lessen its value, or how old accounts will turn out upon coUec- 
 tioji, 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 cred- 
 itor should have ample security ; and therefore it furnishes no conclusive argu- 
 ment of a dishonest purpose, if the deed conveys property of value fully to cover 
 the debts, under any and all contingencies that may be expected or reasonably 
 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 ques- 
 tion is one of intention,"j&c. Id. 459. In Johnson v. Thweatt (18 Ala. 741), 
 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 provisions. 
 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 paying 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 181 8 ; though the excess is a badge of fraud 
 to be considered by a jur)^ Banks v. Clapp, 12 Ga. 5 14 ; Walkins v. Tenks, 24 Ga. 
 431- 
 
 'Shaw, 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. ^ 
 
lOO.] 
 
 WHAT MAY BE ASSIGNED. 1 29 
 
 erty which is, in its nature, assignable ; and, when purport- 
 ing or intended to be a general disposition of the assignor's 
 property, should be in good faith a transfer of the whole, 
 including real and personal estate, debts and choses in 
 action. Among these,' may be more particularly mentioned 
 lands ; interests in lands or real estate, such as the inter- 
 ests of a purchaser,'' mortgagor,^ lessor,'' mortgagee, lessee, 
 and tenants for life ; = profits of lands ; * goods,' merchandise, 
 stock and other descriptions of personal property ; debts,^ 
 
 " Some of the rules given under this head have been established with particular 
 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. 
 
 " 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 
 Littell, 9; Brown v. Chambers, 12 Ala. 697; Ensign v. Kellogg, 4 Pick. i. 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. Coverdale v. Aldrich, 19 Pick. 391, 395. 
 The assignment of a contract to convey an interest in real estate, upon the per- 
 formance of certain conditions, vests an equitable interest therein in the assignee, 
 which will be protected and made available by courts of law. Dyer v. Burnham, 
 25 Me. 9. A vendor's lien for purchase money is assignable. Fisher v. Johnson, 
 5 Ind. 492. But see Inglehart v. Armiger, i Bland, 519. 
 
 ' A statutory right to redeem a mortgage, after the sale of an equity, is assign- 
 able. Bigelow V. Willson, i Pick. 485. See Reed v.'Bigelow, 5 Id. 281 ; Graves 
 v. McFarlane, 2 Cold. (Tenn.) 167 ; Birdwell v. Cain, i Cold. (Tenn.) 301. 
 
 " See Demarest v. Willard, 8 Cow. 206 ; Willard v. Tillman, 2 Hill (N. Y.) 
 274. 
 
 " See Outcalt v. Van Winkle, i Green Ch. 513 ; Emmons v. Cairns, 3 Barb, 
 243 ; Graham v. Newman, 21 Ala. 397. The interest of a tenant at will, in real 
 estate, is not such an interest as can be assigned. Whittemore v. Gibbs, 16 N. H. 
 485. In Georgia, an estate at will, growing out of the statute of frauds, is 
 assignable, but if created by the acts of the parties under the common law, it is 
 not. Cody v. Quarterman, 12 Ga. 386. 
 
 " A growing crop of cotton may be conveyed by deed of trust. Robinson v. 
 Mauldin, 11 Ala. 977 ; Bellamy v. Bellamy's Adm'r, 6 Fla. 52. So, growing crops 
 of wheat, rye and oats. Cochran v. Paris, 1 1 Gratt. 348 ; Dance v. Seaman, Id. 
 778; Montgomery's Ex'rs v. Kirksey, 26 Ala. 172. 
 
 ' Goods of a debtor which are the subject of an action may be assigned. 
 There is nothing improper in embracing in an assignment, goods attached 
 under restraining orders out of chancery, nor in making provision to procure 
 security to obtain the release of those goods, nor in providing for the defense of 
 the suits. Vernon v. Morton, 8 Dana, 247, 252. But the assignment of all the 
 goods of a debtor in Cincinnati and elsewhere, and " that might hereafter be 
 purchased," is fraudulent and void, the goods being in the hands of auction- 
 eers. Shaw V. Lowry, Wright (Ohio, Ch.) 190. 
 
 ' A part only of one entire debt cannot be assigned without the consent of 
 the debtor. Gibson v. Cooke, 20 Pick. 1512 Kent's Com. [532] 688 and n. A 
 contingent debt may be assigned in equity. Crocker v. Whitney, 10 Mass. 316, 
 319. An assignment of debts due a firm passes only the balance of a debt after 
 setting off a claim not yet due, held by the debtor against the firm. Fry v. Boyd, 
 
 9 
 
130 THE ASSIGNED PROPERTY. [cHAP. VI. 
 
 and choses in action generally ; ' including promissory notes, 
 bills of exchange,^ bonds,^ covenants to indemnify, ■* book 
 accounts,' and balances of account ; ^ interests in personal 
 contracts,^ policies of insurance,^ and all vested rights ad 
 
 3 Gratt. 73. The plaintiff cannot assign a debt the subject of a suit during the 
 pendency of the suit, to the prejudice of a third person. Westbrook v. McDow- 
 ell, Ga. Dec. part i, 133. A debtor cannot revive and transfer to his assignee a 
 debt due to him which he has in fraud of creditors discharged. Brownell v. Cur- 
 tis, 10 Paige, 210; Browning v. Hart, 6 Barb. 91, 95. 
 
 ' Spring V. S. Carolina Ins. Co. 8 Wheat. 268. The doctrine of the common law, 
 that choses in action are not assignable, does not obtain in Iowa. Watson v. Hank- 
 ins, 13 Iowa, 547. All choses in action may be assigned in equity. Dobyns v. 
 McGovern, 15 Miss. 662 ; Bell v. Lend. & N. W. Railway Co. 2i Eng. L. & Eq. 
 566 ; Parsons, C. J., in Dix v. Cobb, 4 Mass. 508, 511; Sewell, C. J., in Brown v. 
 Maine Bank, 11 Id. 153, 157 ; Parker v. Grout, Id. Ibid. n. ; Wheeler v. Wheeler, 
 9 Cow. 34 ; Morton, J., in Eastman v. Wright, 6 Pick. 316, 322 ; Welch v. Man- 
 deville, 2 Wheat. 233, 236 ; Corser v. Craig, i Wash. C. C. 424 ; Smith v. N. Y. 
 & N. H. R. R, 28 Barb. 605 ; Grocer's Nat. Bank v. Clark, 48 Id. 26. 
 
 '' But a note or bill payable wholly or partly in personal services is not assign- 
 able. Bothick V. Purdy, 3 Mo. 82 ; Halbert v. Deering, 4 Littell, 9 ; Henry v. 
 Hughes, I J. J. Marsh. 454. See Ransom v. Jones, i Scam. 291. 
 
 ^ Bac. Abr. Assignment, (A). See Minor v. Edwards, 10 Mo. 671 ; Knighton 
 Tufli, II Id. 531 ; see Ensign v. Kellogg, 4 Pick. i. 
 
 * A written promise of indemnity, whether under seal or not, is assignable 
 under the statute in Indiana. Fletcher v. Piatt, 7 Blackf 522. 
 
 ° Dix V. Cobb, 4 Mass. 508; Norris v. Douglass, 2 South. 817 ; Woodbridge 
 V. Perkins, 3 Day, 364 ; but see Wright v. Williamson, 2 Penn. 965 ; Anderson v. 
 Tompkins, i Brock. 456 ; Newman v. Vickery, i Smith (Ind.) 363 ; Kindrick v. 
 Glover, Ga. Dec. part i, 63 ; Forepaugh v. Appold, 17 B. Mon. (Ky.) 625 ; Walter 
 v. Whitbeck, 9 Fla. 86. A debt for goods sold, of which the evidence rests on an 
 account book is assignable. Dix v. Cobb, 4 Mass. 511 ; Norris v. Douglass, 5 
 N. J. L. 817 ; Woodbridge v. Perkins, 3 Day, 364. 
 
 ' Crocker V. Whitney, 10 Mass. 316, 319; Bartlett v. Pearson, 29 Me. (16 
 Shep.) 9; Westcott v. Potter, 40 Vt. 271. 
 
 ' A contract for the performance of personal duties or services is not assign- 
 able. Halbert v. Deering, 4 Littell, 9, 10; Henry v. Hughes, i J. J. Marsh. 454 ; 
 Marcum v. Hereford, 8 Dana, i ; Davenport v. Gentry's Adm'r, 9 B. Mon. 427. 
 A covenant to pay a sum in promissory notes is assignable by statute in Ken- 
 tucky. Sirlott V. Tandy, 3 Dana, 142. In Arkansas, an agreement for the deliv- 
 ery of property may be assigned. Lafferty v. Rutherford, 5 Ark. 649. A contract 
 is assignable only where the entire interest therein can pass by the assignment, 
 both legal and equitable. White v. Buck, 7 B. Mon. 546. A contract on which 
 personal representatives can sue is assignable. Sears v. Conover, 34 Barb. 330. 
 A contract for the labor of convicts. Prindle v. Carruthers, 1 5 N. Y. 425. A con- 
 tract for grading a street. St. Louis v. Clemens, 42 Mo. 69. See Taylor v. Palmer. 
 31 Cal. 240. ■' 
 
 « Spring V. S. Carolina Ins. Co. 8 Wheat. 268 ; Brichta v. New York Lafayette 
 Ins. Co. 2 Hall, 372 ; Gourdon v. Ins. Co. of North America, 3 Yeates, 327 ; i 
 Binn. 430, n. ; Cleveland v. Clap, 5 Mass. 201 ; Wakefield v. Martin, 3 Id. 558. As 
 to the necessity of assent on the part of the insurers, to the validity of the 
 assignment, see Carroll v. Boston Marine Ins. Co. 8 Mass. 515 ; Lazarus v Com- 
 monwealth Ins. Co. s Pick. 76 ; Brichta v. N. Y. Lafayette Ins. Co. 2 Hall, 372, 
 and see De Rouge v. Elliott 23 N. J. Eq. 486 ; Emerick v. Coakley, 35 Md. 188 ; 
 Van Dine v. WiUett, 38 Barb. 319. See Bliss on Life Ins. p 375 
 
§ lOO.] WHAT MAY BE ASSIGNED. 13 1 
 
 rem and in re ; ' possibilities coupled with an interest," con- 
 tingent interests and expectancies, ^ and claims growing out 
 of and adhering to property ; ^ rights of action for damages,^ 
 
 ' Story, J., in Comegys v. Vasse, i Pet. 193. Certificates issued for sums 
 awarded by the Secretary of the Treasury under the treaty with Mexico of April 
 II, 1839, and the acts of Congress of June 12, 1840, and September i, 1841, are 
 legally assignable. Baldwin v. Ely, 9 How. 580. An interest created by a 
 pledge of personal property may be assigned. Russell v. Filmore, 15 Vt. (i 
 Slade), 130. 
 
 '^ Story, J., in Comegys v. Vasse, i Pet. 193 ; Wilde, J., in Bigelow v. Willson, 
 I Pick. 485, 492, 493, citing 3 Term R. 88 ; Shep. Touch. 239 ; Nimmo v. Davis, 
 7 Tex. 26. By the Revised Statutes of New York, a mere possibility coupled 
 with an interest is capable of being conveyed or assigned at law as well as in 
 -equity, in the same manner as an estate or interest in possession. 2 R. S. 725, 
 ii°3. §3S; Lawrence v. Bayard, 7 Paige, 70; see Emmons v. Cairns, 3 Barb. 
 243. 245- 
 
 ' Wilde, J., in Bigelow v. Willson, i Pick. 485, 493 ; Mitchell v. Winslow, 2 
 Story, 630 ; Ivison v. Gassiot, 27 Eng. L. & Eq. 483 ; Nimmo v. Davis, 7 Tex. 26 ; 
 Cooper V. Douglass, 44 Barb. 409. A thing existing in expectation, and not in esse, 
 may be assigned, as a right to a distributive share in the profits of a voyage not 
 yet commenced. Gardner v. Hoeg, 18 Pick. 168 ; but see Robinson v. Mac- 
 donnell, 5 M. & S. 228, 236 ; McNeeley v. Hart, 10 Ired. L. 63. Courts of equity 
 support assignments of contingent interests and expectancies, and also of things 
 which have no present actual or potential existence, but rest in mere possibility 
 only. Story, J., in Mitchell v. Winslow, 2 Story, 630, 639. A mere gratuity, 
 such as an anticipated donation from the State, is not assignable. This was so held 
 by the Supreme Court of New York, in Munsell v. Lewis (4 Hill, 635, 638), in 
 regard to an extra allowance made by statute to contractors on a public work, 
 .-where it was claimed by the assignee of the original contract. But the Court of 
 Errors (S. C. on error, 2 Den. 224) reversed the decision, holding such extra 
 allowance to be not a gratuity, but rather an equitable compensation to cover 
 axtra expenses. 
 
 A legacy may be assigned. Ex'rs of Luce v. Park, 17 N. J. Eq. 415. , So the 
 right of an heir to an inheritance. Grayson v. Sandford, 12 La. An. 646; Fitz- 
 gerald V. Vestal, 4 Sneed (Tenn.) 258 ; but see McDonald v. McDonald, 5 Jones 
 Eq. (N. C.) 211 ; Needles v. Needles, 7 Ohio St. 432. The moment a man has 
 acquired an exclusive interest in anything, though it should be but a contingent 
 and executory interest, he may dispose of it, if not forbidden by law. Graham v. 
 Henry, 17 Tex. 164. The bid of a purchaser at sheriff's sale is assignable. 
 Blount V. Davis, 2 Dev. 19. 
 
 * Story, J., in Comegys v. Vasse, i Pet. 193. 
 
 " Whitaker v. Gavit, 18 Conn. 522. A right of action for a mere personal tort 
 which dies with the party, and does not survive to his personal representative, is 
 not assignable. Story, J., in Comegys v. Vasse, ub. sup. As for a trespass or 
 personal assault. Gardner v. Adams, 12 Wend. 297. In this case, a right of 
 action in trover was held to be not assignable. But see Hall v. Robinson, 2 N. 
 Y. 293. In Jackson v. Losee (4 Sandf Ch. 381), a right of action in replevin 
 was held to be assignable. And in McKee v. Judd (12 N. Y. 622), it was held by 
 the Court of Appeals, that a right of action for the wrongful taking and conver- 
 sion of personal property is assignable ; and that an assignment by a debtor, of 
 all his property and estate, transfers a right of action existing in his favor, for such 
 tortious conversion. The decision in this case has been followed in the cases of 
 Toy v. Troy & Boston R. R. Co. 24 Barb. 382, and The People v. Hud. R. R. R. 
 Co. 4 Duer, 74. In Pennsylvania, it has been held that where a wrong-doer, or 
 his estate, has derived a benefit from his wrong, a right of action will in general 
 
132 THE ASSIGNED PROPERTY. [CHAP. VI. 
 
 interests in actions pending and undetermined/ judgments 
 and executions/ and decrees in equity. ^ 
 
 § 1 01. What Passes imder General Terms. — These and 
 whatever else is capable of assignment, may be made the 
 subject of conveyance in an assignment. Where general 
 words are employed purporting to convey the debtor's entire 
 estate, questions frequently arise as to what will be construed 
 
 survive against them and pass by general assignment for the benefit of creditors, 
 but personal wrongs do not. Sibbald's Estate, 18 Penn. St. (6 Harris), 249. In 
 England, the rule as to the assignability of rights of action was very clearly laid 
 down by Lord Denraan, in the case of Rogers v. Spence, in the Exchequer Cham- 
 ber (13 Mees. & W. 571, 580), which was under the bankrupt act of 6 Geo. IV, 
 c. 16, in the following terms : "That, as the object of the law is manifestly to- 
 benefit creditors, by making all the pecuniary means and property of the bank- 
 rupt available to their payment, it has, in furtherance of this object, been con- 
 strued largely, so as to pass not only what in strictness may be called the property 
 and debts of the bankrupt, but also those rights of action to which he was en- 
 titled, for the purpose of recovering in specie, real or personal property, or dam- 
 ages in respect of that which has been unlawfully diminished in value, with- 
 held or taken from him. But causes of action not falling within this description,, 
 but arising out of a wrong personal to the bankrupt, for which he would be en- 
 titled to remedy whether his property was diminished or impaired or not, are 
 clearly not within the letter, and have never been held to be within the spirit of 
 the enactments, even in cases where injuries of this kind may have been accom- 
 panied or followed by loss of property ; and to this class, we think, the action of 
 trespass quare dausiim f regit, and that of trespass to the goods of the bankrupt, 
 must be considered to belong." In Marshall v. Means (12 Ga. 61), a mere 
 right to file a bill in equity was held to be not assignable. And it seems generally 
 that all such rights of action for a tort as would survive to the personal represen- 
 tatives, may be assigned so as to pass to the assignee. Butler v. N. Y. & Erie R. 
 R. Co. 22 Barb, no; Hodgman v. Western R. R. Co. 7 How. 492 ; Patten v. 
 Wilson, 34 Penn. St. 299 ; Jordan v. Gellen, 44 N. H. 424. So a right of action 
 agamst a common carrier for negligence in not delivering goods. Jordan v. Gel- 
 len, supra. Cause of action for malicious prosecution not assignable even after 
 verdict. Lawrence v. Martin, 22 Cal. 174. 
 
 ' Such as an award, report, or judgment which might be obtained or recovered 
 m a suit pendmg. Leitch v. HoUister, 4 N. Y. 211. A plaintiff on the record, 
 m an action of trespass de bonis asportatis, may assign his interest in the damages 
 sought by the suit. Aliter, as to the plaintiff in an action of slander, or assault 
 and battery North v. Turner, 9 Serg. & R. 244 ; Gibson, J., Id. 248, 249. 
 Goods which have been attached under restraining orders out of chancery may 
 be assigned, where the orders authorize their restoration to the debtors, upon their 
 giving the necessary security for their return, and provision is made in the assign- 
 ment for giving such security. Vernon V. Morton, 8 Dana, 247, 252. 
 
 "Dunn V. Snell, 15 Mass. 481 ; Brown v. Maine Bank, 11 Id 153 • Pearson v 
 Talbot, 4 Littell, 435 ; Vanhouten v. Reily, 6 Sm. & M. 440 ; fiecton v. Ferguson, 
 22 Ala. 599. In North Carolina, the assignment of a judgment is held void at 
 law, and a court of law cannot notice it. Ferebee v. Doxey, 6 Ired. L. 446. In 
 Indiana, the legal interest in a judgment is not assignable, either by the statute 
 or common law. Richardville v. Cummins, 5 Blackf. 48 ; See Moore v. Ireland, I 
 Ind. (Carter), 531. ' 
 
 » Coates' Ex'r v. Muse's Adm'rs, i Brock. 552; Shotwell v. V^ebb, 23 Miss. 
 (I Cush.) 375. ^ 
 
§§ I02, 103. J FOREIGN PROPERTY. I33 
 
 as included in the assignment, and assignees for the benefit 
 of creditors are sometimes clothed by statute with rights in 
 reference to the assigned property which the assignor could 
 not himself assert, and which, therefore, he could not convey. 
 A few particulars in reference to the subjects thus suggested? 
 remain to be noticed. 
 
 § 102. Foreign Property. — As a rule, an assignment, 
 valid where made, will pass the title to personal property 
 wherever situated, but this general proposition is subject to 
 limitations and qualifications hereafter to be considered. 
 With regard to mere incorporeal rights, such as debts, the 
 established rule seems to be that an assignment valid where 
 made, will operate upon them wherever due,' and will pre- 
 clude their subsequent attachment.^ Under a general assign- 
 ment, a claim passes for indemnity against a foreign govern- 
 ment, as for an illegal capture ^ or detention of a vessel ; and 
 such a claim will pass under the words " all debts due the 
 grantor." •* 
 
 § 103. Claims for Damages for Torts. — Claims grow- 
 ing out of mere personal torts, which die with the party, and 
 do not survive to his personal representatives, are incapable 
 of passing by assignment.^ But rights of action for the 
 wrongful taking and conversion of personal property are as- 
 signable, and will pass by an assignment of all the debtor's 
 property and estate.* So claims for torts to personal prop- 
 erty may be assigned ; ' though, in some States, they are 
 
 ' Coskie V. Webster, i Wall. Jr. 131 ; Speed v. May, 17 Penn. St. 91 ; Guillaudet 
 V. Howell, 35 N. Y. 657. 
 
 ' Kerr, J., in Holmes v. Remsen, 4 Johns. Ch. 460, 487. 
 
 ' U. S. V. Hunter, 5 Mason, 62. See Comegys v. Vasse, i Pet. 193 ; Couch 
 V. Delaplaine, 2 N. Y. 397 ; Maitland v. Newton, 3 Leigh, 714. 
 
 * Griffin's Ex'r v. Macaulay's Adm'r, 7 Gratt. 476. 
 
 ' Comegys v. Vasse, i Pet. 193; Sibbald's Estate, 18 Penn. St. (6 Har.) 249; 
 Jordan v. Gellen, 44 N. H. 424; Lawrence v. Martin, 22 Cal. 174. 
 
 " McKee v. Judd, 12 N. Y. 622; Jackson v. Losee, 4 Sandf. Ch. 381 ; Patten v. 
 Wilson, 34 Penn. St. 299 ; Jordan v. Gellen, 44 N. H. 424. See ante, p. 131, n. 5. 
 
 ' See Rogers v. Spence, 13 Mees. & W. 571, and other cases cited ante, p. 
 J3i.n- 5. 
 
134 THE ASSIGNED PROPERTY. [CHAP. VI. 
 
 held not to pass unless specifically included in the assign- 
 ment. Thus, in Connecticut, where a debtor having a claim 
 against a person for willfully and maliciously mutilating the 
 model of a propeller belonging to him, made an assignment 
 ijnder the statute of 1828, but through mistake the claim was 
 omitted, although intended and agreed to be assigned ; it 
 was held, on a bill filed by the purchaser of such claim from 
 the assignee, that the claim not having been included in the 
 assignment, there was no assignment thereof in writing, pur- 
 suant to the statute, and that the complainant was not en- 
 titled to the relief sought' 
 
 § 104. Wife's Property. — Under an assignment by an in- 
 solvent debtor, whatever rights he may have in the property 
 of his wife, acquired by virtue of his marriage, will pass to 
 the assignee." But an assignment of real estate by a debtor 
 does not divest his wife's right of dower, unless she be a 
 party to the assignment,^ or an accompanying deed. Nor 
 does an assignment of all an insolvent's estate for the benefit 
 of creditors pass a chose in action of the wife, unless specially 
 included.'' 
 
 § 105. Leasehold Interests. — Under the general words, 
 " all his personal estate and eifects whatever," a deed of as- 
 signment of leasehold premises, by way of mortgage, has 
 been held to pass.^ So, under the general words (following 
 the more particular description), " all other the personal es- 
 tate and effects of [the assignor], whatsoever or wheresoever," 
 it was held that the lease of a mill passed to the assignee.* 
 So an assignment in favor of creditors conveying all real 
 and personal property and estates, whatever and whereso- 
 
 ' Whitaker v. Gavit, i8 Conn. 522. 
 
 ■^ Outcalt V. Van Winkle, i Green Ch, 513. This was a case of assignment 
 under an insolvent law. 
 
 ' Helfrich v. Obermyer, 15 Penn. St. (3 Har.) 113. 
 
 * Eshelman v. Shuman, 13 Penn. St. (i Har.) 561. 
 
 * West V. Steward, 14 Mees. & W. 47. 
 ° Ringer v. Cann, 3 Mees. & W. 343. 
 
§§ I06-I08.J RENTS. 135 
 
 ever situate, and all interest therein, will pass the interest of 
 the assignee of a lease equitably assigned.' 
 
 § 106. Interests of Devisees. — An assignment of all a 
 debtor's estate and effects will pass the interest of the debtor 
 as a devisee of property, even though the property may 
 have been devised in trust, to be conveyed to the debtor for 
 his own proper use, and without being liable for his debts." 
 But where lands were devised, and charged with legacies, 
 and, by agreement among the parties, the legacies were ap- 
 portioned among the devisees ; and one of the devisees as- 
 signed his property for the benefit of creditors — it was held 
 in Pennsylvania that the assignee took the land subject to 
 the charge of the legacies as so apportioned.^ A legacy is 
 assignable and passes the whole right of the assignor.* 
 
 § 107. Interests of Heirs. — Where real estate was placed 
 in the hands of a trustee, to be conveyed to T.'s appointee, or, 
 in failure of the appointment, to her heirs at law, and she died 
 without making an appointment, and an heir of T. made a 
 general assignment for the benefit of his creditors, of all his 
 lands, tenements, and hereditaments, goods and chattels, &c., 
 and all his right, title and interest in and to the same — it was 
 held that his share in the real estate in the hands of such 
 trustee, passed by the assignment.^ 
 
 § 108. Rents. — An assignment of estates passes a right 
 to rents subsequently falling due, and the debtor cannot aft- 
 erwards lease,. or assign the rents as against creditors.* And 
 where a railroad company leased their road, with the pro- 
 vision that a share of the future earnings should be applied 
 by the lessee to the payment of the lessor's debts, it was held 
 that both the actual and potential interests passed to the as- 
 signee for the benefit of creditors, and that both the lease 
 
 ' Astor V. Lent, 6 Bosw. 612. ' Stuchert v. Harvey, i Miles, 247. 
 
 ' Swoyer's Appeal, 5 Barr, 377 ; and see Couch v. Delaplaine, 2 N. Y. 397. 
 * Ex'rs of Luce v. Park, 17 N. J. Eq. 415 ; see Miller's Appeal, 35 Penn. St. 
 481. 
 
 ' Coverdale v. Aldrich, 19 Pick. 391. 
 
 ° Williamson V. Richardson, 6 Mon. 604; see Pratt v. Levan, i Miles, 358. 
 
136 THE ASSIGNED PROPERTY. [CHAP. VI. 
 
 and the rent were capable of inventory and appraisement 
 under the Pennsylvania statute.' 
 
 § 109. Money in Bank.— A general assignment of all a 
 debtor's property passes a deposit to his credit in a bank, 
 and carries to the assignee all the right which the depositor 
 had in the deposit at the date of the assignment. And the 
 bank has no lien, in such case, upon the deposit for the 
 amount of a bill of exchange, indorsed by the depositor, 
 and discounted by the bank, but which bill has not yet 
 matured.^ 
 
 § no. Property Fraudulently Transferred by Assignor. 
 — Under the common law of assignments the assignee 
 stands in the place of the assignor, and can assert no claim 
 to property which the assignor might not. The assignment 
 therefore does not carry with it to the trustee the title to 
 property which the assignor has previously transferred in 
 fraud of his creditors, for the purpose of hindering, delay- 
 ing and defrauding them.^ But under the statutes of some 
 of the States, the powers of assignees in this respect have 
 been extended. Thus in New York the trustee of " any 
 insolvent estate, association, partnership or individual, may, 
 for the benefit of creditors or others interested in the estate 
 or property so held in trust, disaffirm, treat as void and re- 
 sist all acts done, transfers and agreements made in fraud of 
 the rights of any creditor, including themselves and others 
 interested, in any estate or property held by or of right be- 
 longing to any such trustee or estate.* And the assignee is 
 empowered to maintain an action against any person who has 
 received, taken, or in any manner interfered with the estate 
 property and effects of the debtor in fraud of his creditors.' 
 
 ' Brittenbender v. Sunbury & Erie Railroad Co. 40 Penn. St. 269. 
 
 ° Beckwith v. Union Bank, 4 Sandf. S. C. 604; affi'd on appeal, 9 N. Y. 211 ; 
 see Bucknerv. Sayre, 18 B. Mon. 745. 
 
 ' Brownell v. Curtis, 10 Paige, 210 ; Browning v. Hart, 6 Barb. 91 ; Leach v. 
 Kelsey, 7 Barb. 466 ; Van Dyke v. Christ, 7 Watts & Serg. 373 ; Lord Tenterden, 
 in Jones v. Yates, 9 Barn. & Cres. 532 ; Van Heusen v. Radcliffe, 17 N. Y. 580; 
 Estabrook v. Messersmith, 18 Wis. 545 ; see Van Keusen v. McLaughlin, 21 N. 
 J. Eq. 163. 
 
 ' L. of 1858, c. 3142; Rev. Stat. (6th ed.) p. 146. " lb. § 2. 
 
§ I I I.J WHAT DOES NOT PASS. I37 
 
 So under the Connecticut statute, the assignee may main- 
 tain an action to set aside a fraudulent conveyance made by 
 the assignor.' But when proceedings are not commenced 
 under the insolvent act of that State within sixty days, a con- 
 veyance, though made with the intent to defraud creditors, 
 will not be set aside under the act nor at common law, 
 unless the purchaser participated in the fraud.'' So in Maine, 
 all property conveyed or transferred by the assignor previous 
 to and in contemplation of the'assignment, with the design to 
 defeat, delay or defraud creditors, or togive a preference to 
 one creditor over another, passes to the assignee by the 
 assignment, notwithstanding such transfer, and the assignee 
 may recover, collect and apply it for the benefit of creditors.^ 
 
 § 1 1 1. What does not Pass. — Where the general partner 
 (in a special partnership conducted in his name) made a 
 general assignment of his property for the benefit of cred- 
 itors, and used no language showing an intention to assign 
 the property of the firm, it was held that the partnership 
 property did not pass by the assignment. "^ And where one 
 partner makes an assignment for the benefit of creditors, 
 this gives to his assignee no control over the partnership 
 funds or claims so as to release them.^ The interest con- 
 veyed is only the interest in the surplus after the company's 
 debts are paid.* An assignment of "all the assignor's goods 
 and chattels, wares and merchandises, rights, credits, notes, 
 accounts and demands," does not pass his interest in a sum 
 of money borrowed by him, and then in the course of trans- 
 mission to him from the lender.' Nor does an assignment 
 of "all the bills, drafts, promissory notes, negotiable securi- 
 ties of every name and nature belonging to " the assignor's 
 firm and connected with the business of said firm, pass a 
 
 ' Thomas v. Beck, 39 Conn 241 ; Shipman v. ^tna Ins. Co. 29 Conn. 245 ; 
 Palmer v. Thayer, 28 Conn. 257 ; Robertson v. Todd, 31 Conn. 555. 
 ' Sisson V. Roath, 30 Conn. 1 5. 
 ' Rev. Stat, of Maine (ed. 1871), c. 70, § 8. 
 ■* Merrill v. W^ilson, 29 Me. 58. 
 ' Moddewell v. Keever, 8 W^atts & S. 63. 
 ' Fellows V. Greenleaf, 43 N. H. 421. 'Sheldon v. Dodge, 4 Den. 217. 
 
138 THE ASSIGNED PROPERTY. [CHAP. VI. 
 
 bill or note transferred to the maker of the deed by indorse- 
 ment merely for purposes of collection.' But under the 
 words "all debts due the grantor," the indebtedness of a 
 partner of the grantor to the partnership will pass.'' 
 
 Where a creditor assigned a distil-house in M. and land 
 and wharf adjoining, " and all the rum and other liquors in 
 the distil-house, or on the wharf, or elsewhere on the 
 premises, and all the casks, &c., and other personal property 
 whatsoever, being on the premises of, or belonging to " the 
 debtor — it was held that barrels of rum previously consigned 
 to a commission merchant in B. for sale, did not pass by the 
 assignment.3 In Pennsylvania, before the act of April 11, 
 1 848, by which all a married woman's property is exempted 
 entirely from her husband's control, and from liability for his 
 debts, it was held that a legacy to a wife did not pass by a 
 voluntary assignment. ■* And in the same State, where a per- 
 son holding land in trust for another, who paid the purchase 
 money, conveyed the legal title to the latter ; but, before 
 the deed was recorded, made an assignment of all his prop- 
 erty for the benefit of his creditors who should agree to re- 
 lease their debts, on receiving their share of the estate, and a 
 release was executed accordingly — it was held that the as- 
 signment 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.^ 
 
 § II 2. After Acquired Property. — Purchases made by a 
 firm some time before an assignment, arriving subsequently, 
 the title thereto vests in the assignee, the seller having failed 
 to exercise the right of stoppage in transitu ; but property 
 the title to which is acquired subsequent to the assignment. 
 
 ' Worthington v. Greer, 17 B. Mon. (Ky.) 741. 
 
 ' Griffin's Ex'r v. Macaulay's Adm'r, 7 Gratt. 476. 
 
 ' Tucker v. Clesby, I2 Pick. 22. 
 
 ' Skinner's Appeal, 5 Barr, 262. As to dower, and choses in action of the 
 wife, see ante, p. 134. 
 
 ' Ludwig V. Highley, 5 Barr, 132. 
 
§ 1 1 2, J AFTER ACQUIRED PROPERTY. 1 39 
 
 does not pass.' A trade-mark does not pass to the assignee * 
 nor will the title to bank stock until the statutory require- 
 ment has been complied with, when it is necessary that the 
 transfer should be entered on the corporate records. ^ But 
 an assignment of a particular claim passes all the remedies 
 and securities which the assignor possesses, although not 
 named or set forth in the assignment.** 
 
 ' McCabe's Appeal, 22 Penn. St. 427 ; Haskins v. Alcott, 13 Ohio St. 210. 
 
 ' Bradley v. Norton, 33 Conn. 158. 
 
 " Fiske V. Carr, 20 Me. 301. 
 
 * Mehaffey v. Share, 2 Penn. 361. 
 
CHAPTER VII. 
 
 FOR WHOSE BENEFIT AN ASSIGNMENT MAY BE MADE. 
 
 § 1 1 3. Assignments may be made not only for the bene- 
 fit 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 responsibilities 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 more common than for debtors, on the 
 eve of failing, to assign property for the security of indors- 
 ers, sureties on bonds in the custom house, (fee' 
 
 ' One 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 mean- 
 ing of the statute of 13 EUzabeth. Foote v. Cobb, 18 Ala. 585. A creditor may 
 honestly obtain a security for a debt known or believed to exist, though unhqui- 
 dated. Ruffin, C. J., in Dewey v. Littlejohn, 2 Ired. Eq. 495, 504. 
 
 ^ Stevens v. Bell, 6 Mass. 339 ; Ingram v. Kirkpatrick, 6 Ired. Eq, 463 ; Wis- 
 wall V. Potts, 5 Jones Eq. (N. C.) 184 ; Loeschigk v. Jacobson, 26 How. Pr. 526 ; 
 Dickson v. Rawson, 5 Ohio St. 218. 
 
 = Griffin v. Marquardt, 21 N. Y. 121 ; Stoddard v. Tomlinson, 10 Ala. 824 ; 
 Copeland v. Weld, 8 Me. 41 1 ; Bank v. Cox, 6 Me. 395 ; Keteltas v Wilson, 36 
 Barb. 298 ; s. C. 23 How. Pr. 69 ; Bank v. Talcott, 22 Barb. 550 ; Vaughan v. 
 Evans, I Hill Ch. 414 ; Cunningham v. Freeborn, 1 1 Wend. 241 ; S. C. 3 Paige, 
 537 ; Halsey v. Whitney, 4 Mason, 206 ; Duvall v. Raisin, 7 Mo. 449. Indorsers 
 are viewed by courts as creditors, and a deed of assignment for their security is 
 valid, although no payment had been made by them at the time of the execution 
 of the deed. In the case of Griffin v. Marquardt (Id. ibid, supra), the assignee 
 was directed to pay the amount of certain notes not yet due to the indorsers ; 
 this provision was regarded as in effect the same as if the direction had been in 
 favor of the holders of the notes. As to future indorsers, ■s.e.i. post, p. 141. 
 
 * Woodward v. Braynard, 6 Mart. (La.) 572 ; but see Wallon v. Scott, 10 
 "Watts, 237 ; Price v. Moses, 10 Rich. Law, 454, 562. 
 
 ' Canal Bank v. Cox, 6 Greenl. 395 ; Halsey v. Whitney, 4 Mason, 206, 231 ; 
 Stevens v. Bell, 6 Mass. 339 ; Hendricks v. Robinson, 2 Johns. Ch. 283 ; Loeschigk 
 V. Jacobson, 26 How. Pr. 526. 
 
 » In Halsey v. Whitney, 4 Mason, 206, 231 ; see also Dance v. Seaman, 1 1 Gratt. 
 778, 782. 
 
 ' Parker, C. J., in Gushing v. Gore, 15 Mass. 69, 74 ; see United States v. 
 Hoyt, I Blatch. C. C. 332. By the Massachusetts act of April 15, 1836 (Stat, ol 
 1836, c. 238), it was formally declared that indorsers and sureties might be con- 
 sidered as creditors within the provisions of the act. 
 
§§ 114, II5-] FUTURE LIABILITIES. 141 
 
 § 114. Sureties, Future Responsibilities, &c. — In regard 
 to official sureties, the decisions have not been uniform. In 
 the case of Dewey v. Littlejohn,' it was held in North Car- 
 olina, that a person who is appointed to a public office, for 
 the faithful performance of the duties of which he is bound 
 to give sureties, may properly indemnify such sureties by a 
 deed of trust on his property. In this case, a debtor who 
 had executed a deed of trust for the benefit of his creditors, 
 had made provision in it for the security of the sureties in a 
 bond given by him for the performance of his duties as 
 clerk and master of the court of equity. The deed was ob- 
 jected to, in this particular, as being against good morals 
 and public policy, especially as it included future as well as 
 past breaches of duty ; but the objection was overruled by 
 the court. But in the case of Currie v. Hart,^ in the Court 
 of Chancery of New York, for the first circuit, where an 
 assignment had been made by a sheriff of official fees due 
 and to become due, having for one of its objects an indem- 
 nity of his sureties against future misappropriation of 
 moneys which should be collected on executions, it was 
 held to be void.^ 
 
 § 115. Future and Contingent Liabilities. — Assign- 
 ments for the benefit of persons who may incur liabilities 
 for the assignor at a future period in the shape of advances, 
 suretyships, and the like, will not be sustained.-* But deeds 
 of trust in the nature of mortgages to secure such persons 
 do not come within this rule.' 
 
 ' 2 Ired. Eq. 495. ' 2 Sandf. Ch. 353. 
 
 ^ The assistant vice chancellor, in this case, expressed an opinion to this effect, 
 but waived a formal decision of the point ; the assignment being hfeld void on sev- 
 eral other grounds. In Alabama, a deed of trust executed by a defaulting guard- 
 ian, to indemnify and save harmless his securities, was held valid. Hopkins v. 
 Scott, 20 Ala. 179. 
 
 * Barnum v. Hempstead, 7 Paige, 568, 570 ; Lansing v. Woodworth, i Sandf. 
 Ch. 43 ; and see Griffin v. Marquardt, 21 N. Y. 121 ; Brainerd v. Dunning, 30 N. 
 Y. 211; Neuffer v. Pardue, 3 Sneed (Tenn.) 191; Caruthers, J., Id. 193, 194; 
 Whallon v. Scott, 10 Watts, 237. It is said that where there is a trust for pay- 
 ment of debts, it extends only to debts existing at the time of its execution, i 
 Madd. Ch . 433. 
 
 " Hendricks v. Robinson, 2 Johns. Ch. 283, 308 ; affi'd on error, 17 Johns. 
 438 ; United States v. Howe, 3 Cranch, 73, Marshall, C. J. ; Shunos v. Caig, 7 
 Cranch, 34. 
 
142 ASSIGNMENT FOR WHOSE BENEFIT. [CHAP. VII. 
 
 The pisoposition here stated in no wise limits the right of 
 a debtor to provide for contingent liabilities, provided the 
 liability is based on an existing right or obligation.' The 
 fact that the hability is contingent does not constitute a 
 valid objection, for an assignment to protect a contingent 
 liability no more hinders or delays creditors than one to pay 
 a debt not yet due, even if the assignee is not authorized to 
 pay such debt before its maturity, for the assignee has a 
 right to retain sufficient funds in his hands to meet such 
 liability and distribute the residue, and after the liability is 
 disposed of, distribute the balance.^ 
 
 § ii6. Secured Debts. — It is no objection to a provision 
 for creditors by an assignment that they have already been 
 secured by judgment or mortgage.^ But such a provision 
 will be considered as made subject to the equity as between 
 the creditors to have the mortgage debt paid out of the 
 m'ortgaged property.'* Where one of the creditors had ob- 
 tained a lien by attachment, and in an assignment subse- 
 quently executed he was preferred to the amount which 
 should be found due in the attachment proceedings, pro- 
 vided they were sustained and were a lien, this provision 
 was not considered objectionable, either as being uncertain 
 or as giving an improper preference.' When the assign- 
 ment is, by its terms or by operation of law, for the equal 
 benefit of all the creditors, secured creditors will be paid 
 their dividends on the amount which may be found due to 
 them, after applying the security to the discharge of the 
 debt* The securities held by the debtor should be set 
 forth in the inventory. An omission to refer to them 
 
 ' Brainerd v. Dunning, 30 N. Y. 211 ; Griffin v. Marquardt, 21 N. Y. 121 ; 
 Read v. Worthington, 9 Bosw. (N. Y.) 617 ; Loeschigk v. Jacobson, 26 How. Pr. 
 526; S. C. 2 Robt. 645 ; Hawkins v. May, 12 Ala. 673 ; Grant v. Chapman, 38 
 N. Y. 293. 
 
 ' Loeschigk v. Jacobson, 26 How. Pr. 526 ; Bump on Fraud. Conv. 388. 
 ' Strong V. Skinner, 4 Barb. 546; Paige, J., Id. 559. 
 * Dimon v. Delmonico, 35 Barb. 554. 
 ' Grant v. Chapman, 38 N. Y. 293. 
 ' V\rurtz V. Hart, 13 Iowa, 515. 
 
§ II7-J FICTITIOUS AND FRAUDULENT DEBTS. I43 
 
 in the assignment will not be regarded as a badge of 
 fraud.' 
 
 § 117. Fictitious and Fraudulent Debts. — The debts 
 secured by the assignment must be the debts of the as- 
 signors, which are actually owing or for which a liability 
 has been contracted. Any attempt on the part of the 
 debtor to create a secret trust by providing for the payment 
 of fictitious debts, or for an amount greater than that for 
 which he is liable, will be evidence of an intent to defraud 
 creditors.'" 
 
 The question whether provision in the assignment for 
 the payment of a fictitious debt will invalidate the entire 
 assignment, or whether the instrument will be sustained for 
 the benefit of creditors who have not participated in the 
 fraud, has given rise to conflicting decisions. It will be 
 seen, from the cases referred to in the notes, that the pre- 
 ponderance of authority seems to be in favor of the opinion 
 that the assignment will be held good as to all debts that 
 are bona fide ; and this rule would undoubtedly prevail in 
 those States where provision is made by statute for testing 
 the validity of claims presented to the assignee for payment 
 under the assignment. ^ 
 
 ' Stem V. Fisher, 32 Barb. 198. 
 
 ° In Lockhard v. Browdie (Tenn. Ch. R. 384), it is said that the insertion of a 
 debt as due, or intended to be secured, when in fact no such sum was due, is con- 
 clusive evidence of an intent to hinder and delay creditors, and the deed must be 
 set aside as void; citing Peacock v. Thompkins, Meigs, 317, 329; Gibbs v. Thomp- 
 son, 7 Humph. 179; Bumpas v. Dotson, 7 Humph. 310; Jacobs v. Remsen, 36 N. 
 Y. 668 ; but see Kayser v. Heavenrich, 5 Kan. 324. 
 
 So, in New York, it has been held that the schedules under the act of i860 
 are still to be regarded as part of the assignment, and when they contain fictitious 
 debts the assignment will be deemed fraudulent. Terry v. Butler, 43 Barb. 395. 
 
 But, in the case of Pinneo v. Hart (30 Mo. 561), the fact that some of the 
 claims in the list of preferred debts were fictitious, and that the assignee was 
 aware of their fraudulent character, was not regarded as ground for avoiding the 
 assignment. The duty of the trustee in such cases is to disregard the fraudulent 
 or fictitious claims. And see Kayser v. Heavenrich, 5 Kan. 324. 
 
 = In Macintosh^ v. Comer (33 Md. 607), Mr. Justice Alvey, discussing this 
 question, says : " It' by no means follows that because some of the preferred debts 
 may be fraudulent, and therefore void, that the assignment itself, intended as it is 
 for the benefit of all the creditors, should be declared a nullity. Some of the 
 debts claiming priority may be founded in fraud, and still the general assignment 
 be good as to all debts that are bona fide. Indeed, it is the duty of the trustee 
 under such an assignment to resist and defeat all claims founded in fraud, and 
 
144 ASSIGNMENT FOR WHOSE BENEFIT. [CHAP. VII. 
 
 But a debt is not fictitious because the statute of frauds, 
 if interposed, would prevent its enforcement' Where the 
 deed was made to secure not only the debt of the grantor, 
 but also of a third party, the deed was held void only to 
 the extent of the debts of the third party/ 
 
 § ii8. Usurious Debts. — Whether an assignment for 
 the payment of debts, which intentionally provides for the 
 payment of notes and other securities, together with usu- 
 rious premiums, which are included therein, would not of 
 itself be void, under the usury laws of New York, is a ques- 
 tion which was noticed, but not decided, in the case of 
 Pratt V. Adams, in the Court of Chancery .^ The chancel- 
 
 which would operate to the prejudice of bona fide creditors ; it not being supposed 
 that the trustee accepts such a trust except for real and bona fide creditors." 
 
 So Mr. Justice EngUsh, in Hempstead v. Johnston (i8 Ark. 137) : " If it be 
 assumed * * that they (the debts) were simulated, the deed of trust would, 
 nevertheless, be valid as to the other beneficiaries, unless it had been shown that 
 they were privy to the insertion of the simulated claims for fraudulent purposes." 
 Citing Anderson v. Hook, 9 Ala. 704; Tatum v. Hunter, 14 lb. 557. 
 
 So, in Hardcastle v. Fisher (24 Mo. 75), Mr. Justice Leonard observed : " We 
 think it pretty well settled by the course of decisions in this State, in reference to 
 a voluntary assignment, that the fraud of one or more of the creditors does not 
 defeat it altogether, and render it wholly ineffectual in favor of the others ; and 
 we are not disposed, after reconsidering the matter, to change the course of ad- 
 judication upon this subject. The courts of Virginia, North Carolina, and Ala- 
 bama have taken the same view. Anderson v. Hook, 9 Ala. 704 ; Sewall v. 
 Henry, 5 Graft. 31 ; Harris v. DeGraffenried, 11 Ired. L. 89; Brannock v. Bran- 
 nock, 10 Id. 428. But, in New York, the old rule, void in part, void in toto, seems 
 to be adhered to and applied to these transactions. Fiedler v. Day, 2 Sandf. 
 S. C. 596." 
 
 But in the New York case of Kavanagh v. Beckwith (44 Barb. 195), where it 
 appeared that certain preferred debts were named at a larger amount than the 
 sums actually due, Mr. Justice James C. Smith said : " The overstatements of the 
 amounts of the preferred debts do not make the assignment necessarily fraudu- 
 lent. The assignees are not bound to pay the debts at the amounts therein 
 specified. The provisions of the assignment upon that point are the following : 
 The assignees are first required, in general terms, to pay ' the debts due or to grow 
 due from the assignor, or for which he is liable, to the following persons.' In the 
 schedules subsequently filed the debts were named at the actual amounts due. 
 This was regarded as evidence of an honest intent. The fact, also, that the debts 
 were referred to in the assignment as being about certain amounts, and that the 
 books of account from which the amounts were taken had not been written up for 
 several months, was regarded as evidence rebutting the fraudulent intent." In 
 the case of Jacobs v. Remsen (36 N. Y. 671), the Court of Appeals sustained a 
 charge to the jury, in which they were told that if any portion of the preferred 
 claims were fictitious, the assignment would be fraudulent and void. And see 
 cases cited in notes, p. 143. 
 
 ' Livermore v. Northrup, 44 N. Y. 107. 
 
 '' Harvey's Adm'r v. Steptoe's Adm'r, 17 Gratt. 289. 
 
 " 7 Paige, 615, 617, 641. 
 
§ TiS.J USURIOUS DEBTS. I45 
 
 lor said it was a question which the parties who came in to 
 claim under the assignment could not raise. For, if the 
 assignment was void, none of them were entitled to claim a 
 preference under it and at the same time to insist upon its 
 illegality in respect to the claims of others whose debts, 
 whether valid or not, the assignor intended to provide for 
 specifically. The provision, however, in any event, was 
 held to be good only to the extent of the amount actually 
 and honestly due from the assignor, rejecting the usurious 
 excess. And even this benefit, it was held, could only be 
 claimed under an assignment providing in terms for the pay- 
 ment of the usurious claims. A general provision for the 
 payment of debts in an assignment, would not include debts 
 founded upon a usurious consideration. In the later case 
 of Murray v. Judson & Sands, in the Court of Appeals,' it 
 was expressly held that a general assignment by an insolvent 
 debtor, of his property to a trustee for the payment of his 
 debts is not void on account of its providing for the pay- 
 ment of an irregular and usurious judgment, giving it pri- 
 ority over other debts, if it be in other respects free from 
 objection, and that it is not a fraud upon other creditors for 
 a debtor to pay or provide for the payment of a usurious 
 debt. Gardner, J., said that the question in the case was not 
 whether a provision for a usurious debt may not, in certain 
 cases, be evidence more or less cogent, of a fraudulent in- 
 tent on the part of the debtor, but whether the law will 
 permit a trust for that purpose, to any extent, under any cir- 
 cumstances. 
 
 In North Carolina, it has been held that a deed of trust 
 made to secure a single usurious debt, was void.^ But in a 
 later case, where a deed of trust was given for the security 
 of several debts due to different individuals, some of which 
 were bona fide and some tainted with usury, the deed was 
 
 r " 9 N. Y. (5 Seld.) 73 ; Livermore v. Northrup, 44 N. Y. 167 ; Busby v. Firm, i 
 Ohio St. 409. 
 
 "" Shober v. Hauser, 4 Dev. & Batt. 91. 
 10 
 
146 ASSIGNMENT FOR WHOSE BENEFIT. [cHAP. VII.. 
 
 held to be valid as to the former, though void as to the lat- 
 ter, there being no connection between them.' 
 
 In Alabama, the validity of a deed of trust is not 
 affected by the fact that one of the items of which the debt 
 secured is composed, consisted of usurious interest which 
 the creditor had in good faith been compelled to pay to a 
 third person, for the purpose of replacing money that the 
 grantor had borrowed from him and failed to return.'' In 
 Virginia, where a deed of trust was made to secure a usuri- 
 ous debt, and the debt was aftei-wards freed from its usurious 
 character, and it was agreed that the deed should stand as 
 security for it, the deed was sustained. ^ 
 
 § 119. Other Cases. — In a case in New York, where 
 money belonging to a wife had come into the hands of her 
 husband previous to the married woman's act, and which he 
 agreed to hold as a loan, it was held that equity would per- 
 mit him to pay the loan under an assignment, and for that 
 purpose to prefer her."* Provision may also be made for the 
 payment of a mortgage for the purpose of restoring her in- 
 choate right of dower in the mortgaged premises discharged 
 of the mortgage.' 
 
 ' Brannock v. Brannock, 10 Ired. L. 428 ; and see Roane v. Bank of Nashville, 
 I Head (Tenn.) 526. 
 
 ' Pennington v. Woodall, 17 Ala. 685. ^ Martin v. Hall, 9 Gratt. 8. 
 
 ■■ McCartney v. Welch, 44 Barb. 271 ; Woodworth v. Sweet, 44 Barb. 268. 
 ^ Dimon v. Delmonico, 35 Barb. 554. 
 
CHAPTER VIII. 
 
 FORM OF THE ASSIGNMENT. 
 
 § 1 20. There are two principal modes in which a debtor, 
 not having the means of paying his liabilities in money, may 
 make provision for creditors by the transfer and appropri- 
 ation of property. He may adopt the course of making 
 special transfers of specific portions of property, from time 
 to time, as circumstances may require, or he may make 
 one general transfer embracing the whole. The former 
 course is usually pursued where the creditors are'few, or the 
 indebtedness limited, not amounting to insolvency or involv- 
 ing the necessity of a suspension of business. The latter 
 is the method commonly resorted to by insolvent debtors. 
 
 § 121. Special Assignments. — Again, provision by spe- 
 cial or separate transfers may be either absolutely in payment 
 and satisfaction of the debt provided for, or by way of 
 security. Of the forms of security, a very common one is 
 by mortgage ; another is by assignment directly to the cred- 
 itor, and having the operation of a mortgage ; ' a third is by 
 special deed of trust, which in many respects resembles a 
 mortgage — the conveyance to the creditor, which is direct, 
 being accompanied by a declaration of trust, expressing the 
 particular mode and time of appropriating the assigned 
 property, in case the debt so se'cured is not sooner paid ; '^ a 
 fourth is by deed of trust to a trustee for the creditor, which 
 also is frequently treated as a mortgage.^ 
 
 ' See Leitch V. Hollister, 4 N. Y. 2ii. According to Mr. Justice Story, an 
 assignment directly to a particular creditor, for the payment of his own debts, or 
 as a security or discharge of his own liabilities, is not properly an assignment 
 " for the benefit of creditors." United States v. McLellan, 3 Sumn. 345, 354, 355. 
 See the observations of Redfield, C. J., in Mussey v. Noyes, 26 Vt. 462, 471. 
 
 " See ante, p. 14. " See Stimpson v. Fries, 2 Jones. Eq. 156. 
 
148 FORM OF THE ASSIGNMENT. [CHAP. VIII. 
 
 The appropriation of a debtor's whole property in pay- 
 ment of his debts, may be either by separate transfers to 
 each of the creditors provided for,' or by one general trans- 
 fer of the whole, for their common benefit. Where the 
 latter form is adopted (which is most usual), it may be 
 directly to the creditors themselves, without the interven- 
 tion of a trustee. But the most common form of general 
 transfer, and the one best known in the mercantile com- 
 munity, is a conveyance of the debtor's whole property to 
 one or more trustees or assignees, whether creditors or 
 strangers, for the benefit of the creditors provided for." 
 This is the description of conveyance which the term volun- 
 tary assignment has been held to import,^ and will receive a 
 principal share of attention in the present work. The most 
 prominent features of these general transfers will now be 
 noticed. 
 
 § 122. General Assignments. — A general assignment in 
 trust for the benefit of creditors is understood to import a 
 conveyance of all the debtor's property,"* as distinguished 
 
 ■ " If transferring every part of his property, separately, to individual creditors, 
 in payment of their several debts, would be not only fair but laudable, it cannot 
 be fraudulent to transfer the whole to trustees for the benefit of all." Marshall, 
 C. J., in Brashear v. West, 7 Pet. 608, 614. 
 
 ° In the case of Cunningham v. Freeborn, in the Court of Errors of New 
 York (11 Wend. 241, 256), Mr. Justice Nelson expressed strong disapprobation 
 of the principle of assignments to a trustee, and declared his preference for 
 assignments directly to the creditors themselves ; leaving them to act, either each 
 as his own trustee, or, if this were inconvenient, to appoint a trustee in their place. 
 See, also, the observations of Redfield, C. J., in Mussey v. Noyes, 26 Vt. 462,471. 
 See ante, p. 6. 
 
 ' Walworth, C, in Dias v. Bouchaud, 10 Paige, 445, 448, 461 ; ante, § 3. 
 
 * Thompson, J., in United States v. Clark, i Paine, 629, 640. We have seen 
 that the term assignment, in its application to real estate, implies of itself, and 
 without any words of qualification tir description, a transfer of the assignor's 
 •whole interest in the subject of assignment. See ante, p. i. In mercantile lan- 
 guage, the term is daily used in the same broad sense. W^hen it is said of a mer- 
 chant, that he has " made an assignment," it is understood, not that he has made 
 a transfer of some specific article, or portion of property, to this or that particular 
 creditor, in payment or as security ; but that he has made a general disposition 
 of his property, and suspended his whole business in consequence. In the case 
 of the United States v. Mott (i Paine, 188, 195), the term " voluntary assignment" 
 was considered to mean an assignment of all the debtor's property. In the Ver- 
 mont case of Mussey v. Noyes (26 Vt. 462, 473), it was remarked by the chief 
 justice, that an assignment which includes all one's attachable property, and 
 which is intended to close up one's business, and does so at once, is clearly a 
 general assignment. See, also, Bishop v. Hart's Trustees, 28 Vt. (2 Wms.) 71. 
 
§ 122.] GENERAL ASSIGNMENTS. I49 
 
 from a partial assignment, the nature of which will be con- 
 sidered in the next chapter. An exception of a trifling 
 amount, whether by accident or design, will not alter the 
 character of the conveyance in this respect.' 
 
 A general assignment is also understood to import a 
 provision for a considerable number of creditors, or at least 
 for several, or more than one. An assignment of a debtor's 
 property in trust for the benefit of one creditor was lately 
 held in New York, not to be a voluntary assignment for 
 the benefit of creditors, within the meaning of the act of 
 Congress of March 2, 1799, creating a priority of payment 
 in favor of the United States.'' 
 
 The transfer by a debtor of all his property does not of 
 itself make what is termed a general assignment, but it must 
 also be conveyed to trustees to be held by them in trust for 
 other creditors ; ^ and if the trust is not declared in the in- 
 strument itself, it may arise by implication from the charac- 
 ter of the transaction.'' Thus, in those States' in which 
 fraudulent conveyances made by an insolvent debtor, inure 
 by statute to the equal benefit of all his creditors, and oper- 
 
 ' United States v. Hooe, 3 Cranch, 73, 91 ; United States v. Clark, i Paine, 
 629 ; see United States v. Bank of the United States, 8 Rob. (La.) 262. And see 
 tiie Vermont cases of Mussey v. Noyes, 26 Vt. (3 Deane), 462 ; Noyes v. Hickok, 
 27 Id. (i Wms.) 36 ; and Bishop v. Hart's Trustees, 28 Id. (2 Wms.) 71. In the 
 case of United States v. Clark (i Paine, 629), where a debt amounting to $7,400 
 had been omitted in the statement of the assignor's property, the assignment was 
 held to be general. 
 
 " Bouchaud v. Dias, i N. Y. 201 . In the Vermont case of Mussey v. Noyes, 
 it was remarked by Redfield, C. J., in delivering the opinion of the court, that 
 " the term general, as applied to assignments, does not have reference, probably, 
 so much to the proportion of creditors, as to the proportion of property." 26 Vt. 
 472. After referring to the present work, the learned chief justice adds, "We 
 may conclude then, that if a majority of the creditors are provided for, and all the 
 property is assigned, the assignment is still general." Id. 473. In the Southern 
 States, general assignments are characterized as being absolute conveyances of 
 the debtor's property, in contradistinction from mere deeds of trust, which are 
 intended as security for particular debts, or to protect particular individuals, and 
 which reserve to the grantor the right of redeeming the property by a given time. 
 See the observations of Dargan, C. J., in Johnson v. Thweatt (18 Ala. 741, 746), 
 and of Chilton, C. J., in Shearer v. Loftin, 26 Id. 710, 714. 
 
 ' Isham, J., in Peck v. Merrill, 26 Vt. 696 ; see Noyes v. Hickok, 27 Vt. 36 ; 
 Bishop v. Hart's Trustees, 28 Vt. 71 ; see ante, % 3. 
 
 * Burrows v. Lehndorff, 8 Iowa, 96. 
 
 ' Rev. Stat, of Ohio (S. & C.) p. 713 ; Gen. Stat, of Ky. (ed. 1873), vol. I, 
 p. 490. 
 
150 FORM OF THE ASSIGNMENT. [CHAP. VIII. 
 
 ate as a voluntary assignment, the trust is declared by statute, 
 and the court carries it into effect by the appointment of a 
 trustee. 
 
 A general assignment may consist of several separate 
 transfers, if constituting one transaction, or having one and 
 the same general object.^ But ordinarily, such assignments 
 are effected by a single transfer, and expressed by a single 
 instrument of conveyance. 
 
 § 123. Parties to the Instrumeitt — Assignors. — Where 
 an assignment is made by several persons jointly indebted 
 as partners, they are all, of course, named in the instrument 
 as assignors. 
 
 In some of the States, as Pennsylvania^ and Virginia, 3 
 where real estate is conveyed by assignment, the wives of 
 the assignors are made parties to the deed ; and it has been 
 held in the former State, that a voluntary assignment 
 for the benefit of creditors, by the husband alone, and 
 the subsequent sale and conveyance by his assignees, does 
 not divest the wife's right of dower in the lands assigned.'* 
 In New York, the wife's dower is conveyed by her joining 
 with the husband in a separate deed of the land in the ordi- 
 nary form, such deed bearing even date with the assignment, 
 and accompanying it.^ 
 
 § 124. Assignees. — Where the assignment is to a trustee 
 for the benefit of creditors, it is usual to make the assignee 
 or trustee a formal party to the deed of assignment ; and 
 this is necessary where it is intended that the instrument 
 shall contain an express provision for its execution by the 
 assignee, or any covenant to be performed by him. But it 
 has been held that where the assignment contained no such 
 
 ' See p. 159. 
 
 ^ See Hennessy v. The Western Bank, 6 Watts & Serg. 300. 
 ' See Reynolds v. The Bank of Virginia, 6 Gratt. 174. 
 
 " Helfrich v. Obermyer, 15 Penn. St. (3 Har.) 113 ; see Caldwell v. Brugger- 
 man, 4 Minn. 270. 
 
 ' See Darling v. Rogers (22 Wend. 483), in which there were five of these sep- 
 arate and accompanying deeds. 
 
•§ 125.J CREDITORS. 151 
 
 provision or covenant, it was not necessary that the assignee 
 should become a party to it by signing.' 
 
 Where the assignee is not thus made a party, the assign- 
 ment may be drawn in the first person, in the form of a 
 deed-poll. Where, however, he is made a formal party, the 
 instrument is drawn in the form of an indenture of two 
 parts, technically called an indenture bipartite. 
 
 § 125. Creditors. — Besides the assignee or assignees, it 
 is sometimes the practice to make the creditors themselves, 
 for whose benefit it is intended, parties to the assignment. 
 In general, this is not necessary," nor is it usual, unless there is 
 something in the assignment to which it is desirable to ob- 
 tain the express written assent of the creditors, so as to bind 
 them to its provisions ; as where the assignor stipulates for 
 a release, or some other advantage to himself, to which he 
 would not otherwise be entitled. It appears to be a settled 
 rule in our law, on this subject, that assignments directly to 
 creditors are not valid without their assent ; but that assign- 
 ments to trustees for their benefit do not require such assent 
 to render Ijiem valid and operative.^ In the United States, 
 a common form of assignment (if not the prevailing form), 
 is that of two parts, executed between the debtor' or assignor 
 of the one part, and the assignee or trustee of the other part, 
 without any creditor becoming a party ; and such an assign- 
 
 ' Flint V. Clinton Co. 12 N. H. 430 ; see further, as to the execution of the as- 
 signment by the assignee, /oj^, chap. XVI. 
 
 " By the established principles of law, as held by eminent authority in this 
 country, it is not necessary to the creation of any trust by deed, in favor of any 
 persons, that the person for whose benefit the trust is created, should be a party 
 to it. Story, J., in Halsey v. Whitney, 4 Mason, 206, 214 ; Layson v. Rowan, 7 
 Rob. (La.) I. And courts of equity generally will compel the execution of a trust 
 for creditors, though they be not at the time assenting, and parties to the convey- 
 ance ; Halsey v. Whitney, ubi supra ; NicoU v. Mumford, 4 Johns. Ch. 522, 529, 
 530; Brooks v. Marbury, 11 Wheat. 78 ; Gray v. Hill, 10 Serg. & R. 436 ; Kin- 
 nard v. Thompson, 12 Ala. 487 ; Smith v. Turrentine, 8 Ired. Eq. 185. 
 
 ' Nicoll V. Mumford, 4 Johns. Ch. 522; Ward v. Lewis, 4 Pick. 518; Pingree 
 v. Comstock, 18 Id. 46 ; Weir v. Tannehille, 2 Yerger, 57 ; Robertson v. Sublett, 6 
 Humph. 313; Ingram v. Kirkpatrick, 6 Ired. Eq. 462; Stimpson v. Fries, 2 Jones 
 Eq. 156; Jones v. Dougherty, 10 Ga. 273; Bellamy v. Bellamy's Adm'r, 6 Fla. 
 (Papy), 62; Hall v. Dennison, 17 Vt. (2 Wash.) 310; 2 Kent's Com. [533] 691 ; 
 Brown v. Chamberlain, 9 Fla. 464; Forbes v. Scannell, 13 Cal. 242; see post, 
 chap. XX. 
 
152 FORM OF THE ASSIGNMENT. [CHAP. VIir_ 
 
 ment, on its acceptance by the assignee, is held to be valid 
 and effectual as a provision for creditors, creating a trust for 
 them which they can enforce in the proper courts, and is ir- 
 revocable by the assignor.' A different rule prevails in En- 
 gland, and hence has arisen a material distinction between the 
 forms of assignment in use in the two countries, in regard to 
 their legal qualities and effect as modes of provision for 
 creditors.^ 
 
 ' In Fellows v. Greenleaf (43 N. H. 421), it is said that an assignment not only 
 does not need to contain, but should not contain, any provision for the creditors 
 to sign it, or become parties to it, because if it is properly drawn and executed 
 between the debtor and assignee, the assent of the creditors will be presumed ; 
 and if not so, it will be void as well as to those who have assented to it as to those 
 who have not. See Stimpson v. Fries, 2 Jones Eq. (N. C.) 156 ; 2 Kent's Com. 
 [533] 692, n. See the subject more fully considered, and the principal cases cited,, 
 in Chap. XIV ; see Gibson v. Rees, 50 111. 383. 
 
 ' Assignments to which no creditor is a party, are in England called deeds of 
 agency, or voluntary deeds of agency, the nature and operation of which are thus 
 explained by Rolfe, V. C, in the case of McKinnon v. Stuart, 20 L. J. (N. S.) 
 Chan. 49 : " The doctrine of this court, as to mere deeds of agency, is perfectly 
 simple and intelligible. It is competent to any one to make another his agent or 
 attorney, to get in his property and apply it in payment of his debts, or in any 
 other mode he may direct. And after he has done so, he may, at his pleasure, 
 revoke the authority so given, and direct any other disposition of his property 
 which he may prefer. W^hat was really decided in Garrard v. Lord Lauderdale, 
 and other cases involving the same point, was only this : that, in such a case, the 
 coiiveyance of property to the agent, makes no difference as to the' right of revo- 
 cation in the debtor. The party in whom the property has been vested is a mere 
 trustee for the debtor by whom it has been conveyed to him. He is still the mere 
 agent or attorney, or in the nature of an agent or attorney of the debtor, and must 
 obey his directions as to the disposal of the property. On the other hand, it is 
 abundantly clear on the authorities, that where a creditor is a party to a deed 
 whereby his debtor conveys property to a trustee, to be applied in liquidation of 
 the debt due to that creditor, the deed is, as to the creditor, irrevocable. A valid, 
 trust is created in his favor, and the relation between the debtor and trustee is no^ 
 longer that of mere principal and agent. Of course, that which is true where a 
 single creditor is the cestui que trust, is at least equally so where there are many 
 creditors. Nor does the creditor executing the deed become less a cestui que trust 
 because he gives nothing to the debtor as a consideration for the trust created in 
 his favor, or because it was the voluntary, unsolicited act of the debtor, to create 
 the trust. I never knew that any question had been raised on this subject, as 
 against creditors who had executed the deed, and so made themselves cestuis que 
 trust. Where they have not executed the deed, questions have often arisen how 
 far, by having been apprised of its execution, and so, perhaps, been induced to do 
 or abstain from doing something which may affect their interests, they may not 
 have acquired the rights of cestuis que trust. This is the question referred to by 
 Sir John Leach, in Acton v. Woodgate (2 Myl. & K. 492), and by Sir E. Sugden, 
 in Browne v. Cavendish (i J. & L. 606). But where, as in the present case, the 
 creditors have actually executed the deed, I apprehend there is no longer any pos- 
 sibility of treating it as a mere voluntary deed of agency, revocable by the debtor. 
 
 In the later case of Siggers v. Evans (32 Eng. L. & Eq. 139), it was decided 
 that the doctrine that a conveyance of property to trustees, in favor of creditors, 
 operates as a mere power in the hands of mandataries or agents, revocable until 
 
§ 1 25. J CREDITORS. 153 
 
 In some of the States assignments have been required, 
 by statute, to be so drawn as to enable the creditors to be- 
 come parties to them, if they choose, otherwise they were 
 invaUd as against creditors not parties. This was the case 
 in Massachusetts, under the statute of 1836, c. 238 ; ' al- 
 though, even before this statute, it was considered necessary 
 in that State that the creditors should be parties." This was 
 in conformity with the English rule and practice, already re- 
 ferred to. In Maine all assignments are required to provide 
 for a proportional distribution of the debtor's estate among 
 all his creditors becoming parties thereto ; and three months 
 from the execution of the deed are allowed the creditors to 
 become parties.^ In New York, it has been expressly held to 
 be not necessary that the creditors should be parties ; ■* and the 
 same has been held in Missouri, if the assignment contains 
 
 communicated to or assented to by the creditors, does not apply where the trustee 
 himself takes a beneficial interest under the deed. And according to the same 
 case, it seems that where a deed of assignment has been executed to a stranger as 
 trustee for creditors, a communication of the trust to a creditor, by reason of 
 which he may not have pursued his remedy, or his position may have been altered, 
 will render the deed irrevocable by the assignor, without any actual assent by any 
 creditor. In Smith v. Hurst (22 L. J. [N. S.] Chan. 289; S. C. 15 Eng. L. & Eq. 
 520), it was held that a deed of arrangement between a debtor and one of his 
 creditors, conveying all the property of the debtor to the creditor, and which deed 
 the debtor has power to revolie and alter at any time, and attempts to use as a 
 shield to protect himself against the claims of his other creditors, is fraudulent 
 and void against creditors whose interests are affected by the deed, notwithstand- 
 ing the deed, upon the face of it, purports to be for the benefit of all the creditors. 
 Such a deed is, in truth, a deed for the benefit of the debtor; and if a creditor ac- 
 cepts it, he takes it not for his own benefit, but for the purpose of carrying out 
 the views and objects of the debtor, in fraud of the other creditors. 
 
 ' " No assignment or conveyance made by any insolvent debtor to assignees or 
 trustees, for the use of any of his creditors, shall be valid and effectual against an 
 attachment or execution, in behalf of any creditor who is not a party to it, unless 
 it is so made as to allow all the creditors of the debtor to become parties to it, if 
 they see fit." Statutes of 1836, c. 238, § 11. This statute has been repealed,by 
 that of May 13, 1856. And as to the present law of Massachusetts; see ante, p. 30. 
 
 ^ Parsons, C. J., in Widgery v. Haskell, 5 Mass. 144 ; and in Stevens v. Bell, 6 
 Id. 339 ; see, also, the opinion of Shaw, C. J., in Edwards v. Mitchell, i Gray, 239, 
 240, 241. 
 
 ' Revised Statutes (ed. 1871), p. 543, § 4. It had been previously decided in 
 that State, that if no creditor became a party, the assignment, though executed by 
 the assignor and assignee, was invalid as against an attachment of the property 
 assigned, as the property of the debtor. Carr v. Dole, 18 Me. (5 Shep.) 358. 
 
 * Cunningham v. Freeborn, 1 1 Wend. 240. So in Vermont. Hall v. Denison, 
 17 Vt. (2 Wash.) 310. 
 
154 FORM OF THE ASSIGNMENT. [CHAF. VIII. 
 
 no provisions prejudicial to their interests ; ' otherwise, it is 
 of no avail until executed by them.'' 
 
 Assignments are also sometimes expressly made for the 
 benefit of such creditors as shall become parties to them, 
 without reference to the requirements of any statute. In 
 these cases it is, of course, necessary for the creditors to be- 
 come parties, in order to obtain the benefit of the assign- 
 ment. 
 
 Creditors may become parties to an assignment in other 
 ways than by actually signing the instrument ; as by coming 
 in under it and filing their claims, for the purpose of obtain- 
 ing a dividend. 3 
 
 The effect of thus becoming parties will be considered 
 hereafter.'* 
 
 § 126. Writing, when Necessary. — In considering how 
 an assignment should be made, the necessity of writing to 
 its validity occurs as a preliminary and most important in- 
 quiry.5 Special or particular assignments are usually evi- 
 denced by some written instrument, more or less formal in 
 its character ; and in many cases a writing is expressly re- 
 quired by law to give them validity. In other cases, how- 
 ever, a mere delivery of the subject assigned is sufficient to 
 pass the property ; and in equity many assignments are held 
 good, which are not evidenced by any writing.* 
 
 ' Duval V. Raisin, 7 Mo. 440. 
 
 "^ Drake v. Rogers, 6 Mo. 317; Swearingen v. Slicer, 5 Id. 241 ; but see Gale 
 V. Mensing, 20 Mo. (5 Bennett), 461. 
 
 ' See Bodley v. Goodrich, 7 How. 276. ■• Set post, Chap. XLII. 
 
 ' An assignment, it is said, does not necessarily imply or require writing; and 
 when alleged of any subject, it should always be construed in connection with the 
 law of transfer applicable to that particular subject-matter. Hutchings v. Low, i 
 Green (N. J.) 246. Assignments are very generally made in writing, but they are 
 by no means exclusively so made. Scott, J., in Edison v. Frazier, 4 Eng. (Ark.) 
 220, 221 ; and see further, as to the import of the term, ante, p. 3, n. i. 
 
 ° See ante, p. 3. In Boyden v. Moore (i i Pick. 362), where a debtor delivered 
 ■certain chattels to a creditor, saying, " Take the property, do the best you can 
 with it, pay yourself, and pay the rest to my creditbrs," it was considered by the 
 court as an assignment, and sustained in favor of the assignee. In Loftin v. 
 Lyon (22 Ala. 540), a debtor had delivered to his creditor a quantity of cotton, to 
 be sold, and the proceeds appropriated, first, to the payment of his own debt, and 
 the balance to be paid to other creditors named, in extinguishment of their debts ; 
 and see Higginbottom v. Peyton, 3 Rich. Eq. 398; Gordon v. Green, 10 Ga. 534; 
 
§ 126.] WRITING WHEN NECESSARY. 1 55 
 
 In regard to general assignments, or those usually exe- 
 cuted by insolvent debtors, a stricter rule prevails, and a 
 writing of some kind is generally required, not only as a 
 security against fraud and collusion, but as a necessary 
 means of giving effect to the assignments themselves. The 
 very nature of the transfer, especially when in the form of 
 a trust, comprehending various descriptions of property, 
 and accompanied by directions, more or less numerous and 
 complicated, as to the mode of distribution, renders a writ- 
 ten instrument important' Where real property is 
 either wholly or in part the subject of the assignment, a 
 writing is expressly required by statute. The provision of 
 the English statute of frauds, requiring a writing signed by 
 the party to give effect to transfers of estates or interests in 
 land, includes assignments as well as other conveyances ; '^ 
 and this is said to have been either expressly adopted, or 
 assumed as law throughout the United States.^ In New 
 York it is made to apply not only to every estate and inter- 
 est in lands, but to every trust or power concerning the 
 same,* and to every grant or assignment of any trust. = And 
 in most of the States, both assignments of interests in lands, 
 and declarations or creations of trust in lands, are expressly 
 required to be in writing.* 
 
 Lockwood V. Canfield, 20 111. 126; Newby v. Hill, 2 Mete. (Ky) 530. In the case 
 of Foster v. Lowell (4 Mass. 308), ■ an assignment of a very simple character — 
 being an agreement by the debtor that a third person having money belonging to 
 him in his hands, should retain it for the use of a particular creditor — was held 
 void, on the ground of its not being reduced to writing. But see the reporter's 
 note to the case. 
 
 ' Hertle v. McDonald, 2 Md. Ch. Dec. 128. But see Dale v. Olmstead, 36 111. 
 150. 
 
 " All estates and interests in lands (except leases not exceeding three years) 
 created, granted or assigned, by livery and seizin only, or by parol, and not in 
 writing, and signed by the party, were declared to have no greater force or effect 
 than estates at will only. Stat. 29 Car. II, c. 3, §§ i, 2; 4 Kent's Com. [450] 491. 
 
 ' 4 Kent's Com. ubi supra. * 3 Rev. Stat. (6th ed.) [134] 141, § 6. 
 
 ° 3 Rev. Stat. [137] 145, § 2. 
 
 ° See Rev. Stat, of Me. (ed. 1871), p. 560, c. 73, § n ; Rev. Stat, of N. H. (ed. 
 1867), p. 252, tit. 15, c. 121, §§ 12, 13 ; Rev. Stat, of Vt. (ed. 1862), p. 450, tit. 19, 
 § 21 ; Rev. Stat, of Mass. (ed. i860), p. 502, c. 100, §§ 19, 20 ; Rev. Stat, of N. J. 
 (ed. 1874), p. 503, tit. 17, c. I, §§ 10, II ; Purdon's Dig. (Brightley) vol. i, p. 724, 
 § 3; Swan's Stat, of Ohio (ed. 1841), p. 423, c. 52, § 4; Rev. Stat, of Ind. fed. 
 1870), vol. I, p, 651, §§ I, 2, 3; Rev. Stat, of 111. (ed. 1874), p. 541, c. 49. § 9 I 
 
156 FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 In many of the States, it is expressly required by statute 
 that an assignment for the benefit of creditors should be in 
 writing, and further formalities are in some instances pre- 
 scribed. Thus, in Connecticut," transfers, unless so made, 
 will be void. And in New York,^ a writing is required, and 
 this direction of the statute has been held to be mandatory, 
 and a failure to comply with it will render the assignment 
 invalid.3 And in Indiana, "* a general assignment must be 
 made by indenture, containing a full description of all the 
 real estate assigned and accompanied by a schedule contain- 
 ing a particular enumeration and description of all the per- 
 sonal property assigned. 
 
 § 127. Form of Assignment. — In regard to the particu- 
 lar character of the writing by which an assignment is 
 required to be evidenced, it may be observed that it par- 
 takes usually of the character of a deed, and is drawn 
 with the same care as any other instrument of convey- 
 ance ; consisting of two principal parts — a transfer to the 
 assignee which vests in him the property, and a declara- 
 tion of trust which directs him how to dispose of it.^ In 
 some cases, however, very informal writings have been pro- 
 nounced sufficient as assignments.^ Thus, where a debtor 
 
 Comp. Law of Mich. (ed. 1871), pp. 1455, 1456; Rev. Stat, of, Wis. (ed. 1871), 
 pp. 1254, 1256; Stat, of Ga. Prince's Dig. 915; Civil Code of La. art. 2415; 
 Civil Code of Cal. (Hittell), § 5852. In Texas it is not made necessary by the 
 statute of frauds that an agreement creating a trust in lands should be in writing. 
 James v. Fulerod, 5 Tex. 512. 
 
 ' Gen. Stat, of Conn. (rev. 1875), p. 378; see Whitaker v. Gart, 18 Conn. 
 522 ; and as to trusts, see Beers v. Lyon, 21 Conn. 604 ; Hawey v. Mix, 24 Conn. 
 406. 
 
 ' Laws of i860, c. 348, § I ; 3 Rev. Stat. (6th ed.) p. 32. 
 
 ' Hardman v. Bowen, 39 N. Y. 196; Britton v. Lorenz, 45 N. Y. 51 ; S. C. 3 
 Daly, 23 ; Kercheis v. Schloss, 49 How. Pr. 284. 
 
 * Stat, of Ind. (ed. 1870), vol. i, p. 114. 
 
 ° Sometimes, instead of combining the declaration of trust in the same instru- 
 ment with the conveyance of the property, the property is conveyed absolutely by 
 deed in the ordinary way, and the declaration of trust expressed by a separate 
 instrument. This was the form in the cases of Schuylkill Bank v. Reigart, and 
 Reig;art's Appeal (4 Barr, 477) ; and in Johnson v. Whitwell (7 Pick. 71). But 
 this is not usual. 
 
 " Page V. Weymouth, 47 Me. 238. 
 
127.] 
 
 FORM OF ASSIGNMENT. 1 57 
 
 inclosed notes to one of his creditors by letter, with direc- 
 tions, first, to satisfy" his own debt, and then those of other 
 creditors designated by him, it was held, in South Carolina, 
 that this was a good assignment, as against other attaching 
 creditors, for the benefit of the creditors named.' So, a 
 power of attorney to collect certain moneys and pay them 
 to certain creditors in a prescribed order of preference, has 
 been held in Pennsylvania to be virtually an assignment.^ 
 In this case, Chief Justice Gibson remarked that " an assign- 
 ment of a chose in action or of a fund, need not be by any 
 particular form of words, or particular form of instrument. . 
 * * * Any binding appropriation of it to a particular 
 use, by any writing whatever, is an assignment, or what is 
 
 ' Shubar v. Winding, I Cheves' L. 218. The letter in this case contained, in 
 fact, the elements of a conveyance in trust to pay debts. The assignment in Hall 
 V. Marston (17 Mass. 575), was of the same simple character. Directions to pay 
 money already in hand, present a still simpler form of the class termed equitable 
 assignments, being resolvable into a mere declaration of trust. But these have 'no 
 necessary connection with insolvency, and rather belong to the head of special 
 assignments. 
 
 So in the case of Brown v. Chamberlain (9 Fla. 464), where a debtor without 
 any writing whatever, but verbally and by word of mouth only, assigned, trans- 
 ferred and delivered to three of his creditors, composing a firm, a package con- 
 taining notes, drafts, &c., for nearly $30,000, in trust to collect and distribute the 
 proceeds so far as they would go pro rata between the assignees and his other 
 " Charleston creditors," this was held to be a voluntary assignment. 
 
 " Watson v. Bagaley, 12 Penn. St. 164. But a revocable power of attorney, 
 without any trust for creditors, was held by the same court not an assignment for 
 the benefit of creditors. Beans v. Bullitt, 57 Penn. St. 221. And see Kalkman 
 V. McElderry, 16 Md. 57. But in Britton v. Lorenz (45 N. Y. 51), a bill of sale 
 absolute on its face, was shown by parol to be executed in trust for the benefit of 
 creditors, and was declared invalid as such because not acknowledged in compli- 
 ance with the statute. See Truit v. Caldwell, 3 Minn. 364. See Matter of Oak- 
 ley, 2 Edw. Ch. 478. In the North Carolina case of Stimpson v. Fries (2 Jones 
 Eq. 156), one of the trust deeds was very loosely drawn, having the form and a 
 good deal of the language of a power of attorney, the debtor appointing the 
 trustee his general agent and attorney, to sell and dispose of all of his estate, real 
 and personal, and to pay and satisfy the debts, &c. But it contained an express 
 consideration of ten dollars, and concluded with a clause of express transfer to 
 the trustee, of all the debtor's property, for the purposes mentioned. On these 
 grounds, the court held it to be more than a mere power of attorney, and that it 
 contained sufficient words of conveyance to vest the fee simple and absolute estate 
 in the trustee. But in a New Jersey case, where a debtor, in compliance with 
 the request of some of his creditors, placed, by assignment, the books of account, 
 notes, &c., of a dissolved firm in the hands of a responsible person to collect, and 
 for no other purpose, such an assignment was held to be nothing more than a 
 power of attorney, which did not place the property beyond the control of the 
 debtor, and created no rights between the assignee and the creditors. Brown t. 
 Holcomb, I Stcck. 297. 
 
158 FORM OF THE ASSIGNMENT. [CHAt. VIII. 
 
 the same, a transfer of the ownership."' In a CaHfornia 
 case, where the assignment was in the form of a declaration 
 made before the American consul at Canton, China, and 
 signed and acknowledged by the assignor, it was sustained 
 as valid." But a judgment given to prefer a particular cred- 
 itor has been held, in Pennsylvania, to be not an assignment 
 in substance or in form.^ And it has been further held, in 
 the same State, that the confession of a judgment by a 
 debtor to a trustee for the payment of certain specified cred- 
 itors, is not an assignment for the benefit of creditors, and 
 does not require to bjfi recorded, as required of assignments 
 by the law of that State." It would seem, however, that a 
 judgment may be confessed in favor of the creditors at 
 large, so as to operate as a general assignment. = 
 
 So in the case of Lucas v. The Sunbury & Erie R. R. 
 Co.,* a lease reserving a portion of the rent for the pay- 
 ment of the lessor's debts was held to be an assignment 
 for the benefit of creditors. Mr. Justice Hare said : " The 
 means employed in each particular instance would have 
 seemed to me immaterial if the result were a transfer in 
 trust, or a trust bottomed on a transfer ; if, in short, the 
 property ceased to be the debtor's without vesting directly 
 and absolutely in his creditors, and remained outstanding in 
 the hands of a third person who could not be compelled 
 
 ' No particular form of words is necessary to create a trust. Gordon v. 
 Green, 10 Ga. 534. 
 
 '^ Forbes v. Scannell, 13 Cal. 242. 
 
 ' Blakey's Appeal, 7 Barr, 449; see Worman v. Wolfersberger's Ex'rs, 19 
 Penn. St. (7 Har.) 59 ; see Lansing v. Woodworth, i Sandf. Ch. 43, 45. 
 
 * Guy V. Mcllree, 26 Penn. St. (2 Casey) 92. " There is little if any similarity," 
 observes Knox, J., in this case, " between an assignment and a judgment. The 
 one is an absolute transfer of its subject-matter, whilst the other is but the means 
 whereby to enforce the payment of a debt. An assignment passes the property 
 in real and personal estate, rights and credits, whilst a judgment of itself gives no 
 vested estate in any of the property of the defendant, merely creating a lien 
 upon his real estate, if any he has, at the time of its entry." Id. 94. 
 
 ' In Meux v. Howell (4 East, i), the assignment was in the form of a judg- 
 ment confessed to a creditor for a large sum, with a defeasance that execution 
 should only issue for such an amount as should cover the debt of the . creditor, 
 and all the other creditors, among whom a ratable distribution was to be made. 
 See Adams v. Woods, 8 Cal. 1 52. 
 
 ° 32 Penn. St. 458 ; Bittenger v. R. R. Co. 40 Penn. St. 269. 
 
§ 128.] ASSIGNMENT BY SEVERAL INSTRUMENTS. 1 59 
 
 to render an account or to fulfill the duties imposed upon 
 him without a recourse to the aid of equity." And this 
 language is referred to with approval by Mr. Justice Read 
 in the same case on appeal." 
 
 § 128. Assignment by Several Instruments. — A general 
 assignment, though usually made by one deed or instru- 
 ment, may be made as effectively by several instruments, re- 
 lating to the same subject-matter.'' Thus, in Inglis v. Grant,* 
 there were two deeds. The first was of three parts, between 
 "the debtor, the trustee, and certain creditors, by which the 
 latter covenanted that, if the debtor would assign to the 
 trustee all his effects to pay creditors in a certain order, they 
 would release him. The second deed was an assignment to 
 the trustee, made pursuant to the foregoing. In Johnson 
 v. Whitwell,'' the assignment was by two instruments — an 
 absolute deed of conveyance, and an indenture of th;-ee 
 parts declaring the trust. In Blank v. German,^ there was,, 
 first, an agreement in writing by the debtor to convey the 
 property subject to the payment of a mortgage, and also 
 subject to a full release of certain debts ; next, an agreement 
 in writing by the creditors, that if the debtor would convey 
 to two of their number for the use of the debts, they would 
 release him ; and, finally, a conveyance in the form of an 
 ordinary deed by the debtor and his wife to the two cred- 
 itors. These instruments were taken together as constitut- 
 ing an ordinary assignment to trustees for the use of cred- 
 itors. In Mussey v. Noyes,^ the assignment was in two 
 parts, consisting of two principal deeds referring to each 
 other, together vy^ith other papers, all relating to the same 
 
 ■ Lucas V. R. R. Co. supra. 
 
 '' Norton v. Kearney, 10 Wis. 443 ; Burrows v. Lehndorff, 8 Iowa, 96 ;'^Van 
 Vleet V. Slauson, 45 Barb. 317; Bridges v. Hindes, 16 Md. loi ; Berry v. Cutts, 
 42 Me. 445. 
 
 ' 5 Term R. 530. ' 7 Pick. 71. " 5 Watts & Serg. 36. 
 
 ° 26 Vt. (3 Deane), 468, 471. In the later case of Peck & Co. v. Merrill & 
 Trustees (Id. 686, 691), there was an assignment by the debtor, and also several 
 mortgages of real estate, executed by him about the same time. The court 
 treated them as one instrument. 
 
l6o . FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 subject-matter, executed on the same day, and to effect the 
 same general design. The court took them together, regard- 
 ing them as one transaction. In French v. Townes,' two 
 instruments had been executed by the debtor to a creditor, 
 on the same day ; one being a power of attorney for the 
 particular benefit of the creditor ; the other, a deed of trust 
 to secure the creditors generally, with preferences. The 
 court held that both papers were to be construed as one in- 
 strument. In Stimpson v. Fries,' there were three deeds of 
 trust, separated by considerable intervals ; one executed in» 
 the year 1848 ; another in 1854, of all the debtor's property 
 to the same trustee ; and a third in 1855, of the same prop- 
 erty to another trustee. The court upheld and gave effect 
 to all the three deeds as parts of a general provision for 
 creditors. 
 
 Again, a general assignment may be made either by one 
 instrument conveying the whole of the assignor's property, 
 or by several instruments, conveying several portions re- 
 spectively. In this way, several partial assignments, though 
 in the form of distinct deeds, and executed at different 
 periods, will be taken together as constituting one general 
 assignment. Thus, in the case of Downing v. Kintzing,' 
 there were two assignments made to different persons by an 
 insolvent debtor, with an interval of thirty-one days between 
 them, and together conveying the whole of the debtor's 
 estate ; the object being to evade the act of Congress giv- 
 ing a priority to the United States. It was contended that 
 the two deeds were to be construed each by itself But the 
 court held the contrary, taking them to constitute but one 
 general assignment, and so coming within the act. The 
 same question arose in the late case of the United States v. 
 The Bank of the United States,"* where three partial assign- 
 
 ' 10 Gratt. 513. "2 Jones Eq. 156. 
 
 ' 2 Serg. & R. 326, 335. In the case of Dance v. Seaman (11 Gratt. 778), 
 there were two deeds, dated on the same day ; one executed by one of two debt- 
 ors, and the other by the other debtor, each conveying one moiety of the same 
 property, with substantially the same provisions. 
 
 * 8 Rob. (La.) 262. 
 
§ I29.J ASSIGNMENT BY SINGLE INSTRUMENT. 161 
 
 ments had been made by the bank, dated June 7th, and Sep- 
 tember 4th and 6th, 1841, respectively. The court below 
 had held that all of these assignments should be considered 
 as one, so as to give the United States their priority ; and 
 on appeal, the Supreme Court held that decision to be cor- 
 rect. The rule governing these cases was laid down by the 
 counsel for the plaintiflFs in the following terms, which seem 
 to have met the approval of the court — that, no matter how 
 many instruments are employed to effect the same result, 
 they all partake of the same character, and all should be 
 considered as parts of the same whole. If the same causes 
 w^hich led to the execution of one of the instruments, partial 
 when considered alone, continue to operate until every parti- 
 cle of the debtor's property is divested, the first instrument 
 is to be coupled with those that follow, and the whole should 
 be construed together.' 
 
 § 129. Assignment by Single Instrument. — But assign- 
 ments in trust for the benefit of creditors are usually made 
 by formal instruments having all the requisites of a deed. 
 They may be drawn in either of the following varieties of 
 form, viz. : first, by the debtor to the assignee, in the form 
 of a deed poll, without making the latter a party;" secondly, 
 between the debtor and the assignee, the latter being made 
 a formal party, and this is called an assignment bipartite, 
 or of two parts ; and thirdly, between the assignor, assignee, 
 and creditors, the latter being also made formal parties, and 
 this is termed an indenture tripartite, or of three parts. 
 The two last constitute the species of form in most general 
 use. There is also a fourth variety, of quadripartite assign- 
 ments, in which the parties are arranged in four parts ; ^ but 
 these are rarely adopted. 
 
 ' Holt V. Bancroft, 30 Ala. 195 ; Burrows v. Lehndorff, 8 Iowa, 96 ; Van Vleet 
 V. Slauson, 45 Barb. 317. 
 
 " This appears to be the ordinary form in Connecticut, where assignments are 
 required to conform to the statute. Strong v. Carrier, 17 Conn. 319 ; see Whit- 
 taker V. Williams, 20 Id. 98 ; but see the act of 1853 ; Rev. Stat. (ed. 1874), p. 378. 
 
 ' This was the form of assignment in Foster v. Saco Manufacturing Company, 
 12 Pick. 451. 
 
 11 
 
1 62 FORM OF THE ASSIGNMENT. [cHAP, VIII. 
 
 § 130. Simplest Foym.—T\\& essential features of an 
 instrument of assignment may be most conveniently illus- 
 trated by taking up the simplest variety in common use, 
 which is the assignment bipartite, considering it as divested 
 of all special clauses, and examining in succession its formal 
 parts. These consist of the following: i, the commence- 
 ment ; 2, the recital ; 3, the consideration ; 4, the transfer ; 
 5, the description of the property assigned ; 6, the haben- 
 dum ; 7, the declaration of the trusts or directions to the 
 assignee ; 8, the reservation to the assignor ; 9, power of 
 attorney to the assignee ; 10, covenant by the assignee ; and 
 II, the concluding clause. To the assignment are usually 
 appended two schedules, which are marked and referred to 
 in the body of the instrument, and are taken as a part of it 
 — first, a schedule of the property assigned ; and, secondly, 
 a schedule of the assignor's creditors, or of the debts to 
 which the property is to be appropriated. The forms in the 
 appendix to this work may be consulted with advantage in 
 connection with the following explanations. 
 
 § 131. Commencem,ent and Recital. — The date of the 
 instrument and the names of the parties are first inserted. 
 
 The assignment next proceeds to recite the indebted- 
 ness of the assignor to his creditors in divers sums, which 
 by reason of losses, &c., he is unable to pay ; and his agree- 
 ment to transfer to assignees all his property in trust for 
 their benefit. The indebtedness is usually stated in this part 
 of the instrument in general terms, the particular debts 
 being afterwards specified in a schedule. But sometimes, as 
 where the creditors are few in number, the debts are de- 
 scribed in the recital in lieu of a schedule. It is better that 
 no language should be employed which can raise a question 
 as to the fact of the assignor's insolvency.' 
 
 A false recital of losses as the occasion of the debtor's 
 failure has been held not to affect the rights of creditors 
 
 ' See Kellogg v. Slauson, 1 5 Barb. 56 ; Allen, J., Id. 57, 58 ; s. C. on appeal, 1 1 
 N. Y. 302 ; Parker, J., Id. 304, 305 ; Van Nest v. Yoe, i Sandf. Ch. 4. 
 
§ I3I-] COMMENCEMENT AND RECITAL. 163 
 
 under an assignment' Nor will a misdescription in the 
 recital of debts described as the consideration of the assign- 
 ment affect the validity of the deed.^ And a trust deed to 
 secure creditors, reciting the amount of the debts due to the 
 different creditors, is not conclusive, even as against the 
 grantor and his administrator, of the amount of the respective 
 debts.3 
 
 It has sometimes been the practice to recite in this part 
 of the assignment, the reasons which led to the making of 
 it, the object contemplated by it, and even the circumstances 
 under which it was made/ This, while not strictly neces- 
 sary, may in certain cases be hazardous, as the language of 
 recitals is sometimes relied on to show a fraudulent intent 
 on the part of the assignor, where the assignment is assailed 
 on that ground.5 In a case in New York, where the assign- 
 ment was declared to be made for the purpose of carrying 
 into effect the assignor's intention of " applying his property 
 and estate to the payment of his debts, in a fair and equi- 
 table manner, and without sacrifice," it was held to be no 
 evidence of an intent to hinder or delay creditors, although 
 the. terms used were admitted to be not happily selected/ 
 In a case in Alabama, where a deed of trust recited that 
 some of the grantor's creditors were urging the collection of 
 their debts at a time when there was a great pressure in the 
 money market, and that his property, if sold at a more 
 favorable period, would be more than enough to pay off all 
 his debts, it was held that this was but a statement of the 
 reasons which induced him to make the deed, and did not 
 render it fraudulent on its face.' 
 
 ' Reinhard v. Bank of Kentucky, 6 B. Mon. 252. 
 
 = Graham v. Lockhart, 8 Ala. 9. 
 
 » Griffin's Ex'r v. Macaulay's Adm'r, 7 Gratt. 476. 
 
 ♦ See Brigham v. Tillinghast, 15 Barb. 618 ; Shackelford v. P. & M. Bank of 
 Mobile, 22 Ala. 238. 
 
 ' Ward V. Trotter, 3 Mon. i ; Vernon v. Morton, 8 Dana, 247. 
 
 " Brigham v. Tillinghast, 15 Barb. 618 ; Allen, J., Id. 620. The judgment in 
 this case was afterwards reversed on another ground. 13 N. Y. 21 5. 
 
 ' Shackelford v P. & M. Bank of Mobile, 22 Ala. 238. 
 
164 FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 § 132. Consideration. — Next follows the statement of 
 the consideration of the assignment, which usually is—" of 
 the premises, and of one dollar," or some nominal sum paid 
 to the assignor ; and of the covenants on the part of the 
 assignee. It is always best to express the consideration on 
 the face of the deed, although it will be held to import 
 one.' 
 
 In deeds of trust, the amount of the debts intended to 
 be secured is sometimes specifically recited as the considera- 
 tion. In such cases, the recital should correspond with the 
 actual indebtedness. The recital of a fictitious consideration 
 as the ground of the deed will be evidence of an intention 
 to hinder and delay creditors." In a late case in Tennessee, 
 a deed of trust purporting to be for a debt then due of 
 $2,500, when only $304 were in fact due, was held to be 
 upon a false and fictitious consideration, calculated to de- 
 ceive creditors. 3 
 
 § 133. Transfer. — Next follows the clause of transfer, 
 by which the assignor grants, bargains, conveys, assigns, 
 transfers and sets over to the assignee, his heirs, executors, 
 administrators and assigns, all his estate, real and personal, 
 describing it by sufficient words. 
 
 § 134. Description of Property. — The property intended 
 to be assigned is described either in this part of the instru- 
 ment, or in a schedule annexed, to which reference is here 
 made ; the latter being the usual method, where the property 
 is considerable in amount, or consists of a variety of partic- 
 ulars. In either case, the description should be sufficiently 
 explicit to enable the assignee to take possession.'' A mere 
 
 • See post, chap. XII. 
 
 '^ Neuffer V. Pardue, 3 Sneed, 191, 194 ; Lockhard v. Browdie, Tenn. Ch. R. 304. 
 ' Id. 193. 
 
 * In a case in Missouri, where the property assigned was described as " one 
 bundle of orders, one bundle of fee bills, two bundles of notes, two bundles of 
 accounts and one of receipts," it was held to be void for uncertainty. Crow v. 
 Ruby, 5 Mo. 484 ; and in the case of the State v. Keeler, 49 Mo. 548, it was said 
 by Adams, J. : " It may be assumed as a proposition of universal acceptance that 
 the absolute owner of property has the right to transfer the same by any descrip- 
 tion which, together with parol evidence, may ascertain the property conveyed." 
 
§ 1 34-] DESCRIPTION OF PROPERTY. 1 65 
 
 imperfection in the description will not, however, have the 
 effect of invalidating the instrument, unless where there is a 
 failure to comply with some express statute provision ; and 
 a description in general terms has frequently been held un- 
 objectionable. Thus, in a case in Massachusetts, where the 
 property assigned was described as the cargoes of certain 
 vessels named, without invoices, bills of lading, or valuations ; 
 and real estate lying in Boston, Charlestown;^ and Maine, 
 without a particular description of each parcel — it was held 
 that, as the description could be made certain by the refer- 
 ences given, it was sufficient.' And in another case in the 
 same State, where the property was described as " quantities 
 of leather and stock, designed for the manufacture of boots 
 and shoes, and also of boots and shoes already made or 
 partly made," in the hands of divers persons named — this 
 was held to be a sufficient specification of the property and 
 the place where it was to be found. ^^ And even a descrip- 
 tion of the real estate of the debtor, as " all his lands, tene- 
 ments and hereditaments," was held, in a later case, sufficient 
 to pass all his real estate without a more particular descrip- 
 tion.3 And where an assignment purported to be a convey- 
 ance of the various articles of property stated in a schedule 
 annexed, but no schedule was in fact annexed at the time of 
 the delivery of the assignment, it was held that even if the 
 assignment at the time of delivery was invalid on account of 
 uncertainty in the description of the property proposed to 
 be assigned, the annexation of the schedule, with the consent 
 of the parties, on the day after delivery, would cure the de- 
 
 ■ Hatch V. Smith, 5 Mass. 42. 
 
 ° Emerson v. Knower, 8 Pick. 63 ; Parker, C. J., Id. 65. 
 
 ' Pingree v. Comstock, 18 Pick. 46. But in a late case in Florida, it was held 
 to be essential to the conveyance of real estate that there be some description of 
 the land. Bellamy v. Bellamy's Adm'r, 6 Fla. 62. So in the case of Ryerson v. 
 Eldred, 18 Mich. 12, a description of lands as follows : " 14^ lots of land in Kanka- 
 kee City, Kankakee Co.*, Illinois, valued at $5,400, and 2-7 of 1,600 acres of land 
 in Green Co., Illinois, at $2,500, and 120 acres of land in Chickasaw Co., Iowa, 
 valued at $600," was regarded as too uncertain and vague to make the assignment 
 operate as a transfer of title, at least without clear evidence that the assignor 
 owned certain lands in the places named, which might fall within the description, 
 and that these were the only lands owned by him in such places. See Drakeley 
 V. Deforest, 3 Conn. 272. 
 
1 66 FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 feet ; or would be considered as equivalent to a redelivery 
 as against a creditor attaching subsequently to such annexa- 
 tion.' So, in Connecticut, where a deed of assignment was 
 made with a view to proceedings under the statute of 1828, 
 against fraudulent conveyances, and was a part of such pro- 
 ceedings, the circumstance that it was general in its terms, 
 embracing all the assignor's estate, real and personal (except 
 such as was by law exempt from execution), without any 
 specification or description of such estate, was held, in the 
 absence of any other objection, not to render the assignment 
 invalid.'' And in another case in the same State, where the 
 deed purported to assign to the trustees all the real and per- 
 sonal property of the assignors, of every description, in the 
 State, except their household furniture, a schedule of which 
 property was to be made out and annexed thereto as soon as 
 convenient, it was held that such assignment was not invalid'' 
 as against the assignor^, either because the description of the 
 property was too general, or because the schedule referred 
 to was not then in existence.^ In a case in New York, 
 where the property assigned was described as " all and 
 singular the goods and chattels, merchandise, bills, bonds, 
 notes, book accounts, judgments, evidences of debt, and 
 property of every name and nature whatever," without 
 further specification, and without any inventory — it was held 
 that such omission was not conclusive evidence of fraud, but 
 only a circumstance to be considered by the jury in connec- 
 tion with the other circumstances of the case.'* In Pennsyl- 
 vania, where an assignment of personal property described 
 it in a vague manner, it was held that a notice given by the 
 assignees before the right of any third person had attached, 
 to the person in whose hands the property was, that it had 
 
 ' Clap V. Smith, i6 Pick. 247. 
 
 ' Strong V. Carrier, 17 Conn. 319. The court, however, in this case, placed 
 their decision on the ground that, by the provisions of the statute, two months 
 were allowed for making an inventory after the deed was lodged for record. 
 Church, J., Id. 330. 
 
 ° Clarke v. Mix, 15 Conn. 152. 
 
 * Kellogg v. Slauson, 15 Barb. 56, 58, 59 ; affirmed on appeal, il N. Y. 302. 
 
§ I34-] DESCRIPTION OF PROPERTY. 167 
 
 been conveyed to them, and requesting him to hold it sub- 
 ject to their order, under which was written by the assignor, 
 " I confirm the above," amounted to a declaration identifying 
 the property.' In a case in Virginia, where the deed con- 
 veyed, among other things, cattle, household and kitchen 
 furniture and debts, without specification either in the deed 
 or by schedule accompanying it, it was held that the deed 
 was not therefore fraudulent. " So in Alabama, it has been 
 held that a deed of assignment is not void on account of an 
 imperfect description of some of the chattels conveyed by 
 it,3. and that the omission to specify the property assigned 
 does not render it fraudulent on its face, but is a circum- 
 stance merely to be weighed by a jury in determining the 
 question of fraudulent intent.'* In Mississippi, where, in an 
 assignment by a bank, the property was described as " all 
 the estate of the corporation, whether real, personal or 
 mixed, and all the stock, goods, wares, merchandise, bills re- 
 ceivable, bonds, notes, book accounts, claims, demands, judg- 
 ments, and choses in action," without any schedule, — it was 
 held to be a sufficient general description of the property, to 
 give precise information of ifcs^ nature and extent, by refer- 
 ence and inquiry.5 And in the case of Brashear v. West,^ 
 in the Supreme Court of the United States, an objection 
 that the assignment was in general terms, and that no sched- 
 ule was annexed, was overruled by the Court. And even 
 an erroneous description of the property assigned, will not 
 prevent its passing to the assignee. Thus, where a party 
 assigned his right to certain insurance money, describing it 
 as then in the hands of a person named, when in fact it had 
 not been paid to such person, the assignment was held to 
 pass his right to the money.' 
 
 ' Passmore v. Eldridge, 12 Serg. & Rawle, 198. 
 " Kevan v. Branch, i Gratt. 274. 
 
 ' Tarver v. Roffe,. 7 Ala. 873. See Robinson v. Rapelye, 2 Stew. 86 ; Pope v. 
 Brandon, Id. 401. 
 
 * Brown v. Lyon, 17 Ala 659. 
 
 ' Robins'^. Embry, I Sm. & M. Ch. 207, 208, 273, 274. 
 
 * 7 Pet. 608, 614. ' Sandford v. Conant, 2 Sandf. S. C. 143. 
 
1 68 FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 § 135. Amount Assigned— Reference to the Schedule. — 
 Where the assignment is intended as a general one, it should 
 convey in terms, all the debtor's property of every kind, 
 except such as may be exempted by law ; and under this 
 head, particular reference should be had to the statute law of 
 the State in which the assignment is drawn.' In Maine, all 
 the debtor's property, not exempt by law, will be construed 
 to pass, whether specified in the assignment or not.^ In 
 New Jersey, the inventory required by statute to be annexed 
 to the assignment, is declared to be in no wise conclusive as 
 to the quantum of the debtor's estate, but the assignees will 
 be entitled to any other property which may belong to the 
 debtor at the time of making the assignment, and compre- 
 hended within its general terms.^ 
 
 § 1 36. Where it is intended to assign all the property, 
 care should be taken not to restrict the description by words 
 of reference to the schedule annexed, unless the schedule 
 itself actually contains all. Thus, in the case of the United 
 States V. Rowland,^ in the Supreme Court of the United 
 States, where the property was described as "all and singu- 
 lar the estate and effects, which is contained in a schedule 
 hereunto annexed, marked A," and the caption of the sched- 
 ule was "Schedule of property assigned by [the debtors] 
 to [the creditors]," — it was held by the court (Marshall, C. 
 J.), that the deed conveyed only the property contained in 
 the schedule ; and the schedule did not purport to contain 
 all the property of the parties who made it ; and that, in 
 such a case, the presumption must be that there was prop- 
 erty not contained in the deed, unless the contrary appeared. 
 In accordance with this decision, it was held by Mr. Justice 
 Story, in a case in the Circuit Court of Massachusetts,^ 
 where the assignment was of all a debtor's property in a 
 
 ' See ante. Chap. VI. 
 
 "Act of March 2, 1844, c. 112. See Merrill v. Wilson, 29 Me. 58; Rev.. 
 Stat. (ed. 1 87 1), p. 543. 
 
 = Rev. Stat. (1874), p. 8. See Hayes v. Doane, 1 1 N. J. Eq. 84. ■■ 4 Wheat. 108.. 
 ' United States v. Langton, 5 Mason, 280. 
 
§ 137-1 AMOUNT ASSIGNED. 169- 
 
 schedule referred to, which enumerated only specific prop- 
 erty, and did not purport to contain all — that no presump- 
 tion arose that the property assigned was all the debtor's 
 property, or that the assignment was a general one. So, in 
 a late case in Maryland where the assignment was of all the 
 debtor's "goods, chattels, promissory notes, debts, wares, 
 merchandise, securities and vouchers for, and effecting, Scc^ 
 and property of every name and nature whatsoever of or 
 belonging to him, and which are more particularly and fully 
 enumerated in the schedule hereto annexed, marked Sched- 
 ule A," a sum of money not mentioned in the Schedule A, 
 annexed to the deed of assignment, did not pass to the as- 
 signee for the reason that the general words of the deed 
 were restrained and limited by the reference to the schedule.' 
 
 § 137. So in New Hampshire, where a debtor assigned 
 " all and all manner of goods, chattels, debts, demands, 
 moneys and other things of him, the said D., whatsoever, as 
 well real as personal, of what kind, or nature, or quality 
 whatsoever, in the schedule hereto annexed, and particularly 
 mentioned and expressed," it was held that the latter words 
 were restrictive, and that nothing would pass by the assign- 
 ment unless it was specified in the schedule.^ And in the 
 same State, where an assignment was made by an individual 
 of " all his property, real and personal, in the schedule an- 
 nexed particularly mentioned," to be paid out to the several 
 persons named in the schedule, where all the names of the 
 creditors were not mentioned, it was held that the assign- 
 ment was invalid under the statute of July 5, 1834, as not 
 showing either an assignment of all the property, or as made 
 to all the creditors. 3 So in Massachusetts, where the debtors 
 assigned " all their books, stock in trade, printing apparatus 
 and machinery, books of account, book debts, notes and 
 demands, and all their other property of every name and 
 
 ' Mims V. Armstrong, 31 Md. 87 ; citing Wood v. RadclifFe, 5 Eng. L. & Eq. 
 471 ; Wilkes v. Ferris, 5 Johns. 335, and this treatise ; and see Guerin v. Hunt, 6 
 Minn. 375. 
 
 = Rundlett v. Dole, 10 N. H. 458. ' Beard v. Kimball, 11 N. H. 471. 
 
170 FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 nature, except such as is exempt from attachment, most of 
 the same being now at their place of business, a schedule of 
 which is annexed ; " and it was expressed that other and 
 fuller schedules of the property assigned should be annexed 
 as soon as the same could conveniently be made ; and the 
 schedule annexed to the assignment contained three items, 
 viz. : stock of books in store, printing presses and materials, 
 notes and demands, &c. — it was held that the words of the 
 assignment, though broad enough in themselves to comprise 
 furniture of one of the partners, were restricted by the 
 schedule ; that the furniture was not included in the sched- 
 ule, as originally made, the " &c." being applicable to things 
 ejusdem generis ; and that parol evidence that the assign- 
 ment was intended to embrace the furniture was inadmissible, 
 because it would vary the written instrument." And in a 
 case in England, where a bill of sale purported to assign 
 to G. R. " all the household goods and furniture of every 
 kind and description whatsoever, in the house No. 2 Meadow 
 Place, more particularly mentioned and set forth in an in- 
 ventory or schedule of even date, and given up to the said 
 O. R. on the execution thereof; " but the inventory did not 
 specify all the goods and furniture in the house — it was held 
 that the bill of sale only operated as an assignment of the 
 goods and furniture specified in the inventory.^ 
 
 § 138. In the earlier cases in New York this doctrine 
 was applied,^ but in the later cases the principle of construc- 
 tion prohibiting a false or erroneous addition from vitiating 
 what had been previously sufficiently and fully described as 
 a portion of the subject-matter intended to be transferred by 
 the instrument, has been regarded as the correct rule of con- 
 struction in such cases. Thus, in the case of Turner v. 
 Jaycox,* where the transfer was of "all and singular the 
 
 ' DriscoU V. Fiske, 21 Pick. 503. 
 
 ' Wood V. Rowcliffe, 20 L. J. N. S. Exch. 285 ; 5 Eng. L. & Eq. 471. 
 
 = Wilkes V. Ferris, 5 Johns. 335 ; Moir v. Brown, 14 Barb. 39. See Keep v. 
 Sanderson, 2 Wis. 42 ; Crawford, J., Id. 60, 61. 
 
 ' 40 N. Y. 470; S. C. 40 Barb. 164 ; but see Kircheis v. Schloss, 49 How. 284 ; 
 Hotop V. Neidig, 17 Abb. Pr. 332 ; Birchell v. Strauss, 28 Barb. 293. 
 
§ I39-] WHEN THE SCHEDULES SHOULD BE ANNEXED. 171 
 
 lands, tenements and hereditaments situate, lying and being 
 in the State of New York, and all the goods, chattels, mer- 
 chandise, bills, bonds, notes, book accounts, claims, demands, 
 choses in action, judgments, evidences of debt, and property 
 of every name and nature whatsoever of the said parties of 
 the first part, more particularly enumerated and described in 
 the schedule hereto annexed, marked Schedule A," and no 
 allusion was made in the schedule to any of the tangible 
 personal property of the assignors, it was held that such 
 property passed under the previous general description.' 
 
 An assignment of' a greater amount of property than is 
 sufficient to pay the debts thereby to be secured, is not, of 
 course, fraudulent ; • but if the excess be great, it will be pre- 
 sumptive evidence of fraud.'' 
 
 § 139. When the Schedules should be Annexed. — Where 
 schedules are intended to be prepared, and are referred to in 
 the assignment, they should, in strictness, be prepared before 
 the assignment is drawn ; or, at any rate, be in readiness, so 
 as to be annexed to the instrument before it is executed. 
 In some cases, however, where time has not been allowed 
 for the preparation of schedules, particularly those of the 
 property assigned, an assignment executed without schedules, 
 and only referring to them as "to be made out and an- 
 nexed " at a future time, has been adjudged valid. Thus in 
 Connecticut, where the property assigned was described as 
 " all the real and personal property of the assignors, of every 
 description, in this State, except their household furniture," 
 a schedule of which property was to be made out and an- 
 nexed thereto as soon as convenient — it was held that the 
 assignment was not invalid because the schedule referred to 
 was not then in existence.^ So, in Massachusetts, where 
 an assignment described the property in general terms, and 
 
 ' See comments of Selden, J., on Wilkes v. Ferris, supra, in Piatt v. Lett, 17 
 N. Y. 481. 
 
 '^ Hastings v. Baldwin, 17 Mass. 552 ; Burlingame v. Bell, 16 Id. 318 ; and see 
 further on this head, ante, p. 1 27. 
 
 ' Clark V. Mix, 15 Conn. 152. 
 
172 FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 provided that a schedule of the property should be prepared 
 and made a part of the instrument when completed, it was 
 held that the annexation of the schedule was not a condition 
 precedent to the operation of the assignment.' So in New 
 York, where an absolute assignment of all the assignor's 
 property and choses in action contained a provision that the 
 assignor would, with all convenient speed, make out an in- 
 ventory of such property and choses in action, and which 
 inventory when made out was to be considered a part of the 
 assignment — it was held that the assignment conveyed a 
 present interest to the assignee, and that its taking effect did 
 not depend upon the making out of the inventory.'' And 
 in England, a deed referring to a schedule as annexed, which 
 was not in fact annexed till after its execution, was held 
 valid.3 But in a case in New York, where the property 
 assigned was described as " all and singular the lands, tene- 
 ments, &c., situate, &c., and all the goods, chattels, &c., and 
 property of every name and nature whatever of the said 
 parties of the first part, more particularly enumerated and 
 described in the schedule hereto annexed marked Schedule 
 A ;" but Schedule A was not annexed until after the assign- 
 ment had been executed and recorded — it was held that 
 such schedule was a necessary part of the assignment, as 
 showing what property passed by it, and that without it the 
 assignment was insensible, imperfect and inoperative ; and, 
 as against creditors, did not convey the property to the as- 
 signees.'' More will be said on this subject in considering 
 the schedules as a part of the assignment.^ 
 
 § 140. Habendum. — After the description of the prop- 
 erty intended to be assigned, follows the habendum, or 
 
 ' Woodward v. Marshall, 22 Pick. 468. 
 
 " Keyes v. Brush, 2 Paige, 311. = West v. Steward, 14 Mees. & W. 47, 
 
 " Moir V. Brown, 14 Barb. 39. See post, p. 179, note 2. In the case of 
 Kellogg V. Slauson, in the same court, and decided about the same time (15 Barb. 
 56), in which it was held that the omission of a schedule of the property would 
 not avoid the assignment, there was no reference to a schedule as annexed. And 
 see Kircheis v. Schloss, 49 How. Pr. 284. 
 
 '' Sts post; pp. 179, et seq. 
 
§§ 141, I42-] DECLARATION OF TRUSTS. 1 73 
 
 formal clause, expressing the legal estate ' which the assignee 
 is to have in it : " To have and to hold the same to [the 
 assignee, naming him], his heirs, executors, administrators 
 and assigns," [or, if there be more than one assignee, " to 
 [the assignees], and the survivors and survivor of them, their 
 and his heirs," &c.] ^ Where there are several assignees, and 
 especially where the assignment conveys real estate, it is ad- 
 visable to use words expressive of survivorship, so as to avoid 
 all ground of question as to the estate taken by them, 
 whether it be a joint tenancy, or tenancy in common ;3 al- 
 though in New York every estate vested in trustees is de- 
 clared by statute to be held in joint tenancy/ 
 
 § 141. Declaration of Trusts. — Immediately following 
 the habendum, and in fact constituting a part of it, is that 
 portion of the instrument (commencing with the words "In 
 trust " or " Upon trust "), wl|ich declares the trusts upon 
 which the assigned property is to be held, in the form of 
 directions to the assignee what disposition to make of it. 
 These trusts may be ranked under two general heads : first, 
 to reduce the property into a form in which it may be dis- 
 tributed ; and secondly, to distribute it. 
 
 § 142. To Convert the Property into Money. — In order 
 to reduce the property into a form for distribution, the trusts 
 or directions in this part of the assignment are, first, to take 
 possession of the property assigned ; second, to sell and dis- 
 pose of it to the best advantage, and with the least delay ; ^ 
 
 ' A deed of trust to secure debts must convey the legal as well as the equitable 
 title. Rossett v. Fisher, 1 1 Grat. 492. 
 
 ' The technical meaning of the word "premises" is everything which pre- 
 cedes the habendum, and it is in the premises of a deed that the thing is really 
 granted. Farquharson v. Eichelberger, 15 Md. 63. Under a deed of trust to sell 
 and pay debts, the fee may pass by necessary implication without the word 
 " heirs." Farquharson v. Eichelberger, supra. 
 
 ' A question of this kind arose in the case of Benedict v. Morse, lo Mete. 223. 
 The court, however, held it unnecessary to be decided in the case, because, 
 quacunque via data, the defendant could not avail himself of the legal difference 
 between the two estates. Hubbard, J., Id. 228. 
 
 ' 2 Rev. Stat. (6th ed.) p. 1 104, § 44. 
 
 ' A power to sell and convey is necessarily implied by a conveyance of prop- 
 erty for the payment of debts. Williams v. Otey, 8 Humph. 653 ; Hager, J., in 
 
174 FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 and third, to collect and recover the debts due to the as- 
 signor. 
 
 § 143. To Apply and Distribute the Proceeds. — The 
 trusts or directions under this head comprise the following : 
 first, to pay the expenses of the trust, including a reasonable 
 compensation to the assignee or assignees, for his or their 
 services ; ' secondly, to pay out of the residue all the cred- 
 itors of the assignor named in the assignment, or in a sched- 
 ule annexed and referred to, in full, or in proportion to their 
 respective demands ; and, after payment of the said cred- 
 itors, and all the creditors, in full, thirdly, to pay over the 
 residue to the assignor, his executors, administrators, or as- 
 signs. These several trusts will now be considered more in 
 detail. 
 
 § 144. To Pay the Expenses of the Trust. — These ex- 
 penses include costs of suits and of defenses, necessarily in- 
 curred by the assignee in collecting the debts and claims, 
 and obtaining or retaining possession of the property as- 
 signed. They are sometimes provided for specifically in the 
 assignment.^ But although the deed contains no such pro- 
 vision, the law authorizes the retention by the assignee of 
 all reasonable charges and expenses.^ 
 
 § 145. To Retain a Reasonable Compensation to the As- 
 signee. — Sometimes the amount to be allowed the assignee 
 
 Forbes v. Scannell, 13 Cal. 326. But it is always the practice to give the power 
 or declare the trust for this purpose in express terms. As to special provisions re- 
 specting the sale, steposf, Chap. XI. But it seems that an assignment of "goods, 
 chattels, book accounts, stock debts, and all other estate and effects," does not 
 give the assignee power of sale over real estate without express words. Boker v. 
 Crookshank, i Phila. 193; and see In the Matter of the Assigned Estate of A. J. 
 Gallagher, 5 Phila. 83. 
 
 ' Canal Bank v. Cox, 6 Greenl. 395; Andrews v. Ludlow, 5 Pick. 28. 
 
 '' A debtor may provide in an assignment for payment of present and pro- 
 spective costs of suits going on, relating to some of the assigned property. Len- 
 tilhon V. Rloffatt, i Edw. Ch. 451. A direction to the assignee to pay first of all 
 the just and reasonable expenses, costs and charges, and commissions of execut- 
 ing and carrying into effect the assignment, and all reasonable and proper 
 charges for attorney and counsel fees respecting the trust does not render the 
 assignment invalid. Butt v. Peck, i Daly (N. Y.) 83; Iselin v. Dalrymple, 27 
 How. Pr. 137. 
 
 = Blow V. Gage, 44 111. 208. 
 
§ I46.J TO PAY THE DEBTS DESIGNATED. 1 75 
 
 for his services is fixed and specified in the assignment as a 
 gross sum named/ or so much yearly. A stipulation that 
 salaries shall be paid to the trustees, out of the trust prop- 
 erty, has been expressly held to be not improper.^ And 
 even large salaries so stipulated to be paid do not make the 
 deed fraudulent upon its face.^ But where the trustees were 
 to receive each eight thousand dollars per annum, the assign- 
 ment was for this and other reasons held void as against 
 creditors not parties.* 
 
 In New York, it is held that the debtor cannot provide 
 for the trustees a higher rate of compensation than is 
 allowed to executors, administrators, and guardians, for sim- 
 ilar services. 5 A trustee is entitled to commission as com- 
 pensation for his labor in managing the trust committed to 
 him, though no provision be made for it in the deed of 
 trust. ^ 
 
 § 146. To pay the Debts Designated or Referred to. — 
 Where the debts to be paid are few, it is frequently the 
 practice to specify them in this part of the assignment. But 
 where they are numerous, the more usual course is to refer 
 to them as set forth in a schedule annexed. In both cases 
 they should be described with sufficient certainty, in order 
 that the assignee may not be at a loss, either as to the per- 
 
 ' Andrews v. Ludlow, 5 Pick. 28. ^ Vernon v. Morton, 8 Dana, 247. 
 
 ' Ingraham v. Grigg, 13 Sm. & M, 22. 
 
 * Bodley v. ' Goodrich, 7 How. 276. Compensation to tlie assignee at a fixed 
 sum, provided it should not exceed what the laws of the State allow to executors 
 or administrators, and if it should exceed that amount, then at the rate so pre- 
 scribed for executors and administrators, limits and does not enlarge their legal 
 claims, and is unobjectionable. Keteltas v. Wilson, 36 Barb. 298. 
 
 '' Barney v. Griffin, 2 N. Y. 365 ; Meacham v. Stevens, 9 Paige, 398. In the 
 case of Duffy v. Duncan, 35 N. Y. 187, where the referee allowed the assignee 
 the commissions payable to executors, Mr. Justice Leonard said that " had he found 
 the commissions at the rate allowed to trustees by the Revised Statutes, when they 
 are appointed in proceedings in relation to concealed and absconding debtors, I 
 think his judgment would have remained undisturbed." In Wynkoop v. Shardlow, 
 44 Barb. 84, a commission of twenty per cent, for the collection of assigned ac- 
 counts, consisting of small bills of account which cause much trouble and loss of 
 time in their collection, was not considered unreasonable. And see Campbell v.. 
 Woodworth, 24 N. Y. 304 ; Eyre v. Beebe, 28 How. Pr. 333. 
 
 " Sherrill v. Shuford, 6 Ired. Eq. 228 ; Blow v. Gage, 44 111. 208. And see 
 further, as to conipensation to the assignee, post, Chap. XXXVI. 
 
176 FORM OF THE ASSIGNMENT. [CHAP. VIII. 
 
 son or amount to be paid.' It has been held that a debt, to 
 secure which, a deed of trust has been executed, may be de- 
 scribed by the name of the debtor, and its amount be left to 
 be ascertained. == And parol evidence has been held admis- 
 sible to show that a particular bill of exchange was intended 
 to be secured by a deed of trust, though generally or im- 
 properly described in the deed.^ But where a debt intended 
 to be secured is not correctly described in the deed, though 
 the creditor by identifying it may recover it out of the trust 
 fund, while that remains, yet if the trustee has, bona fide, 
 paid out the trust fund to discharge other debts, without any 
 notice of the mistake by the, creditor to the trustee, the cred- 
 itor cannot make the tioistee personally responsible. ■• In a 
 case in Pennsylvania, where a debt due a creditor was put 
 down in the assignment as "about eleven thousand dollars," 
 which was, in fact, upwards of thirteen thousand dollars, it 
 was held that the trust included the latter sum.^ So, in 
 Massachusetts, where a debt was described as "about 
 $4,500," and the creditor proved claims to the amount of 
 $5,867 ; it was held that he was entitled to a dividend on 
 
 ' In Caton v. Mosely, 25 Tex. 374, when the assignment recited that the as- 
 signor was indebted to sundry persons, but did not name them nor specify the 
 amount of the assignor's indebtedness, but directed the assignee to hold said 
 property and dispose of the same as soon as he could do so to the best advantage, 
 for the benefit of any creditors, generally, the assignment was held invalid for un- 
 certainty in not furnishing some certain means of ascertaining who were the cred- 
 itors. But in many of the States, a method of ascertaining the debts to be paid 
 is provided, and this objection would not in these States be of the same force. 
 
 ' Piatt v. Hodge, 8 Iowa, 386 ; Van Hook v. Walton, 28 Tex. 59 ; England v. 
 Reynolds, 38 Ala. 370 ; Brown v. Knox, 6 Mo. 302 ; U. S. Bank v. Huth, 4 B. 
 Mon. 423 ; Butt v. Peck, i Daly, 83 ; Halsey v. Whitney, 4 Mason, 206 ; Layson 
 v. Rowan, 7 Rob. (La.) i. In Hudson v. Revett (5 Bing. 368 ; 2 M. & P. 663), 
 where a blank was left in the deed for one of the principal debts, the precise 
 amount of which was not ascertained until after its execution by the debtor, when 
 it was inserted in his presence, and with his assent — it was held that by reason 
 of such assent, the deed was valid from that time ; but the court laid it down 
 clearly that it was not a complete deed until then. West v. Steward, 14 Mees. & 
 W. 48, 49, arg. 
 
 = Posey V. Decatur Bank, 12 Ala. 802; Piatt v. Hodge, 8 Iowa, 386. 
 
 * AUemand v. Russell, 5 Ired. Eq. 183. 
 
 ' Brown v. Wier, 5 S. & R. 401 ; Canaday v. Paschall, 3 Ired. Eq. (N. C.) 178. 
 So where the date of the debt was erroneously stated, the error was corrected. 
 Miller v. Cherry, 3 Jones Eq. (N. C.) 24. So an error in the name of the payee. 
 Gardner v. Pike, 3 Jones Eq. (N. C.) 306. 
 
§ 146.] TO PAY THE DEBTS DESIGNATED. 1 77 
 
 the latter sum.' But in a case in Kentucky, where a debt 
 due a creditor on a note was put down, by mistake, as 
 $1,150, instead of $1,282, it was held that the mistake could 
 ' not be corrected to the prejudice of other creditors ; and that 
 such creditors had a right to insist on the distribution of the 
 fund according to the proportions recognized upon the face 
 of the deed. If, however, there should • be a surplus of the 
 trust fund after paying these debts, the mistake might be 
 corrected and the surplus applied accordingly.'' If a deed of 
 trust is intentionally made to secure to the creditor a larger 
 amount than is justly due to him, it renders the deed void ; 
 but a miscalculation, mistake, or unintentional error will not 
 vitiate it.^ 
 
 It may, happen, however, that a debtor is unable to state 
 the names of all the creditors for whom he is desirous of 
 providing, in consequence of ignorance of the extent of his 
 indebtedness. In such a case, a direction to the assignee to 
 give public notice to creditors to present their claims at 
 a reasonable time and place, and to pay those who shall 
 comply with such notice, would be proper."* In a case in 
 New York, it was held that a provision in an assignment 
 directing the assignees, out of the net proceeds and avails of 
 the assigned property, to pay to the laborers and workmen 
 of the assignors, residing in Albany and Buffalo, the amounts 
 due to them .respectively for work and labor done for the as- 
 signors, would not avoid the assignment, although the names 
 of those creditors, with their places of residence, and the re- 
 spective amounts due to each, were not mentioned.^ 
 
 ' Dedham Bank v. Richards, 2 Mete. 105. 
 
 ° Miles V. Bacon, 4 J. J. Marsh. 458, 465. The opinion in this case was de- 
 livered by Underwood, J. But it is said that the chief justice was of opinion that 
 the deed secured to the creditor the full amount of his note, and that the error as 
 to the amount in the description of the note did not essentially affect the con- 
 struction of the deed. Id. 465. 
 
 '•Pennington v. Woodall, 17 Ala. 685; see anU, p. 143. 
 
 " Ward V. Tingley, 4 Sandf. Ch. 476. In this case it was decided that a di- 
 rection to the assignee to pay as a third class, and before other creditors, such as 
 should comply with a notice of this kind, was valid. 
 
 " Bank of Silver Creek v. Talcott, 22 Barb. 550. 
 13 
 
178 FORM OF THE ASSIGNMENT. [CHAP. VIII. 
 
 § 147. To Pay Over the Surplus to the Assignor. — It is 
 usual to provide for the disposition of any ultimate surplus 
 that may remain in the assignee's hands, after payment of all 
 the assignor's debts, by a trust or direction of this kind, al- 
 though, as we have seen,' such a trust would result in favor 
 of the assignor by the mere operation of law. It will here- 
 after be shown under what circumstances reservations of this 
 kind will avoid the assignment. == 
 
 § 148. Power of Attorney. — After the particular trusts 
 and directions which have just been described, follows a gen- 
 eral power of attorney to the assignee, which must be irrev- 
 ocable, to receive and recover the property and debts, to 
 give receipts and acquittances, to collect by suit, &c. 
 
 § 149. Covenant by Assignee. — Next follows the cove- 
 nant, on the part of the assignee or trustee, by which he 
 formally accepts the trust, and undertakes to execute it faith- 
 fully, to the best of his ability, according to the true intent 
 and meaning of the assignment. It is usual, in this cove- 
 nant, for the assignee to undertake to be responsible only 
 for his own defaults, or moneys actually received by him ; 
 and, where there are several, each assignee covenants for 
 himself to be responsible only for his oWn acts and defaults, 
 and not for those of his co-assignees. Under this head, it 
 has been held that a provision that the trustee shall be re- 
 sponsible only for his own defaults must, on its face, be un- 
 derstood 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 fit- 
 ness, and with a proper supervision exercised over them.^ 
 But clauses intended to limit the assignee's responsibility 
 have sometimes an injurious effect upon the assignment ; ■• 
 
 ' See ante, Chap. XII. 
 
 "" S&fLpost, Chap. XI. 
 
 = Ashurst V. Martin, 9 Port. 566; see Jacobs v. Allen, 18 Barb. 549. 
 
 ' See Litchfield v. White, 3 Sandf. S. C. 545 ; and seepos/. Chap. XI. 
 
§§ 150, 151.] SCHEDULES. 1 79 
 
 and in many of the forms in use, covenants on the part of 
 the assignee are wholly dispensed with.' 
 
 § 150. Concluding Clause. — The assignment concludes 
 with the usual in testimonium clause : " In witness," &c. 
 
 § 151. Schedules. — Appended to the assignment are the 
 schedules of the property assigned, and of the debts or cred- 
 itors provided for (or, as they are sometimes termed, sched- 
 ules of assets and of liabilities), which constitute an important 
 part of the instrument. Usually there is but one schedule 
 of each kind, but sometimes several are employed. If possi- 
 ble, these schedules should be completed and annexed to the 
 assignment before execution, but this is sometimes dispensed 
 with. The general rule on this subject appears to be this, 
 that the mere omission to annex the usual schedules is not 
 in itself sufficient to avoid the assignment, and it has been so 
 laid down in New York,° New Hampshire,' Massachusetts,'' 
 Connecticut,^ Missouri,^ Mississippi,' Alabama,' Michigan,' 
 
 ' See Cunningham v. Freeborn, i Edw. Ch. 256; S. C. on appeal, li Wend. 240. 
 
 ' Cunningham v. Freeborn, I Edw. Ch. 256, 264 ; affi'd on appeal, 3 Paige, 
 557; affi'd, 11 Wend. 240. See Keyes v. Brush, 2 Paige, 311; Kellogg v. 
 Slauson, 15 Barb. 56 ; Mathews v. Poultney, 33 Barb. 127 ; Terry v. Butler, 43 
 Barb. 395 ; Hotop v. Neidig, 17. Abb. Pr. 332; Turner v. Jaycox, 40 N. Y. 470 ; 
 Piatt V. Lott, 17 N. Y. 478. But see the qualification of this rule in Averill v. 
 Loucks, 6 Barb. 470; and see Kercheis v. Schloss, 49 How. Pr. 284; Moir v. Brown, 
 14 Barb. 39, cited ante, p. 172. Tn this last case, it was held that where the sched- 
 ule was made a part of the conveyance, and is referred to as containing a specifica- 
 tion of property conveyed and intended to be annexed, it must be annexed at the 
 time of execution, not only as a description and specification of the property, but 
 as necessary, by the very terms of the instrument, to complete the ccmveyance or 
 transfer. Hand, J., Id. 46, 48, 50. Under the act of i860 as amended (Laws of 
 1874, c. 600), a failure to make and deliver the inventory and schedule required by 
 the act does not invalidate the assignment. Previous to the amendment the deci- 
 sions were in conflict. See also Hardman v. Bowen, 39 N. Y. 196; Juliand v. 
 Rathbone, 39 N. Y. 369 ; S. C. 39 Barb. 97 ; Van Vleet v. Slauson, 45 Barb. 317 ; 
 Evans v. Chapin, 12 Abb. Pr. 161 ; S. C. 20 How. Pr. 289 ; Barbour v. Everson, 
 16 Abb. Pr. 366 ; Read v. Worthington, 9 Bosw. 617 ; Camp v. Marshall, 2 Abb. 
 Pr. N. S. 373; Fairchild v. Gwynne, 16 Abb. Pr. 23 ; S. C. 14 Abb. 121. 
 
 = Rundlett v. Dole, 10 N. H, 438. 
 
 ■* Stevens v. Bell, 6 Mass. 339 ; Halsey v. Whitney, 4 Mason, 206 ; Emerson 
 v. Knower, 8 Pick. 63. 
 
 ° Clark v. Mix, 15 Conn. 152. 
 
 " Duvall V. Raisin, 7 Mo. 449 ; Deaver v. Savage, 3 Mo. [180] 252 ; Hardcastle 
 V. Fisher, 24 Mo. 70. 
 
 ' Robins v. Embry, i Sm. & M. Ch. 207. 
 
 « Shackelford v. P. & M. Bank of Mobile, 22 Ala. 238; Brown v. Lyon, 17 
 Ala. 659. 
 
 ' Hollister v. Loud, 2 Mich. 310, 322 ; Nye v. Van Husan, 6 Mich. 329. 
 
l8o FORM OF THE ASSIGNMENT. [cHAP. VIII, 
 
 Virginia,^ Kentucky," California,^ Iowa,* Texas,^ Wiscon- 
 sin,^ and by the Supreme Court of the United States.' 
 In some instances, and when taken in connection with 
 other circumstances, this fact of omission may be considered 
 a badge of fraud. ^ But the inference of fraud may be 
 repelled by various circumstances. Thus, in Massachu- 
 setts, where the assignment itself contained a provision that 
 schedules were to be made out as soon as might be, the 
 presumption of fraud was held to be removed.' So, in New 
 York, where full schedules were presented to the court, in 
 answer to a bill filed by a judgment creditor, the inference 
 of fraud was held to be repelled.'" So, if the property be 
 described in the assignment with sufficient certainty to 
 enable the assignee to take possession of it, the omission to 
 annex a schedule, although provided for in the deed, will 
 not render the assignment void." And if possession accom- 
 pany the transfer, and the transaction be, in all other re- 
 spects, fair, the mere want of a schedule will not render it 
 fraudulent.'" Want of a schedule is less suspicious where 
 
 ' Lewis V. Caperton's Ex'r, 8 Gratt. 148 ; Gordon v. Cannon, i8 Gratt. 388. 
 
 ' Ely V. Hair, 16 B. Mon. 230. " Forbes v. Scannell, 13 Cal. 242. 
 
 " Meeker v. Saunders, 6 Iowa, 61. ' Linn v. Wright, 18 Tex. 317. 
 
 ' Bates V. Ableman, 13 Wis. 644. ' Brashear v. West, 7 Pet. 608, 614. 
 
 ° McCoun, V. C, in Cunningham v. Freeborn, i Edw. Ch. 264 ; Sandford, 
 A. V. C. , in Van Nest v. Yoe, i Sandf. Ch. 4, 7 ; Allen, J., in Kellogg v. Slauson, 
 15 Barb. 56 ; Stevens v. Bell, 6 Mass. 339; Pearpoint v. Graham, 4 Wash. C. C. 
 232 ; Wilt V. FrankHn, i Binn. 502, 514; Burd v. Smith, 4 Dall. 76; see Hower v. 
 Geesaman, 17 Serg. & R. 251 ; Haven v. Richardson, 5 N. H. 113 ; Drakely v. 
 De Forest, 3 Conn. 272 ; Moir v. Brown, 14 Barb. 39 ; Brown' v. Lyon, 17 Ala. 
 659 ; Pine v. Rickert, 21 Barb. 469. 
 
 ' Stevens v. Bell, 6 Mass. 339 ; see Halsey v. Whitney, 4 Mason, 206. 
 
 '" Cunningham v. Freeborn, i Edw. Ch. 264. But in another case in that 
 State, where the schedule of property assigned was referred to as annexed, but 
 was not annexed until after the assignment had been executed and recorded, and 
 after the commencement of a suit by purchasers of the property from the assign- 
 ees against the sheriff who had levied upon the property under a creditor's' execu- 
 tion, it was held that such subsequent annexation did not remove the objection to 
 the validity of the assignment. Moir v. Brown, 14 Barb. 39 ; Hand, J., Id. 48. 
 In this case, there -was no evidence that the schedule was annexed by the author- 
 ity of the parties, or with their knowledge. Id. ibid. See Spring v. Strauss, 3 
 Bosw. (N. Y.) 607 ; Kercheis v. Schloss, 49 How. Pr. 284. 
 
 " Emerson v. Knower, 8 Pick. 63 ; see Robins v. Embry, i Sm. & M. Ch. 
 207. 
 
 '= Pearpoint v. Graham, 4 Wash. C. C. 232 ; see also Deaver v. Savage, 3 Mo. 
 252. 
 
§ 15I.] • SCHEDULES. l8l 
 
 the whole of the assignor's property is conveyed for the 
 benefit of all the creditors, than where part of it is conveyed 
 for particular creditors/ And in New York, the schedules 
 required to be delivered and filed under the act are still to 
 be regarded as a part of the assignment, and where they 
 contained fictitious debts, the assignment was deemed void/ 
 
 It has also been held that the annexation of a schedule, 
 even where it is provided by the assignment that a schedule 
 shall be made out and annexed as soon as may be, is not a 
 condition precedent to the operation of the assignment/ If 
 the assignor neglect to furnish a schedule, the assignee may 
 file a bill of dis.covery against him, and also to obtain a 
 delivery of the books, &c.* And it has been decided in 
 England, that the fact that there is no schedule to regulate 
 the trust does not prevent the property from passing, unless 
 the schedule be expected to show what passed by the deed/ 
 In assignments giving preferences, the actual annexation of 
 schedules of creditors is a matter of more importance/ 
 
 In some of the States, schedules are expressly required 
 by statute to be annexed to the assignment. Thus, in New 
 Jersey, the debtor is required to annex to his assignment an 
 inventory under oath of his estate, real and personal, accord- 
 ing to the best of his knowledge, together with a list of his 
 creditors, and the amount of their respective claims.'' But 
 this inventory is declared to be in no wise conclusive as to 
 the quantum of the debtor's estate, but the assignee will be 
 
 ' Wilt V. Franklin, I Binn. 514, 523. 
 
 ° Terry v. Butler, 43 Barb. 395. But in Indiana, the schedules are not a part 
 of the assignment, and need not be recorded. Black v. Weathers, 26 Ind. 242. 
 
 ' Emerson v. Knower, 8 Pick. 63 ; Woodward v. Marshall, 22 Id. 468 ; Keyes 
 V. Brush, 2 Paige, 311 ; see Cunningham v. Freeborn, 3 Id. 557, 561 ; Kellogg v. 
 Slauson, 15 Barb. 56 ; affi'd on appeal, 11 N. Y. 302. In Emersonv. knower, the 
 court remarked that the property passed, and was intended to pass, before any 
 schedule should be taken. 
 
 ■■ Keyes v. Brush, 2 Paige, 311. 
 
 ' West V. Steward, 14 Mees. & W.47. In Weeks v. Maillardet (14 East, 568), 
 the schedule was material to show what passed. This case was relied on . by the 
 court in Moir v. Brown, 14 Barb. 49, 50. 
 
 « See post, p. 183. ' Rev. Stat. (ed. 1874), p. 9, § 2. 
 
1 82 FORM OF THE ASSIGNMENT. [cHAP. VIII. 
 
 entitled to any other property which may belong to the 
 debtor at the time of making the assignment, and embraced 
 in its general terms.' In Vermont, every assignment is re- 
 quired to be accompanied with a full inventory or schedule 
 of the property assigned, including choses in action, and also 
 with a list of the creditors to be benefited by the assignment, 
 and the sums due each one, as near as may be.'' 
 
 So in Iowa, but the inventory is not conclusive as to 
 the amount of the debtor's estate ; ^ and the want of an in- 
 ventory does not invalidate the assignment.* And in Indi- 
 ana, the assignment must be accompanied by a schedule 
 containing a particular enumeration and description of all 
 the personal property assigned.^ 
 
 In regard to the form of the schedules, it may be ob- 
 served that the items composing them should be stated with 
 as much accuracy as possible.* But as entire correctness in 
 this respect is not always attainable, it is sometimes the 
 practice to insert a provision in the assignment that correc- 
 tions may be made in the schedules, and such items and 
 amounts be afterwards inserted as shall conform to the ac- 
 
 ' Rev. Stat, of N. J. (ed. 1874), p. 9, § 2. 
 
 '' Act of November 19, 1852 ; Laws of 1852, p. 14, § 2. 
 
 ' Iowa Code of 1873, tit. 14, c. 7, §§ 21 17, 2124. 
 
 * Meeker v. Saunders, 6 Iowa, 6i. 
 
 ' Stat, of Ind. vol. I, p. 114, § 2 ; see Black v. Weathers, 26 Ind. 242. 
 
 ° As to the headings and contents of the schedules, and the inferences deduci- 
 ble from them, see United States v. Clark, i Paine, 629, 631, 641. Under the 
 New York Law of i860 (c. 348) ; Rev. Stat. (6th ed.), p. 32, § 32, the inventory 
 and schedules are required to contain : 
 
 1. A full and true account of all the creditors of such debtor or debtors. 
 
 2. The place of residence of each creditor, if known to such debtor or debt- 
 ors ; and if not known, the fact to be so stated. 
 
 3. The sum owing to each creditor, and the nature of each debt or demand, 
 whether arising on written security, account, or otherwise. 
 
 4. The true cause and consideration of such indebtedness in each case, and 
 the place where such indebtedness arose. 
 
 5. A statement of any existing judgment, mortgage, collateral or other secu- 
 rity for the payment of any such debt. 
 
 6. A full and true inventory of all such debtor's estate at the date of such as- 
 signment, both real and personal, in law and in equity, and the incumbrances ex- 
 isting thereon, and of all vouchers and securities relating thereto, and the value 
 of such estate according to the best knowledge of such debtor or debtors. 
 
 7. An affidavit shall be made by such debtor or debtors, and annexed to, and 
 delivered with such inventory or schedule, that the same is in all respects just and 
 true, according to the best of such debtor or debtors' knowledge and belief. 
 
§ 152. J ASSIGNMENTS WITH PREFERENCES. 183 
 
 tual State of facts.' Where in a schedule of the property- 
 assigned sums were set against the different articles as the 
 value of the property, it was held that the mere fact that 
 these sums were entered in the schedule was not even prima 
 facie evidence of the value of the property.'' But in a case 
 where the schedule of creditors contained only a list of the 
 preferred creditors, without specifying the amount of their 
 several claims, it was held that such omission would not 
 invalidate the deed, if it were in other respects unexcep- 
 tionable.3 
 
 Having thus presented an outline of the simplest form 
 of an assignment in trust for creditors, it remains to notice 
 the peculiarities of the principal variations from this form, 
 as they are exhibited in assignments with preferences and 
 assignments tripartite. 
 
 § 152. Assignments with Preferences. — In assignments 
 of this character, the preferences intended to be given are 
 declared in that part of the instrument which specifies the 
 particular debts to be paid, immediately after providing for 
 the expenses of the trust. These preferences, as we have 
 seen, must be distinctly declared, and the order of payment 
 fixed by the assignment itself, or by the schedules annexed 
 to it ; and not be left open to future alteration, either by 
 the assignor or assignee. Where the creditors are few, this 
 part of the instrument may be expressed substantially as 
 follows : " First, to pay and discharge a certain debt (de- 
 scribing it) ; secondly, to pay and take up a certain note 
 (describing it) ; thirdly, after full payment of the said debt 
 and note, out of the residue, if any, to pay all the other 
 creditors of the said party of the first part, in proportion to 
 their respective demands." But where the creditors are 
 numerous and arranged in classes, it is usual to name them 
 in the schedule of creditors as " class number one," " class 
 
 ' See Dedham Bank v. Richards, 2 Mete. 105 ; Halsey v. Whitney, 4 Mason, 
 206, 208. 
 
 " Savings Bank v. Ela, 11 N. H. 335. ^ Brown v. Knox, 6 Mo. 302. 
 
184 FORM OF THE ASSIGNMENT. [CHAP. VIII. 
 
 number two," &c., referring to them in the assignment sub- 
 stantially in this form : " First, to pay in full the creditors 
 named and designated in Schedule A, hereto annexed, as 
 class number one ; secondly, to pay the creditors named in 
 said schedule as class number two," &c. Sometimes a sepa- 
 rate schedule is employed for each class ; and the reference 
 is then to the schedules in their order. 
 
 § 153. Where a preference is intended to be indicated 
 by a schedule, it must be distinctly shown by some 
 separation of the debt intended to be preferred from 
 the other debts specified. The mere placing of a debt at 
 the head of a schedule is not sufficient.' And where an 
 assignment refers to one or more schedules, as fixing the 
 order in which certain preferred creditors shall be paid, it is 
 essential that they should be annexed to the assignment 
 previous to its execution, unless the assignment itself pre- 
 scribe what debts shall be inserted in them, and in what 
 order. Accordingly, where an assignment directed the as- 
 signees 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 a part of the assign- 
 ment, 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 ap- 
 peared that such schedules had not been made out and an- 
 nexed to the assignment previous to its execution, but that 
 they were prepared by the assignors and annexed at some 
 subsequent time— it was held by the Supreme Court of New 
 York that the assignment was fraudulent and void.^ 
 
 § 154. Assignments Tripartite.~\xv these assignments, 
 the parties are arranged in three parts ; the debtor being the 
 
 ' Winslow V. Assignees of Ancrum, i McCord's Ch. 100 ; see Colffin v. Redman, 
 20 Ala. 650. ° 
 
 ^ Averill V. Loucks, 6 Barb. S. C. 470 ; see Kercheis v. Schloss, 49 How. Pr. 284. 
 
§ 1 54-] ASSIGNMENTS TRIPARTITE. 1 8; 
 
 party of the first part, the assignee of the second part, an( 
 the creditors of the third part.' Their principal peculiar 
 ities are the covenants which they contain on the part of thi 
 several parties, and which the form of the instrument admit 
 to a great extent. Thus, the debtor covenants that he wil 
 aid the assignee in the receipt and collection of the debt 
 and property — will ratify and confirm all his lawful act 
 unddr the assignment — and will do all further acts necessar 
 in the execution of the trust. The assignee covenants t( 
 execute the trust — to account with the creditors — and mak- 
 just distribution among them. And the creditors formall; 
 accept the provisions of the assignment, in full payment o 
 their respective debts, and release and discharge the debto 
 from all claims and demands. There are also .frequently in 
 serted a variety of clauses giving special powers to the as 
 signee, and marking out, in considerable detail, th'e coursi 
 of his proceedings in the execution of 'the trust. 
 
 In the execution of these instruments, it is usual t( 
 employ counterparts, so that the transfer may be made com 
 plete by a delivery to the assignee, in case the assignment i 
 retained by the debtor for any purpose, as to procure th^ 
 signatures of creditors. ° 
 
 " This is the proper form of an assignment according to the English practice 
 as illustrated in several important cases. See Estwick v. Caillaud, 5 Term R. 420 
 Inglis V. Grant, Id. 530; Bowker v. Burdekin, 11 Mees. & W. 128; West ^ 
 Steward, 14 Id. 47 ; Janes v. Whitbread, 20 L. J. C. P. (N. S.) 217. It ha 
 also been the prevailing form in Massachusetts, and still is in Maine and othe 
 New England States. 
 
 " Marston v. Coburn, 17 Mass. 454, 457. 
 
CHAPTER IX. 
 
 PARTIAL ASSIGNMENTS. 
 
 § 155. A partial assignment is an assignment of a por- 
 tion of a debtor's property, in trust, for the benefit of his 
 creditors,' and is distinguished, on the one hand, from a 
 special or particular assignment, which is made directly to 
 the creditor, in payment or as security ; and, on the other, 
 from a general assignment, the nature of which has already 
 been explained.'' A general assignment, with an express 
 exception of part of the debtor's property, is, in effect, a 
 partial assignment, and has been so treated.^ An assign- 
 
 ^ The term partial has been occasionally applied to assignments in another 
 sense, namely, as descriptive of the disposition made of the assigned property by 
 the assignor, where he prefers one or more creditors to others. Thus, in Riggs v. 
 Murray (2 Johns. Ch. 565, 577), assignments with preferences are z^H^eA partial 
 assignments. 
 
 '^ If an assignment in trust does not, on its face, purport to be of all the as- 
 signor's property, it will be treated as a partial assignment. See Seaving v. Brink- 
 erhoff, 5 Johns. Ch. 329; Lentilhon v. Moffatt, I Edw. Ch. 451 ; Halsey v. Whit- 
 ney, 4 Mason, 206. An assignment which, on its face, purports to be but a 
 partial assignment, is so to be regarded and treated until the contrary is shown. 
 Redfield, C. J., in Mussey v. Noyes, 26 Vt. (3 Deane), 462, 474. But in a case 
 where an assignment in terms conveyed all the property which the assignors 
 owned in certains towns named, and it did not appear, either upon the face of the 
 assignment or from the evidence, that they owned any property which was situ- 
 ated elsewhere, it was held in Vermont that the court would infer that all the 
 property which the assignors owned was thereby conveyed. Dana v. Lull, 17 Vt. 
 (2 Wash.) 390. So in Maryland, an assignment for the benefit of creditors stipu- 
 lating for releases 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 con- 
 vey all his property or not. Rosenberg v. Moore, 1 1 Md. 376 ; Barnitz v. Rice, 
 14 Md. 24. 
 
 = Ingraham v. Grigg, 13 Sm. & M. 22. An assignment which, on its face, pur- 
 ports to convey all the assignor's property, when, in fact, he has other property 
 not disclosed in the assignment, is void as against creditors ; but if it does not so 
 purport, it is valid, notwithstanding property may remain in the hands of the 
 assignor unassigned. Pearce v. Jackson, 2 R. I. 35. And where the assignor had 
 real estate not conveyed to the assignee (the assignment gave preferences but did 
 not stipulate for releases), this did not render the assignment void. Bates v. 
 Ableman, 13 Wis. 644. In that case Mr. Justice Paine said the answer to this 
 objection is, that if the property is not conveyed it is left as it was before, liable to 
 seizure. See State v. Benoist, 37 Mo. 500 ; Carpenter v. Underwood, 19 N. Y. 
 520 ; Knight v. Waterman, 36 Penn. 258 ; Baldwin v. Peet, 22 Tex. 708. 
 
§ 156.] . STIPULATIONS FOR RELEASES. iS/ 
 
 ment of partnership effects is a partial one, yhenever the 
 debtor has separate property which is not conveyed/ There 
 may be cases where a debtor may find it expedient to pro- 
 vide for creditors by a partial assignment, but transfers of 
 this kind are comparatively rare in practice, and when made, 
 are usually preliminary either to further transfers of the same 
 kind,^ or to a general assignment.^ If the appropriation of 
 part of the debtor's property be found sufficient to liquidate 
 all claims against him, it is usually made in a different and 
 more direct form ; and if it be insufficient, an assignment of 
 such portion, without any further transfer, is of little value, 
 the unassigned residue being open to the remedies of cred- 
 itors, the same as if it had not been made. 
 
 § 156. Stipulations for Releases. — It is true that assign- 
 ments of this description have sometimes been made with a 
 stipulation for a full release by the creditor as the condition 
 of receiving the benefit of them ; and in the important case 
 of Halsey v. Whitney,* Mr. Justice Story gaVe effect to such 
 a condition in a partial assignment. But it is remarked by 
 Chancellor Kent, in commenting on the decision in this 
 case, that the learned judge's own judgment was not satisfied 
 
 " Gibson, C. J., in Thomas v. Jenks, 5 Rawle, 221. 
 
 ' This was the case in the United States v. The Bank of the United States, 8 
 Rob. (La.) 262. 
 
 ' This was the case in Johnson v. Whitwell, 7 Pick. 71. In Nicholson v. 
 Leavitt (4 Sandf. S. C. 252), the debtor's property was transferred by several par- 
 tial assignments, followed by a general assignment. In Johnson v. Whitwell, a 
 partial assignment had been made, as a temporary arrangement, for the benefit of 
 three creditors, with the understanding and expectation that a general assignment 
 should afterwards be made for the benefit of all the creditors. The partial assign- 
 ment was, in fact, canceled, and the general assignment made in the same form. 
 But the first deed was held void, as intended to cover the property and intercept 
 attachments. So in the case of Holt v. Bancroft (30 Ala. 195), where a partial as- 
 signment was made eight days previous to the execution of a general assignment, 
 and it appeared that the intention to make the general assignment existed at the 
 time the first instrument was executed, and the same trustee appointed in both, 
 the entire transaction was taken together and deemed void as giving prefer- 
 ences. 
 
 ^ 4 Mason, 206. The assignment in this case did not, on its face, purport to- 
 convey all the debtor's estate. It was, however, suggested at the bar, that in 
 point of fact the debtor had no other property. Story, J.. W. 218. In the report- 
 er's statement of the case,- the assignment is said to have been of all the debtor's, 
 property. Id, 207. See the observations of Curtis, J., in Stewart v. Spencer, 1 
 Curt. 157, 164. 
 
1 88 PARTIAL ASSIGNMENTS. [CHAP. IX. 
 
 with the autborities under which he acted, and that partial 
 assignments with such a condition ought not to be tol- 
 erated.' It appears, indeed, to be now the settled rule in 
 New York, that an assignment to a trustee, of part of the 
 debtor's property, upon condition of a full release, is void ; " 
 such a condition being regarded as oppressive, coercive, and 
 unjust as against creditors. ^ The same rule has been adopt- 
 ed, and for similar reasons, in Pennsylvania,* Maryland,^ 
 Virginia,* Mississippi,' and Indiana.^ On this principle, it 
 was held by the Supreme Court of Pennsylvania, that an as- 
 signment by partners, of the partnership effects, and not of 
 their separate property also, if it contain a condition that 
 
 ' 2 Kent's Com. [534] 695, note a. 
 
 ^ Seaving v. Brinkerhoff, 5 Johns. Ch. 329 ; Lentilhon v. Moffatt, i Edw. Ch. 
 451 ; Grover v. Wakeman, 11 Wend. 187 ; Beny v. Riley, 2 Barb. S. C. 307. See 
 the observations of Clayton, J., in Ingraham v. Grigg, 13 Sm. & M. 22, 30 ; Austin 
 V. Bell, 20 Johns. 442. See Selden, J., in Dunham v. Waterman, 17 N. Y. 9. 
 
 ° Kent, C, in Seaving v. Brinkerhoff, 5 Johns. Ch. 332. The chancellor said, 
 in this case, " A partial assignment upon such a condition, is pernicious in its 
 tendency, if it be not (as I rather apprehend it to be) fraudulent in its design." 
 Id. ibid. 
 
 * Thomas v. Jenks, 5 Rawle, 221 ; Hennessy v. The Western Bank, 6 W. & S. 
 300 ; In re Wilson, 4 Barr, 430. In the last case, Rogers, J., speaking of the 
 former decisions, observed : " It was ruled that such an assignment was against 
 the policy of the law ; that the condition was oppressive, without the color of jus- 
 tice, and evinced on the face of the instrument a fraudulent design ; that it was 
 taking an unfair advantage of the situation of the creditor, to impose the condition 
 of a release, unless on the terms of the surrender of all the debtor's property. We 
 thought so then, and, notwithstanding all that has been so pertinaciously and 
 strenuously urged to the contrary, we are of the same opinion still." Id. 448, 
 449. In Wiener v. Davis (18 Penn. St. (6 Har.) 331), it was held that, since the 
 act of 1843, an assignment by a debtor, of part of his property, to some of his 
 creditors, they stipulating to give a release, is not necessarily void. See opinion 
 of Agnew, J., in Miners' National Bank Appeal (57 Penn. St. 193), reviewing the 
 history of legislation and decision in Pennsylvania. 
 
 ' 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. 
 Green v. Trieber, 3 Md. 11. See Sangston v. Gaither, Id. 40 ; Rosenberg v. Moore, 
 II Md. 376; Barnitz v. Rice, 14 Id. 178 ; Bridges v. Wood, 16 Id. loi ; Whidbee 
 V. Stewart, 40 Id. 414. 
 
 ^ Skipwith's Ex'r v Cunningham, 8 Leigh, 271, 291 ; Gordon v. Cannon, 18 
 Graft. 387 ; 2 Tuck. Com. [442] 431. 
 
 ' Ingraham v. Grigg, 13 Sm. & M. 22. In this case, Clayton, J., observed : " A 
 debtor in failing circumstances cannot devote a part of his property to the pay- 
 ment of his debts, reserve a part, and say to his creditors, they shall not touch the 
 part so devoted unless upon surrendering all claim to that which is reserved. In 
 other words, a debtor cannot keep any part of his property from his creditors, ex- 
 cept that which the law secures to him ; and any attempt to do so amounts to a 
 fraud." Id. 30. 
 
 ° Henderson v. Bliss, 8 Ind. (Tan.) loo. 
 
§ 1 5 7-] PREFERENCES. ' 1 89 
 
 the creditors shall release their claims against the assignors 
 individually, and as copartners, is fraudulent and void.^ 
 And where an assignment by the members of a firm pur- 
 ported to convey merely the partnership goods and effects, 
 with certain specified real estate, in trust for certain preferred 
 creditors, and then in trust for such as should execute a re- 
 lease, but contained 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, it 
 was held by the same court to be invalid.^ 
 
 § 1 5 7. Preferences. — In some of the States assignments 
 for the benefit of creditors are required to convey all the 
 debtor's estate, and in some such assignments will be con- 
 strued to pass all the estate, whether purporting to or 
 not ; but, independently of statute, partial assignments, 
 when they leave the unassigned residue open to the claims 
 of creditors, are valid conveyances,^ and they have been so 
 held in England.* In some instances, also, where prefer- 
 ences have been prohibited in general assignments, they may 
 still be made in partial assignments,^ or by means of such 
 conveyances. But in other States, even where preferences 
 
 ' Thomas v. Jenks, 5 Rawle, 221. 
 
 ° Weber v. Samuel, 7 Barr, 499. Whether an insolvent debtor who assigns 
 but a part of his property for the benefit of all his creditors, can stipulate for a re- 
 lease, in Rhode Island, see Stewart v. Spencer, i Curt. 157, 166. And see Le 
 Prince v. Guillemot, i Rich. Eq. 187. 
 
 ° Fisher v. Dinwiddle, 12 B. Mon. (Ky.) 208; Ingraham v. Grigg, 13 Sm. & M. 
 22 ; Pearce v. Jackson, 2 R. I. 35 ; State v. Benoist, 37 Mo. 500. 
 
 « Estwick V. Caillaud, 5 Term R. 420; Goss v. Neal, 5 J. B. Moore, 19. 
 
 * Thus, in Iowa, where preferences in general assignments invalidate the con- 
 veyance, "it is still competent," says Mr. Justice Cole, in Sampson v. Arnold (19 
 Iowa, 480), " for any debtor to pay a part of his creditors in full, to secure another 
 part by mortgage or deed of trust upon a part of his property, to make a partial 
 assignment of still other property for the benefit of certain other creditors, with or 
 without preference, and afterward to make a general assignment ; " and see 
 Frorame v. Jones, 13. Iowa, 474; Davis v. Gibson, 24 Iowa, 257; Farewell y. 
 Howard, 26 Iowa, 381. So in Alabama, where preferences are not permitted in 
 general assignments, the right of preferring creditors by partial assignments is. 
 untouched. Holt v. Bancroft, 30 Ala. 195 ; Stetson v. Miller, 36 Ala. 642. So in 
 Missouri. Johnson v. McAllister's Assignee, 30 Mo. 327 ; State v. Benoist, 37 
 Mo. 500; Shapleigh v. Baird, 26 Mo. 322 ; Woods v. Timmerman, 27 Id. 107 ; 
 Many v. Logan, 31 Id. 91. These decisions were mainly under the act of 1855 ; 
 but compare Stat, of Mo. (Wagner), c. 9, p. 150. 
 
390 PARTIAL ASSIGNMENTS. [cHAP. IX. 
 
 are allowed in general assignments, they will not be sus- 
 tained in transfers for the benefit of creditors of less than 
 the entire estate.' 
 
 § 158. Priority to United States. — Partial assignments 
 are not within the provisions of the act of Congress of 
 March 2, 1799, giving priority of payment to the United 
 States, in cases of insolvency ; nor are they within those of 
 the act of March 3, 1797, giving similar priority of payment 
 out of the property of an insolvent who has made a volun- 
 tary assignment for the benefit of his creditors ; such priority 
 existing only in cases of general assignments by debtors.^ 
 But if only a trifling portion of the assignor's estate be re- 
 served, especially for the purpose of evading the law, such 
 reservation will not make the assignment a partial one.^ And 
 a party cannot, by assigning all his property by different 
 acts, defeat the priority of the United States, under the pre- 
 text of the assignments being partial.* 
 
 ' See post, Chap. X. 
 
 " United States v. Hooe, 3 Cranch, 73 ; Conard v. Atlantic Ins. Co. i Pet. 
 386; Story, J., Id. 439 ; United States v. Clark, i Paine, 629 ; United States v. 
 McLellan, 3 Sumn. 345 ; United States v. Bank of the United States, 8 Rob. (La.) 
 262. 
 
 ° United States v. Hooe, 3 Cranch, 91 ; United States v. McLellan, 3 Sumn. 
 345 ; see Dias v. Bouchaud, 10 Paige, 435, 448, 461. 
 
 " United States v. Bank of the United States, 8 Rob. (La.) 262. 
 
CHAPTER X. 
 
 ASSIGNMENTS WITH PREFERENCES. 
 
 § 159. Assignments in trust for the benefit of creditors, 
 giving preferences to certain creditors, or certain classes of 
 creditors, over others, though here treated, for the sake of 
 convenience, as exceptional forms, have in fact constituted, 
 until recently, one of the most common descriptions of this 
 species of transfer in use in this country. They present the 
 form which an assignment seems, in most instances to have 
 naturally taken, wherever a debtor has been allowed to be 
 the distributor of his property among his creditors, as dis- 
 tinguished from the equal distribution provided by law, 
 through the medium of systems of bankruptcy and insolv- 
 ency ; but they have always been a subject of criticism, ob- 
 jection, or open condemnation, as founded on an unjust and 
 erroneous principle. In the courts, where their principle, 
 policy, and practical operation have been daily investigated 
 and discussed, they have been viewed, especially of late, with 
 a growing sentiment of jealousy and disfavor ; and the con- 
 tinued use of them has finally led to most of the legislative 
 interposition by which an insolvent debtor's power of as- 
 signment has been controlled, and its exercise regulated by 
 specific provisions.' 
 
 It will be most convenient to consider the subject of this 
 chapter under the following heads : I. The right to prefer. 
 II. Restrictions on the right. III. Subjects of preference. 
 IV. Modes of giving preferences. V. Illegal and fraudulent 
 preferences. 
 
 ' While the bankrupt act remains in force, assignments with preferences will 
 be unfrequent, but as they may still be made, and are occasionally brought before 
 the courts for review, this chapter is retained, with brief citations of the cases re- 
 ported since the previous edition. See Chap. Ill for questions arising under the 
 bankrupt act, relating to preferences in assignments. 
 
192 ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 § 160. I. Right of a Debtor to Prefer a Creditor. — It has 
 long been a settled rule in English and American law (sub- 
 ject to qualifications which will be considered), that a debtor 
 in failing circumstances/ may not only dispose of his prop- 
 erty in trust for the use and benefit of his creditors generally, 
 but may, by such a conveyance, give a preference, in pay- 
 merit, to one creditor before another, or to one class of 
 creditors before another class. ^ 
 
 This rule may be viewed as the result of a gradual ex- 
 pansion of the acknowledged principle, that a debtor owing 
 several creditors, and not having the means of paying them 
 all, may pay one in preference to another, or some in pref- 
 erence to others ; ' in other words, that he has the right of 
 selection in this mode of satisfying their demands ; and that 
 a payment thus made to one creditor, in good faith, cannot 
 be questioned or interfered with by another.* This principle 
 
 ' See ante, p. 22. 
 
 '' 2 Kent's Com. [532] 689 ; i Tucker's Com. [335] 325 ; 2 Id. [443] 432. 
 Marshall, C. J., in Brashear v. West, 7 Pet. 608, 614 ; Mackie v. Cairns, i Hopk. 
 373; Sutherland, J., in Grover v. Wakeman, 11 Wend. 187, 194; Gaston, J., in 
 Hafner v. Irwin, i Ired. L. 490, 496 ; Harris, J., in Webb v. Daggett, 2 Barb. 9, 
 1 1 ; Gamble, J., in Richards v. Levin, 16 Mo. (i Bennett), 596, 598, 599. 
 
 ^ Sandford, C, in Mackie v. Cairns, I Hopk. Ch. 373, 406 ; Curtis, J., in Stewart 
 V. Spenser, l Curt. 161, 162. 
 
 * In the case of Tillou v. Britton, in the Supreme Court of New Jersey (4 
 Halst. 120, 136), Mr. Justice Ford, in delivering his opinion, observed as follows: 
 "The law contains no such principle as that a man in failing circumstances may 
 not pay any just debt first, which will best relieve his circumstances. If, while a 
 man retains his property in his own hands, the right of giving preferences should 
 be denied, he would so far lose the dominion over his own, that he coiild not pay 
 anybody, because whoever he paid would receive a preference. He could only 
 pay ratably, which is never incumbent till after he has taken the benefit of the in- 
 solvent laws, or has assigned his property to trustees for the benefit of creditors, 
 and so put the dominion over it into other hands. Accordingly, it was decided 
 by this court, in the case of Hendricks v. Mount, 2 South. 743, that the making of 
 such preferences was every day done, was every day sustained in our courts of 
 justice, and is legal." In the case of Blakey's Appeal, in the Supreme Court of 
 Pennsylvania (7 Barr, 449, 451), Coulter, J., observed : "It is only when a man 
 loses dominion over his property, and transfers that dominion to another, that the 
 right of creditors to a/ro rata dividend attaches. Whilst a man retains domin- 
 ion of his property, he may encumber and convey it as he pleases, if not directly 
 forbidden by law, and prefer such creditors by payment or transfer as he chooses. 
 And if it were not so, an individual could not get along in his business." And 
 see Uhler v. Maulfair, 23 Penn. St. (11 Har.)48i ; Hopkins v. Beebe, 26 Penn. St. 
 (2 Cas.) 85. " It is settled," says Walworth, Chancellor, in Wakeman v. Grover 
 (4 Paige, 23, 36), "that the insolvent has the right, while his property remains in 
 his own hands, to apply the same to the payment of one creditor in preference to 
 
§ l6o,j RIGHT OF DEBTOR TO PREFER, 1 93 
 
 has been admitted in England, even under the stringent 
 system of the bankrupt laws ; ' and it has been broadly laid 
 down by the Supreme Court of the United States that a 
 debtor may prefer one creditor, pay him fully, and exhaust 
 his whole property, leaving nothing for others equally meri- 
 torious.'' The same principle has been affirmed by the State 
 courts.3 Even in Massachusetts, where a system of insolv- 
 
 another, notwithstanding the principle of this court, that equality among creditors 
 is equity." See the observations of Nelson, J., in Cunningham v. Freeborn, 11 
 Wend. 256 ; of Wright, J., in Atkinson v. Jordan, 5 Ohio, 178 ; and of Wheeler, 
 J., in Edrington V. Rogers, 15 Tex. 188. And see Kuykendall v. McDonald, 15 
 Mo. 416; Gassett v. Wilson, 3 Fla. 235. 
 
 ' In the early case of Hopkins v. Gray (7 Mod. 139), it was held by Lord Holt, 
 that if a banker or goldsmith who has many people's money refuse payment, yet 
 keep his shop open, and as often as he is arrested give bail, he may by that means 
 give preference of payment to his friends ; and when he has done, if he runs away, 
 yet such payment shiU stand against a commission of bankruptcy ; and his Lord- 
 ship cited the case of Sheppard the banker in confirmation of this doctrine. In 
 the case of Cock v. Goodfellow (10 Mod. 489, 497), Lord Chancellor Parker said: 
 " A man that knows he must be a bankrupt, may tjy law pay off any of his cred- 
 itors." The modern English cases establish the principle, that a preference given 
 to a creditor by payment is not fraudulent, unless it appears to have been volun- 
 tary, without pressure by the creditor, and with the view of giving a fraudulent 
 preference in contemplation of bankruptcy. Cook v. Pritchard, 6 Scott N. R. 34 ; 
 5 Mann. & Gr. 329 ; Green v. Bradfield, i Carr. & K. 449 ; Ogden v. Stone, 1 1 
 Mees. & W. 494 ; Kynaston v. Crouch, 14 Id. 266 ; Brown v. Kempton, 19 L. J. 
 C. P. (N. S.) 169; Hale v. Allnutt, 36 Eng. L. & Eq. 383. But see the 
 bankrupt act 1869, 32 & 33 Vict. c. 71. Fraudulent preference has now for 
 the first time been defined by the legislature. The whole law of bankruptcy is 
 to be found in the bankruptcy act 1869, and the whole law of fraudulent prefer- 
 ences in § 92 of that statute, see Ex parte Mathew in re Cherry, 19 W. R. 1005 ; 
 S. C. on appeal, Ex parte Boland, L. R. 7 Ch. Ap. 24; Ex parte Craven, L. R. 10 
 Eq. 648 ; s. C. on appeal. Ex parte Tempest, L. R. 5 Ch. Ap. 70. So it has been 
 held, under the United States bankrupt law of 1800, that if a person on the eve 
 and even in contemplation of bankruptcy pay money, give security, or assign 
 property to a creditor, it will be valid if the effect of measures taken by the cred- 
 itor, or if done at the creditor's instance and on his application. But if done 
 voluntarily, without solicitation or compulsion, and merely to prefer one creditor 
 to another, it will be fraudulent and void. Ogden v. Jackson, i Johns. 370, 373 ; 
 Phoenix v. Ingraham's Assignees, 5 Id. 412 ; and see, under the act of 1841, Ex 
 parte Garwood and Ex parte Potts, Crabbe, 516; Atkinson v. The Farmers' 
 Bank, Id. 529. As to what will constitute a fraudulent preference under the act 
 of 1867, see Bump on Bank. (8th ed.) pp. 792 et seq. and cases cited ; see Mays v. 
 Fritton, 20 Wall. 414 ; Wilson v. City Bank, 17 Wall. 473. 
 
 ' Clark v. White, 12 Pet. 178 ; see Tompkins v. Wheeler, 16 Id. 106. 
 
 ^ Buffum v. Green, 5 N. H. 71 ; Tillou v. Britton, 4 Hals. 120 ; Stover v. Her- 
 rington, 7 Ala. 142; Ford v. Williams, 3 B. Mon. 550 ; Ex parte Conway, 4 Ark. 
 302; Powles V. Dilley, 2 Md. Ch. Dec. 119; Edrington v. Rogers, 15 "Tex. 188, 
 195 ; Sibley v. Hood, 3 Mo. [206] 290; Richards v. Levin, 16 Id. (i Benn) 596 ; 
 Sedgwick, J., in Hatch v. Smith, 5 Mass. 42, 49 ; Parsons, C. J., in Widgery v. 
 Haskell, Id. 144, 153 ; Wilde, J., in Johnson v. Whitwell, 7 Pick. 71, 73; Dewey, 
 J., in "Nostrand v. Atwood, 19 Id. 281, 284; Wing, P. J., in Hollister v. Loud, 2 
 Mich. (Gibbs), 309, 315. Where a debtor owes two parties, one of them may 
 
 13 
 
194 ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 ency has been established, partaking of the character of a 
 bankrupt law, a payment in money by an insolvent debtor 
 of a debt due a particular creditor has been held valid.' 
 And in Louisiana, where the fundamental law of the State 
 declares all the property of the debtor to be the common 
 pledge of his creditors, and the courts have always been 
 jealous of any conveyance or transaction calculated to de- 
 fraud creditors, or give an unjust preference to one class 
 over another, payments on the eve of insolvency, in the 
 ordinary course of business, have been sustained.^ 
 
 accept payment of his debt in anything of value he can get, though he knows 
 that the debtor owes the other party and cannot pay both. Hopkins v. Beebe, 26 
 Penn. St. (2 Cas.) 85 ; Archer v. O'Brien, 7 Hun (N. Y. Sup. Ct.) 146 ; Lampson v. 
 Arnold, 19 Iowa, 480 ; The York County Bank v. Carter, 38 Penn. St. 446. 
 
 ' Wall V. Lakin, 13 Mete. 167. The decision in this place was placed on the 
 ground that the case of payment, in money, of an existing debt, by an insolvent 
 debtor, is not among the cases embraced within the provisions of § 3 of the statute 
 of 1 841, c. 124. Such a case would have been within the statute of 1838, c. 
 163, § 10, but is thought by the court to have been designedly omitted in the 
 statute of 1 841. The following remarks of Mr. Justice Dewey have an important 
 bearing on the principle considered in the text : " It was strongly urged upon us, 
 at the argument, that it was against the whole policy of the insolvent laws thus 
 to allow a payment to an individual creditor to be retained by him to his own use. 
 If we look merely at the principle of equitable distribution of the whole assets 
 among all the creditors pro rata, it would seem to be in derogation of that princi- 
 ple. But there are other considerations favoring the construction we have given. 
 A different rule might be found to operate with great practical inconvenience in 
 its application to payments made in the usual course of business. Many cases 
 occur of traders and other persons who do business while there is a strong public 
 impression that if their debts were at once all demanded there might not be assets 
 sufficient to pay them, yet who continue to pay such debts as are most strongly 
 pressed, hoping to survive their embarrassments, and by better success in business 
 eventually to discharge their entire indebtedness. Whether it would be sound 
 policy to disturb such payments may certainly be somewhat questionable." 13 
 Mete. 171, 172. It has since been provided by statute, that any payment made by 
 3. debtor, being insolvent or in contemplation of insolvency, within six months 
 before the filing of the petition in insolvency by or against him, with a view, 
 directly or indirectly, to give a preference to any preexisting creditor, or to any 
 person having any preexisting claim or demand against him, or to any person lia- 
 ble as indorser, guarantor, or surety for him, shall be, as to the other creditors, void ; 
 and the assignees in insolvency may recover from the person so preferred the 
 money so paid; with interest, provided such person, when accepting such prefer- 
 ence, had reasonable causE; to believe such debtor insolvent. Act of June 6, 1856, 
 •§ 25 ; Stat, of 1856, c. 284; Gen. Stat, of Mass. c. 118, § 89. But the act does 
 not apply to any payment (not exceeding twenty-five dollars in amount), upon 
 any debt contracted for necessaries furnished to the debtor or his family. Id, 
 Ibid. 
 
 = Garland, J., in The United States v. The Bank of the United States, 8 Rob. 
 <La.) 262, 404. 
 
§ l6l.] METHODS OF GIVING PREFERENCE. 195 
 
 § 161. Methods of Giving Preference. — But an insolv- 
 ent debtor may exercise this right of preference, not only in 
 the form of the actual payment of money to a particular 
 creditor, but also in the form of the assignment or appro- 
 priation of property." And this, againj may be done by 
 either of the following methods : first, by the transfer of 
 property directly to the creditor, either (i) absolutely, in 
 lieu of payment, and as a satisfaction of the debt so pre- 
 ferred ; = or, (2) conditionally, or by way of security, as by 
 bond, pledge, or mortgage ; ^ secondly, by consenting to a 
 
 ' Garr v. Hill, i Stock. 210; Curtis, J., in Heydock v. Stanhope, i Curt. 474; 
 Uhler V. Maulfair, 23 Penn. St. (11 Har.) 481 ; Glen v. Grover, 3 Md. 212; 
 Powles V. Dilley, 2 Md. Ch. Dec. 119 ; Cooper v. McClun, 16 111. 435 ; Wright v. 
 Linn, 16 Tex. 34; Gassett v. Wilson, 3 Fla. 235. A debtor in failing circum- 
 stances may give a preference to one or more of his creditors, to the exclusion of 
 others ; and such disposition- of his effects is not impeachable on the ground of 
 fraud, even though it embraces all his property. Cason v. Murray, 1 5 Mo. 378. A 
 ■debtor in failing circumstances may convey all his property to a bona fide creditor 
 at an adequate price, even though the known effect of such sale and conveyance 
 may be to delay or defeat his other creditors. Young v. Dumas, 29 Ala. 60 ; see 
 PuUiam v. Newberry, 41 Ala. 168 ; Harkins v. Bailey, 48 Ala. 377. 
 
 " Parsons, C. J., in Widgery v. Haskell, 5 Mass. 144, 153 ; Dewey, J., in Nos- 
 trand v. Atwood, 19 Pick. 281, 284; Sandford, C, in Mackie v. Cairns, Hopk. Ch. 
 373, 406. He may assign all or any part of his effects, in satisfaction of a bona 
 fide debt, in exclusion of all other creditors. Tilghman, C. J., in The United 
 States V. King, Wall. Sr. 13, 21 ; Lawrence v. Davis, 3 McLean, 177 ; Ford v. 
 Williams, 3 B. Mon. 550; Bennett, J., in Hall v. Demson, 17 Vt. (2 Wash) 310, 
 315 ; Stover v. Herrington, 7 Ala. 142 ; Bruce's Adm'rs v. Smith, 3 Harr. & J. 499 ; 
 Hickley v. The Farmers' & Merchants' Bank, 5 Gill & J. 377 ; Eastman v. McAl- 
 pin, I Kelly, 1 57 ; King v. Trice, 3 Ired. Eq. 568 ; Gaston, J., in Hafner v. Irwin, 
 I Ired. L. 490; Powers v. Green, 14 111. 386; Little v. Eddy, 14 Mo. 160; Kuy- 
 kendall v. McDonald, 15 Id. 416; Edrington v. Rogers, 15 Tex. 188 ; Hancock v. 
 Horan, lb. 507 ; Paige, J., in Curtis v. Leavitt, 15 N. Y. (i Smith), 197. A con- 
 veyance of land by an insolvent debtor to a creditor, to pay an existing debt, 
 though the parties intend thereby that the claims of other creditors shall be de- 
 feated, is not fraudulent. Covanhovan v. Hart. 21 Penn. St. (9 Har.) 495; see 
 Lloyd V. Williams, Id. 327. " A debtor in failing circumstances has the right to 
 prefer one creditor to another; and if he takes his property and pays one of his 
 creditors with it, designing at the time, and knowing, that the effect of such pay- 
 ment to the particular creditor will be to prevent some other creditor or creditors 
 from taking his property upon their executiops, this will not affect the title of the 
 ■creditor to whom he has delivered the property." Marvin, J., in Hall v. Arnold, 
 15 Barb. 599, 600. But see, as to the good faith of the transaction, the observa- 
 tions of Nelson, C. J., in Birdseye v. Ray, 4 Hill, 158, 163 ; and see Garr v. Hill, 
 I Stock. 210, 215 ; Hancock v. Horan, 15 "Tex. 507. 
 
 ' Stevens v. Bell, 6 Mass. 339 ; Wilde, J., in Johnson v. Whitwell, 7 Pick. 71, 
 73 ; Dewey, J., in Nostrand v. Atwood, 19 Id. 284 ; Bates v. Coe, 10 Conn. 280 ; 
 Pomeroy v. Manin, 2 Paine, 476 ; Waters v. Comly, 3 Har. (Del.) 117 ; Anderson 
 v. Tydings, 3 Md. Ch. Dec. 167 ; Davis v. Anderson, i Kelly, 176; Nelson, C. J., 
 in Birdseye v. Ray, 4 Hill, 158, 163 ; Paige, J., in Curtis v. Leavitt, 15 N. Y. (i 
 Smith), 197 ; Redfield,.,C. J., in Mussey v. Noyes, 26 Vt. (3 Deane), 462, 471 ; 
 
196 ASSIGNMENTS WITH PREFERENCES. [cHAP. X. 
 
 transfer by operation of law, as by voluntarily confessing a 
 judgment ; ' and thirdly, by transferring property to a third 
 person in trust, to hold and dispose of for the benefit of 
 the creditor.'^ By this gradation, we reach that common 
 form of voluntary assignment by which a debtor transfers 
 the whole of his property to a trustee, to be applied for the 
 benefit of certain creditors, or in which he classifies his 
 creditors, and directs his trustee to pay them in a certain 
 prescribed order. 
 
 § 162. Preferences by Direct Transfer. — The right of a 
 debtor in embarrassed or failing circumstances to provide 
 for particular creditors by appropriations out of property of 
 which he himself retains the dominion, or, in other words, 
 the right to prefer by the direct transfer of property to the 
 creditor preferred, rests in a great degree on the necessities of 
 mercantile business,^ and is conceded even in those judicial 
 opinions which deny or condemn the exercise of the right 
 
 Giddings V. Sears, 115 Mass. 505; Isham, J., in Peck v. Merrill, Id. 686, 693 ;; 
 Leitch V. Hollister, 4 N. Y. 211. A creditor has a right to secure himself by ob- 
 taining a lien on the property of a failing debtor, and if done fairly, he may thus 
 obtain a preference over other creditors. Caldwell, J., in Fassett v. Traber, 20 
 Ohio (Lawr.) 540, 545 ; see- Wiley v. Knight, 27 Ala. 336. But this right has been 
 abridged by statute in some of the States. See post, pp. 203 et seq. 
 
 ' Williams v. Brown, 4 Johns. Ch. 682 ; Wilder v. Winne, 6 Cow. 284 ; 
 Blakey's Appeal, 7 Barr, 449 ; Guy v. Mcllree, 26 Penn. St. (2 Cas.) 92. In the 
 English case of Holbird v. Anderson (5 Term R. 235), where a debtor preferred 
 a creditor by confessing a judgment to him, under which execution was issued 
 and levied, even after judgment obtained and execution issued by another creditor, 
 the preference was held to be not fraudulent under the statute of 1 3 Eliz. c. 5. 
 But in New Jersey, judgments confessed for the purpose of preferring creditors 
 are within the act declaring all preferences fraudulent and void. Rev. Stat. (ed. 
 1874), p. 9, § I. In Maryland, judgments confessed by a debtor, with a view or 
 under an expectation of applying for the benefit of the insolvent laws, and for the 
 purpose of preferring a creditor or surety, are declared void. Holcomb's Law of 
 Debtor & Creditor, 298 ; and in Louisiana the confession of judgment by a debtor 
 within three months next preceding his failure, in order to give an unjust prefer- 
 ence to one or more of his creditors over the others, is required to be declared 
 null and void. Rev. Stat. (ed. 1870), p. 359, § 1808. And in Kentucky, by act of 
 March 8, 1862, every judgment which shall be suffered by a defendant in contem- 
 plation of insolvency, with the design to prefer one or more creditors to the exclu- 
 sion in whole or in part of others, shall operate as a general assignment for the 
 benefit of all creditors ratably. Supplement to Rev. Stat. (1866), p. 239. 
 
 = Stevens v. Bell, 6 Mass. 339 ; Dewey, J., in Nostrand v. Atwood, 19 Pick.. 
 284. 
 
 ' See the observations of Coulter, J., in Blakey's Appeal, 7 Barr, 449, 451,. 
 and of Ford, J., in Tillou v. Britton, 4 Hals. 120, 136. 
 
§ l62.] PREFERENCES BY DIRECT TRANSFER. I97 
 
 in the indirect form of a trust.' The mere preference thus 
 given is nothing more than what the law itself constantly 
 allows and secures to one creditor over another as the re- 
 ward of superior vigilance and diligence in the prosecution 
 and enforcement of his remedies. The priority everywhere 
 given to a creditor who obtains a judgment over other 
 creditors equally meritorious, is a familiar example of this 
 preference by law. On the same ground rests the priority 
 given in New York to creditors proceeding under the "act 
 to abolish imprisonment for debt and to punish fraudulent 
 debtors," and in other States to attaching creditors, and in 
 all these cases the preference is one which cannot be di- 
 vested by the debtor, even by an assignment of all his prop- 
 erty for the benefit of all his creditors.'' The exercise of the 
 right to prefer in this direct form, especially where the ap- 
 propriations made by it are limited and partial, leaving the 
 residue of the debtor's property open to the legal pursuit of 
 his creditors, does not affect the right of unpreferred cred- 
 itors to proceed against such residue, nor does it necessarily 
 hinder or delay them in the prosecution of their legal 
 remedies. Hence we find it admitted in the jurispru- 
 dence of those States where preferences by general as- 
 signments, in trust, are expressly or in effect prohibited by 
 statute ; as in New Hampshire,^ Connecticut,'' New Jersey,^ 
 
 ' See the opinion of Nelson, J., in Cunningham v. Freeborn, 1 1 Wend. 240, 
 256 ; and of Sutherland, J., in Grover v. Wakeman, Id. 194, 201. In Atkinson v. 
 Jordan, 5 Ohio, 178 (5 Ham. 293), Wright, J., observed, " It seems admitted that 
 a debtor in failing circumstances may, in good faith, pay one creditor in money or 
 goods in preference to another, but the frequent abuses practiced in transfers to 
 effect a preference by means of trusts instead of actual payment has led many to 
 doubt the policy of holding such transfers valid." 
 
 ^ Wood V. Bolard, 8 Paige, 556 ; Spear v. Wardell, i N. Y. 144 ; see Hall v. 
 Kellogg, 12 N. Y. 325 ; Wilde, J., in Johnson v. Whitwell, 7 Pick. 71, 75 ; Story, 
 J., in Halsey v. Whitney, 4 Mason, 206, 213. 
 
 ' Meredith Manuf. Co. v. Smith, 8 N. H. 347 ; Law v. Wyman, Id. 536 ; Bar- 
 ker V. Hall, 13 Id. 298 ; so, formerly, in Massachusetts ; Henshaw v. Sumner. 23 
 Pick. 446 ; Brown v. Foster, 2 Mete. 1 52 ; Danforth v. Denny, 25 N. H. 155. But 
 see the statutes of 1838, 1841 and 1856, referred io post, p. 211, n. 6. 
 
 * Bates V. Coe, 10 Conn. 280; Pomeroy v. Manin, 2 Paine, 476. But see the 
 act of 1853 ; Rev. Stat. (ed. 1875) p. 378. 
 
 ' Tillou V. Britton, 4 Hals. 120, 121 ; Garr v. Hill, i Stock. 210, 215. 
 
igS ASSIGNMENTS WITH PREFERENCES. [cHAP. X. 
 
 Pennsylvania," Iowa/ Alabama,^ Missouri,* California,^ and 
 Ohio/ 
 
 § 163. Preferences in Assignments to Trustee. — But 
 where an insolvent debtor, instead of retaining the dominion 
 of his property, divests himself of it by a general assignment to 
 a trustee,with directions to the latter to apply it in satisfaction 
 of certain specified debts, to the exclusion or postponement 
 of others, he places the rights of unpreferred creditors on 
 quite a different and much less favorable footing. Deprived 
 by such a transfer of all remedy against the property except 
 where the assignment can be avoided as fraudulent or illegal,, 
 they are compelled to await the uncertain result of the exe- 
 cution of the trust in its due course, with all the delays 
 necessarily attendant on the processes of collection, sale, and 
 distribution by the assignee, and are effectually turned over 
 to the remote chances of sharing in a possible surplus re- 
 maining after full satisfaction of the claims preferred. The 
 temptations to the abuse or inequitable exercise of the right 
 
 ' Blakey's Appeal, 7 Barr, 449 ; Worman v. Wolfersberger's Ex'rs, 19 Penn.. 
 St. (7 Harr.) 59 ; Uhler v. Maulfair, 23 Penn. St. (n Harr.) 481 ; York Co. Bank 
 V. Carter, 38 Penn. 446 ; Guy v. Mcllree, 26 Penn. St. (2 Cas.) 92. Under the 
 act of April 16, 1849, § 4, judgments confessed to evade the act of 1843, followed 
 by an assignment of real estate, were held to be void as against other creditors., 
 and not entitled to preference out of the proceeds of sale of such real estate, but 
 entitled only to a /re raia payment with the other debts of the debtor. Summers' 
 Appeal, 16 Penn. St. (4 Harr.) 169. And if the debtor, at the time of confessing 
 the judgment, knew that he was insolvent, his subsequent execution of the assign- 
 ment was held to be conclusive evidence that the judgments were given in fraud 
 of the act of 1843. Id. ibid. But the act of 1849 was repealed, so far as related 
 to judgments, by the act of May 4, 1852, § 5. Laws of 1852, p. 584; Purdon's 
 Digest, p. 52, and notes. But independent of the statute, the decision in Sum- 
 mers' Appeal, supra, was overruled on authority in Hutchinson v. McClure, 20 
 Penn. 63 ; and see as to partial assignment in trust. Miners' Nat. Bank Appeal.. 
 57 Penn. St. 193. 
 
 " Fromme v. Jones, 13 Iowa, 474; Davis v. Gibson, 24 Id. 257 ; Farewell v. 
 Howard, 26 Id. 381 ; Lampson v. Arnold, 19 Id. 480. 
 
 ^ Young V. Dumas, 29 Ala. 60 ; Pulham v. Newberry, 41 Ala. 168 ; Harkins v.. 
 Bailey, 48 Ala. 377. 
 
 ' Cason V. Murray, 1 5 Mo. 378 ; Johnson v. McAllister's Assignee, 30 Id. 327 ; 
 State V. Benoist, 37 Id. 500. 
 
 " Civil Code of California, §§ 34. 51, expressly provides that the provisions of the 
 act shall not affect the power of a person, although insolvent, to transfer property 
 to a particular creditor for the purpose of paying or securing the whole or a part 
 of a debt owing to such creditor, whether in his own right or othei-wise. 
 
 " Wilcox V. Kellogg, 1 1 Ohio, 394 ; Hulls v. Jeffrey, 8 Ohio, 390. 
 
§ 163.] PREFERENCES IN ASSIGNMENTS TO TRUSTEE. 199 
 
 of preference itself in this form, and the facilities for reserv- 
 ing undue advantages to the debtor, through the services of 
 a friendly trustee, are other evils attending the unrestricted 
 allowance of the right to favor one creditor at the expense 
 of another through the medium of this description of con- 
 veyance. Hence, the policy of the rule allowing prefer- 
 ences in general assignments to trustees has frequently been 
 questioned by high authority in this country, as conferring a 
 power which may be easily abused and rendered subsen'ient 
 to fraud, and the practice itself has been pointedly con- 
 demned as calculated to create confusion, uncertainty and 
 collusion.' 
 
 ' In the case»of Riggs v. Murray (2 Johns. Ch. 565, 577), Chancellor Kent de- 
 scribed the operation of the rule in the following terms : "As we have no bapk- 
 rupt system, the right of the insolvent to select one creditor and to exclude another 
 is applied to every case, and the consequences of such partial payments are exten- 
 sively felt and deeply deplored. Creditors out of view, and who reside abroad or 
 at a distance, are usually neglected. This checks confidence in dealing, and hurts 
 the credit and character of the country. These partial assignments are, no doubt, 
 founded in certain cases upon meritorious considerations, yet the temptation leads, 
 strongly to abuse and to the indulgence of improper motives." In Cunningham 
 V. Freeborn (11 Wend. 240, 256), Mr. Justice Nelson expressed his disapprobation, 
 in still stronger language. " The root of the vice, in all these cases of voluntary 
 assignments, lies in the principle oi preference. It affords the pretense for putting 
 the property into the possession of a friendly trustee, and thereby may substan- 
 tially secure to the debtor the control of it for a long time after the law presumes it 
 to have passed from him, and when his own possession would be incompatible 
 with its security." In Burd v. Smith (4 Dall. 76), decided when preferences were 
 allowed in Pennsylvania, though the court admitted the right, Mr. Justice Breck- 
 enridge condemned the practice in the following terms : " The right has been 
 allowed, perhaps on a principle of humanity, or in favor of just debts, to exclude 
 debts in law not strictly ex debito justiticE. But I do not think that the practice 
 should be encouraged. It is calculated to create confusion, uncertainty, and col- 
 lusion." Id. 88. In Pingree v. Comstock (18 Pick. 46, 51), decided before pref- 
 erences were prohibited in Massachusetts, Mr. Justice Wilde observed : '•' It is to 
 be regretted that an insolvent debtor has the power to make any preferences. It 
 is a power which may be grossly abused, and ought not to be extended or 
 encouraged." In Atkinson v. Jordan »(5 Ohio, 178; 5 Ham. 293), Mr. Justice 
 Wright described the operation of the rule in Ohio, while preferences were allowed 
 in that State, as follows : " The practice among speculating traders of shattered 
 and desperate circumstances, of accumulating property upon credit with a desire 
 of securing the means of satisfying the claims of confidential creditors, who con- 
 tribute in various ways to keep up the credit upon which the property has been 
 procured, and then passing these effects so procured into the hands of trustees, 
 to be protected from legal process, and to be exhausted in satisfying those pre- 
 ferred claims, leaving all other creditors without a farthing, can hardly be justified 
 on any sound moral or legal principle. Instances are frequent of merchandise 
 procured from an honest trader, on credit, being handed over in bulk to trustees, 
 to secure indorsers and other confidential creditors. Equity delights in equality, 
 and it is becoming a grave question whether courts of justice should longer coun- 
 tenance a sinking debtor in preferring one creditor to another in the distribution 
 
200 ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 § 164-. Notwithstanding these objections, however, the 
 right to give preferences to creditors in deeds of assignment 
 to trustees, has, in cases not within the bankrupt law, been 
 freely admitted, nay, justified, by the courts in England,' 
 and repeatedly recognized by the federal and State courts 
 of the United States. So that it may be laid down as a 
 general rule that in the absence of any statutory prohibition 
 and of a bankrupt law, a debtor may, at any time before 
 liens have attached upon his property, make a general or 
 partial assignment to a trustee for the benefit of his creditors, 
 with preferences ; which assignment will be valid as against 
 the process of creditors, from the time of the execution of 
 
 of his effects.'' Id. See, also, the observations of Hinman, J., id Beers v. Lyon, 
 21 Conn. 610; of Vi^oods, J., in Barker v. Hall, 13 N. H. 301 ; of Isham, J., in 
 Peckv. Merrill, 26 Vt. (3 Deane), 686, 692 ; and of Pratt, J., in Pierson v. Manning, 
 2 Mich. (Gibbs), 445, 448. The preamble to the Georgia statute of December 19, 
 1818, prohibiting preferences in general assignments, is in the following words : 
 " Whereas, a practice of selecting particular creditors by assignments and trans- 
 fers of property, made by persons indebted, and thereby excluding or defrauding 
 other bona fide creditors of their just claims on the estate of insolvent debtors, is 
 contrary to the first principles of equity and justice ; to prevent the mischief 
 thereof. Be it enacted," &c. See also the observations of Roosevelt, J., in Nichols 
 V. McEwen, 17 N. Y. 22 ; of Fairchild, J., in Huff v. Roane, 22 Ark. 184. 
 
 ' In the case of Estwick v. Caillaud (5 Term R. 420), where a debtor had as- 
 signed a part of his property in trust for the benefit of certain creditors. Lord 
 Kenyon, in sustaining the conveyance, observed that " it was neither illegal nor 
 immoral to prefer one set of creditors to another ; " and that even under the 
 bankrupt law, a trader might, by a partial assignment, give a preference, in some 
 respects, to his creditors. Id. 423. In the same case, Ashurst, J., said, " Where 
 the bankrupt laws do not interfere, a debtor may give a preference to particular 
 creditors." Id. 425. And in Nunn v. Wilsmore (8 Term R. 521), where the 
 debtor had conveyed all his effects in trust for the benefit of creditors. Lord Ken- 
 yon, in pronouncing the assignment good, remarked that, " putting the bankrupt 
 law out of the case, a debtor may assign all his effects for the benefit of particular 
 creditors." Id. 528. And such preference by a debtor has not only been con- 
 ceded, but, in some of the older cases, justified. Thus, it was said by the master 
 of the'roUs, m Small v. Dudley (2 P. Wnps. 427), " There may be just reason for 
 a sinking trader to give a preference to one creditor before another ; to one that 
 has been a faithful friend, and for a just debt lent him in extremity, when the rest 
 of his debts might be due from him as a dealer in trade, wherein his creditors 
 may have been gainers ; whereas the other may be not only a just debt, but all 
 that such creditor has in the world to subsist upon ; in this case (I say), and so 
 circumstanced, the trader honestly may, nay ought to give the preference." Id. 
 429. Similar views were taken by Lord Chancellor Parker, in Cock v. Goodfellow 
 (10 Mod. 489). So, in the United States, in Burd v. Smith (4 Dal. 76, 86), 
 Smith, J., observed that cases may be easily conceived in which the giving a pref- 
 erence "would be a duty." And in Murray v. Riggs (15 Johns. 571, 585), 
 Thompson, C. J., said, " I think I may assume it as a settled and unshaken prin- 
 ciple, both at law and in equity, that a failing debtor has a just legal and mo'ral 
 right to prefer, in payment, one creditor, or set of creditors to another." 
 
§ 164.] PREFERENCES IN ASSIGNMENTS TO TRUSTEE. 201 
 
 the deed/ " He may," observed Mr. Justice Sutherland, in 
 Grover v. Wakeman,'' " assign the whole of his property for 
 the benefit of a single creditor, in exclusion of all others, or 
 he may distribute it in unequal proportions, either among a 
 
 ' I American Leading Cases (Hare & Wallace's notes), 95 [65, ed. 1857] ; 2 
 Kent's Com. [532] 689 ; Marbury v. Brooks, 7 Wheat. 556 ; Spring v. S. Carolina 
 Ins. Co. 8 Id. 268 ; Brooks v. Marbury, 1 1 Id. 78 ; Brashear v. West, 7 Pet. 608, 
 614; Clark V. White, 12 Id. 178; Tompkins v. Wheeler, 16 Id. 106; Pearpoint v. 
 Graham, 4 Wash. C. C. 232 ; United States v. Xing, Wall. Sr. 13, 21 ; Halsey v. 
 Whitney, 4 Mason, 206, 212, 213; Lawrence v. Davis, 3 McLean, 177; Curtis, J., 
 in Stewart V. Spenser, i Curt. 157, 162; Kent, C, in Hendricks v. Robinson, 2 
 Johns. Ch. 283, 306; Van Ness, J., in McMenomy v. Ferrers, 3 Johns. 71, 84; 
 Wilkes V. Ferris, 5 Johns. 335 ; Van Ness, J., in Hyslop v. Clarke, 14 Id. 458, 463 ; 
 Thompson, C. J., in Murray v. Riggs, 15 Id. 571, 583; Mackie v. Cairns, 5 Cow. 
 547; Wintringham v. Lafoy, 7 Id. 735; Grover v. Wakeman, 11 Wend. 187; 
 Jacobs V. Remsen, 36 N. Y. 668 ; Putnam v. Hubbell, 42 N. Y. 106 ; Webb v. 
 Daggett, 2 Barb. S. C. 9; Brigham v. Tillinghast, 15 Id. 618; Burd v. Smith, 4 
 Dall. 85 n. ; Smith, J., Id. 86; Wilt v. Franklin, i Binn. 502, 514; Lippincott v. 
 Barker, 2 Id. 174; Cameron v. Montgomery, 13 Serg. & Rawle, 128 ; De Forest 
 V. Bacon, 2 Conn. 633 ; Ingraham v. Wheeler, 6 Id. 277 ; Hatch v. Smith, 5 Mass. 
 42 ; Widgery v. Haskell, Id. 144, 1 53 ; Russell v. Woodward, 10 Pick. 407 ; Fos- 
 ter V. Saco Manufacturing Co. 12 Id. 451; Nostrand v. Atwood, 19 Id. 281; 
 Pierce v. Jackson, 2 R. I. 35 ; Beckwith v. Brown, Id. 311 ; Dockray v. Dockray, 
 Id. 547; Nightingale v. Harris, 6 Id. 321 ; Allen v. Gardner, 7 Id. 22; Buffum v. 
 Green, 5 N. H. 71 ; Haven v. Richardson, Id. 113; Hall v. Denison, 17 Vt. (2 
 Wash.) 310; Redfield, C. J., in Mussey v. Noyes, 26 Vt. (3 Deane), 462, 471 ; 
 Canal Bank v. Cox, 6 Greenl. 395 ; Tillou v. Britton, 4 Halst. 120; Atkinson v. 
 Jordan, 5 Ohio, 178; Hickley v. 'The Farmers' & Merchants' Bank, 5 Gill & J. 
 377 ; State of Maryland v. Bank of Maryland, 6 Id. 205 ; Cole v. Albers, i Gill, 
 412; McCall v. Hinckley, 4 Id. 128; Beatty v. Davis, 9 Gill, 211 ; Sangston v. 
 Gaither, 3 Md. 40; Maenel v. Murdock, 13 Id. 164; McColgan v. Hopkins, 17 Id. 
 395 ; McCuUough v. Sommerville, 8 Leigh, 41 5 ; Skipwith's Ex'r v. Cunningham, 
 Id. 271 ; Phippen v. Durham, 8 Gratt. 457 ; Dance v. Seaman, 11 Id. 778; Gor- 
 don V. Cannon, 18 Gratt. 388; Moffatt v. McDowall, i McCord's Ch. 434; 
 Moore v. Collins, 3 Dever. 126; Hafner v. Irwin, i Ired. L. 490; AUemand v. 
 Russell, 5 Ired. Eq. 183; Smith v. Campbell, Rice, 353; Niolon v. Douglass, 2 
 Hill's Ch. 443; Eastman v. McAlpin, i Kelly, 157; Cameron v. Scudder, Id 204 ; 
 Bellamy v. Bellamy's Adm'r, 6 Fla. (Papy), 62 ; Holbrook v. Allen, 4 Fla. 
 (Hogue), 87, 92 ; Robinson v. Rapelye, 2 Stew. 86 ; Richards v. Hazard, i Stew. 
 & Port. 139 ; Williams v. Jones, 2 Ala. 314; Hindman v. Dill, 11 Id. 689; Ran- 
 kin V. Loder, 21 Ala. 380; Sharkey, C. J., in Brown v. Bartee, 10 Sm. & M. 268, 
 274 ; Layson v. Rowan, 7 Rob. (La.) i ; McQuinnay v. Hitchcock, 8 Tex. 33 ; 
 Edrington v. Rogers, 15 Id. 188, 195; Wright v. Linn, 16 Id. 34, 42; Vernon v. 
 Morton, 8 Dana, 247 ; Pearson v. Rockhill, 4 B. Mon. 296 ; Marshall v. Hutchin- 
 son, 5 Id. 305 ; Ramsdell v. Sigerson, 2 Gilm. 73 ; Cross v. Bryant, 2 Scam. 37 ; 
 Howell V. Edgar, 3 Id. 417; How v. Camp, Walk. 427; Hollister v. Loud, 2 
 Mich. (Gibbs), 309, 314; Bell v. Thompson, 3 Mo. [61] 84; Sibley v. Hood, Id. 
 [206] 290 ; Cason v. Murray, 15 Id, 378 ; Gamble, J., in Richards v. Levin, 16 Id. 
 (i Benn.) 596, 598, 599; Ex parte Conway, 12 Ark. 302; Hoff v. Rpane, 22 Ark. 
 184; Hempstead v. Johnson, 18 Ark. 123 ; Bailey v. Mills, 27 Tex. 434; Rowland 
 v. Coleman, 45 Ga. 204 ; Lay v. Seago, 47 Id. 82. The cases above cited em- 
 brace the decisions of the highest courts in almost every State of the Union. It 
 will be seen, however, from the text, that in some of these States the right to pre- 
 fer has latterly been either wholly taken away, or more or less modified by statute. 
 
 ^ II Wend. 187, 194, 197. 
 
202 
 
 ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 part or the whole of his creditors. No matter how or upon 
 what principles the distribution is made, if the debtor de- 
 votes the whole of his property to the payment of just debts, 
 neither law nor equity inquires whether the objects of his 
 preference are more or less meritorious than those for whom 
 he has made no provision. The right to prefer may origin- 
 ally have been sustained, in part, upon the supposition that 
 just and proper grounds of preference did, in most cases, ex- 
 ist, and would be duly regarded by the debtor ; but what- 
 ever may have been the reason or foundation of the rule, it 
 is one of that numerous class of cases in which the rule has 
 become absolute, without any regard to the fact whether the 
 reason on which it was founded exists or not in the particu- 
 lar cases. It is now too late to agitate the question whether 
 these assignments, either partial or general, are sustained by 
 considerations of true wisdom and policy. Reflecting men 
 have differed upon that subject ; but the better opinion 
 seems to be that, in the absence of a general bankrupt sys- 
 tem, the interests of a commercial community require that 
 they should be sustained. They have accordingly grown 
 into use, and have been sanctioned by judicial decisions in 
 most of the States of the Union. They have become thor- 
 oughly incorporated into our system ; and all that it is now 
 competent for our courts to do, is to see that they fairly ap- 
 propriate all the insolvent's property, or such portion of it as 
 he undertakes to assign, to the payment of his just debts, 
 and are not made the instruments of placing it beyond the 
 reach of his creditors, and for the benefit, either immediate 
 or remote, of the insolvent himself 
 
 r" 1 
 
 § 165. Restrictions on the Right to Prefer. — The re- 
 marks here quoted continue to be fully applicable to the 
 present law of assignments in the State of New York. " It 
 is now entirely settled in this State," observed Mr. Justice 
 
 ' And see, to the same effect, the observations of Gaston, J., in Hafner v. Ir- 
 win, I Ired. L 490; of Allen, P., in Dance v. Seaman, 11 Gratt. 780, 781 ; and ot 
 Wing, P. J., in Plollister v. Loud, 2 Mich. 309, 315. 
 
§ 165.] RESTRICTIONS ON THE RIGHT TO PREFER. 205 
 
 Harris, in the case of Webb v. Daggett/ " that a debtor in 
 failing circumstances may assign his property in trust for 
 his creditors, and give such preference among them as he 
 may choose." It is true, also, that assignments of this char- 
 acter have heretofore been in constant use, and as constantly 
 sustained in most of the United States, and that, at common 
 law, the right to prefer cannot be questioned. ° Of late, 
 how^ever, the tendency has been towards a restriction of the 
 exercise of this right on the part of insolvent debtors ; and 
 in several of the States statutes have been passed declaring 
 assignments with preferences, or such as provide for an un- 
 equal distribution of the debtor's property, to be either abso- 
 lutely void, or to inure to the equal benefit of all the cred- 
 itors. Thus, in Califomia,^ Connecticut,'* Delaware,^ Iowa,* 
 Kansas,' New Hampshire,^ and Missouri,^ general assign- 
 ments giving preferences are declared fraudulent and void. In 
 Massachusetts," assignments, whether with or without prefer- 
 ences, are equally voidable by creditors not parties to them.. 
 In Maine," every assignment made for the benefit of creditors 
 
 ' 2 Barb. S. C. 9. And see the observations of Duer, J., in Nicholson v. Leav- 
 itt, 4 Sandf. S. C. 252, 282. 
 
 ■' Tilghman, C. J., in United States v. King, Wall. Sr. 13, 21 ; Lawrence v.Davis,, 
 3 McLean, 177; Beatty v. Davis, 9 Gill, 211 ; Redfield, C. J., in Mussey v. Noyes, 
 26 Vt. 462, 471. 
 
 " Civil Code of California, tit. 3, part 2, § 3457. 
 
 * General Statutes of Connecticut (rev. of 1875), p. 378, § i. See Goodell v.. 
 Williams, 21 Conn. 419 ; Beers v. Lyon, 21 Conn. 604. 
 
 ' Revised Code of Delavirare (ed. 1874), c. 132, § 6. 
 
 ' Code of Iowa (ed. 1873), Title 14, c. 7, § 21 15. 
 
 ' General Statutes (ed. 1868), c. 6, § i, p. 93. 
 
 " General Statutes (ed. 1867), c. 126, § i, p. 262. True v. Congdon, 44, 
 N. H. 48. 
 
 ° General Statutes of Missouri (ed. 1872), vol. i, c. g, p. 150. 
 
 " See. post, p. 211. 
 
 '' Revised Statutes of Maine (ed. 1871), p. 543. The former act of April i„ 
 1836 (3 Laws of Me. 550, c. 761), prohibited preferences. Pike v. Bacon, 2i Me. 
 280. 
 
 Under the act of 1844, preferences given in the act of assignment or in the 
 transaction by which the distribution is effected, if the assignment is a part thereof,, 
 are in violation of the statute ; though the preferences may not be shown in the 
 assignment itself, they may be shown by proof aliunde. Berry v. Cutts, 42 Me. 
 445- 
 
204 ASSIGNMENTS WITH PREFERENCES. [cHAP. X. 
 
 is required to provide for a proportional distribution of all 
 the real and personal estate of the debtor, except what is 
 exempt from attachment, among all the creditors becoming 
 parties thereto ; and in whatever form made, or however 
 expressed, is declared to have the same effect. In Ver- 
 mont,' all assignments are required to be for the benefit of 
 all the creditors of the assignor, in proportion to their re- 
 spective claims, anything in such assignments to the con- 
 trary notwithstanding. 
 
 In New Jersey,^ all assignments in trust for the benefit 
 of creditors are expressly required to be made for their 
 •equal benefit, in proportion to their several demands ; and 
 all preferences of one creditor over another, or whereby any 
 one or more shall be first paid, or have a greater proportion 
 in respect of his claim than another, excepting mortgage 
 and judgment creditors (when the judgment has not been 
 by confession, for the purpose of preferring creditors), are 
 to be deemed fraudulent and void. In Pennsylvania,^ all 
 assignments of property in trust, which shall be made by 
 debtors to trustees, on account of inability, at the time of 
 the assignments, to pay their debts, to prefer one or more 
 creditors (except for the payment of wages of labor, the 
 claims for which shall not severally exceed the sum of fifty 
 dollars), are required to be held and construed to inure to 
 the benefit of all the creditors, in proportion to their respect- 
 
 ' Act of November 14, 1855, § i ; Laws of 1855, p. 15 ; Gen. Stats. (1870), p. 454, 
 § I ; Passumpsic Bank v. Strong, 42 Vt. 295. General assignments were formerly 
 prohibited. Mussey v. Noyes, 26 Vt. 462 ; Noyes v. Hickok, 27 Vt. 36 ; Merrill v. 
 Englesby, 28 Vt. 150; Bishop v. Catlin, 28 Vt. 71 ; Fair v. Brackett, 30 Vt. 344. 
 
 " Rev. Stat. (ed. 1874), p. 8, § i ; Varnum v. Camp (13 N. J. L.) i Green, 
 326 ; Brown v. Holcomb, i Stock. 297 ; Tillou v. Britton, 9 N. J. L. 121. 
 
 By the act of March 15, 1855, Nixon's Dig. (ed. 1868), 37, the wages of clerks, 
 miners, mechanics and laborers, due at the time of malfing the assignment, are 
 preferred, provided that such preferred debt shall not in any case exceed the sum 
 of three hundred dollars. 
 
 " Act of April 17, 1843 ; Laws of 1843, p. 273 ; Dunlop's Laws (ed. 1847), 
 c. 592, p. 896; Purdon's Dig. (Brightley, loth ed.) vol. i, p. 90. The prefer- 
 ences which are forbidden in this State are only those given by the assignment 
 itself. See^osi, p. 205. 
 
§ 165.] RESTRICTIONS ON THE RIGHT TO PREFER. 205 
 
 ive demands.' In Ohio,^ all assignments of property in trust, 
 which shall be made by debtors to trustees, in contempla- 
 tion of insolvency, with the design to prefer one or more 
 creditors, to the exclusion of others, are required to be held 
 to inure to the benefit of all the creditors in proportion to 
 their respective demands ; ^ and all transfers, conveyances 
 and assignments made with the intent to hinder, delay and 
 defraud creditors, inure to the equal benefit of all creditors 
 who, after notice, join in the proceeding to fasten a trust 
 upon such fraudulent transfers.'* In Kentucky,^ every assign- 
 ment made by a debtor in contemplation of insolvency, and 
 with the design to prefer one or more creditors, to the ex- 
 clusion, in whole or in part, of others, is declared to operate 
 as an assignment and transfer of all such debtor's property 
 and effects, and to inure to the benefit of all his creditors,, 
 in proportion to the amount of their respective demands, 
 including those which are future and contingent. And in 
 that State it is also provided that every judgment which 
 shall be suffered by any defendant, or any act or devise 
 which shall be done or resorted to by debtors in contem- 
 plation of insolvency, and with the design to prefer one or 
 
 ' The statute does not avoid such conveyances, but merely expunges the pref- 
 erences. Wiener v. Davis, 18 Penn. St. (6 Har.) 331 ; Law v. Mills, Id. 185 ; 
 Miners' Bank Appeal, 57 Penn. St. 193 ; Driesback v. Becker, 34 Id. 152. By the 
 act of April 16, 1849, § 4, any condition in assignments, for the payment of re- 
 leasing creditors only, is required to be taken as a preference in favor of such 
 creditors, and is declared void. Laws of 1849, p. 664 ; Purdon's Dig. 92. And 
 see as to claims for wages to be preferred by assignees, acts of April 2, 1849 ; 
 April 14, 1851, § 10; April 22, 1854; Purdon's Dig. p. 92. The act of May 4, 
 1864, provides for the appraisement and exemption of property to the debtor. 
 Purdon's Dig. (Brightley), p. 93, § 17. 
 
 " See anU, p. 36 ; i Rev. Stat, of Ohio (S. & C.) p. 712, § 16 ; Act of March 
 14, 1838; I Rev. Stat, of Ohio (S. & C.) p. 713. 
 
 ' Act of 1859 ; I Rev. Stat. (S. & C.) p. 713 ; Act of Feb. 12, 1863 ; Stat, of 
 Ohio (Sayl.) vol. i, p. 354. 
 
 * The statute merely gives such assignments a particular direction ; it does not 
 avoid them. Caldwell, J., in Brown v. Webb, 20 Ohio (Lawr.) 389, 400 ; Dore- 
 mus V. O'Hara, i Ohio St. 45 ; Floyd v. Smith, 9 Ohio St. 546. For a full state- 
 ment of the effect of this legislation, see Thomas v. Talmadge, 16 Ohio St. 433. 
 
 ° Act of March 10, 1856 ; Rev. Stat, of Ky. vol. i, p. 553. See, as to the law 
 previous to this statute, Vernon v. Morton, 8 Dana, 247 ; Reinhard v. Bank of 
 Ky. 6 B. Mon. 252. By section 7 of this act, debts due as guardian or adminis- 
 trator have priority, as also debts due as trustee, if the trust be created by deed 
 or will duly recorded in the proper clerk's office. 
 
•2o6 ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 more creditors, to the exclusion, in whole or in part, of 
 others, shall in like manner inure to the equal benefit of all 
 creditors.' In Alabama, every general assignment made by a 
 debtor, by which a preference or priority of payment is 
 given to one or more creditors, over the remaining creditors 
 of the grantor, is declared to be and inure to the benefit of 
 all the creditors of the grantor equally.^ In Missouri,^ every 
 provision in any assignment providing for the payment of 
 one debt or liability in preference to another is declared to 
 be void ; and all debts and liabilities within the provisions 
 of the assignment are required to be paid pro rata from the 
 assets. In Louisiana, it. is a fundamental rule, that the prop- 
 erty of a debtor is the common pledge of his creditors, and 
 its proceeds must be distributed among them ratably, except 
 for lawful causes of preference.'* 
 
 In the States of New York,^ Rhode Island,^ Maryland,' 
 Virginia,* North Carolina,' South Carolina,'" Florida," Mis- 
 
 ' Act of March 8, 1862 ; Sup. to Rev. Stat. (1866), p. 239 ; see Hampton v. 
 Morris, 2 Mete. (Ky.) 336. 
 
 = Rev. Code of Ala. (1867), p. 411, § 1867. The act does not avoid the as- 
 signment which provides for a preference, but simply declares that it shall inure 
 to the benefit of all the creditors equally. Price v. Mazange, 31 Ala. 701. The 
 statute does not apply to preferences by partial assignments. Holt v. Bancroft, 
 30 Ala. 195 ; Stetson vl Miller, 36 Ala. 642; Longmire v. Goode, 38 Ala. 577. 
 For the law in regard to preferences before the statute, see West v. Snodgrass, 
 17 Ala. 549; Branch Bank at Mobile v. Robertson, 19 Id. 798 ; Colgin v. Red- 
 man, 20 Id. 650; Rankin v. Lodor, 21 Id. 380. 
 
 '. Stats, of Mo. (Wagner), p. 1 51, c. 9, § i. The act of 1855 prohibited prefer- 
 ences made in the deed. See Johnson v. McAllister's Assignee, 30 Mo. 327 ; 
 Shapleigh v. Baird, 26 Mo. 322. 
 
 " Civil Code, art. 3150 ; see also Rev. Stat. (ed. 1870), p. .360, § 181 5. 
 
 ° See infra, in the text. 
 
 ' Pearce v. Jackson, 2 R. I. 35 ; Beckwith v. Brown, Id. 311 ; Dockray v. 
 Dockray, Id. 547 ; Nightingale v. Harris, 6 Id. 321 ; Allen v. Gardner, 7 Id. 22. 
 
 ' Beatty v. Davis, 9 Gill, 211 ; Powles v. Dilley, 2 Md. Ch. Dec. 119; see 
 American Exch. Bank v. Inloes, 7 Md. 380 ; Maenel v. Murdock, 13 Id. 164; Mc- 
 Colgan v. Hopkins, 17 Id. 395. ^ 
 
 » 2 Tucker's Com.t443] 432 ; Burr's Ex'r v. McDonald, 3 Graft. 215 ; Rey- 
 nolds v. The Bank of Va. 6 Id. 174; Dance v. Seaman, 11 Id. 778; see Code of 
 Va. (1873), p. 897, tit. 33, c. 114, I 6; Gordon v. Cannon, 18 Graft. 388. 
 
 " Hafner v. Irwin, i Ired. L. 490 ; see post, p. 209 ; Wiswall v. Potts, 5 Jones 
 Eq. (N. C.) 184. 
 
 '° Smith v. Campbell, i Rice, 352. 
 
 " Bellamy v. Bellamy's Adm'r, 6 Fla. 62 ; Holbrook v. Allen, 4 Id. 87. 02 : 
 Walters v. Whitlock, 9 Fla. 86. 
 
§ 1 66.] PREFERENCES REGARDED WITH DISFAVOR. 20/ 
 
 sissippi,' Texas,' Tennessee,^ Illinois,* Michigan, ' Georgia,* 
 Minnesota, Wisconsin and Arkansas,' preferences to cred- 
 itors in general assignments have not been prohibited by 
 statute ; but in most of these States the principle of prefer- 
 ence has been regarded with disfavor, and the courts have 
 sustained it with reluctance, and subject to more or less re- 
 striction and qualification. 
 
 § 1 66. Preferences Regarded with Disfavor. — In New 
 York, particularly, the inclination of the courts against as- 
 signments with preferences has been becoming stronger, and 
 its expression more pointed and emphatic ever since the case 
 of Riggs V. Murray,^ in the Court of Chancery, in 1817. In 
 that case. Chancellor Kent, while admitting the legality of 
 the rule allowing preferences, observed that its application 
 was " always to be watched with jealousy ; " and that the 
 court was not " required by any reasons of expediency or 
 justice, to enlarge the rule by giving it a new and dangerous 
 facility." ' In the leading case of Grover v. Wakeman,'° in 
 the Court of Errors, in 1833, it was decided that a debtor in 
 failing circumstances may prefer one creditor or set of cred- 
 itors, by assigning his property for their benefit, in exclusion 
 of his other creditors ; provided that he devote the whole of 
 the property assigned to the payment of his just debts — 
 that the assignment be absolute and unconditional — that it 
 contains no reservation or condition for his benefit — and 
 does not extort from the fears or apprehensions of his cred- 
 
 ' Sharkey, C. J., in Brown v. Bartee, \o Sm. & M. 268, 274 ; see Lawson v. 
 ■Rowan, 7 Rob. (La.) i. 
 
 " McOuinnay v. Hitchcock, 8 Tex. 33 ; Edrington v. Rogers, 15 Id. 188, 195; 
 Wright \. Linn, 16 Id. 34, 42 ; Bailey v. Mills, 27 Id. 434. 
 
 ' Gait V. Dibrel, 10 Yerg. 146 ; Rindskoff v. Guggenheim, 3 Cold. (Tenn.) 284. 
 
 * Cross V. Bryant, 3 111. 37 ; Blow v. Gage, 44 111. 208. 
 
 ' Pierson v. Manning, 2 Mich. 445, 448. 
 
 ° Rowland v. Coleman, 45 Ga. 204 ; Lay v. Seago, 47 Id. 82. Previous to the 
 act of 1866, preferences were not permitted. Lamb v. Radcliff, 28 Ga. 520 ; Nor- 
 ton V. Cobb, 20 Id. 44; Banks v. Clapp, 12 Id. 514; Eastman v. McAlpin, i 
 Kelly, 1 57 ; Cameron v. Scudder, i Id. 204. 
 
 ' Ex parte Conway, 12 Ark. 302 ; Huff v. Roane, 22 Ark. 184 ; Hempstead v. 
 Johnson, 18 Ark. 123. 
 
 ' 2 Johns. Ch. 565. " 2 Johns. Ch. 579. "" 11 Wend, 187. 
 
208 ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 itors, an absolute discharge as a consideration for a partial 
 dividend.' In the case of Boardman v. Halliday/ in the 
 Court of Chancery (1843), Chancellor Walworth character- 
 ized the principle of preference as " an erroneous principle, 
 as injurious to the just rights of creditors as it is dangerous 
 to the morals of the community," ^ and refused to sanction 
 its extension beyond what must be considered as the settled 
 law of the land. In the case of Goodrich v. Downs/ in the 
 Supreme Court (1844), Mr. Justice Bronson observed that 
 " the courts have found great difficulty in upholding assign- 
 ments which give a preference among creditors ; and such 
 transfers have only been allowed to stand where the debtor 
 makes an unconditional surrender of his effects for the benefit 
 of those to whom they rightfully belong." In the later case 
 of Webb V. Daggett/ in the same court (1847), it was said 
 that assignments giving preferences have not ceased to be 
 regarded with jealousy, and that they are rather tolerated 
 than favored.^ In the case of Barney v. Grifi&n/ in the 
 Court of Appeals (1849), it was remarked by Bronson, J., 
 that " the courts have very reluctantly upheld general assign- 
 ments by an insolvent debtor, which give a preference among 
 creditors ; and they can only be supported when they make 
 a full and unconditional surrender of the property to the 
 payment of debts. The debtor can neither make terms, nor 
 reserve anything to himself, until after all the creditors have 
 been satisfied." The same determination to confine these 
 assignments within the narrowest limits, and to scan every 
 
 ' See the opinion of Mr. Justice Sutherland in this case (ii Wend. 192), from 
 which an extract has already been made {ante, p. 201). 
 
 '' 10 Paige, 223. 
 
 ' The chancellor also referred to the opinions of Judge Holman, of the Dis- 
 trict Court of the United States for Indiana; of Judge Judson, of Connecticut; 
 and of Judges Story and Baldwin of the Supreme Court of the United States, as 
 strongly adverse to the principle. 
 
 * 6 Hill, 438, 439. - 2 Barb. S. C. 9, 1 1. 
 
 ° And see, to the same effect, the observations of Sandford, V. C, in Cram v. 
 Mitchell, I Sandf Ch. 251, 253 ; of Duer, J., in Nicholson v. Leavitt, 4 Sandf. S. 
 C. 252, 280, 281 ; and of Allen, J., in Brigham v. Tillinghast, 15 Barb. 618. 
 
 ' 2 N. Y. 365, 371. 
 
§ 1 66.] PREFERENCES REGARDED WITH DISFAVOR. 2O9 
 
 provision they contain without favor, has been still more 
 ■strongly exhibited in the later case of Nicholson v. Leavitt,' 
 in the same court (1852), on appeal from the Superior 
 Court of the city of New York. 
 
 So in the case of Dunham v. Waterman,^ Mr. Justice 
 •Selden said : " The true 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 assigned, and may 
 also direct upon what debts and in what order the proceeds 
 shall be applied, but beyond this can prescribe no conditions 
 whatever as to the management or disposition of the as- 
 signed property." And in a still later case it was remarked 
 by Mr. Justice Davis, that "it is needless to cite authorities 
 ±0 show that by the law of this State preferential assignments 
 are not for that reason fraudulent and void." ' 
 
 In North Carolina, it was decided by the Supreme 
 Court, in the case of Hafner v. Irwin,* that though a debtor 
 has a right, by the laws of the State, by a deed of trust, to 
 convey all his property for the purpose " of paying certain 
 creditors in preference, yet there must be no condition, 
 direct or indirect, controlling this application. Such a deed 
 must be bona fide for the purpose it professes to have in 
 view. In South Carolina, it was held in Smith v. Henry,^ 
 that the law allows a debtor to give a preference to one 
 creditor over another, but it will not allow him to secure an 
 
 ' 6 N. Y. (2 Seld.) 510. ■' 17 N. Y. 9. 
 
 ' Jacobs V. Remsen, 36 N. Y. 668. 
 
 * I Ired. L. 490. The observations of Gaston, J., in this case, are very much 
 in the strain of those of Sutherland, J., in Grover v. Wakeman, the principle of 
 -which is adopted. The following quotation may be added to what is said in the 
 text. " It is enough, perhaps more than enough, for human infirmity, that the 
 debtor shall be allowed, under these distressing circumstances, to select, accord- 
 ing to his unbribed judgment, among his creditors, for those who merit a prefer- 
 ence, and to make a simple and unconditional appropriation of his property to the 
 payment of their claims. " But to allow him to negotiate for terms with them — to 
 seek out those who will be most favorable to him, either in the way of profit or 
 commerce, direct or indirect — to stipulate, openly or covertly, with regard to the 
 property conveyed, other than its appropriation to the purposes of the convey- 
 ance — would be injurious to the best interests of the community." Id. 499, 500. 
 
 ' I Hill (S. C.) 1 6. 
 14 
 
2IO ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 ' advantage to himself, at the expense of creditors, as the price 
 of such preference. In Tennessee, it was held in Gait v. 
 Dibrell,' that though a debtor may, by a deed of trust, pre- 
 fer one creditor to another, yet he cannot thereby contract 
 for his own benefit, and secure to himself the use and enjoy- 
 ment of the property ; if he does so, the transaction is fraud- 
 ulent and void as to other creditors. Similar views have 
 been expressed by the Supreme Court of Alabama.' Irt 
 Maryland, it was held in American Exchange Bank v. In- 
 loes,3 that although, at common law, a debtor may secure 
 one creditor to the exclusion of others, yet such a provision 
 in a deed of trust is only permitted by a court of equity, and 
 if followed by other provisions equally suspicious, the court 
 will have little difficulty in discovering sufficient fraud tO' 
 vacate the deed.'* 
 
 § 167. Preferences in Special Instances. — It is to be 
 observed, however, that even in some of those States, 
 where preferences in assignments have been either actu- 
 ally prohibited by being declared void by statute, or virtu- 
 ally prohibited by being rendered inoperative, the prohibi- 
 tion has been confined by the courts to cases of general 
 assignments, where the preferences are given by the assign- 
 ment itself, or by some instrument or act so connected 
 with it as to be deemed in law part of the same transaction, 
 and has been held not to extend to distinct ^/ma;/ transfers of 
 property, in payment or security of some particular debt. 
 Thus in New Hampshire, it has been held = that the statute 
 of July 5, 1834, entitled "An act for the equal distribution 
 
 ' 10 Yerg. 146; and see Lockhard v. Brodie, Tenn. Ch. R. 384. 
 
 ' Rankin v. Lodor, 21 Ala. 380. » 7 Md. 380. 
 
 * The learned editor of the first volume of the "American Leading Cases," in. 
 concluding his note to the cases of Thomas v. Jenks and Grover v. Wakeman, 
 remarks that " the view now generally adopted appears to be this — that since the 
 claims of creditors may be meritorious in unequal degrees, and since particular 
 creditors have it in their power to obtain a priority by legal proceedings, the pref- 
 erence of creditors is an allowed object or result of a debtor's assignment, but 
 that it is not permitted to be used as a means of accomplishing ends which are 
 not the legitimate objects of a debtor's efforts." i Am. Lead. Cases, lo2 [75, ed.. 
 1857]. 
 
 " Meredith Manufacturing Co. v. Smith, 8 N. H. 347. 
 
§ 167.] PREFERENCES IN SPECIAL INSTANCES. 211 
 
 of property assigned for the benefit of creditors," does not 
 apply to an assignment made by a debtor of some particular 
 part of his property, merely for the purpose of paying some 
 particular debt or debts, nor to a pledge of all his attachable 
 property to secure a particular debt or debts,' nor to a mort- 
 gage of all his property to secure a portion of his debts.'' So 
 formerly in Massachusetts, the statute of 1836, c. 238, was held 
 not to impair the debtor's right of securing a particular cred- 
 itor, to the prejudice of other creditors, unless when at- 
 tempted to be exercised by or in connection with a convey- 
 ance by the debtor to assignees, in trust for the use of any 
 of his creditors.^ Preferences given in this way, by mort- 
 gage,"* and by the delivery to the creditor of promissory 
 notes, immediately before executing an assignment under 
 this statute,^ were held not to avoid it* 
 
 ' Low V. Wyman, 8 N. H. 536; Danforth v. Denny, 25 N. H. 155. 
 
 ' Barker v. Hall, 13 N. H. 298. 
 
 ^ Henshaw v. Sumner, 23 Pick. 446 ; see Fairbanks v. Haynes, Id. 323. 
 
 * Id. Ibid. 
 
 ' Brown v. Foster, 2 Met. 152. 
 
 ° But in that State, the right to prefer, by the direct transfer of property, has 
 been greatly abridged by statutory enactments (being parts of a system of insolv- 
 ency.) The pi-Qvisions of the act are as follows (Rev. Stat, [i860], pp. 593, 594) : 
 
 § 8g. If any person being insolvent, or in contemplation of insolvency, within 
 six months before the filing of the petition by or against him, with a view to give a 
 preference to any creditor or person having a claim against him, or who is under 
 any liability for him, procures any part of his property to be attached, sequestrated, 
 or seized on execution, or makes any payment, pledge, assignment, transfer or 
 conveyance of any part of his property, either directly or indirectly, absolutely or 
 conditionally, the person receiving such payment, pledge, assignment, transfer or 
 conveyance, or to be benefited thereby, having reasonable cause to believe such 
 person is insolvent, or in contemplation of insolvency, and that such payment, 
 pledge, assignment or conveyance is made in fraud of the laws relating to insolv- 
 ency, the same shall be void, and the assignees may recover the property or the 
 value of it from the person so receiving it or so to be benefited. 
 
 § 91. If any person being insolvent, or in contemplation of insolvency, within 
 six months before the filing of the petition by or against him, makes any sale, 
 assignment, transfer, or other conveyance of any description, of any part of his 
 property to any person who then has reasonable cause to believe such person in- 
 solvent, or in contemplation of insolvency, and that such sale, assignment, trans- 
 fer, or other conveyance is made with a view to prevent the property from coming 
 to his assignee in insolvency, or to prevent the same from being distributed under 
 the laws relating to 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 pro- 
 visions, the sale, assignment, transfer or conveyance shall be void, and the as- 
 signee may recover the property or the value thereof as assets of the insolvency ; 
 and if such sale, assignment, transfer or conveyance is not made in the usual and 
 ordinary course of business of the debtor, that fact shall be prima facie evidence 
 of such cause of belief. 
 
212 ASSIGNMENTS WITH PREFERENCES. [cHAP. X. 
 
 § 1 68. So, in Connecticut, where a debtor in failing cir- 
 cumstances and with a view to his insolvency, executed a 
 mortgage of his estate to certain of his creditors, and after- 
 wards, on the same day, made a general assignment of his 
 property, including the mortgaged premises, in trust for all 
 his creditors, under the statute of 1828, c. 3, it was held that 
 the mortgage aiid assignment were not to be deemed parts 
 of the same transaction, and that the preference given by 
 the former was not within the prohibition of the statute ; the 
 court holding that the object of the statute was merely to 
 provide a responsible trustee to receive property when as- 
 signed for the benefit of creditors, and to cause it to be dis- 
 tributed proportionally among them ; " but not at all to in- 
 terfere with the long established principle of a debtor giving 
 a preference voluntarily."' So, in New Jersey, it has been 
 held,= that the act "to secure creditors an equal and just 
 division of the estate of debtors who convey to assignees for 
 the benefit of creditors," does not extend to a solitary trans- 
 fer of an individual item of property to a creditor, in pay- 
 ment of a debt ; and the operation of the act must be con- 
 fined, if not to cases where a trust is created, at least to cases 
 where there is something like universality in the assignment. 
 Mortgages and judgments, also, are expressly excepted, but 
 judgments confessed for the purpose of preferring creditors, 
 are within the act.^ In Pennsylvania, preferences by direct 
 transfers of property to the creditors preferred, are not with- 
 in the act of April 17, 1843, concerning preferences in as- 
 signments.'' Nor are judgments confessed to secure cred- 
 
 ' Bates V. Coe, lo Conn. 280 ; Daggett, C. J., Id. 295. But see the act of 
 1853, Gen. Stat. (rev. of 1875), p. 378. 
 
 " Tillou V. Britton, 4 Halst. 120 ; Garr v. Hill, i Stock. 210, 215 ; Moses v. 
 Thomas, 26 N. J. L. 124; Van Waggoner v. Moses, Id. 570; Garretson v. 
 Brown, 26 Id. 425. 
 
 ' See Rev. Stat. p. 9, § i. 
 
 * Worman v. Wolfersberger's Ex'rs, 19 Penn. St. (7 Har.) 59 ; Uhler v. Maul- 
 fair, 23 Id. (II Har.) 481 ; Hopkins v. Beebe, 26 Id. (2 Gas.) 85 ; Hutchinson v. 
 McClure, 20 Penn. St. 63 ; Morgan's Appeal, Id. 1 52 ; Griffin v. Rogers, 38 Id. 
 382 ; Mellon's Appeal, i Grant, 212 ; York Co. Bank v. Carter, 38 Penn. St. 446. 
 But it applies to partial assignments for the benefit of particular creditors. Miners' 
 Bank Appeal, 57 Penn. St. 193. 
 
§ 1 68.] PREFERENCES IN SPECIAL INSTANCES. 2 1 5 
 
 itors such preferences as are avoided by that act, although 
 an assignment for creditors may be intended, and be shortly 
 afterwards executed.' In Ohio, an absolute conveyance to 
 a creditor, in payment of his debt, does not come within 
 the provisions of the act of February 23, 1835, relating to 
 fraudulent assignments,'' nor was it affected by the later 
 statutes of 1838, 1853 and 1859.3 And the rule is the 
 same in the case of a mortgage to a creditor, unless where 
 it is for the benefit of some other creditor besides the 
 mortgagee.* And in Georgia, an absolute conveyance of 
 property by a debtor, who is in fact insolvent, to a cred- 
 itor, in payment of his debt, without any reservation for 
 the benefit of the debtor, is not fraudulent as to the other 
 creditors, under the statute of 18 18, "to prevent assign- 
 ments," &C.5 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 Iowa, it has been repeatedly held that the statute 
 prohibiting preferences does not limit or affect the right of 
 an insolvent debtor to sell or mortgage, bona fide, a part or 
 
 ' See anU, p. 198, note I. 
 
 ' Wilcox V. Kellogg, 1 1 Ohio, 394 ; Wood, J., Id. 399. 
 
 ' Hulls V. Jeffrey, 8 Ohio, 390; Lane, J , Id. 391. See Doremus v. O'Hara, i 
 Ohio, St. 45. 
 
 * Bloom V. Nagle, 4 Ohio St. 45 ; Harkrader v. Leiby, Id. 602 ; Atkinson v. 
 Tomlinson, i Ohio St. 237; Justice v. Uhl, 10 Ohio St. 170; Dickson v. Rawson, 
 5 Id. 218; see Mitchell v. Gazzam, 12 Ohio, 315, overruled in Atkinson v. Tomlin- 
 son, supra. 
 
 ' Eastman V. McAlpin, i Kelly, 157; Cameron v. Scudder, Id. 204; McWhor- 
 ter V. Wright, 5 Ga. 555 ; Starnes, J., in Miller v. Conklin, 17 Ga. (Cobb), 430, 433; 
 Brown v. Lee, 7 Ga. 267; Ezekiel v. Dixon, 3 Kelly (Ga.) 146. See Code of Ga. 
 fed. 1873), § 1953, and see the proviso in the statute. 
 
 " Davis V. Anderson, I Kelly, 176; Lee v. Brown, 7 Ga. 276; Lavender v. 
 Thomas, 18 Ga. 668, 675. 
 
 ' Rev. Stat, of La. (ed. 1870), p. 359, §§ 28, 1808. 
 
.214 ASSIGNMENTS WITH PREFERENCES. [cHAP. X. 
 
 all of his property to one or more of his creditors in pay- 
 ment or security of a particular debt/ 
 
 § 169. Preferences in Partial Assignments.r— it has been 
 thought that an assignnment giving preferences to certain 
 creditors or classes of creditors is not valid unless it contains 
 a transfer of all the debtor's property ; and expressions may 
 be found in the opinions of the court in several important 
 cases, which go the length of establishing such a doctrine. 
 Thus, in Goodrich v. Downs,'" in the Supreme Court of this 
 State, Bronson, J., in dehvering the opinion of the court, 
 observes : " Such transfers have only been allowed to stand 
 where the debtor makes an unconditional surrender of his 
 effects, for the benefit of those to whom they rightfully be- 
 long." ^ "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. Post,= 
 Barculo, J., more explicitly says : " As we understand the 
 settled law in this State, derived from an examination of all 
 the decisions, assignments preferring certain creditors are 
 only tolerated when they are absolute and unconditional ; 
 when they devote the whole of the assignor s property to 
 the immediate and unqualified payment of his debts," &c.* 
 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 payment of the debts." Similar expres- 
 sions may be found in decisions made in the courts of other 
 States.' But in the leading case of Grover v. Wake- 
 
 ' Lambson v. Arnold, 19 Iowa, 479 ; Cole v. Dealman, 13 Id. 551 ; Johnson v. 
 McGrew, 1 1 Id. 1 5 1 ; Fromme v. Jones, 1 3 Id. 457 ; Whitaker v. Lindley, 14 Id. 598 ; 
 Buell V. Buckingham, 16 Id. 284; Davis v. Gibbon, 24 Id. 257 ; Farrall v. How- 
 ard, 26 Id. 381 ; Graves v. Alden, 13 Id. 573. 
 
 ' 6 Hill, 438. ' Id. 439. ' 2 N. Y. 365, 371. 
 
 ' 12 Barb. 168. » Id. 175. 
 
 ' 18 Barb. 272, 275. See also, the observations of Comstock, J., in Curtis v- 
 Leavitt, 15 N. Y. 132. 
 
 " Sangston v. Gaither, 3 Md. 40 ; Phelan, J., in Rankin v. Lodor, 2i Ala. 380, 
 389; Goldthwaite, J., in Shackelford v. P. & M. Bank of Mobile, 22 Id. 238, 245. 
 
§ I70-] RESTRICTIONS ON THE RIGHT TO PREFER. 215 
 
 man,' 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, 
 either partial or general, are sustained by considerations of 
 true wisdom and policy. * * * They have become thor- 
 oughly incorporated into our system ; and all that it is now 
 competent for our courts to do, is to see that they fairly ap- 
 propriate all the insolvent's property, or such portion of. it 
 as he undertakes to assign, to the payment of his just 
 debts." ' The true doctrine is here stated with great clear- 
 ness and discrimination. It has been further laid down, in 
 a work of authority,^ as 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 as- 
 signment giving preferences among creditors, and not em- 
 bracing all the debtor's property, is not void for those rea- 
 sons. 
 
 § 170. W. Restrictions on the Right to Prefer. — The 
 j-ight to prefer one or more creditors to others, in assign- 
 ments by debtors, is sometimes either restrained or entirely 
 
 " II Wend. 187. Md. 195. 
 
 3 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. Uennison, 17 Vt. 310; and see Cole v. Dealman, 13 
 Iowa, 551, and cases cited ante,^. 201. Partial assignments with preferences which 
 do not exact releases are valid in Maryland. Price v. Ford, 18 Md. 489. But in 
 the Michigan case of Smith v. Mitchell (12 Mich. 180), it was said that the assign- 
 ment 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; 
 McClelland v. Remsen, 36 Barb. 622; affi'd 33 How. Pr. 618. 
 ■* 24 Barb. 105, 122-127. 
 
2l6 ASSIGNMENTS WITH PREFERENCES. [CHAP. X.. 
 
 taken away by statute, as has been shown under the last 
 head. Where a bankrupt law exists, the right is also con- 
 sidered as taken away, its exercise having always been re- 
 garded 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 depriving an insolvent 
 debtor, who attempts to exercise the right, of the benefit of a 
 discharge under them. This is the case in New York, 
 where it is provided that if an insolvent debtor, at any time 
 within two years before presenting his petition for a dis- 
 charge, in contemplation of his becoming insolvent, or of his 
 petitioning for a discharge under the statute, or knowing of 
 his insolvency, have made any assignment, sale or transfer, 
 either absolute or conditional, of any part of his estate, real 
 or personal, or of any interest therein, or has confessed any 
 judgment or given any security with a view to give a pref- 
 erence for an antecedent debt to any creditor, he shall not 
 be entitled to a discharge under the statute.' Similar pro- 
 visions have been enacted in Massachusetts ^ and Delaware.* 
 By the insolvent laws of Maryland, any confession of judg- 
 ment, or any conveyance or assignment made by any insolv- 
 ent for the purpose of defrauding his creditors, or giving an 
 undue preference, is declared void, and the property so 
 assigned vests in the insolvent trustee. = But these pro- 
 visions do not avoid bona fide assignments by debtors merely 
 because of preferences given to some creditors over others.* 
 So in South Carolina, assignments by debtors giving un- 
 due preferences to creditors have the effect of debarring 
 such debtors from the benefit of the insolvent or " prison 
 bounds " act.^ But in North Carolina, a deed of trust to 
 
 ' 2 Kent's Com. [532] 688; see Ex parte Breneman, Crabbe, 456; Caryl v. 
 Russell, 13 N. Y. 194. 
 
 " 3 Rev. Stat. (6th ed.), p. 16, § 29; see Egberts v. Wood, 3 Paige, 517, 521. 
 
 ' Rev. Stat. (ed. i860), p. 586. 
 
 ' Rev. Code of Del. (ed. 1874), p. 785. 
 
 ' Md. Code (i860), pp. 345, 346, art. 48, §§ 7, 8. 
 
 ° McColgan v. Hopkins, 17 Md. 395. 
 
 ' McKenzie v. Garrison, 10 Rich. L. 234 ; and see Brandon v. Rogers, Id. 9> 
 
§ I7I-] LIMITED PARTNERSHIPS. 21/ 
 
 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 insolvent act, if he 
 sets forth the deed in his schedule, and surrenders all his re- 
 sulting interests.' 
 
 In New York, the power to make an assignment, with 
 or without preferences, is entirely denied to a debtor against 
 whom proceedings have been instituted by a creditor under 
 the " act to abolish imprisonment' for debt, and to punish 
 fraudulent debtors." " 
 
 § 171. Limited Partnerships. — The right of giving pref- 
 erences to creditors is also, in many of the States, denied to 
 limited partnerships, even where preferences by other part- 
 nerships are allowed. Thus, in New York, every sale, as- 
 signment or transfer of any of the property or effects of a 
 limited partnership, made by such partnership when insolv- 
 ent or in contemplation 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 partner 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, declared void as against the 
 creditors of such partnership. ^ Similar preferences given by 
 any general or special partner are also declared void.* Sim- 
 ilar provisions ^ have been enacted in Rhode Island,* New 
 Jersey,' Pennsylvania,^ Ohio,' Indiana,'" Virginia," South 
 
 ' Adams v. Alexander, i Ired. L. 501. 
 
 " Spear v. Wardell, 1 N. Y. 144; Wood v. Bolard, 8 Paige, 556, 557. 
 
 ' 2 Rev. Stat. (6th ed.) pp. 11, 56. 
 
 ' Id. ibid. See Mills v. Argall, 6 Paige, 576 ; see ante, p. 115. 
 
 ' In Massachusetts, the provisions of the insolvent act are extended to limited 
 partnerships. Rev. Stat. (ed. i860), p. 597, § no. 
 
 • Gen. Stat. (1872), p. 260, § 10. 
 
 ' Nix. Dig. (4th ed.) p. 683. 
 
 « Purd. Dig. (ed. 1872), pp. 937, 938, §§ 22, 23. 
 
 » Laws of 1846, p. 29 ; Rev. Stat. (S. & C.) p. 905, §§ 17, 18. 
 '° Rev. Stat. (G. & H.) p. 462. 
 " Code of Virginia (ed. 1873), p. 991, § 10. 
 
2l8 ASSIGNMENTS WITH PREFERENCES. [cHAP. X. 
 
 Carolina/ Alabama," Florida,^ Arkansas/ California.^ Il- 
 linois/ Michigan/ Wisconsin/ Missouri/ and other States/" 
 
 § 172. Restrictions on the Right of Corporations to 
 J'refer. — The right of a corporation to prefer its creditors in 
 or by an assignment of its property has in some of the States 
 been subjected to material restrictions by statute." Thus, in 
 New York, where an individual debtor's right to give pref- 
 erences is unquestioned, it has been provided by statute on 
 the subject of moneyed corporations — after declaring that no 
 conveyance, assignment or transfer, not authorized by a pre- 
 vious 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 suflFered, lien created, or security 
 given by any such corporation when insolvent or in contem- 
 plation of insolvency, with the intent of giving a preference 
 to any particular creditor over other creditors of the com- 
 pany, shall be valid in law ; and every person receiving, by 
 means of any such conveyance, assignment, transfer, lien, 
 -security or payment, any of the effects of the corporation, 
 shall be bound to account therefor to its creditors or stock- 
 holders, or their trustees, as 'the case shall require." '^ 
 
 § 1 73. 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 
 
 ' 6 Stat. 578; Acts of 1846, p. 365; Rev. Stat. (1873), p. 326. 
 
 ' Rev. Code of Alabama (1867), § 1819. 
 
 ' Thomp. Dig. (ed. 1847), p. 233, § 10. 
 
 ' Rev. Stat. (ed. 1874), §§ 4368, 4369. > Civil Code of Cal. (Hitt.) 7496. 
 
 " Rev. Stat. (ed. 1874), p. 680, § 22. ' 16 Comp. L. (ed. 1871), p. 523. 
 
 = Stat, of Wis. (Taylor, 1871), p. 849. 
 
 ° 2 Stats, of Mo. (Wagner, 1872), p. 978, § 10. 
 
 '° See Troub. Law of Limited Partnership, c. 13, p. 388. 
 
 " See ante, p. 86. " 2 Rev. Stat. (6th ed.) p. 298, § 8. 
 
 " 2 Rev. Stat. (6th ed.) p. 298, § 9. 
 
 " See Bowery Bank Case, 5 Abb. 41 5 ; 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, 
 35 N. Y. 9; Gillet V. Phillips, 13 N. Y. 114; Johnson v. Bush, 3 Barb. Ch. 207. 
 
§ 1 73-] RESTRICTIONS ON CORPORATIONS. 219 
 
 Gillet V. Phillips,' in the Court of Appeals, it was said that 
 " when a moneyed corporation is insolvent, in such a sense 
 that all its debts cannot probably be discharged from its 
 assets, the payment of any one creditor in full is a pref- 
 erence within the meaning of the statute." ° But it was in 
 the later case of Curtis v. Leavitt,^ in the same court, that 
 the language of the same section received the fullest consid- 
 eration, and the meaning of the terms " insolvency," " con- 
 templation of insolvency," and "intent of giving a pref- 
 erence," 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 contem- 
 plation of insolvency is where the debtor, having full knowl- 
 edge of his embarrassed circumstances, has no hope or 
 expectation of relief, and anticipates an entire failure in 
 business and absolute insolvency ; or when his circum- 
 stances are such that any prudent man, taking a reasonable 
 view of his situation and of the surrounding circumstances, 
 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 
 conveyance by a moneyed corporation is not within the said 
 ninth section, unless made with intent to prefer a particular 
 creditor over others. The intent to prefer is a fundamental 
 fact, which must be alleged and proved."' "From this it 
 
 ' 13 N. Y. (3 Kern.) 114. _ 
 
 ' Gardiner, C. J., Id. 119, cited by Brown and Paige, JJ., in the case infra. 
 
 » IS N. Y. (I Smith), 9. 
 
 * Brown, J., Id. 140. The learned judge cites 2 Bell's Com. 162, and Gillet. v. 
 Phillips, cited supra. 
 
 '' Paige, J. , Id. 200. The learned judge goes into a critical examination of the 
 meaning of the term, and g^ves various definitions. 
 
 ° Paige, J., Id. 203, citing Gibson v. Muskett, 3 M. & G. 158, 168. 
 
 ' 15 N. Y. 10. 
 
220 ASSIGNMENTS WITH PREFERENCES, [CHAP. X. 
 
 must follow," said Comstock, J., "that so long as the debtor 
 corporation, notwithstanding the pressure of great embar- 
 rassments, entertains an honest expectation, in the exercise 
 of a reasonable intelligence, 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 contemplation of insolvency 
 may be proved either by direct evidence, or inferred as the 
 necessary consequence of other facts clearly proved. If in- 
 solvency is relied upon to defeat the securities, knowledge 
 of the insolvency by the 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 insolvent, or with 
 a contemplation of its insolvency." ^ 
 
 It has been decided by the Supreme Court of this State, 
 that insurance companies are within the provision of the 
 statute prohibiting preferences. ^ 
 
 § 174. In New Jersey, it is provided by statute, that 
 whenever any incorporated company shall become insolvent, 
 or shall suspend its ordinary business for want of funds to 
 carry it on, it shall not be lawful for the directors or man- 
 agers of the company, or for any officer or agent, to sell, con- 
 vey, assign or transfer any of the estate, effects, choses in 
 action, goods, chattels, rights or credits, lands or tenements 
 of the said company ; nor shall it be lawful to make any 
 
 ' 15 N. Y 109. See the observations of Brown, J., Id. 139. 
 
 " 15 N. Y. 198. 
 
 ' Hill V. Reed, 16 Barb. 280; Hurlbut v. Carter, 21 Id. 221. 
 
§ 1 74- J RESTRICTIONS ON CORPORATIONS. 221 
 
 such sale, conveyance, assignment or transfer, in contempla- 
 tion of the insolvency of any such company ; and every such 
 sale, conveyance, assignment, or transfer shall be utterly null 
 and void as against creditors ; provided always, that in case 
 of a bona fide purchase made for a valuable consideration, 
 before such company shall have actually suspended its ordi- 
 nary business, by any person having no knowledge, informa- 
 tion, or notice of the insolvency of such company, or of the 
 sale being made in contemplation of its insolvency, such 
 purchase shall not be invalid or impeached.' In the case of 
 Holcomb's Ex'rs v. The President and Managers of the 
 New Hope Delaware Bridge Company,' it was said by 
 Chancellor Williamson, that the object of this section was to 
 prevent companies actually insolvent, or whose embarrass- 
 ments were such as must inevitably lead to insolvency, from 
 doing what it is lawful for an individual debtor to do — 
 make a preference in favor of any one or more of its cred- 
 itors. 
 
 In Ohio, it is provided by the banking act of March 21, 
 1851,5 that "all transfers of notes, bonds, bills of exchange, 
 and other evidences of debt, owing to any banking com- 
 pany, or of deposits to its credit ; all assignments or mort- 
 gages, or other securities on real estate, or of judgments or 
 decrees in its favor ; all deposits of money, bullion, or other 
 valuable thing for its use, or for the use of any of its stock- 
 holders or creditors ; all payments of money to either, made 
 after the commission of an act of insolvency, or in contem- 
 plation thereof, with a view to prevent the application of its 
 assets in the manner prescribed by the act, or with a view to 
 the preference of one creditor to another, except in pay- 
 ment of its circulating notes, shall be held utterly null and 
 void. 
 
 ' Nixon's Dig. (4th ed.) p. 405, § 2. 
 
 " I Stock. 457, 459. But the effect of the provision has since been declared to 
 be, to prohibit assignments by corporations, whether conferring preferences or not. 
 Am. Ice Machine Co. v. Paterson St. Fire Eng. & Mach. Co. 22 N. J. Eq. 72. 
 
 " Rev. Stat, of Ohio (S. & C.) p. 172, § 28. See Rossman v. McFariand, 9 
 Ohio St. 369. 
 
222 ASSIGNMENTS WITH PREFERENCES. [cHAP. X. 
 
 In Louisiana, every assignment, transfer, conveyance, or 
 sale of property or assets, made by a banking company after 
 the protest of any of its notes, is declared by statute null 
 and void.' 
 
 In Connecticut, corporations are expressly included in 
 the provisions of the act of 1853, "for the relief of insolvent 
 debtors, and for the more equabdistribution of their effects 
 among their creditors." "^ 
 
 § 175. III. Subjects of Preferences in Assignments. — 
 In those States vs^here preferences are not prohibited by 
 statute, it is well settled that not only actual creditors, but 
 sureties and indorsers may be preferred by debtors, in mak- 
 ing 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 of property to 
 him, in preference to other creditors."* Sureties liable on 
 existing, or even future responsibilities, 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, although no payments have 
 been made by them at the time of its execution.* 
 
 § 1 76. A preference also may not only be personal, but 
 may be extended so as to cover particular demands, whoever 
 may be the holder. Thus, where, among the preferred de- 
 mands contained in a schedule, annexed to an indenture of 
 assignment, was " S. & T.'s draft (accepted by the debtors), 
 
 ' Rev. Stat. (ed. 1870), p. 63, § 295. = Gen. Stat. (rev. of 1875), p. 378. 
 
 ° Hendricks v. Robinson, 2 Johns. Ch. 283 ; affirmed on error, 17 Johns. 438; 
 Cunningham v. Freeborn, 11 M^end. 240; Lansing v. Woodworth, i Sandf. Ch. 
 43 ; Duval v. Raisin, 7 Mo. 449. 
 
 *■ Hendricks v. Robinson, 2 Johns. Ch. 283 ; see Barnum v. Hempstead, 7 
 Paige, 568 ; ante, pp. 141, 142. 
 
 ' Cunningham v. Freeborn, 1 1 Wend. 240. 
 ' Duvall V. Raisin, 7 Mo. 449. 
 
§§ ^n^ 178.] MODES OF GIVING PREFERENCES. 223 
 
 for which they hold a mortgage of B. W." &c., it was held 
 that the trust was not personal to S. & 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 
 preferred debts, such as have been previously secured by 
 either judgment or mortgage ; and a provision for their pay- 
 ment 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.3 
 
 § 177. IV. Modes of Giving Preferences in Assign- 
 ments. — Preferences 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 pro- 
 ceeds of the assigned property, and the balance to be ap- 
 plied for the benefit of all the other creditors without dis- 
 tinction ; or by formally dividing the creditors into num- 
 bered or designated classes, arranged in a certain order, and 
 directing each class to be paid, to the extent of the proceeds 
 applicable for that purpose, before the one immediately fol- 
 lowing. 
 
 § 1 78. Again, preferences may be given either absolutely, 
 as by directing certain named creditors to be first paid, at 
 all events ; or upon condition, as by preferring such creditors 
 as shall comply with certain requisitions named in the as- 
 signment. In regard to the latter species of preference, 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 
 
 ' 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. 
 
 " Strong V. Skinner, 4 Barb. 546. * Besley v. Lawrence, 11 Paige, 581. 
 
224 ASSIGNMENTS WITH PREFERENCES. [cHAP. X. 
 
 the effects for himself, or anything that would carry his 
 power beyond mere preference ; ' and that a debtor may de- 
 prive the creditor who refuses to accede to his terms, of his 
 preference, and postpone him to all other creditors,^ A 
 ■condition of preference frequently inserted in assignments, 
 is that which requires the creditors to exhibit their demands 
 to the assignee within a specified period ; and a condition 
 of this kind has been sustained in New York.^ Another 
 condition of constant occurrence has been that which re- 
 quires the creditors to release, or agree to release, their 
 claims against the debtor, by becoming parties to the assign- 
 ment itself, where it contains a release, or by the execution 
 of a separate instrument to that effect. Assignments con- 
 taining 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 illegal, it is now usually viewed with disfavor.^ A pro- 
 
 ' Gibson, C. J., in Thomas v. Jenks, 5 Rawle, 221 ; and see Layson v. Rowan, 
 7 Rob. (La.) I ; but see Jackson v. Cornell, i Sandf. Ch. 348, 354. 
 
 " 2 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 the condition that H. accounted for certain collaterals. If he did 
 not account 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. 135 ; S. C. 38 N. Y. 
 9), preferences were given to such of the creditors as had already executed a con- 
 ditional release on receiving 50 per cent, of their claims. If the preference had 
 been conditioned on the release, the assignment would have been invalid under 
 the decisions in Grover v. Wakeman (11 Wend. 201) ; Hyslop v. Clarke (14 Johns. 
 458). See also, to the same effect. Low v. Graydon, 50 Barb. 414 ; Powers v. 
 Graydon, 10 Bosw. (N. Y.) 630 ; see Palmer v. Giles, 5 Jones Eq. (N. C.) 75. In 
 the case of Grant v. Chapman (38 N. Y. ags), a provision preferring the amount 
 found due in certain attachment proceedings, provided they were sustained and 
 were a lien, was not regarded as rendering the assignment invalid, as being con- 
 ditional or giving an illegal preference. 
 
 = Ward V. Tingley, 4 Sandf. Ch. 476. 
 
 ' 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. 
 
 * In 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 ; 
 
§ 1 79-] MODES OF GIVING PREFERENCES. 225 
 
 vision in an assignment 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, has 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. 
 
 § 1 79. It is a further rule on the subject of preferences, 
 that the debtor must declare such preferences in the assign- 
 ment at the time of executing it, and he cannot reserve to 
 himself or transfer to his assignee the right to declare future 
 preferences, or to change the order of the preferences already 
 given, or to give preferences at the assignee's discretion.'' 
 Assignments containing provisions to this effect have been 
 repeatedly held fraudulent and void.^ Thus, where an as- 
 signment contained a provision giving to the assignee a dis- 
 cretionary 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 
 assignor, as being calculated to injure, delay and hinder 
 creditors in the collection of their 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 in- 
 
 Purdon's Dig. p. 22, pi. 3. The subject of stipulations for a release, as a general 
 condition in assignments, will be more fully considered in Chapter XI. 
 
 ' Marsh v. Bennett, S McLean, 117, 123. 
 
 ° Sutherland, J., in Grover v. Wakeman, 11 Wend. 187; Boardman v. Halli- 
 day, 10 Paige, 223, 228; Sandford, A. V. C, in Van Nest v. Yoe, i Sandf Ch. 4; 
 2 Kent's Com. [532] 691, note ; Van Vorst, J., in Kercheis v. Schloss, 49 How. 288. 
 
 ^ Barnum v. Hempstead, 7 Paige, 568 ; Boardman v. Halliday, 10 Id. 223 ; 
 Sheldon v. Dodge, 4 Den. 217; Strong v. Skinner, 4 Barb. S. C. 546 ; Averill v. 
 Loucks, 6 Id. 470; Mitchell v. Stiles, 13 Penn. St. (i Harr.), 306; Gazzam v. 
 Poyntz, 4 Ala. 374. 
 
 * Barnum v. Hempstead, 7 Paige, 568, 571 ; see Morse v. Slason, 13 Vt. 296. 
 15 
 
226 ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 sufificient to pay all such debts, then to apply the same in 
 payment of such parts 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 discretion, and that the assignment was 
 fraudulent and void as to creditors who did not assent to 
 the same/ So where an assignment providing for the pay- 
 ment of the debts of the assignor, according 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 as- 
 sumed 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 com- 
 pound 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 a 
 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 subsequent time — it was held that the as- 
 signment was fraudulent and void.* But where an assign- 
 ment providing for the payment of creditors in certain 
 classes, directed the assignee to pay, as a third class, such 
 
 • Boardman v. Halliday, lo Paige, 223. ^ Sheldon v. Dodge, 4 Den. 217. 
 
 ' Wakeman v. Grover, 4 Paige, 23, 41. 
 
 ' Averill V. Loucks, 6 Barb. S. C. 470; Kercheis v. Schloss, 49 How. Pr. 284. 
 
§§ l8o, 1 8 1. "J ILLEGAL PREFERENCES. 22/ 
 
 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 preferences, within 
 the meaning of the rule established by the preceding cases.' 
 
 § I So. 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 dispose of the trust property that no surety in the said 
 debts should suffer or be injured on account thereof, it was 
 held that the debts for which sureties were bound were, pre- 
 ferred debts, and to be first satisfied.'' 
 
 § I Si. Illegal and Fraudulent Preferences. — Where a 
 preference is privately given to one or more creditors over 
 others, contrary to the principle and professed object of the 
 deed of assignment itself, it is clearly fraudulent and void. 
 This happens more frequently in cases of deeds of composi- 
 tion 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 instru- 
 ments, the rule has been established in England by numer- 
 ous cases, that any secret or separate agreement between 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 purports to secure to all,* or of additional security,, 
 though for no great sum,' — is a fraud upon the other cred- 
 
 ' Ward V. Tingley, 4 Sandf. Ch. 476, 479. 
 '' Miller v. Holcombe's Ex'r, 9 Gratt. 665. 
 " Best, C. J., in Britton v. Hughes, 5 Bing. 465. 
 ' Mawson v. Stock, 6 Ves. Jr. 300. 
 
 ' Spurrett v. Spiller, i Atk. 105 ; Middleton v. Lord Onslow, i P. Wms. 768 ; 
 Jackman v. Mitchell, 13 Ves. Jr. 561 ; Jackson v. Lomas, 4 Term R. 166. 
 ° Chesterfield v. Janssen, 2 Ves. 125 ; Lord Hardwicke, Id. 156. 
 ' Ex parte Sadler & Jackson, 15 Ves. Jr. 52; Leicester v. Rose, 4 East, 371. 
 
228 ASSIGNMENTS WITH PREFERENCES. [CHAP. X. 
 
 itors/'and is void not only in equity but at law.^" And tiie 
 rule is the same whether the agreement 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 creditor by 
 holding out a threat of refusal to sign.^ And in a case 
 where a creditor refused to accede to the proposed composi- 
 tion until the debtor's brother agreed to supply him with 
 coal equal in value to the residue of the debt, which agree- 
 ment was unknown to the other creditors and was fully per- 
 formed 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.'° 
 
 Any unlawful consideration moving from the preferred 
 creditor to induce the preference may avoid the deed which 
 gives it." 
 
 ' It is said to be a fraud both upon the debtor and the other creditors. Ex parte 
 Sadler & Jackson, ubi supra ; and see Jackman v. Mitchell, 13 Ves. Jr. 581. 
 
 = Jackman v. Mitchell, ubi supra ; Cockshott v. Bennett, 2 Term R. 763. 
 
 ' Chesterfield v. Janssen, 2 Ves. 125. 
 
 ' BuUer, J., in Jackson v. Lomas, 4 Term R. 166. 
 
 ^ Spurrett v. Spiller, i Atk. 105 ; Cockshott v. Bennett, 2 Term R. 763 ; O'Shea 
 V. The Collier White Lead & Oil Co. 42 Mo. 397. 
 
 " Knight V. Hunt, 5 Bing. 432. 
 
 ' Russell V. Rogers, 10 Wend. 473, 499 ; Breck v. Cole. 4 Sandf. S. C. 79. 
 The latter case contains a good summary of the doctrines on this point. 
 
 ° Cockshott V. Bennett, 2 Term R. 763 ; Jackson v. Lomas, 4 Id. 166. 
 
 » Smith V. Stone, 4 Gill & J. 310; Case v. Gerrish, 15 Pick. 49; Clarke v. 
 White, 12 Pet. 178 ; O'Shea v. The Collier White Lead & Oil Co. 42 Mo. 397. 
 
 " The rule against secret preferences has also been applied to cases of the direct 
 transfer of property to the creditor preferred. Ednngton v. Rogers, 15 Tex. 188 ; 
 Hancock v. Horan, Id. 507. 
 
 " Marshall, C. J., in Marbury v. Brooks, 7 Wheat. 556. 
 
CHAPTER XL 
 
 ASSIGNMENTS WITH SPECIAL PROVISIONS. 
 
 § 182. 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 property is unconditionally 
 and unreservedly transferred to the assignee, 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 a common 
 practice, however, to introduce into these instruments special 
 clauses of various kinds, tending to limit or rriodify 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 ; and special directions to the assignee, as to 
 the manner of executing the trust. 
 
 Some of these clauses are entirely within the admitted 
 scope of the power which the law allows an assignor, of 
 directing the disposition 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 doubt- 
 ful utility, or decidedly objectionable, as tending to give rise 
 to questions affecting the validity or operation of the instru- 
 ment ; and if not to be avoided, are at least to be inserted 
 with care and caution. Others, again, have almost uniform- 
 ly the effect of invalidating the assignment, and defeating 
 its object. 
 
 § 183. Special Provisions should be Avoided. — As a gen- 
 eral rule, it is not advisable to multiply special clauses of 
 
230 SPECIAL PROVISIONS. [CHAP. XI. 
 
 any description. If unusual, they always excite suspicion.' 
 And even those of an ordinary character are to be inserted 
 vsrith great care, particularly in assignments which give pref- 
 erences. " Every provision in a voluntary assignment," ob- 
 served 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 uniformly act 
 upon this principle. Even clauses directing an assignee to 
 do what is prima facie, his duty to do without them, some- 
 times give rise to suspicions.^ And so many instances 
 have occurred of 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 argument of the 
 case of Litchfield v. White,* in the Superior Court of the 
 city of New York, and the remarks of Mr. Justice Sandford 
 
 ' Clauses which are unusual, ought, on that account alone, to excite suspicion. 
 Gaston, J., in Cannon v. Peebles, 2 Ired. L. 449, 455. 
 
 " 10 Watts, 237, 244. 
 
 ' 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 a clause (framed perhaps with reference to 
 the previous decision), expressly prokiditing- the assignee from selling on credit. 
 The assignment was assailed on this very ground, as furnishing evidence of fraud ; 
 ^nd the court so far regarded the objection as to hold that such a provision was 
 not, ^er 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 assignee, to do what is 
 J^rima facie his duty, is, fer se, evidence of fraud. It may be that such a provis- 
 ion is an unwise one, and one that ought not to be countenanced ; 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 consideration 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 a clause does not invalidate the assign- 
 ment. Grant v. Chapman, 38 N. Y. 293 ; Carpenter v. Underwood, 9 N. Y. 520; 
 see Work v. Elhs, 50 Barb. 512. 
 
 ' 3 Sandf. S. C. 545. 
 
§ 183.J SPECIAL PROVISIONS SHOULD BE AVOIDED. 23! 
 
 in reply so well explain 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 indirectly for their own benefit, to the detriment of their 
 creditors, or vesting in assignees the power of giving pref- 
 erences, or excluding creditors who will not release the 
 debtor, or exempting the assignee 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 
 presented 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. 
 
 ' Id. 554, 555. In the case of Ogden v. Peters (21 N. Y. 23), Mr. Justice Corn- 
 stock 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 re- 
 strictions contained in the writing which creates the trust, and if these are incon- 
 sistent 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. Waterman, 17 
 N. Y. 9. 
 
232 SPECIAL PROVISIONS. [CHAP. XI, 
 
 I. Stipulations for the Release of the Debtor as a Condition 
 of the Assignment. 
 
 § 184. Assignments are sometimes drawn with a stipu- 
 lation for a release of the debtor as the condition of receiving 
 the benefit of the deed ; or, in other words, making it a con- 
 dition 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 condi- 
 tion of receiving aity benefit under the assignment, non- 
 releasing creditors being wholly excluded ; in others, as a 
 condition of preference over other creditors provided for ; 
 and in others, as a condition of sharing in the surplus re- 
 maining after payment of creditors who are preferred abso- 
 lutely ; and it is sometimes united with a provision expressly 
 reserving the shares of non-releasing creditors to the assignor 
 himself' 
 
 In England, a stipulation in an assignment for the re- 
 lease 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 proviso 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 aflFect the validity of the assignment." = 
 It was, in fact, held void on another ground. 
 
 In the United States, there is no uniform rule on the 
 subject. In some of the States, assignments with stipula- 
 
 ' On the questions discussed in this subdivision, see Bump on Fraudulent Con- 
 veyances, Chap. XV. 
 
 ' The King v. Watson, 3 Price (Exch.) 6. 
 
 ° See the case of Janes v. Whitbread, 20 L. J. C. P. (N. S.) 217 ; s. C. 5 Eng.. 
 L. & Eq. 431 ; Forbes v. Limond, 4 DeG; M. & G. 298. " 
 
 ' 4 Term R. 166. ° 2 Kent's Com. [534] 693. 
 
§ 185.] RELEASES — PENNSYLVANIA. 235 
 
 tions 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 
 postpone non-releasing creditors to others. In other States, 
 they have been pronounced void under all circumstances. 
 
 § 185. 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 High Court of Errors and Appeals, 
 the trusts 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 proportion 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 assignment 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.^ In Pearpoint v. Gra- 
 ham, ■• where the same question arose, it was held by Mr. 
 Justice Washington, in affirmance of the same doctrine, that 
 an assignment in trust for the benefit of such creditors as 
 should release their debts was founded upon a sufficient con- 
 
 ' 4 Dall. 76, sometimes cited as "Burd v. Fitzsimmons." This case is gener- 
 ally considered to have involved the point of a release of the debtor. Walworth, 
 C, in Wakeman v. Grover, 4 Paige, 23, 39. 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. 
 
 '' 2Binn. 174. It is 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. 
 
 ° In 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 Lippincott v. Barker. But the Pennsylvania judges have held otherwise. See 
 In re Wilson, 4 Barr, 430, 441, Coulter, J. And see the explanation given by 
 Tilghman, C. J., and Yeates, J., in Wilt v. Franklin, i 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. 
 
 * 4 Wash. C. C. 232. 
 
■234 SPECIAL PROVISIONS. [CHAP. XI. 
 
 sideration in law. So in the cases of Cheever v. Imlay,' 
 Wilson V. Kneppley/ Sheepshanks v. Cohen,^ Bayne v. 
 Wylie," and Mechanics' Bank v. Gorman,' assignments con- 
 taining stipulations for a release were adjudged valid. In 
 the 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 de- 
 cisions, pronounced 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 Livingston v. Bell,' an assignment 
 in trust for the payment of debts was held good, although it 
 contained a provision excluding all creditors 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 pref- 
 erences in assignments," » and that under that act non-releas- 
 ing creditors were not entitled to dividends under an assign- 
 ment in trust for such creditors as should release.'" But, to 
 make the assignment good in any of these cases, it was uni- 
 formly held that it must be of all the debtor's property and ef- 
 fects, without reserving, either expressly or by the effect of the 
 assignment, any portion of the effects for the debtor." Ac- 
 cording to the present law of Pennsylvania, as established 
 
 ' 7 Serg. & R. 510. "" 10 Serg. & R. 439. » 14 Serg. & R.35. 
 
 * 10 Watts, 309. ' 8 Watts & S. 304. ' 7 Pet. 608. 
 
 ' 3 Watts, 198. " 9 Barr, 504. ' Ante, p. 38. 
 
 '° But in the case of Seal v. Duffy (4 Barr, 274), it was said in argument, and 
 -allowed by the court, that clauses for a release were, in effect, expunged by the 
 ■act of 1843. See the observations of Gibson; C. J., Id. 275. In the 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. 
 
 " Thopias V. Jenks, 5 Rawle, 221 ; Hennessy v. The Western Bank, 6 Watts 
 •& S. 300; In re Wilson, 4 Barr, 430 ; Fassitt v. Phillips, 4 Whart. (Pa.) 399; see 
 M.nte, p. 188, note 4. 
 
§§ l86, 187.J RELEASES VIRGINIA MARYLAND. 235 
 
 by the act of April i6, 1849, § 4'' ^^Y condition in assign- 
 ments 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 re- 
 quired to be taken as a preference in favor of such creditors, 
 and is declared void, and the assignment is to be held and 
 construed to inure to the benefit of all the creditors in pro- 
 portion to their respective demands. 
 
 § 186. /Releases — Virginia. — In Virginia, assignments 
 containing stipulations for a release of the debtor, and wholly 
 excluding non-releasing creditors from the benefit of the 
 trust, have been held valid.'' And the same doctrine 'has 
 been maintained in South Carolina.^ In the latter State, 
 however, it has been held that an express reservation of the 
 surplus to the grantor, would be fraudulent.* 
 
 § 187. Releases — Maryland. — In Maryland, stipulations 
 for a release, in assignments of all the debtor's property, as 
 conditions of preference, have been sustained. = But the 
 assignment must, on its face and by its terms, convey all the 
 property of the grantor, and unless it does so it is void, no 
 
 ' Laws of 1849, p. 664; Purd. Dig. (Brightley, loth ed.) vol. i, p. 90. 
 
 ^ Skipwith's Ex'r v. Cunningham, 8 Leigh, 271 ; Kevan v. Branch, i Gratt. 
 274 ; Pearpoint v. Graham, 4 Wash. C. C. 232. But this is only where all the 
 debtor's property is conveyed. But this need not appear on the face of the deed. 
 Gordon v. Cannon, 18 Gratt. 387. And where two of three partners conveyed all 
 the effects of the firm and their individual property, and the third had none, a stip- 
 ulation requiring a release, both of the firm and all the members, by the cred- 
 itors who accepted the deed, was sustained. Gordon v. Cannon, supra ; and see 
 2 Tiick. Com. [442] 431 ; see ante, p. 188 ; and see Phippen v. Durham, 8 Gratt. 
 457- 
 
 ' Aiken v. Price, Dudley, 50 ; Niolon v. Douglas, 2 Hill Ch. 443 ; Le Prince 
 V. Guillemot, i Rich. Eq. 187. 
 
 * Niolon V. Douglas, 2 Hill Ch. 443 ; Jacot v. Corbett, i Cheves Ch. 71. 
 
 " McCall V. Hinckley, 4 Gill, 128; see Md. Code, art. 48, § 13, p. 346; see 
 ante^ p. 34. The trusts in this case were, first, to pay in full certain cred- 
 itors 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 a 
 reservation of the ultimate surplus to the grantors. And see Kettlewell v. Stew- 
 art (8 Gill, 472), where the assignment was of a similar character. In Hollins v. 
 Mayer (3 Md. Ch. Dec. 343), a trust deed directing the shares of non-releasing 
 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. 
 
236 SPECIAL PROVISIONS. [cHAP. XI. 
 
 matter whether it does in fact convey all his property or 
 not' And when it is made by partners, it must gonvey all 
 their property, as well their individual estate as their part- 
 nership effects. = The whole estate must be surrendered for 
 the benefit of the creditors, and a direction to the assignee 
 to pay over to the grantor the balance remaining after satis- 
 fying creditors who execute releases, will invalidate the as- 
 signment,3 and a failure to provide in express terms for the 
 disposition of this surplus among the non-releasing creditors, 
 will be equally fatal."* 
 
 § 188. Releases — Alabama. — In Alabama, they were at 
 one time held valid to the extent of excluding non-releasing 
 creditors, 5 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 stipu- 
 lates for no share of the proceeds to result to himself, such a 
 stipulation will be sustained.^ 
 
 Assignments requiring a creditor to make any release or 
 to do any other act impairing his existing rights, before par- 
 
 ' Rosenberg V. Moore, 11 Md. 376; Barnitz v. Rice, 14 Id. 24; Farquharson 
 V. Eichelberger, 1 5 Id. 63 ; Green v. Trieber, 3 Id. 1 1 ; Sangston v. Gaither, 3 Id. 
 40. 
 
 " Insurance Co. v. Wallis, 23 Md. 173. 
 
 ° Bridges v. Woods, 16 Md. loi ; Green v. Trieber, 3 Id. 1 1 ; HoUins v. Mayer, 
 3 Md. Cli. 343. 
 
 ■■ Whedbee v. Stewart, 40 Md. 414; Malcolm v. Hodges, 8 Id. 418. 
 
 ' Robinson v. Rapelye, 2 Stew. 86. 
 
 ° Ashurst V. Martin, 9 Port. 566 ; Gazzam v. Poyntz, 4 Ala. 374 ; Wiswall v. 
 Ticknor, 6 Id. 179 ; Smith v. Leavitts, 10 Id. 92. 
 
 ' Grimshaw V. Walker, 12 Ala. loi ; see West v. Snodgrass, 17 Id. 549. In 
 this case the assignment provided that the preferred creditors were not to enjoy 
 its benefits 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. 
 
 ' Rankin v. Lodor, 21 Ala. 380. This is laid down by Phelan, J., as a '' settled 
 legal proposition in this State." Id. 389. 
 
§ iSg.] RELEASES — MASSACHUSETTS. 237 
 
 ticipating in or receiving the securities therein provided for 
 him, are now expressly declared to be fraudulent and void 
 by statute.' 
 
 § 189. 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 exam- 
 ined by him went, they were considered as leaving the ques- 
 tion in equilibrio.^ 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 Su- 
 preme Court of the State ; and in several subsequent cases, 
 in which questions arose upon assignments containing stip- 
 ulations for a release, this question was not raised.^ In the 
 case of Nostrand v. Atwood,* however, the point was ex- 
 pressly made, the assignment being objected to on the 
 ground that it contained such a stipulation, which, it was 
 said, operated compulsorily upon the creditors, and pre- 
 
 • Rev. Code of Ala. (1867), § 1866. 
 ^ 4 Mason, 206, 229. 
 
 ' The 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 
 validity of the stipulation ; and those of Hatch v. Smith (5 Mass. 42), and Hast- 
 ings V. Baldwin (17 Id. 552), as going in its support. 
 
 * 4 Pick. 265. 
 
 " 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 Brig Watchman (Ware, 232), and Grover v. Wakeman (11 Wend. 
 187), the question was regarded, out of the State, as an open one. 
 
 ° 19 Pick. 281. 
 
238 SPECIAL PROVISIONS. [CHAP. XI. 
 
 scribed 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 stip- 
 ulation being regarded as wholly immaterial to the rights of 
 the plaintiflfs 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 intro- 
 duction 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 indisposed to 
 assent thereto, and who might thus be deprived of receiving 
 his share of the fruits of the assignment."' It is to be ob- 
 served, 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. The changes introduced by 
 that and subsequent statutes, have already been adverted to." 
 
 § 190. Releases — Vermont — Maine. — In Vermont, be- 
 fore the act of Nov. i, 1843, prohibiting general assign- 
 ments, stipulations for a release, as conditions of preference, 
 were held valid. ^ 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 distribution of assigned 
 property, they are considered fraudulent. = So, in Maine, 
 before the act of April i, 1836, stipulations for a release in 
 assignments were judged valid.^ But under that act it was 
 decided that assignments containing such stipulations were 
 illegal.' And it was further held that a clause of release, 
 
 '■ 19 Pick. 284. 
 
 " Ante, pp. 21-24. The rule established by the decisions in Massachusetts is 
 considered by the learned authors of the Notes to American Leading Cases, as 
 favoring the validity of these stipulations, i Am. Lead. Cas. (Hare & Wall. 
 Notes) 100 [72, ed. 1857.] 
 
 * Hall V. Denison, 17 Vt. (2 Wash.) 310. But see the act of Nov. 14, 1855, 
 requiring all assignments to be for the beneiit of all the creditors in proportion to 
 their respective claims. Laws of 1855, p. 15. 
 
 ' Havens v. Richardson, 5 N. H. 113. ' Hurd v. Silsby, 10 N. H. 108. 
 
 " Fox v. Adams, 5 Greenl. 245 ; Canal Bank v. Cox, 6 Id. 395 ; Todd v. Buck- 
 man, 2 Fairf. 41. 
 
 ' Pearson v. Crosby, 23 Me. 261 ; Wheeler v. Evans, 26 Me. 133. 
 
§ igl'] RELEASES — RHODE ISLAND. 239 
 
 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 re- 
 ceived several partial payments under the assignment' And 
 in the United States District Court of Maine, an assignment 
 with a stipulation for a release, as a condition of participating 
 in the fund, the surplus resulting to the assignor, was held 
 fraudulent.^ But under the act of March 21, 1844, c. 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, which shall forever discharge him 
 from their claims, on his making oath that he has assigned 
 all his estate, real and personal, for their benefit. 
 
 § 192. Releases — Rhode Island. — In Rhode Island, stipu- 
 lations 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 preferences in favor of certain creditors, 
 and with a provision that no creditor shall receive any divi- 
 dend or profit from the assignment, except upon the condi- 
 tion that he execute a discharge in full of all his claims, and 
 that the dividends of the creditors who refuse such a dis- 
 charge, shall result to the assignor, is valid. = But this is 
 allowed 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 condi- 
 tion of obtaining a preference under the assignment, was 
 held to be fraudulent and void as to creditors. 
 
 ' Vose V. Holcombe, 31 Me. (i Red.) 407. 
 
 " The Brig Watchman, Ware, 232. 
 
 = Rev. Stat. (ed. 1871), c. 70, p. 543, § 2. 
 
 ' See Angell on Assignments, 112. 
 
 " Dockray v. Dockray, 2 R. L 547 ; Heydock v. Stanhope, i Curt. 471 ; Night- 
 ingale V. Harris, 6 R. L 321 ; Sadlier v. Fallon, 4 Id. 490; Allen v, Gardner, 
 7 Id. 22. See Beckwith v. Brown, 2 R. I. 311. 
 
 " Stewart v. Spencer, i Curt. 1 57. 
 
240 SPECIAL PROVISIONS. [CHAP. XI. 
 
 In New Jersey it is provided by statute that creditors 
 who come in under the assignment and exhibit their de- 
 mands for a dividend, shall be wholly barred from having 
 afterwards any action or suit at law or equity against the 
 debtor or his representatives.' 
 
 § 192. 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 un- 
 der 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 satisfy a debt due to a particular creditor ; second, to 
 pay all the other creditors ratably, on condition of their dis- 
 charging 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 creditors 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 stipulation 
 for a discharge being considered coercive in its character, 
 and the provision reserving to the assignors the right to de- 
 
 ' Act of April 16, 1846 ; Rev. Stat. p. 316; Nixon's Dig. (ed. 1868), p. 34, § 14. 
 The entire section reads as follows : " Nothing in this act shall be taken or under- 
 stood as discharging said debtor or debtors from. liability to their creditors who 
 may not choose to exhibit their claims, either in regard to the persons of such 
 debtors, or to any estate, real or personal, not assigned as aforesaid, but with re- 
 spect to the creditors who shall come in under said assignment and exhibit their 
 demands as aforesaid for a dividend, they shall be wholly barred from having af- 
 terwards any action, or suit at law or equity, against such debtors or their repre- 
 sentatives ; unless, on. the trial of such action or hearing in equity, the said cred- 
 itor shall prove fraud in the said debtor or debtors with respect to the said assign- 
 ment, or concealing his estate, real or personal, whether in possession, held in 
 trust, or otherwise." Property subsequently acquired by the debtor is not liable 
 to satisfy such claims. Vanderveer v. Conover, 16 N. J. L. 487. 
 
 ' 14 Johns. 458. 
 
§ I92-] RELEASES — NEW YORK, 
 
 241 
 
 clare 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 assign- 
 ors 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 release of all 
 their demands), by executing the same ; and upon the fur- 
 ther trust, that in case any of the said creditors should not, 
 within the time limited, become parties to the assignment, 
 then the grantees (or assignees) should pay to the grantors 
 the proportion of such of the creditors as should neglect or 
 refuse to execute the assignment. 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 assignment, 
 to apply them to their own' use, or to pay to their creditors, 
 as they pleased. It was pronounced to be " not only an at- 
 tempt 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 assignment was of certain real estate, in trust for the 
 benefit of all the creditors who should prove their debts, but 
 upon condition that each creditor " should seal and deliver 
 
 ' See the opinion of Van Ness, J., 14 Johns. 462, 463. 
 
 ' 20 Johns. 442. 
 
 ' 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 tirne ;, 
 and which, on the authority of Murray v. Riggs (15 Johns. 571), was adjudged, 
 valid ; though, on this point, as we shall see hereafter, the decision of the. court 
 has since been overruled. 
 
 * Spenser, C. J., 20 Johns. 450. '• 5 Johns. Ch. 329. 
 
 16 
 
242 SPECIAL PROVISIONS. [cHAP. XI. 
 
 a full and complete discharge of his demand." The chancel- 
 lor held this provision to be rigorous, 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 assign- 
 ment 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 proportion of their debts as could be 
 paid out of the surplus avails of the assigned property, after 
 paying the preferred creditors, in full discharge 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 fraudu- 
 lent and void ; and, on error to the Court of Errors,^ the 
 decision of the chancellor was sustained. It will be seen 
 that this case goes farther than any of the previous cases, 
 laying down the rule broadly, that the requii'ement of a re- 
 lease from any of the creditors, and as a consideration of 
 preference merely, without any direct resei-vation of the 
 share of the non-releasing creditors to the assignor himself, 
 avoids the assignment. 
 
 In Armstrong v. Byrne,^ in the same court, for the first 
 circuit, the trust of the assignment was, to divide the pro- 
 ceeds of the assigned property among the creditors ratably, 
 on condition of their releasing the balance of their debts ; 
 excluding non-releasing creditors from all benefit, and direct- 
 ing the shares of the latter to be equally divided among 
 such of the creditors as should accept of the composition. 
 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 
 
 ' 4 Paige, 23. " Grover v. V^akeman, 11 Wend. 187. 
 
 = I Edw. Ch. 79. 
 
§ 1 92- J RELEASES — NEW YORK. 243 
 
 against the policy of the law, and vitiated the assignment 
 entirely." 
 
 In Lentilhon v. Moffatt,'' in the same court, the assign- 
 ment was of part of the debtor's property in trust for all his 
 creditors, and to be paid to them ratably, as they should re- 
 spectively 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 ap- 
 pointment 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 assignment 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. ; second, 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 overthrow the assignment as fraudulent, on the 
 ground of its trust tending to delay, hinder, or defraud cred- 
 itors, the vice chancellor decided against its validity, princi- 
 
 ■ I Edw. Ch. 80. ' Id. 451. '2 Edw. Ch. 183. 
 
244 
 
 SPECIAL PROVISIONS. [cHAP. XI. 
 
 pally on the authority of the case 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 confidential creditors ; secondly, the 
 creditors who had executed the conditional release, and then 
 directed that the residue of the creditors be paid, this assign- 
 ment was not regarded as coming within the rule of Wake- 
 man 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 because they had agreed to it. 
 
 § 193. Releases in Other States. — In Ohio,* North Car- 
 
 ' 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. 
 
 " And see the observations of Sandford, A. V. C, in Jackson v. Cornell, I 
 Sandf Ch. 348, 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 
 arrangement 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 Hable to the objection of being intended 
 to coerce a release from the creditors. Hastings v. Belknap, i Den. 190. 
 
 Mr. Justice Parker, m the case of Strang v. Spaulding, 38 N. Y. 12, remarks: 
 " The law is undoubtedly well settled that such assignments (in which cred- 
 itors are preferred on condition of their subsequently executing releases of their 
 respective 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. 139; 
 and Mr. Justice Monell, in Powers v. Graydon, 10 Bosw. 659. 
 
 = Spaulding v. Strang, 37 N. Y. 135 ; s. C. 38 N. Y. 9 ; rev'g S. C. 36 Barb. 
 310 ; S. C. 32 Barb. 235 ; Low v. Graydon, 50 Barb. 414 ; Powers v. Graydon, 39 
 Barb. 548 ; S. C. 25 How. Pr. 512; Renard v. Graydon, 39 Barb. 548; S. C. 25 
 How. Pr. 178. See remarks of Savage, C. J., in Hone v. Henriquez, 13 Wend. 
 243- 
 
 ' Atkinson v. Jordan, 5 Ohio, 178; 5 Ham. 293 ; Woolsey v. Umer, Wright 
 N. Pri. (Ohio), 606 ; Barrett v. Reids, Id. 701. 
 
§ I93-J RELEASES IN OTHER STATES. 245 
 
 olina,' Mississippi,^ Missouri,^ and Georgia," Texas,^ and Ten- 
 nessee,* the courts have adopted the principle established by 
 the New York decisions/ 
 
 In Connecticut ^ and Illinois,^ the requirement of a re- 
 lease as a condition of participation in the fund assigned, the 
 surplus resulting to the assignor, has been held to be fraudu- 
 lent, and to avoid the deed ; but the cases in these States 
 have not decided the question whether a release being made 
 a condition of preference merely, is fraudulent."" In Indiana, 
 a stipulation for a release in an assignment not embracing 
 all the debtor's property, has been held to avoid the assign- 
 ment." In the same case, the court expressed a strong in- 
 clination against the validity of these stipulations in general, 
 but waived a decision of that question. In Michigan, the 
 question has not been decisively settled in any reported case 
 in the State courts." 
 
 ' Hafner v. Irwin, I Ired. L. 490. ' Robins v. Embry, i Sm. & M. Ch. 208. 
 
 ' Brown v. Knox, 6 Mo. 302; Drake v. Rogers, Id. 317. 
 
 ' 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 objecting 
 creditors. See McBride v. Bohanan, 50 Ga. 527 ; Lay v. Seago, 47 Id. 82. 
 
 ° Carlton v. Baldwin, 22 Tex. 724 ; Baldwin v. Peet, 22 Id. 708. 
 
 ° Wilde V. Rawlings, I Head (Tenn.) 34. 
 
 ' I Am. Lead. Cases (Hare & Wall. Notes), 100 [72, ed. 1867]. See the argu- 
 ment of counsel, in Livermore v. Jenckes, 21 How. (U. S.) 133, 143. 
 
 ' Ingraham v. Wheeler, 6 Conn. 277. This was before the changes introduced 
 by the statute of 1853 ; see anie, p. 26. 
 
 ° Howell V. Edgar, 2 Scam. 417; Ramsdell v. Sigerson, 2 111. (2 Gilm.) 78. In 
 Howell V. Edgar, it was decided that an assignment which provides that all cred- 
 itors wishing to become parties to it, shall, within twelve months from the date, 
 affix their signatures thereto, and that the debtor shall not be held liable to pa.y 
 any creditors who may sign, any deficiency that shall remain unsatisfied of their 
 respective demands, is fraudulent and void. 
 
 In the case of Conkling v. Carson, 1 1 111. 503, where the assignment required 
 creditors who should come in arid receive dividends to release their demands, this 
 ■provision was considered fraudulent ; but an amendment of the obnoxious clause 
 having been made by the parties and creditors, the objection was removed. See 
 Hardin v. Osborne, 60 111. 98. 
 
 " I Am. Lead. Cas. ubi sup. 
 
 '' Henderson v. Bliss, 8 Ind. (Tan.) 100. So an assignment which required each 
 creditor, upon payment of his pro rata share of the proceeds, to release his en- 
 tire debt, was held fraudulent and void. Butler v. Jaffray, 12 Ind. 504; and see 
 McFarland v. Birdsall, 14 Id. 126. 
 
 " McLean, J., in Marsh v. Bennett, 5 McLean, 117, 128, 129. In this case, an 
 
246 SPECIAL PROVISIONS. [cHAP. XI. 
 
 In California, it is provided by the civil code that an as- 
 signment for the benefit of creditors is void against any cred- 
 itor not assenting to it, if it tend to coerce any creditor to 
 release or compromise his demand.' 
 
 § 194. Stipulations for Release — Summary. — It has 
 been considered ° that the weight of American authority 
 was in favor of the validity of these stipulations upon gen- 
 eral 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 de- 
 cisions 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 equilibria,'' 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 inapplicable, 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 
 
 assignment containing 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. 
 
 ' Civil Code of Cal. § 3457. 
 
 ^ Angell on Assignments, 114. Mr. Angell remarks that the general practice, 
 and the general current of authority in England are decidedly in favor of introduc- 
 ing such clauses into assignments, and refers to the principal books of precedents 
 in conveyancing. See Bump on Fraud. Con. p. 433. 
 
 ^ Angell on Assignments, 105. * 4 Mason, 230. 
 
 ° " When we take into consideration the great length of time during which 
 stipulations 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. Wake- 
 man (II Wend. .199, 200) ; and of Wright, J., in Atkinson v. Jordan, 5 Ohio, 178 
 (Ham. 293). 
 
 ° 4 Mason, 230. ' 2 Binn. 174. 
 
 " 4 Wash. C. C. 232. So cited, the correct title being " Pearpoint v. Graham." 
 
§ 1 94-] STIPULATIONS FOR RELEASE. 247 
 
 Court, and the English Exchequer case of The King v. 
 Watson.' 
 
 In Lippincott v. Barker, it will be seen that the assign- 
 ment had been formally accepted by the great majority of 
 the creditors before it was acted upon, and Chief Justice 
 Tilghman, in delivering his opinion, expressly confined it to 
 the circumstances of that particular case, observing that 
 there were " many and strong objections to deeds of assign- 
 ment made without the privity of creditors, and excluding 
 all who do not execute releases."'' The remaining Amer- 
 ican 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 question had been new, and many estates had not 
 passed upon the faith of such assignments, the strong in- 
 clination of his own mind would have been against their 
 validity .3 The decision itself has been critically examined, 
 and its soundness upon principle questioned in several re- 
 cent American cases.-* 
 
 In the New York case of Grover v. Wakeman,^ where 
 the question was fully discussed, and the English and Amer- 
 ican 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 
 
 ' 3 Price (Exch.) 6. 
 
 '■' 2 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 (Hamm. 293). But the Pennsyl- 
 vania courts have held the contrary opinion. In re Wilson, 4 Barr, 430. 
 
 ^ 4 Mason, 230. 
 
 " See McCall v. Hinckley, 4 Gill (Md.) 228 ; Lord v. Brig Watchman, Ware, 
 232 ; Miller v. Conklin, 17 Ga. (Cobb), 430 ; and see White v. Winn, 7 Gill, 446. 
 
 ' II Wend. 187. 
 
248 SPECIAL PROVISIONS. [cHAP. XI. 
 
 the rule against the validity of the stipulations in ques- 
 tion ; 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 release ; but this was done with marked re- 
 luctance,' and only because the court felt itself bound by the 
 construction which had been previously given by the courts 
 of Pennsylvania to the statute of that State.^ The assign- 
 ment on which the question arose had been executed in 
 Pennsylvania by a citizen of that State, and the court ob- 
 serve 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 question as to the validity of these stipulations 
 was not formally presented, 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 
 decision pronounced." After remarking that the question 
 
 ' 7 Pet. 608 ; Marshall, C. J., Id. 614. 
 
 " 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 voluntary 
 one, but was induced by the necessity arising from the certainty of being post- 
 poned to all those creditors who should accept the terms by giving the release. 
 And of the objection to the deed on this ground, they say, it " is certainly power- 
 ful 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 
 thereby entitle themselves under the deed. The weight of this argument is felt." 
 
 ' Lippincott v. Barker and Pearpoint v. Graham were relied on. 
 
 ^ 5 McLean, 117. 
 
§ 1 94- J ' STIPULATIONS FOR RELEASE. 
 
 249 
 
 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 assign- 
 ment contained a stipulation for a release, as a condition 
 of preference, but it had been made by a debtor who after- 
 wards absconded to a foreign country, carrying with him a 
 large sum of money. On this latter ground, and this only, 
 the assignment was held fraudulent and void as to creditors. 
 The court, following the law of Rhode Island, assumed it 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 instru- 
 ment 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 in that case,^ and the authorities cited 
 are few.^ Taking into consideration 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 decided on gen- 
 eral principles, and free from the controlling influence of 
 
 ' 5 McLean, 128, 129. ^ I Curt. 157. 
 
 " I Curt. 162, 163. 
 
 - Vol. 2, c. 28, § 1036. 
 
 ^ " 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 further 
 claims, beyond the property assigned, will (it seems) be valid and binding on such 
 creditors." 
 
 " 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. S. C. Ins. Co. the 
 point does not appear to have been made ; and in Wheeler v. Sumner, it is ex- 
 pressly said that the assignment contained no such stipulation. 
 
 ' 7 Pet. 608. 
 
250 SPECIAL PROVISIONS. [CHAP. XI. 
 
 State construction, the decision would be against the right 
 to stipulate.' 
 
 § 195. Stipulations for Release, Excluding Non-re- 
 leasing Creditors. — So far as stipulations for a release are 
 coupled with provisions cutting off" from all 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 authority may now be 
 fairly pronounced to be against their validity.^ And where, 
 after opposition by creditors, a condition of release is sus- 
 tained, equity will decree the surplus to the creditors who 
 have not acceded to the deed.^ But the rule is hot so 
 clearly settled against the validity of these stipulations, as 
 conditions of preference only, where the non-releasing cred- 
 itors are left by the assignment to share in any surplus which 
 may remain after satisfaction 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 cur- 
 rent 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. 
 
 § 1 96. Objections to Stipulations for Releases. — The ob- 
 jections to the allowance of these stipulations in assignments 
 
 ' In the case of Livermore v. Jenckes, 21 How. (U. S.) 126 {1859), the Supreme 
 Court of the United States sustained an assignment executed in Rhode Island, be- 
 tween citizens of that State, stipulating for releases, but the case went upon the 
 point that the complainants' 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. 
 
 '' 2 Kent's Com. [534] 693, 694, and note; see also. Miller v. Conklin, 17 Ga. 
 430 ; Henderson v. Bliss, 8 Ind. 100 ; Sangston v. Gaither, 3 Md. 1 1 ; Bridges v. 
 Wood, 16 Id. loi ; Whedbee v. Stewart, 40 Id. 414 ; HoUins v. Mayer, 3 Md. Ch. 
 Dec. 343 ; Wilde V. Rawlings, I Head (Tenn.) 34; Conkling v. Carson, 11 111. 503; 
 Butler v. Jaffray, 12 Id. 504; Carlton v. Baldwin, 22 Tex. 724; Baldwin v. Peet, 
 22 Id. 708 ; Reavis v. Garner, 12 Ala. 661. But see Dockray v. Dockray, 2 R. I. 
 547; Heydock v. Stanhope, i Curt. 471; Gordon v. Cannon, 18 Gratt. 388; 
 Nightingale v. Harris, 6 R. I. 321 ; and see Allen v. Gardner, 7 Id. 22. 
 
 ^ Brashear v. West, 7 Pet. 608 ; Vaughan v. Evans, I 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. 
 
 ' 2 Kent's Com. [534] 693, 694: Id. [536] 696, 697, note. 
 
§ ig^-] OBJECTIONS TO STIPULATIONS. 25 1 
 
 to trustees, 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, un- 
 less 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 de- 
 feating 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 cred- 
 itors." The force of this objection lies not in the mere cir- 
 cumstance of stipulating for terms with a creditor, but in so 
 stipulating when the debtor's property is no longer accessible 
 to the creditor's remedies. " If a debtor, with his property 
 in his own hands," observes Mr. Justice Sutherland,^ " and 
 open to the legal pursuit of his creditors, 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 dis- 
 charge, 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 accommoda- 
 tion." + 
 
 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 
 
 ' In Halsey v. Whitney, 4 Mason, 206, 228. 
 
 ° In Armstrong v. Byrne, i Edw. Ch. 79, 81. 
 
 " In Grover V. Wakeman, 11 Wend. 187, 201. 
 
 * And see, to the same effect, the observations of Assistant Vice Chancellor 
 Sandford, in Jackson v. Cornell, i Sandf. Ch. 348, 354; see also White v. Winn, 
 8 Gill, 499. 
 
252 SPECIAL PROVISIONS. [cHAP. XI. 
 
 debts.' The debtor, observes Vice Chancellor McCoun,' 
 " does not benefit himself by merely creating a preference of 
 payment amongst his creditors ; because he remains 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 forcible than either of the preceding, is, that they are 
 expressly designed 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 Chancellor Walworth,^ " does not rec- 
 ognize 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 re- 
 sults 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 bank- 
 
 ' See the observations of Sutherland, J., in Grover v. Wakeman, 11 Wend. 187, 
 201. 
 
 ° In Armstrong v. Byrne, i Edw. Ch. 79, 81. 
 " In Wakeman v. Grover, 4 Paige, 23, 38. 
 
§ 197'] RELEASES IN PARTIAL ASSIGNMENTS. 253 
 
 rupt discharge, namely, an entire and unconditional surren- 
 der of property ; the debtor thus making, in the language 
 of Chief Justice Parsons,' "a bankrupt law for himself" 
 
 § 197. Stipulations for Releases in Partial Assign- 
 ments. — 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 assignments, there is much more uni- 
 formity in the decisions, it being held, almost without ex- 
 ception,^ that such a stipulation in an assignment of part of 
 the debtor's property, is fraudulent. ^ The rule, to this ex- 
 tent, has been laid down in no State more strongly than in 
 Pennsylvania, where such stipulations in general assignments 
 were, previous to the statute, invariably sustained. Thus, in 
 Thomas v. Jenks/ it was held that an assignment by part- 
 ners, of the partnership effects, and not of their separate 
 property also, if it contain a condition that the creditors 
 shall release their claims against the assignors, individually 
 
 ' In Widgery v. Haskell, 5 Mass. 144, 152 ; and see Thomas v. Jenks, 5 Rawle, 
 221, Gibson, C. J. ; Miller v. Conklin, 17 Ga. 430, 432, 434, Stames, J. ; Hender- 
 son V. Bliss, 8 Ind. 100, 103, 104, Perkins, J. 
 
 '^ The rule in Massachusetts is considered to be an exception, i Am. Lead. 
 Cases, 94, citing Nostrand v. Atwood, 19 Pick. 281. In the case of Stewart v. 
 Spencer (i Curt. 1 57), 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, I am not prepared to say that such a deed is necessarily fraudulent 
 on its face. If the property not conveyed by the assignment is left 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 designed 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. 1 66. 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 instrument." Id. ibid. 
 
 ^ Seaving v. Brinkerhoff, 5 Johns. Ch. 329 ; Skipwith's Ex'r v, Cunningham, 8 
 Leigh, 27 1 ; Green v. Trieber, 3 Md. 1 1 ; Sangston v. Gaither, Id. 40 ; and see 
 ante, chap. 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. Miners' National 
 Bank Appeal, 57 Penn. St. 193. 
 
 * 5 Rawle, 221 ; and see Henderson v. Bliss, 8 Ind. 100. 
 
2 54 SPECIAL PROVISIONS. [cHAP. XI. 
 
 and as copartners, is fraudulent and void. In Hennessy v. 
 The Western Bank," it was held that an assignment by co- 
 partners, stipulating for a release, was not valid without con- 
 taining 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 prop- 
 erty. In the subsequent case of In re Wilson,' it was de- 
 cided that a general assignment by two partners, stipulating 
 for a release to themselves and a third partner, was fraudu- 
 lent on its face, though the non-assenting partner had no 
 estate but such as passed to the assignee. The opinion of 
 the court was expressed by Mr. Justice Rogers, in language 
 peculiarly strong and emphatic.^ In the still 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, 
 purporting 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 exe- 
 cute a release, while it contained 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 
 
 ' 6 W. & S. 300. =4 Barr, 430. 
 
 ' See ante, p. 188, 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. 338) ; Passraore v. Eldridge (12 S. & R. 201) ; 
 Adlum V. Yard (i Rawle, 163) ; Johnston's Heirs v. Harvey (2 Penn. 92) ; and 
 McClurg V. Lecky (3 Penn. 83). 
 
 * 7 Barr, 499. 
 
 ' The objections to conditional assignments, in general, have been very forcibly 
 expressed by 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 th.ese 
 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 13 Elizabeth." And see the opinion of Gaston, J., in Hafner 
 V. Irwin, i Ired. L. 490, 499, 500. 
 
§ I97-J RELEASES IN PARTIAL ASSIGNMENTS. 255 
 
 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 exist- 
 ence of a residue was concealed by the debtor, has been con- 
 sidered to be fraudulent in fact ; ° and a reservation to the 
 grantor of the surplus, after paying to. releasing creditors 
 forty per cent, if the estate would yield as much, was de- 
 cided to be fraudulent.^ 
 
 But in a case in Rhode Island, where the grantor pre- 
 ferred certain 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 assignment was sustained."* 
 
 As regards the manner of stipulating, it is effected, on 
 the part of the creditors, either by executing the assignment 
 containing a release, or by executing a separate agreement 
 to release.^ The former is the usual practice. The particu- 
 lar form of the release to be given is sometimes prescribed 
 in the assignment, and such a provision has been held valid.* 
 It is necessary, also, to specify a time within which the re- 
 lease is to be executed ; ' and this period must be a reasona- 
 ble one,' neither too long^ nor too short,'" otherwise the 
 assignment will be considered fraudulent. " 
 
 ' Sangston v. Gaither, 3 Md. 40 ; Green v. Trieber, Id. 11; Rosenberg v. 
 Moore, 11 Id. 371; Bamitz v. Rice, 14 Id. 24; Farquharson v. Eichelberger, 15 
 Id. 63; Insurance Co. v. Wallis, 23 Md. 173. 
 
 "^ Le Prince v. Guillemot, i Rich. Eq. 187. 
 
 ' Jacot V. Corbet, i Cheves Ch. 71. ■* Nightingale v. Harris, 6 R. I. 321. 
 
 " This was the form in Ludwig v. Highley, 5 Barr, 132. 
 
 ° Bayne v. Wylie, 10 Watts, 309. 
 
 ' Pearpoint v. Graham, 4 V\^ash. C. C. 232; Henderson v. Bliss, 8 Ind. 100; 2 
 Kent's Com. [533] 693. 
 
 ' In 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 is a common period. 
 
 ° Pearpoint v. Graham, 4 Wash. C. C. 232. 
 
 " Fox V. Adams, 5 Greenl. 245 ; Ashurst v. Martin, 9 Porter, 566. 
 
 " 2 Kent's Com. [533] 693 ; and s&spost, V., in this Chapter. 
 
256 SPECIAL PROVISIONS. [cHAP. XI. 
 
 The deed should in such cases give to the creditors all 
 the information 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' 
 
 1 1. Reservations of Benefit to the Debtor. 
 
 § 198. In the largest sense of the term "reservation," 
 comprehending any benefit secured to the debtor, imme- 
 diately 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." Assign- 
 ments of his property, therefore, considered as modes of pro- 
 vision 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 creditors, and not for the benefit of the 
 debtor himself, at their expense. Hence, it is a settled gen- 
 eral 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 compensation, or otherwise, and whether reserved to the 
 debtor himself, or for the support of his family — ^is a fraud 
 in law, and vitiates and avoids the whole assignment.^ 
 
 ' Gordon v. Cannon, 18 Gratt. 387. 
 
 ° Savage, C. J., in Mackie v. Cairns; 5 Cow. 547, 580. 
 
 ■' Rogers, J., in McClurg v. Lecky, 3 Penr. & W. (or Penn. R.) 83, 91, 93 ; In- 
 graham V. Grigg, 13 Sm. & M. 22, 27 ; Mackie v. Cairns, S Cow. 547 ; Harris 
 V. Sumner, 2 Pick. 129; Richards v. Hazard, I Stew. & P. 139 ; Bronson, J., in 
 Goodrich V. Downs, 6 Hill (N. Y.) 438, 439. " To say that an insolvent debtor 
 
§ 1 99-] RESERVATIONS OF PROPERTY. 257 
 
 § 199. Reservations of Property. — ^Thus, in Massachu- 
 setts, where the assignment contained a reservation to the 
 debtor, in the form of an agreement that the trustees might 
 pay to him the sum of one thousand dollars, or a certain pro- 
 portion of it, in a certain event, it was held void on this ac- 
 count.' 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 two thou- 
 sand dollars per annum for a limited time, they were held 
 void in to to as being a fraud upon creditors.^ So, in Penn- 
 sylvania, 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 them- 
 selves, the deed was held to be fraudulent and void as against 
 creditors.3 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 in- 
 direct 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 
 thafpart of the property, to be fraudulent and void as to all 
 creditors who did not assent to the arrangement, though the 
 assenting creditors' claims might exceed the amount of the 
 property assigned ; and the dissenting creditors might take 
 it in execution.* And where a debtor executed an assign- 
 can put any portion of his property, not exempt by law, beyond the reach of cred- 
 itors for his own benefit, is a monstrous proposition." Id. ibid. 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 cred- 
 itors, and with intent to defraud them. Stokes v. Jones, 18 Id. 734, 737. And 
 see Sheopards v. Turpin, 3 Graft. 373 ; Leadman v. Harris, 3 Dev. 144 ; Byrd v. 
 Bradley, 2 B. Mon. 239 ; Henderson v. Downing, 24 Miss. (2 Cush.) ig6 ; Green 
 V. Trieber, 3 Md. 11. 
 
 ' Harris v. Sumner, 2 Pick. 129. 
 
 " Mackie v. Cairns, Hopk. Ch. 373 ; 5 Cow. 547. So a 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. 
 
 ' Johnston's Heirs v. Harvey, 2 Penr. & W. (or Penn. R.) 82. 
 
 ' McAllister v. Marshall, 6 Binn. 338. 
 17 
 
258 SPECIAL PROVISIONS, [cHAP. XI. 
 
 ment of all his estate and effects (being a certain factory and 
 machinery, &c.), 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 fac- 
 tory, 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 rendered the assignment fraudulent 
 and void.' 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, the same being 
 nominal, was held to be evidence of fraud.' In North 
 Carolina, where a debtor, upon being applied to by a bona 
 fide creditor to secure him by a deed of trust on his prop- 
 erty, refused to secure any part of the debt unless the cred 
 itor 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 secured by such deed ; and the creditor, 
 though reluctantly, consented — 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 cred- 
 itors.^ In Virginia, where an assignment contained a stipu- 
 
 ' McClurg V. Lecky, 3 Penr. & W. (or Penn. R.) 83. But where a debtor 
 made an assignment 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. 
 
 " Currie v. Hart, 2 Sandf. Ch. 353. 
 
 ' Kissam v. Edmonston, i Ired. Eq. 180. 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 ft 
 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 as a part of 
 the contract to convey the property. Id. 183. 
 
§ 200.] TRUSTS FOR THE ASSIGNOR. 259 
 
 lation 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 Missis- 
 sippi, where a deed, besides extending the time of payment 
 for five years, contained a stipulation that the family ex- 
 penses 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 payment of a claim in which, by previous arrangement, 
 the assignor had an interest, this was such a secret reserva- 
 tion for the benefit of the assignor as to render the assign- 
 ment void.3 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 afterwards selected by 
 the assignors themselves, it was held to be void upon its 
 face.* 
 
 § 200. Trusts for the Assignor. — The great rule on the 
 subject of these reservations for the benefit of assignors (and 
 which is one of the most important in the whole law of vol- 
 untary assignments), 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 himself.^ And this rule is 
 
 ' Spence v. Bagwell, 6 Gratt. 444. But in the later case of Dance v. Seaman, 
 in the same State (i i Gratt. 778), where a deed of trust was not to be enforced 
 for two years, and the profits were in the mean time 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. (2 Gush.) 106, 117. And see Johnson y. 
 Thweatt, 18 Ala. 741. 
 
 ^ Kayser v.' Heavenrich, 5 Kan. 324. ■* Clark v. Robins, 8 Kan. 574. 
 
 ' 5 Cow. 547, 548 ; see Kingman, C. J., in Kayser v. Heavenrich, stipra ; 
 Roosevelt, J., in Nichols v. McEwen, 17 N. Y. 22 ; Seldon, J., in Jessup v. Hulse, 
 21 N. Y. 168. 
 
 "Id. ibid. ; Goodrich v. Downs, 6 Hill (N. Y.) 438; Shaffer v. Watkins, 7 
 W. & S. 219 ; Green v. Trieber, 3 Md. n ; Banks v. Clapp, 12 Ga. 514; Wheel- 
 er,J ., in Wright v. Linn, 16 Tex. 34, 42. And ^e.e,post, chap. XXV. 
 
26o SPECIAL PROVISIONS. [cHAP. XI. 
 
 SO rigidly enforced in New York, that an assignment con- 
 taining such a trust, is held void, not only for the portion 
 reserved, but for the whole. ^ And even a distinct security, 
 such as a judgment, intended to come in aid of an assign- 
 ment which contains such a provision, is, by the effect of 
 such connection rendered void also.= And in Goodrich v. 
 Downs,3 it was held that where, on a trial before a jury, 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, without sub- 
 mitting the question to the jury. So, in Pennsylvania, a 
 fraudulent trust of this kind avoids the assignment in toto, 
 and the property which is made the subject of it, is held to 
 remain in the debtor, liable to the execution of those cred- 
 itors 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 expressly 
 
 ' Mackie v. Cairns, 5 Cow. 547. 
 
 ^ Mackie v. Cairns, 5 Cow. 547 ; reversing on this point the decision of the 
 court below. D'lvernois v. Leavitt, 23 Barb. 63, 64. Where the debtor author- 
 ized 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 real estate, declaring that 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 assignment, 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 reserva- 
 tion of property as vitiated the assignment. Dow v. Platner, i6 N. Y. 563. 
 
 ' 6 Hill (N. Y.) 438 ; but see Curtis v. Leavitt, cited infra. 
 
 ' McClurg V. Lecky, 3 Penn. & W. 83 ; see McAllister v. Marshall, 6 Binn. 338. 
 
 ' 2 Rev. Stat. (6th ed.), p. 142, § i. 
 
 ' Indiana— Statutes of Indiana, vol. i, p. 353, § 18. Michigan — Compiled 
 Laws (ed. 1871). Minnesota — Statutes at Large (ed. 1873), vol. i, p. 692, § 14. 
 New Jersey — Revised Statutes, p. 499, § i ; Nixon's Digest (ed. 1868), p. 355, § i 
 and in other States ; see j>ost, Chap. XXV. 
 
 ' Curtis V. Leavitt, 15 N. Y. (i Smith), 119, 147, 149. 
 
§ 20I.] WHAT RESERVATIONS ARE ALLOWED. 261 
 
 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 incidental and partial 
 only ; and the case of Goodrich v. Downs, so far as it main- 
 tains 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 sus- 
 tained 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 recognized, 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 un- 
 less 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.'' 
 
 § 201. What Reservations are Allowed. — But the rule 
 against the reservation of benefits to the assignor, in deeds 
 of assignment, has not always been inflexibly applied by the 
 courts, without regard to amount or circumstances. ^ Thus, 
 in Virginia, where the grantor reserved the sum of three 
 
 ' IS N. Y. (I Smith), 9. 
 
 " Paige, J., IS N. Y. (i Smith), 208; Comstock, J., Id. 132. In Collomb v. 
 Caldwell, 16 N. 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. 135, § i) relating to conveyances " in trust for the use of the 
 person making the same, has been overruled by this court (Curtis v. Leavitt, i S 
 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 instrument to reserve any portion of the fund to himself. In this view of 
 the question, Goodrich v. Downs was well enough decided, and the decision 
 ' depending upon this principle was approved in Barney v. Griffin (2 N. Y. 365)." 
 See McClelland v. Remsen, 36 Barb. 622. 
 
 ' I Am. Lead. Cases (Hare & Wall. Notes), 98 \]q, ed. 1857]. 
 
262 SPECIAL PROVISIONS. ' [CHAP. XI. 
 
 hundred and fifty dollars to his individual use and disposi- 
 tion, for the purpose of paying some small claims due from 
 him, of high honorary obligation, which were not then liq- 
 uidated or specifically ascertained, it was held that such res- 
 ervation did not of itself avoid the deed.' And clauses in 
 assignments, giving the trustees power, if they think proper, 
 to employ the debtor as agent or manager of the property, 
 for a limited time, and in subordination to the objects of the 
 assignment, have been held valid. Thus, in Alabama, a 
 deed conveying a plantation to trustees for the benefit 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 supervis- 
 ion, until the growing crop was sold.^ And in England 
 assignments are constantly drawn with clauses enabling the 
 trustees to employ the debtor in winding up his aflFairs, and 
 in collecting and getting in 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 accord, 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 incon- 
 sistent with the purposes of the trust, and as his own, it will 
 be evidence that the assignment was not made in good 
 
 ' Skipwith's Ex'r V. Cunningham, 8 Leigh, 271. And see Dance v. Seaman, 
 1 1 Gratt. 778. In a 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 20/, as they might deem 
 expedient, it was sustained. Coate v. "Williams, 21 Law J. Exch. (N. S.) 176 ; 
 S. C. 9 Eng. L. & Eq. 481. 
 
 ^ Planters' & Merchants' Bank of Mobile v. Clark, 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 
 right 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. 
 
 ' See Janes v. M'hitbread, 20 Law J. C. P. (N. S.) 217 ; s. C. 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 stationer's in London." Coate v. Williams, ubi sup. 
 
§ 203.] STIPULATIONS FOR THE USE OF PROPERTY. 263 
 
 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, 
 compound with the creditors of the concern, &c., vesting in 
 him the most ample powers, the court say : " If these deeds 
 can be considered as one act, we should be strongly inclined 
 to think it would, of itself, be conclusive evidence of a fraud- 
 ulent intent, as it would, in eflFect, be the same thing as if 
 this power had been reserved in the deed itself" ^ 
 
 § 202. Reservations or Exceptions of Property. — There 
 seems to be a distinction between provisions in assignments, 
 excepting from the operation- of the conveyance itself a cer- 
 tain 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. 
 
 § 203. Stipulatio?is for the Use of Property. — Stipula- 
 tions that the debtor making an assignment may retain, for a 
 time, possession of the assigned property, so as to have the 
 use of it, appear to 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 covenant in a general as- 
 
 ' Smith V. Leavitts, 10 Ala. 92. 
 
 " Ormond, J., in Smith v. Leavitts, 10 Ala. 92, 105. 
 
 ^ Thus, property encumbered beyond its value (Fassett v. Phillips, 4 Wheat. 
 399), or of small value (Phippen 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, i Phila. 193. See Knight v. Waterman, 36 Penn. 258 ; Hickman 
 V. Messenger, 49 Penn. 465. 
 
264 SPECIAL PROVISIONS. [CHAP. 
 
 XI. 
 
 signment, 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 posses- 
 sion might be evidence of fraud), as against creditors not 
 parties to the assignment.' So in Virginia, a provision that 
 the grantor should remain in possession for six months was 
 held not to be fraudulent." But where a deed of trust con- 
 tained 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 con- 
 veyed at private or public . sale for cash, and to give title 
 thereto, and to collect the proceeds of sale, upon conditi on 
 that he should immediately 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 re- 
 covery of their respective debts, should be debarred from any 
 right or benefit under the deed — the deed was held, in the 
 same State, to be fraudulent upon its face.^ In North Caro- 
 lina, a stipulation in the deed for possession by the debtor 
 for a long time, has been distinguished from a mere retention 
 of possession 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 he 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 
 
 ■ Baxter v. Wheeler, 9 Pick. 21. In Russell v. Woodward (10 Pick. 408), 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. 
 
 ' Kevan v. Branch, i Gratt. 274. 
 
 ^ 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 i Tuck. Com. [338, 340] 328, 330. See 
 Sipe V. Earman, 26 Gratt. 563. 
 
§ 203.] STIPULATIONS FOR THE USE OF PROPERTY. 265 
 
 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 creditors designated in the deed, but providing also that 
 the debtor 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 conveyance without the assent of all the benefi- 
 ciaries, the contrary not being expressed in the deed.^ And 
 in another case, it was further held that, until such assent,, 
 the property conveyed is liable to execution against* the 
 grantor.3 And where a debtor conveyed pro|)erty in trust, 
 as security for certain creditors, reserving the use of perisha- 
 ble effects which might be consumed in the use, it was held 
 in the same State that any other creditor might notwith- 
 standing 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 opinion, most 
 comport with the interest of all parties concerned, required 
 him, if the property was not sold within six months, to sell 
 it at public auction, &c., was not rendered fraudulent on its 
 face by a provision that the debtor should retain possession 
 of certain of the property conveyed until a favorable oppor- 
 tunity 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 cred- 
 itors, conveying all the debtor's estate, was held not to be 
 rendered fraudulent upon its face by a stipulation contained 
 in it that the grantor should retain the possession of his 
 dwelling-house and the slaves conveyed until the trustees, in 
 
 ' Ruffin, C. J., in Hardy v. Skinner, 9 Ired. L. 195. For the rule in Tennessee, 
 see Gait v. Dibrell, 10 Yerg. 146. 
 ' Lockhart v. Wyatt, 10 Ala. 231. 
 
 ' Hodge V. Wyatt, Id. 271. * Graham v. Lockhart, 8 Id. 9. 
 
 '' Abercrorabie v. Bradford, 16 Id. 560. 
 
266 SPECIAL PROVISIONS. • [CHAP. XI. 
 
 the exercise of the discretion conferred upon them, should 
 think proper to sell them.' 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 posses- 
 sion of all tl?e 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 held to be fraudulent and void in law as against the un- 
 secured creditors.3 
 
 And in a later case a deed of trust which was made by 
 an insolvent 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 credit- 
 ors should attempt to subject the property to the payment 
 of their debts, was adjudged void.'' , 
 
 § 204. In Missouri it has been held that a deed convey- 
 ing to a trustee a stock of goods, for the benefit of creditors, 
 
 ^ Shackelford v. P. & M. Bank of Mobile, 22 Id. 238. 
 
 ■' Lanier v. Driver, 24 Ala. 149. 
 
 ' Montgomery'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 prop- 
 erty and exempt it from liability for his other debts, while he has the temporary 
 benefit of the use of it, and a contingent residuum. Such assignments, when 
 these facts appeared on their face, have uniformly been declared fraudulent in 
 law. 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 establishing 
 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. 382; Hindman v. 
 Dill, II Id. 689 ; Planters' & Merchants' Bank v. Clarke, 7 Id. 770; Wiswall v. 
 Ticknor, 6 Id. 178 ; Grimshaw v. Walker, 12 Id. 102 ; Cummings v. McCullough, 
 5 Id. 324; and Rugely v. Harrison, 10 Id. 731. 
 
 * King V. Kenan, 38 Ala. 63. See Reynolds v. Cook, 31 Ala. 634. 
 
§ 205.] RESERVATIONS IN MORTGAGES. 267 
 
 but providing that the grantor may continue to have posses- 
 sion, 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 mat- 
 ter of law.' 
 
 In Pennsylvania" and New Jersey,^ a stipulation in an 
 assignment, for the retention by the assignor of the posses- 
 sion 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 stipulation 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 
 be avoided, as tending, at best, to give rise to questions as 
 to their validity, and in this way to embarrass or perhaps de- 
 feat the operation and object of the whole assignment. 
 
 § 205. Reservations hi Mortgages and Deeds of Trust. 
 — Reservations 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 mort- 
 gages 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 unreasonably de- 
 layed,5 and that the property be of such a nature that it will 
 
 ' Brooks V. Wimer, 20 Mo. (5 Benn.) 503 ; Stanley v. Bunce, 27 Id. 269 ; Reed 
 V. Pellestier, 28 Id. 173 ; Billingsley's Adm'r v. Bunce, 28 Id, 547. 
 
 ' Klapp's Assignees v. Shirk, 13 Penn. St. (i Har.) 589. But the mere circum- 
 stance of the property being left in the assignor's possession, after the assign- 
 ment, will not, in this State, avoid it. Id. ibid. The subject of delivery of posses- 
 sion of the assigned property will be fully considered hereafter, under a distinct 
 head. See Chap. XIX. 
 
 " Knight V. Packer, 12 N. J. Eq. 214. 
 
 ■■ Hempstead v. Johnson, 18 Ark. 123 ; Marks v. Hill, 15 Graft. 400; Sipe v. 
 Earman, 26 Graft. 563. 
 
 ' Hafner v. Irwin, i Ired. L. 496; Hardy v. Skinner, 9 Id. 191 ; Hempstead 
 V. Johnson, 18 Ark. 123. 
 
268 SPECIAL PROVISIONS. [CHAP. XI. 
 
 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 
 reverts 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 prop- 
 erty still remains open to the pursuit of creditors. 
 
 § 206. Rese7^va,tions of Surplus Moneys or Property. — 
 Assignments are sometimes drawn with a provision stipulat- 
 ing for the repayment to the assignor of the surplus moneys 
 remaining after distribution among the creditors provided 
 for, or for the reconveyance to him, by the assignee, of such 
 property as may not have been converted into money. Such 
 a stipulation is sometimes innoxious in its consequences, 
 while, in other cases, it has the effect of invalidating the 
 whole assignment ; its validity depending upon the consid- 
 eration whether or not it be a reservation of a benefit to the 
 debtor, at his creditors' expense. Thus, a reservation to the 
 assignor, of the surplus remaining after payment of all the 
 creditors, is not fraudulent, for it is no more than the law it- 
 self would imply.'* So, a provision in an assignment by co- 
 partners, 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 
 
 ' Elmes V. Sutherland, 7 Ala. 267 ; Dai-win v. Hundley, 3 Yerg. 503 ; Hemp- 
 stead V. Johnson, 18 Ark. 123. 
 
 '' Bait. & 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, i Sm. & 
 M. 207 ; and see Arthur v. Commercial Bank, 9 Sm. & M. 394 ; Fellows v. 
 Commercial Bank, 6 Rob. (La.) 246. 
 
 'Hannah v. Carrington, 18 Ark. 85 ; Briggs v. Davis, 21 N. Y. 574. 
 
 ' Wintringham v. Lafoy, 7 Cow. 735; Savage, C. J., Id. 738; Story, J., in 
 Halsey v. Whitney, 4 Mason, 206, 222 ; Hall v. Denison, 17 Vt. (2 Wash.) 310; 
 Bennett, J., Id. 318; Burgin v. Burgin, i Ired. L. 453; Ruffin, C. J., Id. 458; 
 Gamble, J., in Richards v. Levin, 16 Mo. (i Benn.) 596, 598, 599 ; Wing, P. J., 
 in Hollister v Loud, 2 Mich. (Gibbs), 309, 322 ; Van Rossum v. Walker, 1 1 Barb. 
 S. C. 237 ; Ely v. Cook, 18 Id. 612 ; Comstock, J., in Curtis v. Leavitt, 15 N. Y. 
 (i Smith), 120; Brown, J., Id. 146; Paige, J., Id. 206. See Wilkes v. Ferris, 5 
 Johns. 335 ; Finlay v. Dickerson, 29 111. 9; Estate of Potter v. Paige, 54Penn.,St. 
 465 ; Van Hook v. Walton, 28 Tex. 59 ; Farquharson v. McDonald, 2 Heisk. 404. 
 
§ 207.] RESERVATIONS OF SURPLUS MONEYS. 269 
 
 partners.' But where the estate assigned consists in part of 
 the individual property of the members of the firm (as where 
 consists in part of real estate owned by them as tenants 
 in common), a reservation to the assignors of the surplus re- 
 maining after payment of the partnership debts, without 
 providing for the payment of the debts of the individual 
 partners, will avoid the assignment.^ 
 
 § 207. 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 reassign 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 fa- 
 vor of the validity of such an assignment.^ The contrary 
 rule however, prevails in New York * and in some other 
 
 ' Bogert V. Haight, 9 Paige, 297 ; Walworth, C, Id. 302. 
 
 " 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 
 conveyed 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 individual 
 property of the partners was not conveyed, and no provision was made for the 
 payment of their individual debts. 
 
 ' Miller v. Stetson, 32 Ala. 161 ; Brown v. Lyon, 17 Id. 659 ; Hindman v. Dill, 
 1 1 Id. 689 ; Conkling v. Carson, 1 1 111. 503 ; Finlay v. Dickerson, 29 Id. 9 ; The 
 New Albany & Salem R. R. Co. v. Huff, 19 Ind. 444 ; McFarland v. Birdsall, 14 
 Id. 126; Burgin v. Burgin, I Ired. L. 453 ; Ely v. Hair, 16 B. Mon. (Ky.) 230; Bige- 
 low V. Stringer, 40 Mo. 195 ; Johnson v. McAlhster's Assignee, 30 Id. 327 ; Rich- 
 ards V. Levin, 16 Id. 596 ; Bailey v. Mills, 27 Tex. 434; Kneeland v. Cowles, 4 
 Chand. (Wis.) 49; Livingston v. Bell, 3 Watts, 198; Mechanics' Bank v. Gorman, 
 8 W. & S. 304 ; Shipwith's Ex'r v. Cunningham, 8 Leigh, 271 ; Phippen v. Durham, 
 8 Gratt. 457 ; Dance v. Seaman, 1 1 Id. 778 ; Floyd v. Smith, 9 Ohio St. 546. In the 
 last case cited, the cases of Hoffman v. Mackall (5 Ohio St. 134), and Dickson 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 unlaw- 
 fully delayed in their remedies against the debtor in following the surplus of the 
 estate, either in his hands or in those of his trustee. 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. 
 
 ■" Goodrich v. Downs, 6 Hill, 438 ; Strong v. Skinner, 4 Barb. S. C. 546 ; Lan- 
 sing v. Woodworth, i Sandf. Ch. 43 ; Barney v. Griffin, 4 Id. 552 ; affirmed on 
 appeal, 2 N. Y. 365; Leitch v. HoUister, 4 N. Y. 211; Collomb v. Caldwell, 
 16 N. Y. 484; see Jacobs v. Remsen, 35 Barb. 384; S. C. 36 N. Y. 668. 
 
270 SPECIAL PROVISIONS. [CHAP. XI. 
 
 States,' and in these States it has been held to make no dif- 
 ference whether the surplus be large or small, or whether there 
 be any at all." And even if there be no express reservation of 
 the surplus to the assignor, it has been held, in Vermont 
 and Michigan, that an assignment of all the debtor's prop- 
 erty, 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 trtist of 
 the surplus,^ even (in Vermont) if it turns out that there is 
 no surplus.* 
 
 § 208. Resulting Trust 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 property for the benefit of certain spec- 
 ified creditors, the assignment is not void, unless it were 
 merely colorable, and made for the sake of the resulting 
 a trust f and that where the assignment does not purport to 
 convey all the assignor's property, and it does not appear 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 
 
 ' Dana V. Lull, 17 Vt. 390; Goddard v. Hapgood. 25 Id. 351; Therasson v. 
 Hickok, 37 Id. 454; Truitt v. Caldwell, 3 Minn. 364; Banning v. Sibley, 3 Id. 389; 
 Green v. Trieber, 3 Md. 1 1 ; Pierson v. Manning, 2 Mich. 445. 
 
 - Barney v. Griffin, 2 N. Y. 365 ; Leitch v. HoUister, 4 Id. 21 1. But in Beck v. 
 Burdett (i 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 pre- 
 ferred debts, the idea that the reservation of a surplus to the grantor will render 
 the deed fraudulent, is a mere mistake." Id. 598, 599. 
 
 ^ Dana v Lull, 17 Vt. (2 Wash.) 390; Redfield, C. J., in Merrill v. Englesby, 
 28 Id. (2 Wms.) 155; Pierson v. Manning, 2 Mich. (Gibbs), 445 ; Pratt, J., Id. 
 449; see Burd v. Smith, 4 Dall. 76 ; West v. Snodgrass, 17 Ala. 549. 
 
 * Dana v. Lull, vbi 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 
 assignment, or by a new declaration of trust in favor of all the creditors. 28 Vt. 
 (2 Wms.) 150. 
 
 " Wilkes V. Ferris, 5 Johns. 335 ; Oliver Lee & Co. Bank v. Talcott, 19 N. Y. 
 146. 
 
§ 20g.] STIPULATIONS FOR RELEASES. 271 
 
 payment of his other creditors, will not render the assign- 
 ment void on its face.' But if it can be shown that the as- 
 signed 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 re- 
 vert to him after the payment of the preferred debts, the as- 
 signment will be fraudulent and void." 
 
 § 209. Reservations with. Stipulations for Releases. — 
 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 re- 
 leasing the debtor, will also avoid the assignment. This 
 rule may now be considered to be established by a prepon- 
 derance of authority, though in some of the States it does 
 not prevail.3 Thus, in Pennsylvania, an assignment of prop- 
 erty in trust for the payment of such creditors as should agree 
 
 'In the case of Spies v. Joel, in the Superior Court (i 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 as- 
 signed, 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 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. 
 
 ^ Doremus v. Lewis, 8 Barb. S. C. 124. In the case of Hooper v. Tuckerman 
 (3 Sandf. S. 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, 3 Dev. 126; Beck v. Burdett, i Paige, 305 ; Hastings v. Bald- 
 win, 17 Mass, 552; Rahn v. McElrath, 6 Watts, 151. 
 
 ^ In the Virginia case of Phippen v. Durham (8 Graft. 457), Moncure, J., 
 remarked 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 a 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. 273. 
 
272 SPECIAL PROVISIONS. [cHAP. XI. 
 
 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 fraudu- 
 lent and void against a creditor who had obtained judg- 
 ment.' So in New York, where an assignment contained 
 a proviso, that if any of the creditors named should not be- 
 come parties to it within a time limited, their shares should 
 be paid by the assignees to the assignor himself, the assign- 
 ment (which contained a release of the debtor) was held 
 fraudulent and void, and the property in the assignees' 
 hands liable to the execution of a judgment creditor be- 
 fore the expiration of the time limited for creditors to exe- 
 cute 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 favorable to the assignor, and reserving to 
 him the surplus which should remain after payment of such 
 creditors, it was held to be coercive and void as against 
 creditors.3 So in Maryland, the reservation 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 property, in trust, first to pay certain preferred cred- 
 itors, the surplus, if any, to be appropriated to the other 
 creditors ratably, who should, within a specified time, exe- 
 cute a release of their claims, and the ultimate surplus to be 
 paid over to the assignor — was held to contain such a stipu- 
 lation for the benefit of the debtor as rendered the deed 
 fraudulent and void.= So, in South Carolina, a reservation 
 to the grantor of the surplus after paying to releasing cred- 
 itors forty per cent, if the estate would yield as much, was 
 
 " Burd V. Smith, 4 Dall. 76. 
 ' Austin V. Bell, 20 Johns. 442. 
 " Berry v. Riley, 2 Barb. S. C. 307. 
 
 ' Green v. Trieber, 3 Md. 11 ; Bridges v. Wood, 16 Id. loi ; Barnitz v. Rice, 
 14 Id. 24 ; Rosenberg v. Moore, 11 Id. 376 ; Vi^hedbee v. Stewart, 40 Id. 414. 
 ' Grimshaw v. Walker, 12 Ala. loi. 
 
§ 209.] STIPULATIONS. 273 
 
 decided to be fraudulent.' On the other hand, in Pennsyl- 
 vania ° and Virginia,^ a reservation to the debtor, in an as- 
 signment 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*Seed containing it. 
 The same was held in Halsey v. Whitney,* in the case of a 
 partial assignment. So, in Maryland, an assignment by a 
 copartnership of all their property, in trust, first, to pay 
 certain preferred creditors ; next, to appropriate the residue 
 to such of the creditors as should, within a specified time, 
 assent to the deed and release the grantors ; and, after full 
 satisfaction of all the said claims and all interest out of the 
 residue, if any, to pay all the other creditors, with a pro- 
 visi9n that if there should be any surplus it should be paid 
 to the grantors — was held to be valid. = And in Alabama, 
 an assignment appropriating the property unconditionally to 
 the payment of certain preferred creditors, and the residue 
 pari passu, to all other creditors who should, within six 
 months, execute the deed, was held not to be vitiated by the 
 implied reservation of such residue to the grantor, in the 
 event the latter class of creditors should fail or refuse to 
 comply with the conditions prescribed,'' So in Illinois and 
 Indiana, a clause in an assignment authorizing the payment 
 to the assignor of the surplus that might remain after the satis- 
 faction of the debts of such creditors as should become parties 
 to it, does not invalidate the assignment ; as creditors not 
 parties can pursue their remedies against the debtor, following 
 the surplus, either in his hands or those of the trustee.' And 
 
 ' Jacot V. Corbet, i Cheves Ch. 71. 
 
 ^ Livingston v. Bell, 3 Watts, 198 ; Mechanics' Bank v. Gorman, 8 W. & S. 
 304. But as to stipulations for a release in this State, see ante, pp. 233, ^34. 
 
 ' Skipwith's Ex'r v. Cunningham, 8 Leigh, 271. In Phippen v, Durham (8 
 Gratt. 437), this case was considered as of binding authority, though the principle 
 of it was disapproved. 
 
 * 4 Mason, 206. As to this case, see ante, pp. 187, 246^ 247. 
 
 ' McCall V. Hinckley, 4 Gill, 128. This was decided, by an equal division of 
 the Court of Appeals, in affirmance of the judgment of the court below. 
 
 • Brown v. Lyon, 17 Ala. 659. 
 
 ' Conkling v. Carson, 11 111. 503; Finlay v. Dickerson, 29 111. 9; The New 
 18 
 
2 74 SPECIAL PROVISIONS. [cHAP. XI. 
 
 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 Alabama, it^as been held that a reservation to the 
 grantor, in a deed of trust to pay a single preferred creditor, 
 of the surplus after payment of the preferred debt, was not 
 void per se.' And similar decisions have been made in 
 North Carolina ^ and Tennessee.'* And in New York, it 
 has been held by the Court of Appeals, that the rule pro- 
 hibiting the reservation of a surplus to the assignor does 
 not apply to assignments made directly to creditors them- 
 selves, 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. Appropriation of Assets in Assignments by Firms 
 and their Members. 
 
 § 2 ID. Preference of Individual Creditors. — Assign- 
 mentsy ma be made by copartners of the partnership prop- 
 erty, for the payment of the partnership debts, and by indi- 
 
 Albany & Salem R. R. Co. v. HofF, 19 Ind. 444 ; McFarland v. Birdsall, 14 Ind. 
 126. 
 
 ' Gates V. Labeaume, 19 Mo. 17. See Johnson v. McAllister, 30 Id. 327. 
 
 ' Hindman v. Dill, 1 1 Ala. 689. ' Burgin v. Burgin, i Ired. L. 453. 
 
 ■■ Austin V. Johnson, 7 Humph, igi. ° Leitch v. Hollister, 4 N. Y. 211. 
 
 " Rahn v. McElrath, 6 Watts, 151. 
 
 ' McCullough V. Hutchinson, 7 Watts, 434 ; Smith v. Lowell, 6 N. H. 67 ; 
 Smith V. Smith, 1 1 Id. 459. 
 
§ 2IO.] PREFERENCE OF INDIVIDUAL CREDITORS. 275 
 
 viduals, 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 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 copartnership assets of the different members of a firm, 
 it has respect to the several equities of the creditors of the 
 firm and its individual 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 respective indi- 
 vidual debts. ^ But, remarks Chancellor Walworth, in the 
 case of Kirby v. Schoonmaker,' where the copartners are 
 administering 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 copart- 
 ners 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 copart- 
 ners 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 prop- 
 erty of both to pay the individual debt of one of the copart- 
 ners only.* 
 
 ' 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 01 each of 
 the partners as well as the common property of both. Coggill v. Botsford, 29 
 Conn. 439. 
 
 ' Mr. Justice Allen, in O'Neil v. Salmon, 25 How. Pr. 251 ; Parsons on Part- 
 nership, 347, 480. 
 
 ' 3 Barb. Ch. 49; Smith v. Howard, 21 How. Pr. 124. 
 
 ' Kirby v. Schoonmaker, 3 Barb. Ch. 51 ; Wilson v. Robertson, 21 N. Y. 
 S92. 
 
276 SPECIAL PROVISIONS. [cHAP. XI. 
 
 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 copart- 
 nership creditors.'' And in such a case, the proportion of 
 the capital contributed by each partner is an immaterial con- 
 sideration.3 
 
 § 211. Preference of Firm Creditors. — What has been 
 said of an assignment by copartners preferring their indi- 
 vidual 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 appropri- 
 ation 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 property, except to see that firm prop- 
 erty 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, 
 
 ' Wilson V. Robertson, 2i N. Y. 592 ; s. C. 19 How. Jr. 350. See Davis, J., 
 in Hurlbert v. Dean, 2 Abb. Ct. App. Dec. 432. 
 
 " Wilson V. Robertson, supra ; Knauth v. Bassett, 34 Barb. 31 ; Cox v. Piatt, 
 
 32 Barb. 126; s. C. 19 How. Pr. 121 ; Keith v. Fink, 47 111. 272; Heye v. BoUes, 
 
 33 How. Pr. 266; s. C. 2 Daly, 231; Kirby v. Schoonmaker, 3 Barb. Ch. 46; 
 Lester v. Abbott, 28 How. Pr. 488 ; s. C. 3 Robt. 691 ; Henderson v. Hadden, 12 
 Rich. Eq. (S. C.) 393 ; French v. Lovejoy, 12 N. H. 458. 
 
 ' Wilson V. Robertson, 21 N. Y. 591. 
 
 ■• Jackson v. Cornell, i Sandf. Ch. 348 ; Smith v. Howard, 20 How. Pr. I2l. 
 
 ' O'Neill V. Salmon, 25 How. Pr. 252, Allen, J. ; Eyre v. Beebe, 28 How. 334; 
 Kirby v. Schoonmaker, 3 Barb. Ch. 46 ; Van Rossum v. Walker, 1 1 Barb. 240 ; 
 Gadsen v. Carson, 9 Rich. Eq. (S. C.) 252 ; Newman v. Bagley, 16 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 in- 
 dividual creditors, under the decisions in CoUomb v. Caldwell (l6 N. Y. 484), and 
 Wilson v. Robertson (21 N. Y. 587). 
 
§ 211.] PREFERENCE OF FIRM CREDITORS. 277 
 
 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 circuit, 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 exclusion of his own, was 
 fraudulent and void as to the latter. The converse of the 
 rule was also considered as established, viz. : that an assign- 
 ment by a copartnership, preferring the creditors of the 
 individual copartners to those of the firm, was invalid against 
 the latter, on the same principles. The decision was rested 
 essentially on the rule of equity (which was held to be uni- 
 form 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 members 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 cred- 
 itors can claim anything.'' But in the later case of Kirby v. 
 Schoonmaker,3 before the chancellor, it was held that the 
 rule relied on in the. last case, applied only where a partner 
 ship 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 law to make distribution ; and that the rule did not go 
 so far as to deprive the partners themselves of the power, 
 while they have the legal control of their property, of dis- 
 tributing it among all their creditors, in such manner as they 
 might see fit, provided no injustice was done to any of them. 
 It was accordingly decided, that copartners may assign their 
 
 ' I Sandf. Ch. 348. This case is cited with approval in 3 Kent's Com. [65] 
 78, note b. But see Whiteley v. May, in the Virginia Circuit Court, where a con- 
 trary doctrine is strenuously maintained. U.S. Law Mag. May, 1850, p. 442; 
 Editor's note (4) to 3 Kent's Com. (7th ed.) 78. 
 
 " Sandford, A. V. C, i 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 ; I Story's Eq. Jur. 625, § 675. 
 
 = 3 Barb. Ch. 46. See Newman v. Bagley, 16 Pick. 570. 
 
278 SPECIAL PROVISIONS, [CHAP, XI. 
 
 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 co- 
 partners may make an assignment of their respective interests 
 in the partnership property, 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 partnership 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 quasi 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 
 
 ' Van Rossum v. Walker, 1 1 Barb. S. C. 237, ace. 
 
 ' Walworth, C, 3 Barb. Ch. 49, citing Story on Part. §§ 97, 326, 360. And see 
 3 Kent's Com. [65] 78. 
 
 = 3 Barb. Ch. 47. * 4 Sandf. S. C. 252. 
 
§ 211.] PREFERENCE OF FIRM CREDITORS. 279 
 
 of the city of New York, the court (Duer, J.) gave to the 
 equitable rule of distribution in the case of insolvent co- 
 partnerships, the same application as the assistant vice chan- 
 cellor 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 all 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 con- 
 sidered as overruled on that point by Kirby v. Schoon- 
 maker." The preference violated a rule of equity, but not 
 any statutory prohibition.'' 
 
 The views of the court in Jackson v. Cornell, and Nich- 
 olson V. Leavitt, in regard to the applicability of the equi- 
 table rule of distribution 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. Sommer- 
 ville,3 and of the Supreme Court of the United States, in 
 the case of Merrill v. Neill.+ 
 
 But an assignment of individual property for the pay- 
 ment 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 illustrated by the case of Col- 
 lomb V. Caldwell,^ where partners holding certain real 
 
 ' 3 Barb. Ch. 46. 
 
 ° The distinction was taken in this case between an assignment of partnership 
 property, giving a preference to debts due from the partners individually, but con- 
 taining a general trust for the partnership creditors, and such an assignment, de- 
 voting 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, I. 
 
 ' 8 Leigh, 415. 
 
 * 8 How. 414. And see the case of Andress v. Miller, in the Supreme Court 
 of Pennsylvania, 15 Penn. St. (3 Har.) 316. 
 
 ' 16 N. Y. 484. 
 
28o SPECIAL PROVISIONS. [CHAP, XI. 
 
 estate as tenants in common, assigned it with other prop- 
 erty 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 partner- 
 ship property, the assignment was sustained. It will be 
 observed that this is a distinct question from that which 
 arises where the individual property of one partner is ap- 
 plied to the payment of the individual debts of his copart- 
 ners, for in such a case the creditors benefited have plainly no 
 claim in law or equity upon the fund out of which payment 
 is provided for them.'' 
 
 In the absence of an express provision directing an un- 
 lawful appropriation of the funds, the law will interpret the 
 instrument according to the rights of parties and the re- 
 spective equities of the creditors.^ Proof has been admitted 
 to show that the assignment included sufficient individual 
 property of each partner to pay his individual debts directed 
 to be paid by the assignee.'' Evidence 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 
 
 ' 24 N. Y. 505, su6 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 
 assignment was not void as against partnership creditors who were prefen'ed. 
 But see Smith v. Howard, 20 How. Pr. 121 ; O'Neil v. Salmon, 25 How. Pr. 254. 
 
 ' Wilson V. Robertson, 21 N. Y. 587; Smith v. Howard, 20 How. Pr. 121; 
 Morrison v. Atwell, 9 Bosw. 503; Eyre v. Beebe, 28 How. Pr. 340; O'Neil v. 
 Salmon, 25 How. Pr. 254. 
 
 ^Forbes v. Scannel, 13 Cal. 242 ; Farquharson v. Eichelberger, 15 Md. 63 ; 
 Heckman v. Messinger, 49 Penn. St. 465 ; Black's Appeal, 44 Penn. 503 ; Andress 
 V. Miller, 15 Penn. 316 ; Eyre v. Beebe, 28 How. Pr. 340. 
 
 * Knauth v. Bassett, 34 Barb. 31 ; Van Nest v. Yoe, i Sandf. Ch. 4; Hollister 
 v. Loud, 2 Mich. 309 ; see Smith v. Howard, 20 How. Pr. 121 ; Lester v. Abbott, 
 28 How. Pr. 488 ; S. C. 3 Robt. 691. 
 
 " In 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 payment 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 sur- 
 plus, each of the assignors testified that he owed no individual debts, and owned 
 no individual property, and this was deemed sufficient to rebut the presumption 
 of fraud. 
 
§ 212.] STIPULATIONS TO CONTINUE BUSINESS. 28 1 
 
 where it is apparent that such an unlawful disposition of the 
 firm proceeds has been attempted, this will invalidate the 
 entire 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 partner was interested, for the payment of their 
 debts, to the exclusion of the creditors of the former copart- 
 nership, 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 assignment of the new 
 firm property for the payment of the indebtedness of the 
 former partners would be a violation of the rights of existing 
 creditors, and an application of the property to the payment 
 of the debts of strangers.* 
 
 IV. Stipulations for the Continuance of Assignor s Business. 
 
 § 212. Assignments are sometimes drawn with stipula- 
 tions for the continuance of the debtor's business, either by 
 
 'Wilson V. Robertson, 21 N. Y. 587; Keith v. Fink, 47 III. 272; Smith v. 
 Howard, 20 How. Pr. 121. In Wilson v. Robertson, supra, Mr. Justice Wright, 
 remarks : " 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 fraudu- 
 lent intent on the part of the assignors." 
 
 ^ McCullough V. Sommerville, 8 Leigh, 415; Read v. Baylis, 18 Pick. 497; 
 Kemp V. Camley, 3 Duer, i ; Nye v. Van Husan, 6 Mich. 329 ; Lassel v. Tucker, 
 5 Sneed, i ; Gordon v. Cannon, 18 Gratt. 387; see Eyre v. Beebe, 28 How. Pr. 
 333. See remarks of Hogeboom, J., in Cox v. Piatt, 32 Barb. 126. In Morrison 
 v. Atwell (9 Bosw. 503), 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 assignment, but 
 was not a ground of complaint as to partnership creditors. 
 
 ' Dimond v. Hazzard, 32 N. Y. 65 ; Smith v. Howard, 20 How. Pr. 121 ; Price 
 v. Ford, 18 Md. 489; Miller v. Estell, 5 Ohio St. 508 ; Mandel v. Peay, 20 Ark. 
 325. See Mattison v. Demarest, 4 Robt. 161 ; Cox v. Piatt, 32 Barb. 126. 
 
 * Lester v. Abbott, 28 How. Pr. 488; Smith v. Howard, 20 How. Pr. 121. 
 
282 SPECIAL PROVISIONS. [cHAP. XI. 
 
 the assignees, or by the debtor himself under their direction ; 
 and where this is done as ancillary to winding up the 
 debtor's affairs, and with the view of more effectually pro- 
 moting 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 com- 
 pleting the manufacture of any of the assigned property, or 
 fitting it for sale, and working up materials, etc., so as to 
 realize the greatest possible amount of money therefrom, as 
 in their judgment should seem most advisable ; and were 
 expressly directed to pay out of the proceeds of the prop- 
 erty 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 abso- 
 lutely void on its face, thus reversing on this point the pre- 
 vious decision of the Court of Errors in the important case 
 of Cunningham v. Freeborn.^ Mr. Justice Selden, in de- 
 livering the opinion of the Court of Appeals, makes use of 
 the following language : " The true principle applicable to 
 all such cases is, that a debtor who makes a voluntary assign- 
 ment 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 conditions whatever as to the managemeiit or 
 
 ' This has been decided in England, in Janes v. Whitbread, 20 L. J. 
 C. P. (N. S.) 217 ; 5 Eng. L. & Eq. 431. 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. Wilsmore, 8 Term R. 521, 522; Coate v. Williams, 21 L. J. 
 Exch. (N. S.) 176 ;_S. C. 9 Eng. L. & Eq. 481. And, by what is called "a 
 deed 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 cred- 
 itors are satisfied, the trustees shall hold the residue of the trust property in trust 
 for the assignor. Hickman v. Cox, 36 Eng. L. & Eq. 400. In this case, the 
 creditors executing the deed were held to be partners quoad third persons. 
 
 " Dunham v. Waterman, 17 N. Y. 9 ; reversing s. C. 3 Duer, 166. 
 
 " I Edw. Ch. 256 ; S. C. on appeal, 11 Wend. 240. 
 
§ 2 1 3- J STIPULATIONS TO CONTINUE BUSINESS. 283 
 
 disposition of the assigned property. In all other respects 
 the assignee must be left to act under 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 manage and improve, sell, &c., and convert into money 
 all the assigned property," &c., and it appeared that the real 
 estate was heavily encumbered with mortgages, some of 
 which were about to be foreclosed ; it was held by the Su- 
 preme Court of New York, that the power " to manage and 
 improve" did not invalidate the assignment; the construc- 
 tion 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." ' 
 
 In Connecticut, an assignment of the contents of a coun- 
 try store, and raw materials of a factory, empowering the 
 assignees 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 materials on hand at the time of the assign- 
 ment should be worked up — ^was held valid.^ 
 
 § 2 1 3. So in Massachusetts, where, in an assignment by 
 a manufacturing company, it was stipulated, that until de- 
 fault of payment of debts mentioned, the trustees should 
 permit the assignors to remain in possession of all the prop- 
 erty, and to sell and dispose of the personal property accord- 
 ing to the usual course of their business, unless the trustees 
 should be of opinion that the safety of creditors would re- 
 quire them to take immediate possession, in which case they 
 should have the right to do so ; and that they should also 
 have the right to take possession of subsequently acquired 
 property, and apply it to the payment of subsequently con- 
 
 ' Hitchcock V. Cadmus, 2 Barb. 381 ; but was held to render the assignment 
 void in Schlussel v. Willett, 34 Barb. 615 ; s. C. 12 Abb. Pr. 397 ; 22 How. Pr. 
 15 ; and see Renton v. Kelly, 49' Barb. 536. 
 
 ^ De Forest v. Bacon, 2 Conn. 633 ; S. P. Kendall v. New England Carpet Co. 
 II Id. 383. 
 
a84 SPECIAL PROVISIONS. [chap. XI. 
 
 tracted debts ; the transaction was held to be lawful.' And 
 in a subsequent case in the same State, a clause in an assign- 
 ment made under the statute of 1836, c. 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, &c., also corn, fodder 
 and bacon, giving to the trustee the management of the 
 plantation during the current year, and devoting the pro- 
 ceeds thereof to the payment of the debts to secure which 
 the deed was made, was decided to be not fraudulent /^rj^.^ 
 But where stipulations of this kind are intended chiefly 
 for the benefit of the assignor, or are coupled with pro- 
 visions of an onerous or coercive character towards credit- 
 ors, they will have the effect of avoiding the assignment. 
 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 proceeding should be commenced against 
 him, he should be at liberty to plead the assignment in dis- 
 charge and acquittance thereof, such assignment was, for 
 this and other reasons, held to be coercive and void as 
 against creditors. "* 
 
 ' 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 
 remain in possession and have the use of the property would have rendered it 
 void as against creditors. But it was a good executory contract, and when the 
 possession was actually taken, in pursuance of its terms, the sale became com- 
 plete." Shaw, C. J., 12 Pick. 454. In the case of Bull v. Loveland (10 Pick. 9), 
 an assignment 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 questions arose upon it. 
 
 ' Woodward v. Marshall, 22 Pick. 468. 
 
 = Ravisies v. Alston, 5 Ala. 297. And see Planters' & Merchants' Bank of 
 'Mobile v. Clarke, 7 Id. 765. 
 
 ' King V. Kenan, 38 Ala. 63 ; and see Doyle v. Smith, 1 Cold. (Tenn.) 674; Fur- 
 man V. Fisher, 4 Cold. (Tenn.) 626 ; Rindskoff v. Guggenheim, 3 Cold. (Tenn.) 284 ; 
 Inloes V. American Ex. Bank, 11 Md. 173 ; Marks v. Hill, 5 Gratt. 400; Berry v. 
 Riley, 2 Barb. S. C. 307. 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. 
 
§ 214.] PROVISIONS FOR EXECUTING THE TRUST. 285 
 
 V. Provisions respecting the Time for executing the Trust. 
 
 § 214. It is sometimes the practice to stipulate in assign- 
 ments, that the trust shall be executed, by sale of the assigned 
 property and distribution of the proceeds, within a specified 
 time. If the period fixed be a reasonable one, such a stipu- 
 lation will be vaHd.' 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 delaying 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 reason- 
 ableness of the delay depends on the character of the prop- 
 erty, and the circumstances of the case.^ An interval of 
 three years before the 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 con- 
 tained a stipulation that a sale should not take place for three 
 years, and that in the mean time the grantor should remain 
 in possession of the property, consisting of lands, negroes, 
 &c. — it was held that the deed could not be regarded by the 
 court as fraudulent in law, upon its face ; the opposing cred- 
 itor having admitted that it was not fraudulent in fact.^ 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, providing also that the grantor should 
 
 ' Rundlett v. Dole, 10 N. H. 458. 
 
 ^ Ruffin, C. J. in Hardy v. Skinner, 9 Ired. L. 191, 195. 
 
 ' Hafner v. Irwin, i 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, 
 I Sm. & M. 207 ; Arthur v. Commercial & Railroad Bank of Vicksburg, 9 Sm. & 
 M. 396 ; Farmers' Bank v. Douglas, 1 1 Id. 469 ; Henderson v. Downing, 24 Miss. 
 (2 Gush.) 106 ; Mitchell v. Beal, 8 Yerg. 134 ; Bennett v. Union Bank, 5 Humph. 
 612; Hempstead v. Johnson, 18 Ark. 123 ; K'night v. Packer, 12 N. J. Eq. 214. 
 
 * Adlum V. Yard, i Rawle, 162; Mitchell v. Beal, 8 Yerg. 134. 
 
 * 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 
 m ght 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. 
 
286 SPECIAL PROVISIONS. [cHAP. XI. 
 
 in the mean time retain possession of the property, but de- 
 voted 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, &c., and which 
 was not to be enforced till the end of two years from its 
 date, the profits being, in the mean time, reserved to the 
 grantCM", was held to be not fraudulent as to creditors.' A 
 year's suspension of proceedings, where the expressed object 
 of the conveyance was to prevent a sacrifice of the property, 
 was decided in Kentucky to be fraudulent. ^ But twelve 
 months to collect the debts and sell the property of an in-, 
 solvent company was considered, in Mississippi, not unrea- 
 sonable ; the debts being numerous and widely scattered, 
 and the creditors residing at a distance.* The same period 
 has been adopted in Pennsylvania, as the proper limit be- 
 yond 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-assenting creditors. = But in a 
 later case, it was decided that a proviso, 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 
 preferred creditors, from time to time, as often as there should 
 be moneys in hand, did not postpone the liability of the as- 
 signees to account, or protect them from being cited after a 
 year, and was therefore no objection to the validity of the 
 assignment.^ In Kentucky, three months' delay of payment, 
 
 ' Elmes V. Sutherland, 7 Ala. 262 ; commented on and approved in Johnson v. 
 Thweatt, 18 Id. 741, 746. 
 
 ' Dance v. Seaman, 1 1 Gratt. 77^. And see Cochran v. Paris, Id. 348 ; Lewis 
 V. Caperton's Ex'r, 8 Id. 148. 
 
 ° Ward V. Trotter, 3 Mon. i. <■ Robins v. Embry, i S. & M. Ch. 207. 
 
 ' Sheerer v. Lautzerheizer, 6 Watts, 543. 
 
 • Dana 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 
 
§ 2l6.] PROVISIONS FOR EXECUTING THE TRUST. 287 
 
 for the purpose of maturing 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.° 
 
 § 215. In the Mississippi case of The Farmer's Bank of 
 Virginia v. Douglas,^ it was said to be " difficult, indeed im- 
 possible, to lay down any precise and definite rule, applicable 
 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 re- 
 lied on as one means of payment." = In the later case of 
 Henderson v. Downing,* in the same State, the rule was laid 
 down in more absolute terms, the court (Yerger, J.) dis- 
 claiming 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 stipulation extending the time of payment for five years ; 
 and this was held to render it fraudulent and void as to ex- 
 isting creditors. 
 
 § 2 1 6. An omission to limit any time for the assignee 
 to apply the proceeds of the assigned property, has been 
 held, in Massachusetts, to be hot objectionable ; because 
 the law in such cases requires it to be done in a reasonable 
 time.' In the New York case of Cunningham v. Freeborn,' 
 
 subsequent 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 & Sham. Imp. Co. 25 Penn. St. (i Casey), 56. 
 
 " Christopher v. Covington, 2 B. Mon. 357. 
 
 ^ Hindman v. Dill, 1 1 Ala. 689. And see further, subd. VI, post, in this 
 chapter. 
 
 = n S. & M. 469; Clayton, J. Id. 539. 
 
 ' Mitchell V. Beal, 8 Yerg. 134; 3 Humph. 180. 
 
 " Bennett v. The Union Bank of Tennessee, 5 Humph. 612. 
 
 ' 24 Miss. (2 Cush.) 106, 116. 
 
 ' Stevens 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, I Binn. 502. 
 
 ° II Wend. 241. 
 
288 ■ SPECIAL PROVISIONS. [cHAP, XI. 
 
 there was no limitation of time within which the trust was 
 to be executed. But this was not considered objectionable, 
 especially where, from the nature of the business, it was 
 impossible to fix a time. " All convenient dispatch," ob- 
 served 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 paying the preferred debts, 
 the assignees should distribute the funds realized from the 
 assigned estate among the general creditors, "at such rea- 
 sonable time or times as they in their discretion might think 
 proper," it was held to be, 9n that ground, void.'' In Mich- 
 igan, however, an assignment containing a similar provision 
 has been held to be unobjectionable on the ground that no 
 time was limited by it for closing the trust. ^ 
 
 But where the provisions of the assignment itself have 
 the eflFect 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 convey- 
 ance 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 paid all the debts of the grantor, where the prop- 
 erty thus conveyed is to revert or be reconveyed to him, 
 is fraudulent and void, as hindering and delaying creditors.* 
 Where, therefcre, an incorporated 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 as- 
 signees for the completion of the road, and all the expenses 
 
 ' Id. 255, 256. ^ D'lvemois v. Leavitt, 23 Barb. 63. 
 
 ' Hollister v. Loud, 2 Mich. (Gibbs), 309, 321. 
 
 * Arthur v. The Commercial & Railroad Bank of Vicksburg, 9 Sm. & M. 394. 
 
§ 217.] LIMITATION OF TIME TO ASSENT. 289 
 
 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, &c.; 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 the 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 cor- 
 poration ; and that it was therefore void.' 
 
 VI. Limitation of Time for Creditors to become Parties, 
 
 or Assent. 
 
 § 2 1 7. Assignments 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 lim- 
 ited 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, &c. A time may 
 be so short, or so long, as justly to raise a presumption of 
 fraud.3 It must neither be too long, so as thereby to im- 
 properly delay the creditors in the collection of their debts,, 
 nor so short as not to afford time for examination, and there- 
 fore be merely illusory.'' In Pennsylvania, in the case of 
 Burd V. Smith,5 the creditors were required to accept the as- 
 
 ' Id. ibid. 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 Chancery of Mississippi, in Robins v. 
 Embry, I Sm. & M. Ch. 207. 
 
 ^ Green v. Trieber, 3 Md. 11. 
 
 ° Story, J., in Halsey v. Whitney, 4 Mason, 206, 225 ; see Pearpoint v. Graham,, 
 4 Wash. C. C. 232; Fox v. Adams, 5 Greent. 245. 
 
 * Ashurst V. Martin, 9 Port. 566. ' 4 Dall. 76. 
 
 19 
 
290 SPECIAL PROVISIONS. [cHAP. XI, 
 
 signment within nine months. The deed not having been 
 deUvered 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 no- 
 tice 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, con- 
 sidering the state of the affairs of the debtor. In the case 
 of Dedham Bank v. Richards,^ in the same State, two calen- 
 dar months were limited by the assignment, for creditors to 
 become parties, with a proviso for extending it, not to ex- 
 ceed in the whole six calendar months ; to which no objec- 
 tion was taken. In Virginia, in the case of Phippen v. 
 Durham,^ in which the assignment was sustained, the credit- 
 ors were required to signify their acceptance within thirty 
 days. In Alabama, the case of Ashurst v. Martin,* one hun- 
 dred and fifty days after notice of the deed was held a reason- 
 able time, the creditors being scattered over a large space. 
 In Brown v. Lyon,^ in the same State, the assignment re- 
 quired the residuary creditors to execute it within six 
 months. In Illinois, in the case of Howell v. Edgar, ^ an 
 assignment 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 Hable to pay any creditors who might sign the same 
 any deficiency that should remain unsatisfied of their respect- 
 ive demands, was held to be fraudulent and void. So in a 
 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 as- 
 signment all other creditors, some of them residing at great 
 distances, who should not signify their acceptance within a 
 fixed time, which under the circumstances was unreasonably 
 
 ' 4 Mason, 206. '■' 2 Mete. 105. = 8 Gratt. 457. 
 
 ' 9 Port 566. ' 17 Ala. 659. " 3 Scam. 417, 
 
§ 2l8.] TIME OF SALE. 
 
 291 
 
 short, the assignment was held void.' In Tennessee, a provis- 
 ion in a deed of assignment requiring the creditors to pre- 
 sent their claims within a specified time — twenty months — 
 was not thought objectionable.'' A provision requiring credit- 
 ors to prove their claims before receiving a dividend is no 
 evidence of an intent to hinder or delay them.^ In Maine, 
 creditors are allowed, by statute, three months from the exe- 
 cution of the assignment, to become parties.* In New 
 Hampshire,^ the assent of creditors to an assignment, exe- 
 cuted pursuant to the statute, will be presumed, unless their 
 dissent is made known to the assignee, within thirty days 
 after public notice given of the assignment ; and in some of 
 the 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 considered 
 fraudulent' 
 
 VII. Provisions Respecting the Sale of the Property 
 
 Assigned. 
 
 § 2 1 8. Time of Sale. — We have already seen that a clause 
 unreasonably postponing the time of sale of the assigned 
 property will avoid the assignment. If the assignee be 
 directed to delay the sale, for the purpose of obtaining 
 higher prices for the property, unless by the consent of the 
 
 ' Hardin v. Osborne, 60 111. 93. 
 
 ° Meyer v. Pulliam, 2 Head (Tenn.) 346. 
 
 = U. S. Bank v. Hutte, 4 B. Mon. (Ky.) 423. 
 
 ' Rev. Stat. ^d. 1871), p. 543, § 4. 
 
 ' Gen. Stat. (ed. 1867), c. 126, § 3. " Set post, Chap. XLII. 
 
 ' Pearpoint v. Graham, 4 Wash. C. C. 232 ; 2 Kent's Com. [533] 693 ; Green 
 V. Trieber, 3 Md. 11 ; Henderson v. Bliss, 8 Ind. (Tan.) 100, 104. In Shakleford 
 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. 
 
292 
 
 SPECIAL PROVISIONS. [cHAP. XI. 
 
 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 as- 
 signed should be exhausted, unless with the consent of the 
 assignor, it was held to be not an unconditional assignment, 
 and therefore fraudulent and void in law as against creditors 
 not preferred, or not provided 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 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, without 
 great loss, then, at the expiration of that period, it should be 
 sold absolutely at public sale, it was adjudged that the neces- 
 sary effect of this clause was to hinder, delay and defraud credit- 
 ors, and that it rendered the assignment void.^ But in some 
 cases, directions for delaying a sale until the happening of a 
 certain contingency or event, have 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 objec- 
 tionable as being made " to hinder, delay, or defraud cred- 
 itors."'' So, an assignmebt of a similar character was held, 
 in the same State, not to be void on account of a condition 
 that there should be no sale until the security debt was first 
 paid.' 
 
 ' Hart V. Crane, 7 Paige, 37. 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 sacriiice," it did not operate to render the assignment invalid. 
 Woosterv. Stanfield, 11 Iowa, 128. 
 
 " Pierson v. Manning, 2 Mich. (Gibbs), 445, 448, 449. 
 
 " Hardin v. Osborne, 60 111. 98. 
 
 ■* Planters' & Merchants' Bank v. Clarke, 7 Ala. 765. 
 
 " Tarver v. Roffe, Id. 873. 
 
2 1 9-] TIME OF SALE. 
 
 293 
 
 § 219. 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 direc- 
 tion to convert the property into cash " as soon as the same 
 may conveniently and properly be done," ' " to sell the same 
 without delay," 3 "to sell, dispose of, and convey the said 
 real estate and personal property, at such time or times, and 
 in such manner as shall be most conducive to the interests 
 of the creditors, and convert the same into money as soon 
 as may be consistent with the interests of said creditors," * and 
 such like,5 have been ordinarily inserted in assignments, and 
 although sometimes questioned, as tending unduly to extend 
 the powers of the assignee to the prejudice 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 provis- 
 ion that the assigned property might remain in the trustee's 
 
 ' Thornton, J., in Hardin v. Osborne, 60 III. 98. 
 
 ' Ogden V. Peters, 21 N. Y. 23, Comstock, J. 
 
 " Griffin v. Marquardt, 21 N. Y, 121. 
 
 ■* Jessup V. Hulse, 21 N. Y. 384; 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 concerned. " 
 In Bellows v. Partridge (19 Barb. 176), the direction was to sell "as soon as rea- 
 sonably practicable, with due regard to the rightful interests of the parties con- 
 cerned." In HoUister v. Loud (2 Mich. [Gibbs], 309, 321), the direction was to 
 sell "within such reasonable time as to them shall seem meet." In Mussey v. 
 Noyes (26 Vt. [3 Deane], 462), the direction was to sell " as soon as practicable 
 and in the most beneficial manner." 
 
 ' In 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 
 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 unobjection- 
 able. And see Wilson v. Robertson, 2i 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 Woodbum v. Mosher (9 
 Barb. 255), where the assignment directed the assignees to sell " within convenient 
 time as to them shall seem meet," it was held that this- clause authorized the as- 
 signees to discharge their duties whenever it should suit their convenience, and 
 that it rendered the assignment void, as operating to hinder or delay creditors. 
 Monson J., Id. 257. And see the general rule laid down in Brigham v. Tilling- 
 hast (13 N. Y. 220). 
 
294 SPECIAL PROVISIONS. [CHAP. XI, 
 
 possession until he might choose to sell, or be required to do 
 so by the beneficiaries of the deed, was held to afford no in- 
 ference of fraud.' And in the same State, an assignment by 
 the members of a mercantile company, conveying land for 
 the payment of the debts of the partnership, and requiring 
 the trustee to sell at the instance of any creditor 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 payment of certain specified debts of the grantor, im- 
 posing no condition 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 cred- 
 itors in the collection of the debts secured. Were the trus- 
 tee to refuse to act promptly, or within a reasonable time, 
 they might compel him, in equity, to do so, or have him dis- 
 placed 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 after which the property should 
 be sold, but reserved to the debtor the power of ordering 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 
 creditors.* And in a later case, in the same State, it has 
 been held that a provision in a deed of trust, for the post- 
 ponement of the sale of the property for nine months, and 
 
 ' Dubose V. Dubose, 7 Ala. 235. ' Griffin v. Doe, 12 Ala. 783. 
 
 ' Evans v. Lamar, 21 Ala. 333; Ligon, J., Id. 336. The deed, in this case, 
 empowered the trustee tosell, "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- 
 
 * Cannon v. Peebles, 2 Ired. L. 449 ; s. C. 4 Id. 204. 
 
§ 2 20.] MODE OF SALE. 295 
 
 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 provided 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 /^r 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 assigned property, but to leave it to the discretion 
 of the assignees, in general terms ; they being only directed 
 to sell " with all reasonable speed ; " or " as soon as reason- 
 ably practicable ;" or "from time to time, and at such time 
 as they may deem reasonable and proper ; " or the like.^ 
 
 § 220. Mode of Sale. — It has been a common practice in 
 drawing voluntary assignments, to leave the manner, as well 
 as time of sale, to the discretion of the assignees ; author- 
 izing them to sell " at public or private sale," as they may 
 deem proper ; •• they having such a discretion, in the absence 
 
 ' Gilmer v. Earnhardt, I Jones L. 559. 
 
 ^ Dance v. Seaman, 11 Gratt. 778; see, however, the observations of Allen, 
 P., Id. 780. With regard to the length of time for which the sale may be de- 
 layed, it has been held that forty days (Hafner v. Irwin, I Ired. L. 490), three months 
 (Christopher v. Covington, 2 B. Mon. [Ky.] 357), four months (Cannon v. Peebles, 
 2 Ired. L. 449 ; S. C. 4 Id. 204), nine months (Gilmerv. Earnhardt, I 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, 543 ; contra, Graham v. Lock- 
 hart, 8 Ala. 9 ; Farquharson v. McDonald, 2 Heisk. 404 ; Rindskoff v. Guggen- 
 heim, 3 Cold. 284), eighteen months (Barcroft v. Snodgrass, i Cold 430), two 
 years (Quarles v. Kerr, 14 Gratt. 48), three years (Adlum v. Yard, i Rawle, 163), 
 and five years (Storm v. Davenport, i Sandf. Ch. 135), have been held fatal. 
 Bump on Fraud. Con. 412, 413. 
 
 = See form in Illinois, Sackett v. Mansfield, 26 111. 21 ; in Ohio, Thomas v. 
 Talmadge, 228 ; Abbott's Conveyancer. 
 
 ' Sackett v. Mansfield, 26 111. 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 creditors into a settlement. In Farquharson v. 
 Eichelberger (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. And see observations 
 of Duer, J., in Nicholson V; Leavitt, 4 Sandf. S. C. 252 ; rev'd 6 N. Y. 510. The 
 modern English forms are drawn with a similar clause. See Janes v. Whitbread, 
 20 L. J. C. P. (N. S.) 217 ; 5 Eng. L. & Eq. 431. 
 
296 SPECIAL PROVISIONS. [CHAP. XI. 
 
 of any express direction or authority contained in the in- 
 strument' In some cases, objections have been raised 
 against assignments on this ground. But in Alabama, a 
 discretion of this kind, given to the trustee in a deed of 
 trust, has repeatedly been held to be not indicative of fraud." 
 And in North Carolina, a provision authorizing a trustee to 
 sell at private 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 seJ 
 
 The discretion given to the assignees, on this point, is 
 sometimes expressed in more general terms ; the assignment 
 empowering them to sell " in such manner as they may con- 
 sider expedient, and most for the interest of all parties.""* 
 And sometimes both modes of sale are designated ; the as- 
 signees 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.' 
 
 § 221. 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 advan- 
 tageous ; " * and sometimes more particularly empowering 
 them to sell " for cash or upon credit," "> as they may deem 
 
 ' Hart V. Crane, 7 Paige, 37. 
 
 ^ Brock V. Headen, 13 Ala. 370; Abercrombie v. Bradford, 16 Id. 560; Evans 
 V. Lamar, 21 Id. 333; Shackelford v. P. & M. Bank of Mobile, 22 Id. 238. 
 
 ' Burgin v. Burgin, I 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 ptcblic 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. 
 
 * 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. 63; Ely V. Hair, 16 B. Mon. 230. But see Clark v. Fuller, 21 Barb. 128, 
 contra. 
 
 ' Hopkins v. Ray, i Mete. 79. 
 
 " Ashurst V. Martin, 9 Port. 566 ; Pierce v. Brewster, 32 111. 268. 
 
 ' 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. 
 
§ 221.] TERMS OF SALE. 297 
 
 proper, or most for the advantage of parties.' 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 de- 
 laying creditors ; ^ that the power itself was, in many 
 instances, beneficial to the interests of creditors, and, in 
 some cases, essential to the due execution of the trust ; ' 
 and that where it was not expressly given, it was usually 
 implied in trusts for the payment of debts.'' But the Court 
 of Appeals of this State have, in several cases, deter- 
 mined that a clause of this kind avoids the whole assign- 
 ment ; s its tendency and eflFect being to " hinder, delay, and 
 
 ^ 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. 
 
 '' Rogers v. De Forest, 7 Paige, 272 ; Nicholson v. Leavitt, 4 Sandf. S. C. 252 ; 
 reversed on appeal, 6 N. Y. 510. 
 
 ' Nicholson v. Leavitt, 4 Sandf. S. C. 252 ; Duer, J., Id. 289, 290. 
 
 * Walworth, C, in Rogers v. De Forest, 7 Paige, 272; Nicholson v. Leavitt, 
 ubi sup. 
 
 ' Barney v. Griffin, 2 N. Y. 365, 371 ; Nicholson v. Leavitt, 6 N. Y. 510 ; Bur- 
 dick V. Post, Id. 522 ; Porter v. Williams, 5 Id. 142 ; Kellogg v. Slauson, 1 1 Id. 
 302; 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 judicially 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 Forest, which came before the Court of Chancery in 1838 (7 Paige, 272). In 
 this case, the assignment, which was of both real and personal property, con- 
 tained an express 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 provis- 
 ions of the Revised 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 usualty 
 implied in trusts of this description, and it is not a violation of the provisions of 
 the Revised Statutes, 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 be- 
 tween 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 imme- 
 diately converted into money, and applied towards the satisfaction of their re- 
 spective 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, to lease or mortgage, the chancel- 
 lor 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 decree in this case, to the Court of Errors (Darling v. 
 Rogers, 22 Wend. 483), the chancellor's decision was reversed ; the court holding 
 
298 SPECIAL PROVISIONS. [cHAP. XI. 
 
 defraud creditors," within the meaning of the statute. The 
 
 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 decision, therefore sustaining the assignment on that 
 point, may be considered to have been left undisturbed. 
 
 In the case of Meacham v. Sternes, which came before 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 prop- 
 erty 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 un- 
 necessary delay. And the assignment itself would have been clearly fraudulent, 
 if the assignors had, in terms, chrected their assignees 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 circumstances, 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 authority cited 
 and relied on by the court being that of Goodrich v. Downs, in the Supreme 
 Court (6 Hill, 438), in which such a clause was the principal ground of the de- 
 cision. 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 resen'ing 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 delivered the opinion of the court, to be an unan- 
 swerable 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 converted into money for their benefit, without delay. They have 
 the right to determine for themselves, whether the property shall be sold on credit; 
 and a conveyance 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. 
 371. The learned judge relied on the case of Meacham v. Sternes, observing 
 that the question was considered by the chancellor in that case, and that his 
 views fully accorded 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 
 voluntary assignments, came before the Superior Court of the city of New York, 
 in 1850 (4 Sandf. S. C. 252). Some of the assignments contained a clause direct- 
 ing a sale of the assigned property " for cash or upon credit, or partly for cash 
 and partly upon credit, and by and under such terms and conditions as the as- 
 signees should deem reasonable and proper;" and upon this and several other 
 
§ 2 21.] TERMS OF SALE, 299 
 
 same doctrine has been recognized by the Supreme Courts 
 
 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 assignment. 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 judg- 
 ment of the Court of Errors in Darling v. Rogers, or by the chancellor's own 
 remarks in Meacham v. Stemes. The decision of the Court of Appeals to the 
 contrary, in Barney v. Griffin, was not considered as of binding authority ; the 
 opinion expressed by Mr. Justice Bronson in that case, on the point of an author- 
 ity to sell on credit, being regarded (from the form of the reporter's note and 
 other circumstances) merely as his own, and not that of the court. The question 
 was considered 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 facil- 
 itated 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 whpre it was not 
 given in terms, the law would imply its existence ; and that an authority which the 
 law itself would give by implication, could not be regarded as illegal and fraudu- 
 lent 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 1 85 1 , an assignment contain- 
 ing 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 bind- 
 ing 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 execute his trust. This case, also, 
 was carried to the Court of Appeals. A decision to the same point had been 
 previously made at the Ulster County Special Term in 1851. Whitney v. Krows. 
 II Barb. 198. 
 
 The case of Nicholson v. Leavitt, on appeal from the Superior Court of the 
 city of New York, as already stated, went up on the single question which forms 
 the subject of this note, namely, whether a voluntary assignment by a debtor in 
 failing circumstances was void by reason of its containing a clause authorizing 
 the assignee to sell the assigned property on credit. The Court of Appeals (in 
 1852) reversed the judgment of the court below, holding that the assignment was 
 fraudulent and void, for the general reason stated in the text. Nicholson v. 
 Leavitt, 6 N. Y. 510. The court, in dehvering their opinion, remark that the debtor 
 tor cannot, by the creation of a trust, avoid the obligation of immediate payment, 
 or extend the period of credit, without the assent of the creditor ; and that the 
 attempt to do this, however plausible may be the pretense, is in conscience and in 
 law, a fraud and nothing else. Id. 517. They further say that if the property is 
 more than sufficient to discharge all the debts of the assignor, he has no right to 
 delay creditors by giving credit on the sale of the property, with a view to increase 
 the surplus resulting to him ; this would be a trust for his own benefit, and con- 
 sequently void by the first section of the "Act against fraudulent conveyances." 
 / Paige, 37; Id. 518. Finally, it is remarked that the same considerations which 
 made the legislature require an immediate sale, require an immediate payment 
 also ; and that a discretion may be as judiciously exercised in postponing the time 
 of sale of property, as in postponing the time of payment. Id. 521. The ruling 
 
300 SPECIAL PROVISIONS. [cHAP. XI. 
 
 of Vermont,' Wisconsin/ Minnesota,^ Michigan/ and Dli- 
 nois.5 On the other hand, it has been decided in Alabama, 
 that a provision in an assignment, authorizing the trustee to 
 sell for cash or on credit, as shall, in his opinion, most com- 
 port with the interest of all parties concerned, was not suffi- 
 cient to affect the validity of the deed.* The court refer to 
 the case of Ashurst v. Martin,' in the same State, where it 
 was said that such a power was necessary to enable the 
 trustee to execute the trust, but must be exercised, in refer- 
 ence to the objects of the trust and the interest of the 
 creditors, in good faith. The power to sell for cash or on 
 good credit, it was said, does not vary in legal effect, from 
 the power to sell on such terms as he may deem expedient ; 
 and the court refused to pronounce that the reservation of 
 such a power, within itself, renders the deed void. It is the 
 duty of the trustee to execute the trust speedily, it is true, 
 but yet in such a manner as will best subserve the interest of 
 the creditors. He ought to sell for cash, or on such credit 
 as will not unreasonably delay the payment of the debts. 
 To require the sale, in all instances, to be for cash only, may 
 work a prejudice to all or some of the parties interested. 
 " We think," it is finally observed, " the trustee ought to have 
 a reasonable discretion in fixing the terms of the sale ; and 
 that he is clothed with such discretion as may benefit the 
 
 of the chancellor in Rogers v. De Forest, was disapproved, and the decision in 
 Burdick v. Huntting (Post) and Barney v. Grififin were relied on ; the authority of 
 the latter being now expressly confirmed. At a subsequent day in the same term, 
 the judgment of the Supreme Court, in Burdick v. Post, was unanimously 
 affirtned, for the reasons given in Nicholson v. Leavitt. Burdick v. Post, 6 N. Y. 
 522. And this mling has been recognized in several subsequent cases, and may 
 be regarded as the settled law of the State. See Gates v. Andrews, 37 N. Y. 657 ; 
 Morrison v. Brand, 5 Daly, 40; Porter v. Williams, 9 N. Y. 142; S. C. 12 How. 
 Pr. 107 ; Rapalee v. Stewart, 27 N. Y. 310. 
 
 ' Redfield, J., in Mussey v. Noyes, 26 Vt. 462, 470 ; Bennett, J., in Page v. 
 Olcott, 28 Vt. 465, 468, 469. 
 
 " Hutchinson v. Lord, i Wis. 286; see Id. 312, 313; Keep v. Saunderson, 2 
 Id. 42 ; s. C. 12 Wis. 352; Haines v. Campbell, 8 Wis. 187. 
 
 ' Greenleaf v. Edes, 2 Minn. 264 ; Truitt v. Caldwell, 3 Minn. 364 ; see Mower 
 V. Hanford, 6 Minn. 535. 
 
 ' Sutton V. Hanford, 14 Mich. 19. 
 
 ' Pierce v. Brewster, 32 III. 268; Bowen v. Parkhurst, 24 III. 257. 
 
 " Abercrombie v. Bradford, 16 Ala. 560. ' 9 Port. 566. 
 
§ 221.] TERMS OF SALE. 3OI 
 
 creditors, if discreetly exercised, is not sufficient, within it- 
 self, to authorize us to pronounce the deed fraudulent."' 
 The same doctrine has continued to be maintained in several 
 later cases in the same State.^ In Virginia,^ Tennessee,* 
 Maryland,^ Missouri,* and Texas,' also, a trust for sale on 
 credit has been held valid. And express powers to trustees, 
 to sell for cash or on credit, are of constant occurrence in 
 deeds of trust in Virginia,^ and other Southern States.' In 
 a case in Ohio,'° where the question came before the Supreme 
 Court and the New York cases were cited and relied on, it 
 was held that an express power to sell on credit did not, 
 per se, avoid an assignment. The court (Swan, J.) in de- 
 livering their opinion observe : "A sale by a trustee, upon 
 reasonable time of credit, taking the usual security, is an act 
 of good faith, and is recognized by our laws relating to the 
 settlement of the estates of deceased persons, and is fre- 
 quently directed by the court. An absolute and inflexible 
 rule, that a trustee for the payment of debts must at all times 
 and under all circumstances, sell for cash, would not be for 
 the interest of creditors. And if this be so, a provision in 
 the trust deed in regard to credit, not specifically requiring a 
 credit beyond what a court would sanction in the absence of 
 such provision, cannot in our opinion be deemed, per se, 
 fraudulent." " In California, the rule adopted by the Supreme 
 
 ' Dargan, J., 16 Ala. 565, 566. 
 
 " Evans v. Lamar, 21 Ala. 333 ; Shackelford v. P. & M. Bank of Mobile, 22 Id. 
 238 ; Goldthwaite, J., Id. 244; Miller v. Stetson, 32 Ala. 161 ; S. C. 36 Ala. 642; 
 England v. Reynolds, 38 Ala. 370. 
 
 ° Dance v. Seaman, 11 Gratt. 778, 781, and cases cited. 
 
 * Gunnell v. Adams, i ( Humph. 85. 
 
 '" Farquharson v. Eichelberger, 15 Md. 63 ; Berry v. Matthews, 13 Md. 537. 
 
 ' Johnson v. McAllister's Assignee, 30 Mo. 327 ; Gates v. Labeaume, 19 Mo. 
 
 17- 
 
 ' Carlton v. Baldwin, 22 Tex. 724. 
 
 " Johnston v. Zane's Trustees, 11 Gratt. 552 ; Dance v. Seaman, Id. 778. 
 
 " Evans v. Lamar, 21 Ala. 333. 
 
 " Conkling v. Conrad, 6 Ohio St. 611. 
 
 " Conkling v. Conrad, 6 Ohio St. (Critch.) 620, 621. The court, after notic- 
 ing the New York rule to the contrary, and citing the cases of Nicholson v. 
 Leavitt and Burdick v. Post, continue to say : " But, this seems to be law peculiar 
 to New York ; and the dissenting opinion of Brown, J., in the case of Burdick v. 
 
302 SPECIAL PROVISIONS. [CHAP. XI. 
 
 Court is, that a power to assignees to sell on credit is not 
 conclusive, but only presumptive evidence of fraud.' 
 
 § 222. But though, in New York, it is now settled that 
 an express authority to an assignee to sell on credit, avoids 
 an assignment, it is not advisable to prohibit him from sell- 
 ing on credit, by an express provision in the -deed. In a 
 case in the Supreme Court, an assignment was sought to be 
 avoided on the ground, among others, that it contained such 
 a clause ; and the court held that though, in the particular 
 case, it was not per se evidence of fraud, so as to justify 
 them in setting the assignment aside, it might become so 
 in connection with other circumstances showing that a 
 forced sale was intended, to the injury of the creditors ; ^ but 
 it has since been determined that such a clause does not of 
 itself invalidate an assignment. ^ 
 
 § 223. A direction to the assignees, to sell the assigned 
 property at retail, and on credit, will render an assignment 
 fraudulent and void.'' And a power given to a trustee in a 
 deed of trust, to sell property "gradually, according to the 
 terms and manner of the grantor's business," will vacate the 
 deed as to creditors.^ 
 
 § 224. Implied Power to Sell on Credit. — Not only has 
 it been decided in New York and elsewhere, that an express 
 authority to sell on credit vitiates an assignment, but it has 
 been further held in some cases,^ that if such a power can be 
 fairly inferred or implied from the language of the instru- 
 ment, it will be equally fatal to its validity. It therefore 
 
 Post et al. above referred to, shows very conclusively to our minds that the de- 
 cision of the majority cannot be sustained upon principle or authority ; and we 
 must refer to that dissenting opinion for the reasons upon which our own opinion 
 is based." Id. ibid. ; and see Hoffman v. Mackall, j Ohio St. 124. 
 
 ' Billings V. Billings, 2 Cal. 107, 114. 
 
 ° Van Rossum v. Walker, 11 Barb.«237. 
 
 ' Grant v. Chapman, 38 N. Y. 293; Carpenter v. Underwood, 19 N. Y. 520; 
 Stern v. Fisher, 32 Barb. 198. 
 
 ' Meacham v. Sternes, 9 Paige, 398 ; Truitt v. Caldwell, 3 Minn. 364. 
 
 ' Am. Exch. Bank v. Inloes, 7 Md. 380; Inloes v. Am. Exch. Bank, 11 Md. 
 73- 
 
 ° See, however, what is said by Redfield, Ch. J., in Mussey v. Noyes, 26 Vt. 
 (3 Deane), 462, 469, and see the note in loc. 
 
§ 2 24-] IMPLIED POWER TO SELL ON CREDIT. 303 
 
 becomes important to ascertain what words will be con- 
 strued to confer such a power, or what amounts to a power 
 to sell on credit. 
 
 It has already been stated ' to be a common practice in 
 drawing assignments, to leave the terms as well as the time 
 and manner of the sale, to the discretion of the assignees ; 
 they being directed, after taking possession of the property, 
 to sell and dispose of it, "upon such terms and conditions 
 as, in their judgment, they may think best and most for the 
 interests of the parties concerned," or words of equivalent 
 import. Such a clause has long been in use in this and 
 other States, and will be found in the most approved collec- 
 tions of precedents." It has recently been contended, how- 
 ever, that it amounts to an authority to sell on credit, and is 
 therefore good ground for avoiding the assignment contain- 
 ing it. The most important cases in New York, in which 
 it has been made the subject of construction by the courts, 
 will now be briefly reviewed. 
 
 In Lyon v. Platner,' where the assignment contained a 
 clause resembling the one in question, the Supreme Court 
 held that it authorized a sale upon credit, and was therefore 
 void. In Moir v. Brown,'' the clause was in terms identical 
 with the one in question, the assignees being authorized to 
 sell and dispose of the property upon " such terms and con- 
 ditions as in their judgment they may think best and meet 
 [most] for the interest of the parties concerned, and convert 
 
 ' Ante, p. 296. 
 
 ° Angell on Assign. 209, 215, referred to by Parker, J., in Kellogg v. Slauson, 
 II N. Y. 302, 307. 
 
 ° This case was cited by the court in Woodburn v. Mosher (9 Barb. 255), as 
 decided in the Sixth District, in 1850 ; but it has not been reported. The case ot 
 Woodburn v. Mosher, itself has sometimes been relied on as an authority to the 
 same point. See Murphy v. Bell, 8 How. Pr. 468.' But the question in that 
 case was rather as to the time than the terms of the sale, the assignees being 
 directed, "within convenient time as to them shall seem meet," to convert the 
 property into money. The court held that this clause authorized the assignees to 
 discharge their duties whenever it should suit their convenience, and that it ren- 
 dered fhe assignment void, as operating to hinder and delay creditors. Monson, 
 J., 9 Barb. 257 ; see the observations of Parker, J., in Kellogg v. Slauson, 11 N. Y. 
 307- 
 
 * 14 Barb. 39. 
 
304 SPECIAL PROVISIONS. [cHAP. XI. 
 
 the same into money." The court (Hand, J.), thought that 
 this language certainly gave a " broad discretionary power, 
 sufficient, in an ordinary power of attorney, to sustain a sale 
 on credit." But the point was not decided. In Schufeldt 
 V. Abernethy,' however, in the Superior Court of the city 
 of New York, where the assignment contained the same 
 clause, the court held that the words, by a necessary impli- 
 cation, gave a discretionary power to the assignee to sell 
 upon credit, and therefore rendered the assignment, on its 
 face, fraudulent and void. 
 
 But in several other cases, embracing the latest decisions 
 in the Supreme Court and Court of Appeals, such a clause 
 has been sustained. Thus, in Whitney v. Krows,"" it was 
 held that it would not be construed as authorizing the as- 
 signees to sell on credit. The court further held that the 
 fair construction of such a provision was, that the trustecii 
 were to exercise their judgment as to the manner of sale, 
 but when they did sell, they were to receive the money. In 
 Southworth v. Sheldon,^ the same view was taken ; the 
 court saying that the provision merely authorized the as- 
 signees to do what the law imposed upon them as a duty. 
 In Kellogg V. Slauson,* where the same question was raised, 
 the Supreme Court again held that the clause did not 
 authorize a sale upon credit, and would not therefore render 
 the assignment void, as hindering or delaying creditors. On 
 appeal, the Court of Appeals affirmed the judgment.^ These 
 
 ' 2 Duer, 533. '11 Barb. 198. 
 
 ' 7 How. Pr. 414; New York Special Term, Jan. 1853. This case appears 
 to be in conflict with that of Murphy v. Bell (8 How. Pr. R. 468), decided at the 
 Monroe County Special Term, in the same month and year. But in the latter 
 case, as in Woodbum v. Mosher, upon which the court relied, the clause in ques- 
 tion seems to have had reference rather to the time of the sale than the terms. 
 The court, it is true, laid stress upon the word " securities," as implying a sale on 
 credit ; but the reasoning on this point is not satisfactory. 
 
 * 15 Barb. 56. 
 
 ' II N. Y. 302. The court, in this case (Parker, J.), remark: "It is certain 
 that the ' terms and conditions ' on which the property is to be disposed of, are 
 left entirely to the discretion of the assignees. But that discretion is to be exer- 
 cised within legal limits. The law implies a restriction not inserted in express 
 words. It will not defeat the instrument by inferring that the assignor contem- 
 plated an illegal act. There is no express authority given in the assignment to 
 
§ 224.] IMPLIED POWER TO SELL ON CREDIT. 305 
 
 cases were cited and relied on by the Supreme Court in 
 Nichols V. McEwen,' the court saying that the question 
 was no longer open to discussion. 
 
 In Clark v. Fuller,'' the Supreme Court held that a pro- 
 vision empowering the assignee to sell and dispose of the 
 assigned property " in such manner as he shall deem best 
 and most for the interest of the parties concerned, and con- 
 vert the same into money," was not to be construed as 
 authorizing a sale on credit, and therefore did not render the 
 assignment void on its face. 
 
 In Bellows v. Patridge, the assignment authorized the 
 assignee to convert the assigned property into money, by 
 sale either public or private, " as soon as reasonably practi- 
 cable, with due regard to the rightful interests of all the 
 parties concerned, and in such a manner as might in the 
 judgment of the assignee, be for the best interests of the 
 estate." On the hearing of the case at the special term, it 
 was objected that this clause conferred a power to sell on 
 credit, and consequently rendered the assignment void. But 
 the court (Roosevelt, J.) overruled the objection, holding 
 that, by the language of the instrument, it was only a " right- 
 ful " or " lawful " power which was intended to be given, and 
 that if a power to sell on credit were not lawful, no such 
 power was given. On appeal to the general term, the judg- 
 ment of the court was affirmed.^ 
 
 sell on credit or do any other illegal act ; and there is ample room, within legal 
 limits, for the exercise of the discretion conferred. The assignees were at liberty 
 to sell at public or private sale — in large or small quantities — or one article, with 
 the privilege of taking more of the same kind at the same price. They might 
 require a certain percentage to be paid at the time of the bid, and the balance on 
 delivery, and might prescribe the time and place for delivery in gross or in parcels. 
 The language of the assignment can be abundantly satisfied by a construction 
 that shall support the instrument, and in such case, the rule is well settled that a 
 construction shall not be given which shall defeat it." Id. 305. 
 
 ' 21 Barb. 65; S. C. 17 N. Y. 22. 
 
 •' 21 Barb. 128. But see Neally v. Ambrose, 21 Pick. 185, contra. It had been 
 previously held, in Meacham v. Stemes (9 Paige, 398), that a provision that the- 
 property should be sold by the trustee "in such manner and at such reasonable- 
 times as should seem proper to him," did not authorize a sale at retail on credit.. 
 Rapalye v. Stewart, 27 N. Y. 311. 
 
 " 19 Barb. 176. The case, as decided at the general term, is all that is here 
 reported. It will be seen that the opinion of the court is not so much on the 
 
 20 
 
306 SPECIAL PROVISIONS. [CHAP. XI. 
 
 In Mann v. Whitbeck/ the assignment contained a clause 
 authorizing the assignee, "generally to adopt such measures 
 in relation to the settlement of the estate as would, in his 
 judgment, promote the true interest thereof." It was held, 
 on the authority of Bellows v. Patridge, and Whitney v 
 Krows, that this clause did not invalidate the assignment. 
 
 In Brigham v. Tillinghast,^ the assignees were directed 
 "as soon as practicable and expedient for the best interests 
 of all concerned and interested," to convert the property 
 assigned " into money or available means." The Supreme 
 Court held the assignment good, but, on appeal, the Court 
 of Appeals reversed the judgment, holding the assignment 
 void on the ground that the words " available means " con- 
 ferred, by necessary implication, a power to sell on credit.^ 
 The court (Dean, J.), in concluding their opinion in this 
 case, say : " The true rule to be observed is this : An insolv- 
 ent debtor may make an assignment of all his estate to 
 trustees, to pay his debts, with or without preferences ; but 
 such assignees are bound to make an immediate application 
 of the property. And any provision contained in the 
 assignment, which shows that the debtor, at the time of its 
 execution, intended to prevent such immediate application, 
 will avoid the instrument ; because it shows that it was made 
 with ' intent to hinder and delay creditors in the collection 
 of their debts.' Such an intent, expressed in the instrument 
 or proved aliunde, is fatal alike by the language of our stat- 
 ute, and the well-settled adjudications of the English and 
 American courts." * 
 
 In Wilson v. Robertson,^ where the language employed 
 was the same as in Kellogg v. Slauson, it was not regarded 
 
 point of a power to sell on credit, as on that of a delay of the sale ; the court 
 holding that the clause in dispute " implies no authority to the assignee to delay 
 the sale longer than the ordinary time required for the efficient performance of 
 such a duty, which depends upon the peculiar circumstances of each case and the 
 condition in which the assignor's affairs are placed, and does not render the 
 assignment void." 
 
 ' 17 Barb. 388. = 15 Barb. 618 ; see McCallie v. Walton, 37 Ga. 611. 
 
 M3 N. Y. 215. ■■ Id. 220. 
 
 " 21 N. Y. 587; see Jessup v. Hulse, 21 N. Y. 168. 
 
§ 224.J IMPLIED POWER TO SELL ON CREDIT. 307 
 
 as objectionable, and the rule was there laid down as being 
 that an assignment will not be construed as conferring an 
 authority to sell on credit, when its language is consistent 
 with a different interpretation, which will make it legal and 
 valid. But in Rapalee v. Stewart,' where the direction was 
 that the trust property be converted into cash or otherwise 
 disposed of to the best advantage by the assignee, this was 
 construed as conferring a power to sell on credit, and invalid- 
 ated the assignment. In Benedict v. Huntington,^ the as- 
 signees were directed to sell and dispose of the property 
 upon such terms and conditions as in their judgment might 
 appear best and most for the interest of the parties con- 
 cerned, the court sustained the assignment. Mr. Justice 
 Potter observed, where the- language of an assignment can 
 be abundantly satisfied with a construction that will support 
 the instrument, the well settled rule should control that a 
 construction should be .given which will not defeat it. And 
 in Townsend v. Stearns,' where the assignee was empowered 
 to sell and dispose of the ^assigned premises at such, time or 
 times and in such manner as to him may seem to be most 
 for the benefit and advantage of the creditors, the same rule 
 of construction was applied and the assignment was sus- 
 tained. 
 
 In Wisconsin, the New York doctrine, in regard to an im- 
 plied power to sell on credit and its eflFect appears to have 
 been adopted, and even extended. Thus, in Hutchinson v. 
 Lord,* where the assignment empowered the assignee to 
 sell in such manner, and "upon such terms and for such 
 prices as to him should seem advisable," it was held that this 
 was an authority to sell on credit, which necessarily would 
 operate to hinder and delay creditors, and rendered the as- 
 signment fraudulent and void. And in the later case of Keep 
 
 ' 27 N. y. 31 1. The assignment, however, was sustained as against the plaint- 
 iff, he having assented to and ratified it. 
 
 ' 32 N. Y. 219. = 32 N. Y. 209. 
 
 * I Wis. 286. See the observations of Crawford, J., who goes into a critical 
 examination of the meaning of the word "terras." Id. 313, 314. 
 
3o8 SPECIAL PROVISIONS. [cHAP. XI, 
 
 V. Sanderson,' where the provision objected to was in the 
 exact words of that in Kellogg v. Slauson, the court held 
 that it conferred an authority to sell on credit, which avoided 
 the whole assignment. 
 
 In Vermont, the doctrine of an implied power to sell on 
 credit, and its effect, does not seem to be approved, or rather 
 the courts decline to infer such a power where none is ex- 
 pressly given. Thus, in Mussey v. Noyes,'' where the assign- 
 ment empowered the assignees, " as soon as practicable, and 
 in the most beneficial manner," to convert the property into 
 money, it was objected that this conferred a power to sell on 
 credit. But the Supreme Court (Redfield, Ch. J.) held 
 that the words would more naturally exclude such a power, 
 especially where it was regarded as illegal ; and that the 
 power was neither expressly nor impliedly given. In the 
 later case of Peck & Co. v. Merrill,' in the same court, the 
 point as to the effect of an implied power to sell on credit 
 was distinctly raised and argued by counsel. But the court 
 passed it over without notice. In the still later case of Page 
 v. Olcott,-* the court (Bennett, J.) quote the case of Mussey 
 V. Noyes, as having been "decided upon a construction of 
 the assignment, the court holding that no express power of 
 .sale was given in the instrument, and none should be in- 
 tended in order to vitiate the assignment." And it may be 
 stated as the general rule, that an authority to sell on credit 
 will not be implied adversely to the assignment, from 
 language susceptible of a different construction which will 
 support the instrument.' 
 
 " 2 Wis. 42 ; Crawford, J., Id. 59, 60. The court rely upon the previous case 
 of Hutchinson v. Lord, supra ; S. C. 12 Wis. 352 ; but see Norton v. Kearney, 10 
 Wis. 443. 
 
 " 26 Vt. (3 Deane), 462, 468, 469 ; and see the note, ibid. 
 
 =■ Id. 686. 
 
 * 28 Vt. (2 Wms.), 465, 469. 
 
 " Finlay v. Dickerson, 29 111. 9 ; Sackett v. Mansfield, 26 111. 21 ; Meeker v. 
 Saunders, 6 Iowa, 61 ; Berry v. Hayden, 7 Iowa, 469 ; Booth v. McNair, 14 Mich. 
 19 ; McCallie v. Walton, 37 Ga. 61 1 ; and see New York cases cited ante in the text. 
 
§§ 225, 2;?6.] POWER TO MORTGAGE. 309 
 
 VIII. Special Powers and Directions to Assignees. 
 
 § 225. Power to Mortgage and Lease. — A clause in an 
 assignment of real property, authorizing the assignees to 
 lease or mortgage the property, for the benefit of the cred^ 
 itors at large, is, in New York, void, under the statute of 
 uses and trusts,' and inoperative. But it does not, of itself, 
 avoid the whole assignment." And where the trust is to sell 
 or mortgage, and apply the proceeds to the payment of 
 debts, the assignment is a valid instrument, under the statute, 
 as to the trust to sell, and vests the estate assigned in the 
 assignees, notwithstanding that the trust to mortgage is 
 void. 3 And even a trust to mortgage, if expressed to be for 
 the purpose of raising funds to pay charges upon the land, 
 such as judgments and mortgages, would, it seems, be valid.'* 
 In Mississippi, a clause in an assignment by a bank, permit- 
 ting the trustees to sell or pledge any of the property or 
 effects conveyed, including the bank notes of the bank, in 
 case any pressing emergency, not otherwise provided for, 
 should render it necessary so to employ said bank notes, 
 does not of itself vitiate the assignment, or render it fraud- 
 .ulent in law ; and if the power be improperly exercised, it 
 may be controlled and checked by a court of chancery.^ In 
 Maryland, an assignment reserving to the trustee the power 
 to mortgage the assigned property, has been sustained.* 
 
 § 226. Power to Pay Insurance, Interest, and Incum- 
 brances. — An assignment will not be vitiated by a provision 
 authorizing the assignees to effect an insurance upon a por- 
 tion of tbe assigned property, and to keep good an insurance 
 already existing upon another portion of the property, so 
 
 ' Rogers v. De Forest, 7 Paige, 272 ; s. C. on appeal, sub nom. Darling v, 
 Rogers, 22 Wend. 483 ; Planck v. Schermerhom, 3 Barb. Ch. 644, 646. 
 
 " Darling v. Rogers, 22 Wend. 483 ; Sandford, A. V. C, in Van Nest v. Yoe, i 
 Sandf. Ch. 4, 6. 
 
 ' Darling v. Rogers, ubi supra. ■" Id. ibid. 
 
 ' Montgomery v. Galbraith, 11 Sm. & M. 555. 
 
 " Beatty v. Davis, 9 Gill, 211. 
 
3IO 
 
 SPECIAL PROVISIONS. [CHAP. XI. 
 
 long as in their judgment it shall be necessary.' Neither 
 will it be vitiated by a provision authorizing the assignees, 
 if they shall deem it necessary, to pay the interest on a mort- 
 gage 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 express authority from the assignor.^ 
 
 § 227. Power to Employ Agents. — So, a power in an 
 assignment, authorizing assignees to appoint and dismiss 
 agetits, and to pay them out of the proceeds of the assigned 
 property, is unobjectionable ; they having the same authority 
 without such provision."* 
 
 § 228. Power to Compound and Compromise Debts. — 
 But a power given to assignees to declare future pre- 
 ferences, or change the order of preferences already given, 
 will render the assignment void.= So, a power to as- 
 signees 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 order of preference estab- 
 lished by the assignment : the effect of the provision being 
 
 ' Whitney v. Krows, 11 Barb. 198. 
 
 " Id. ibid. So a 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. 
 
 ° II Barb. 198 ; Harris, J., Id. 201, 202. 
 
 * Vernon v. Morton, 8 Dana, 247 ; Hennessy v. The Western Bank, 6 W. & S. 
 300; Mann V. Whitbeck, 17 Barb. 388; Van Dine v. Willett, 38Barh«i3i9; Casey 
 V. Jones, 37 N. Y. 608 ; Nye v. Van Husan, 6 Mich. 329 ; Maennel v. Murdock, 
 13 Md. 164. When the assignment contained a direction that the assignee 
 should employ certain particular persons as attorneys in collecting in the estate, 
 this direction was regarded as a badge of fraud. Carlton v. Baldwin, 22 Tex. 724. 
 
 ' Bamum v. Hempstead, 7 Paige, 568 ; Grier v. Trieber, 3 Md. 11 ; Strong v. 
 Skinner, 4 Barb. 546; Sheldon v. Dodge, 4 Den. 217; Kercheis v. Schloss, 49 
 How. Pr. 284 ; see Stimpson v. Fries, 2 Jones Eq. 1 56. 
 
 " Wakeman v. Grover, 4 Paige, 24 ; s. C. on appeal, Grover v. Wakeman, 1 1 
 Wend. 187. 
 
 ' Walworth, C, in Wakeman v. Grover, 4 Paige, 41 ; Sutherland, J., in Grover 
 V. Wakeman, 1 1 Wend. 203. 
 
§ 229.] POWER TO COMPOUND. 3II 
 
 considered to be to perpetuate the right of giving prefer- 
 ences, 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 restrict- 
 ing or preventing the assignee from liquidating or com- 
 pounding with any of the creditors, by making over, assign- 
 ing 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 Illinois, a clause in a general 
 assignment, authorizing the trustee to compound with the 
 creditors, renders it void.^ But a clause authorizing the 
 assignee to compound with the assignor's debtors, has been 
 sustained; as where the assignee was empowered "to com- 
 promise all bad and doubtful claims,"'* or "to compound, 
 compromise and settle the claims assigned, in his discre- 
 tion." = 
 
 § 229. An assignment may contain a clause directing the 
 trustees to give notice before making a dividend, and requir- 
 ing 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 
 directing the assignee to give notice to the creditors to pre- 
 sent their claims to him at a reasonable time and place, and 
 
 ' Walworth, C, ubi supra ; Sutherland, J., uM supra. 
 
 ' Van Nest v. Yoe, i Sandf. Ch. 4, 5. 
 
 ^ Hudson V. Maze, 3 Scam. 578. 
 
 * Brigham v. Tillinghast, 15 Barb. 618. 
 
 'Bellows V. Patridge, 19 Barb. 176; White v. Monsarrat, 1 8 B. Mon. 809; 
 Price V. Ford, 18 Md. 489 ; Carlton v. Baldwin, 22 Tex. 724; Watkins v. Wal- 
 lace, 19 Mich. 57; Murphy v. Bell, 8 How. Pr. 468; see Conkling v. Conrad, 6 
 Ohio St. 611 ; Woodbum v. Mosher, 9 Barb. 255. 
 
 » Garland, J., in U. S. v. Bank of U. S. 8 Rob. (La.) 412. See Ashurst v. 
 Martin, 9 Port. 566 ; U. S. Bank v. Huth, 4 B. Mon. 423. The English forms 
 sometimes 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 ; 
 S. C. S Eng. L. & Eq. 431. 
 
312 SPECIAL PROVISIONS. [CHAP, XI. 
 
 preferring such creditors as should comply with such notice 
 over others.' 
 
 § 230. 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 indem- 
 nify them, it was held to be no objection to its validity.^ 
 So in New York, where an assignment contained a power 
 to the assignee to defend all law, equity, and other proceed- 
 ings which they [he] might deem necessary to the execution 
 of the trusts ; it was held to afford no marked 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. 3 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 instituted against him by any cred- 
 itor or other person, for anything growing out of the assign- 
 ment, or in any way connected with it, it was held that the 
 assignment was fraudulent against his creditors.* 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 pro- 
 ceeds 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, a clause providing 
 that the assignees shall not pay costs on the debts that have 
 
 ' Ward V. Tingley, 4 Sandf. Ch. 476. 
 
 = Vernon v. Morton, 8 Dana, 247 ; Ewing, J., Id. 252, 265. Nor does the fact 
 that the defense proved unavaiUng make any difference. Id. 
 » Sandford, A. V. C, in Van Nest v. Yoe, i Sandf. Ch. 4, 6. 
 ' Mead v. PhilHps, 1 Sandf Ch. 83. 
 ' Planck V. Schermerhorn, 3 Barb. Ch. 644. 
 
§ 231.] STIPULATIONS FOR BENEFIT OF ASSIGNEES. 313 
 
 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 assignee to deliver merchandise in specie to certain pre- 
 ferred creditors at prime cost, the value to be settled by the 
 assignee.^ So, it may have a stipulation and direction that 
 no interest 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 expi- 
 ration 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 ; carrying 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 fraud- 
 ulent and void upon its face.^ 
 
 IX. Stipulations for the Benefit of Assignees. 
 
 § 231. A clause in an assignment, exempting the assign- 
 ees from liability for effects that should not come to their 
 hands, and for losses, &c., 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 
 
 ' Gates V. Labeaume, 19 Mo. (4 Benn.) 17. 
 
 ' Bayne v. Wylie, 10 Watts, 309. " Ingraham v. Grigg, 13 Sm. & M. 22. 
 
 ^ Storm V. Davenport, i Sandf. Ch. 135. ° Mann v. Whitbeck, 17 Barb. 388. 
 " Hennessy v. The Western Bank, 6 W. & S. 300. 
 
314 SPECIAL PROVISIONS. [cHAP. XI. 
 
 acts, receipts, neglects or defaults of any attorney or attor- 
 neys, agent or agents, that they may employ, nor for any 
 misfortune, loss, or damage, which may happen without 
 their willful 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 provision 
 that the assignee shall not be accountable for any defalca- 
 tion committed by any clerk, agent, or assistant necessarily 
 employed by the assignors or either of them, in the exec^u- 
 tion 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 willful 
 misconduct, exonerates him from a great portion of the 
 responsibility which the law attaches to his office ; is con- 
 sidered evidence of an intent to hinder, delay, and defraud 
 creditors ; and has therefore been held to render the assign- 
 ment void as against them.^ So a provision that the as- 
 signee, " while acting in good faith, shall not be made or 
 held personally liable in the premises, in any manner," is 
 such a restriction upon the liability of the assignee as ren- 
 ders the assignment fraudulent and void as against creditors ; 
 the rule being, that a reservation or restriction of the liabil- 
 ity of the assignee to a degree less than that which the law 
 imposes upon trustees, renders the assignment void.* 
 
 ' Jacobs V. Allen, 18 Barb. 549 ; Baldwin v. Peet, 22 Tex. 708 ; Gordon v. 
 Cannon, 1 8 Gratt. 387 ; Hennessy v. The Western Bank, 6 W. & S. 300 ; Rankin 
 V. Loder, 21 Ala. 380. In Missouri, it has been held where a trustee is author- 
 ized by the deed of trust to appoint agents or substitutes, to assist in the manage- 
 ment 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 mal- 
 feasance, a court of chancery will not hold him liable. O'Fallon v. Tucker, 13 
 Mo. 262. 
 
 ' Van Nest v. Yoe, i Sandf. Ch. 4, 6. 
 
 ^ Litchfield v. White, 3 Sandf. S. C. 545 ; affirmed on appeal, 7 N. Y. 438. 
 
 * Hutchinson v. Lord, I Wis. 286 ; see Keep v. Sanderson, 2 Id. 42 ; Whipple 
 V. Pope, 33 111. 334 ; Mclntire v. Benson, 20 111. 500 ; Finlay v. Dickerson, 29 111. 
 9; True V. Congdon, 44 N. H. 48; Olmstead v. Herrick, i E. D. Smith, 310; 
 Metcalf V. Van Brunt, 37 Barb. 621. A provision that the assignee shall not be 
 accountable 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. Mcln- 
 tire V. Benson, 20 111. 500 ; Finlay v. Dickerson, 29 111. 9 ; True v. Congdon, 44 
 N. H. 48 ; Pitts V. Viley, 4 Bibb, 446. 
 
§§ 232, 233-] PROVISIONS FOR EXPENSES. 315 
 
 § 232. Provisions for Expenses and Services of As- 
 signees. — A provision may be made for the payment from 
 the fund of the just and reasonable expenses, costs, charges, 
 damages,' and commissions of executing and carrying the 
 assignment into effect,^ and may also provide for all reason- 
 able 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. Reservations of Powers to Assignors. 
 
 § 233. 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. 
 
 Thus, a clause reserving to the assignor a general power 
 of revocation 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."* 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 
 
 ' Blow V. Gage, 44 111. 208. 
 
 ^ Eyre v. Beebe, 28 How. Pr. 333 ; Iselin v. Dalrymple, 27 Id. 137; S. C. 2 
 Robt. 142 ; Jacobs v. Remsen, 36 N. Y. 668 ; Halstead v. Gordon, 34 Barb. 422. 
 
 = Butt V. Peck, I Daly, 83. 
 
 * Nichols. V. McEwen, 17 N. Y. 22 ; Heacock v. Durand, 42 111. 230. 
 
 ^ Riggs V. Murray, 2 Johns. Ch. 565 ; Cannon v. Peebles, 4 Ired. L. 204 ; 2 
 Tuck. Com. [442] 431 ; Green v. Trieber, 3 Md. 11. 
 
 ° 2 Johns. Ch. 579. ' Id. 579, 580. 
 
 ° Lavender V. Blackstone, 3 Lev. 146; 3 Keb. 256, pi. 11. 
 
3l6 SPECIAL PROVISIONS. [cHAP. XI. 
 
 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 put- 
 ting it in his power to defeat the whole settlement; for 
 though the consent of the truste»s was necessary, yet they 
 were trustees of his own nomination. And in Maryland it 
 has been held, that the reservation to the grantor of' 
 the power of making leases, avoids an assignment' So, 
 in another English case," where the deed reserved to the 
 grantor a power to mortgage the estate conveyed, it was 
 held by the lord keeper 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. 
 
 § 234. 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 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 existing at the time, that converts the 
 power to do those acts into a fraudulent power of revoca- 
 
 ' Green v. Trieber, 3 Md. 11. ' Tarbuck v. Marbury, 2 Vem. 510. 
 
 ' Averill v. Loucks, 6 Barb. 470 ; ante, p. 226. 
 
 * 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/^r se. Hall v. 
 Wheeler, 13 Ind. 371. 
 
§ 235-] RESERVATIONS OF POWERS TO ASSIGNORS. 317 
 
 tion, either literally or substantially. The true principle is, 
 that if it appear expressly to be for the benefit 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 purpose 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, is 
 void.' So, a clause reserving to the assignor the right to 
 name the successor of the assignee, in case such assignee 
 should wish to resign the trust, is good ground of objection 
 to an assignment. 3 
 
 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 creditors, and has premeditated fraud 
 upon the face of it.* 
 
 § 235. A clause in a deed of trust, reserving to the debtor 
 the power of ordering a sale at an earlier day than that pre- 
 scribed by the deed, was held in North Carolina not to be 
 objectionable. 5 But the reservation to the debtor of the 
 power to direct the terms and places of the sale, was con- 
 sidered more objectionable, and one which, if followed as a 
 precedent, might lead to great abuses. The court considered 
 
 ' 4 Ired. L. 209, 210. And see Stimpson v. Fries, 2 JonesEq. 156. 
 
 ' Riggs V. Murray, 2 Johns. Ch. 565. 
 
 " Planck 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 
 execute the trust, the assignor should have the power of appointing another trus- 
 tee in his stead ; although the provision would be inoperative. Vansands v. Miller, 
 24 Conn. 180, 184. 
 
 ■* Hartv. McFarland, 13 Penn. St. (i Harris), 182. A reservation of property 
 to be subsequently selected by the assignors renders the assignment void on its 
 face. Clark V. Robbins, 8 Kans. 574. In Burr's Ex'rv. McDonald (3 Gratt. 215), 
 a provision in 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. 
 
 ' Cannon v. Peebles, 2 Ired. L. 449. 
 
3l8 SPECIAL PROVISIONS. [cHAP. XI. 
 
 that the reservation of such a power was not easily reconciled 
 with the absolute and bona fide appropriation by the debtor, 
 of his property 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 ifke debtor himself, should proceed to sell at auc- 
 tion 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 cor- 
 rect, 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 fraudu- 
 lent and void in law, as against creditors not preferred or not 
 provided for in the assignment.^ 
 
 A conveyance by one indebted, in tnast to sell, the 
 grantor reserving a power of appointment of the proceeds, is 
 fraudulent as to a prior creditor recovering judgment after 
 the grantor had appointed 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 in- 
 terfere authoritatively in the appropriation of the proceeds. = 
 
 ' Cannon v. Peebles, 2 Ired. L. 449; S. C. 4 Id. 204. 
 
 ^ Spence v. Bagwell, 6 Gratt 444, 450. 
 
 ' Pierson v. Manning, 2 Mich. (Gibbs), 445 ; Pratt, J., Id. 449 ; Sipe v. Eannan, 
 26 Gratt. 563. 
 
 * Mitchell V. Stiles, 13 Penn. St. (i Harris), 306. 
 
 '' Whallon v. Scott, 10 Watts, 237; Sheerer v. Lautzerheizer, 6 Id. 549 ; Coulter 
 J., in Mitchell v. Stiles, 13 Penn. St. (i Harris), 306, 309. 
 
CHAPTER XII. 
 
 CONSIDERATION OF ASSIGNMENTS. 
 
 § 236. There can be no question whether an assignment 
 of a debtor's property to a trustee for the benefit of his cred- 
 itors is for a valuable consideration or not, because the 
 debts due to the creditors constitute a valuable considera- 
 tion 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 concerned. This was the opinion of Mr. Justice Story 
 in the case of Halsey v. Whitney,' and it has been repeat- 
 edly 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 M c Lean, ^ 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 circumstances, of prop- 
 erty not subject to any lien, has always been considered 
 as founded on sufficient consideration.'' In New York, the 
 nominal consideration of one dollar, or the fact that the as- 
 
 ' 4 Mason, 206, 214; cited by Garland, J., in The United States v. Bank of the 
 United States, 8 Rob. (La.) 405 ; and followed by Bennett, J., in Hall v. Dennison, 
 17 Vt. (2 Wash.) 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 performance of the trust. Hudson v. Maze, 4 111. (3 Scam.) 578 ; Meeker 
 V. Saunders, 6 Iowa, 61 ; Nutter v. Harris, 9 Ind. 88 ; Exchange Bank v. Knox, 
 19 Graft. 739 ; Haven v. Richardson, 5 N. H. 113 ; U. S. Bank v. Huth, 4 B. 
 Mon. 423 ; Feimester v. McRorie, 12 Ind. 287. 
 
 '' 2 Johns. Ch. 182, 189; citing Stephenson v. Hayward, Free, in Ch. 310. And 
 see Kellogg v. Slauson, 1 5 Barb. 58, Allen, J. 
 
 ' Lawrence v. Davis, 3 McLean, 177. 
 
 * Burd V. Smith, 4 Dall. 76 ; Wilt v. Franklin, i Binn. 502. 
 
320 CONSIDERATION OF ASSIGNMENTS. [CHAP. XII. 
 
 signee was a creditor, as appearing on the face of the assign- 
 ment, is held sufficient to transfer the legal title to the prop- 
 erty 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 and creditor between the 
 parties, and the legal consequences of the assignment, con- 
 stitute a sufficient consideration as between them.' In Mis- 
 souri, a deed of assignment to a trustee for the benefit of 
 creditors, is held to be for a valuable considerarion." In 
 Michigan, such 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. 3 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, especially 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 dollars), 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 security for a debt, \s prima 
 facie valid, and a claimant under such deed is not bound to 
 show a consideration for it in the first instance.^ 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.' 
 
 § 237. In Massachusetts, however, prior to the statute 
 regulations on the subject of assignments, a different rule pre- 
 vailed, growing out of the local law which required the assent 
 
 ' Nelson, J., in Cunningham v. Freeborn, 11 Wend. 240, 250. 
 
 ^ Gates V. Labeaume, 19 Mo. (4 Benn.) 17. 
 
 ^ HoUister v. Loud, 2 Mich. (Gibbs), 309. 
 
 ■* Jones V. Dougherty, 10 Geo. 273. 
 
 ' Johnston V. Zane's Trustees, 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 consideration, 
 citing Wickham v. Martin, 13 Gratt. 427 ; Evans v. Greenhow, 15 Gratt. 153. 
 
 " Brown v. Bartee, 10 Sm. & M. 268. 
 
 ' Vernon v. Morton, 8 Dana, 247, 253. 
 
§ 237- J CONSIDERATION OF ASSIGNMENTS, 32 1 
 
 of creditors to give them validity. The consideration of an 
 assignment in this State was held to depend upon the cir- 
 cumstance 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 were no cestuis que trust, and so no 
 trusts, and the consideration entirely failed.' If the cred- 
 itors elected to become parties, or to assent, and their debts 
 amounted to as much as the assigned property, this com- 
 pleted the intended consideration, rendered the conveyance 
 effectual against other creditors, and vested the whole prop- 
 erty in the assignees.'' If the debts of the assenting creditors 
 were of less amount than the property assigned, they con- 
 stituted a good consideration pro tanto, and gave the as- 
 signee 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 as- 
 signed, otherwise the consideration might be deemed inade- 
 quate 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 conveyance to a trustee for the payment 
 of debts, within the statute of Elizabeth, one or more cred- 
 itors 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 alluded to, in con- 
 
 ■ Morton, J., in Fall River Iron Works Co. v. Croade, 15 Pick. 11, 15. 
 " 15 Pick. 16. See Everett v. Walcott, Id. 94, 97. 
 " 15 Pick. 16. 
 
 * Woodbury, J., in Adams v. Blodgett, 2 W. & M. 237 ; citing Russell v. 
 Woodward, 10 Pick. 408. 
 
 ° Roberts on Fraud. Conv. pp. 429, 431, 432, 434, 437. 
 
 • Acton V. Woodgate, 2 M. & K. 492 ; Smith v. Keating, 6 M.G. & S. 136. 
 It was 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 subject in a 
 different view. " A general conveyance or assignment to a stranger, in trust to 
 pay the debts of the person conveying, is clearly not a consideration sufficient 
 even to raise a use upon a covenant to stand seized." Rob. Fraud. Conv. p.. 
 
 31 
 
322 CONSIDERATION OF ASSIGNMENTS. [cHAP. XII, 
 
 sidering the parties to assignments, and will receive further 
 attention under a future head. 
 
 429. " That the mere destination of the property to the object of paying 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], i Leon. 194." Id. ibid. 
 ' ' That such a conveyance for payment of debts, to which no creditor is a party, 
 cannot support itself, under the statutes of Ehzabeth, against purchasers or dis- 
 contented creditors, is a proposition flowing pretty clearly from the general anal- 
 ogy of the reported decisions, and deducible fromi the very plan and spirit of the 
 statutes themselves." Id. 431. " But if a creditor be ^;party to such a convey- 
 ance to a trustee for payment of debts, however open the transaction may still be 
 considered to the imputation of fraud, from concomitant circumstances, there is a 
 clear valuable consideration to support the deed." Id. ibid. And as to the pres- 
 ent rule in England, see further, ante^ p. 152 note 2. 
 
CHAPTER XIII. 
 
 TRUSTS OF ASSIGNMENTS. 
 
 § 238. The trusts 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 composi- 
 tion of all assignrnents which contemplate provision or 
 security for creditors (as distinguished from transfers in ab- 
 solute and final payment and satisfaction) ; embracing not 
 only such as are made to trustees formally appointed by the 
 assignor, distinct from the creditors or cestuis que irttst, but 
 such as are made directly to creditors themselves. 
 
 In one sense of the word, there is but a single trust cre- 
 ated by any assignment for the benefit of creditors ; the 
 term being, properly, 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 prop- 
 erty and its proceeds, as declared and directed by the assign- 
 ment ; 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 execute 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 assign- 
 ment are accomplished. But the term is also used in a more 
 limited sense, and with reference 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. 
 
 § 239. Trusts must be Declared. — The express trusts of 
 of an assignment are the expressions or designations by the 
 
324 TRUSTS OF ASSIGNMENTS. [cHAP. XIII. 
 
 assignor, of the particular objects or purposes for which it is 
 made ; and they usually take the form of directions, more or 
 less minute, to the assignee or trustee, how to dispose of the 
 property assigned. In the 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 i'' but this is not usual. 
 
 It may be considered as well settled, that every valid as- 
 signment must declare the uses to which the property 
 assigned is to be applied, and must settle the rights of cred- 
 itors 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 as a part of the transfer, 
 and the conditions and the transfer stand or fall together.^ 
 
 § 240. Implied 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 recover 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.* 
 
 ' See ante, p. 1 56. 
 
 ° Lord Nottingham, in Cook v. Fountain, 3 Swanst. 585 ; 2_ Story's Eq. Jur. 
 § 1 195, note. See Boyden v. Moore. 11 Pick. 362. But declarations of trust in 
 real estate, are almost uniformly required to be in writing. See ante, pp. 155, 156. 
 
 ° Averill v. Loucks, 6 Barb. 476 ; Sheldon v. Dodge, 4 Den. 220 ; Caton v. 
 Mosely, 25 Tex. 374; Kercheis v. Schloss, 49 How. Pr. 284. 
 
 ' Ogden V. Peters, 21 N. Y. 23 ; Goodrich v. Proctor, i Gray, 567 ; Purdie v. 
 Whitney, 20 Pick. 25 ; Gould v. Lamb, 1 1 Mete. 84. 
 
 " Jessup V. Hulse, 21 N. Y. 168, Selden, J. 
 
 ■ United States v. Hoyt, i Blatchf. C. C. 332 ; Field v. Flanders, 40 111. 470. 
 
§241.] EXPRESS -TRUSTS. 
 
 325 
 
 But resulting trusts are, properly, those which arise out of 
 an assignment for the benefit of the assignor himself; and 
 such a result takes place whenever there is a surplus of prop- 
 erty or its proceeds remaining undisposed of, after the exe- 
 cution of the express trusts ; ' whether all the creditors are 
 paid or not." If all are paid, and there is no express reserva- 
 tion of the surplus to the assignor, it constitutes a resulting 
 trust for his benefit, by mere operation of law,' which he 
 may enforce against the assignee. And so, if only a portion 
 of the creditors are paid, and a surplus of property or pro- 
 ceeds remains with the assignee, a trust for the assignor re- 
 sults by the operation of the instrument ; with this very 
 material difference, however, that such a resulting trust 
 frequently avoids the whole assignment, being held equiva- 
 lent to an express reservation for the debtor's own benefit.* 
 
 § 241. 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 creditors provided for. But these are some- 
 times vaiied by the assignor. 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 men- 
 tioned, 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 reserve 
 the expenses 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. 
 
 ' 2 Story's Eq. Jur. § 1 196 a. 
 
 ^ See Wilkes v. Ferris, 5 Johns. 335 ; Dubose v. Dubose, 7 Ala. 235. 
 
 ■' Halsey V. Whitney, 4 Mason. 206 ; Story, J., Id. 223 ; In the Matter of the Estate 
 of Potter Paige, 54 Penn. St. 465. 
 
 ' Dana v. Lull, 17 Vt. (2 Washb.) 390, 397 ; Burd v. Smith, 4 Dal. 76 ; Hooper 
 V. Tuckerman, 3 Sandf. S. C. 311. 
 
 ' Bayne v. Wylie, 10 Watts, 309. 
 
 " 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. Scan- 
 nel, 13 Cal. 242. An assignment for the payment of debts, generally, without any 
 limitations or directions, confers upon the trustee the right to sell. Planck v. 
 Schermerhom, 3 Barb. Ch. 644. 
 
326 TRUSTS OF ASSIGNMENTS. [cHAP. XIII. 
 
 Thus, in New York, the only express trust that can be cre- 
 ated in an assignment of lands for the benefit of creditors, is 
 a trust to sell, and to apply the proceeds to the payment of 
 the debts.' And where an express trust is created for any 
 other purpose, it is declared that no estate shall vest in the 
 trustees.^ 
 
 § 242. 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 con- 
 veyed property to a trustee to sell, and directed that the 
 avails over and above the expenses, should constitute 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 completion 
 of the trust, paid over and distributed to his heirs at law as 
 by statute in case of persons dying intestate," — held that what 
 remained 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 accounting 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 encumber, 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 interest perme- 
 ates and vitiates the whole instrument. = 
 
 ' Rev. Stat. [728, 729] (6th ed.) vol. 2, p. 1106, § 55 ; Bamum v. Hempstead, 
 7 Paige, 568 ; Rogers v. De Forest, Id. 272 ; Darling v. Rogers, 22 Wend. 483. 
 
 ^ I Rev. Stat. [729] (6th ed.) vol. 2, p. 1102, §69. 
 
 » Kittell V. Osborn, 4 Sup. Ct. (T. & C.) 45. ' Ibid. 
 
 ' Darling v. Rogers, 22 Wend. 483 ; rev'g Rogers v. De Forest, 7 Paige, 272 
 see Barnum v. Hempstead, 7 Paige, 568. 
 
§ 243-] TRUSTS FOR ASSIGNOR. 327 
 
 § 243. Trusts for Assignor. — Another important statute 
 provision in New Yorlc and some other States, is that which 
 declares that " all conveyances, and all transfers or assign- 
 ments, 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 sub- 
 sequent, of such person." ' 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 expo- 
 sition and application of this statute was made the subject 
 of very elaborate discussion, both in the arguments of coun- 
 sel and in the opinions of the court. And it was then deter- 
 mined that the statute applies only to conveyances, &c., 
 wholly or primarily for the use of the grantor, and not to 
 such as are created for other and active purposes where the 
 reservations are incidental and partial only. 
 
 The principal rules in regard to the trusts of an assign- 
 ment, which remain to be considered, are the following : 
 that all express trusts must be openly declared by the as- 
 signor, a secret trust being always void,* and when once de- 
 clared, cannot afterwards be revoked or altered ; = that there 
 must be no express trust for the use or benefit of the as- 
 signor,^ nor any resulting trust in his favor, until after pay- 
 ment of all the debts ; ' that the trusts declared must be co- 
 
 ' 3 Rev. Stat. (6th ed.) p. 142, § i. Site. post, Chap. XXV, where similar enact- 
 ments in other States are noticed. 
 
 " 6 Hill, 438. = 1 5 N. Y. (I Smith), 9, 297. 
 
 * Passmore v. Eldridge, 12 S. & R. 198 ; McAllister v. Marshall, 6 Binn. 338; 
 McCuUough 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, i McMuUan, 27 ; Edring- 
 ton V. Rogers, 15 Tex, 188 ; Wheeler, J., in Wright v. Linn, 16 Id. 42; Caldwell 
 V. Williams, i Ind. (Carter), 405 ; Comstock, J., in Curtis v. Leavitt, 15 N, Y. (1 
 Smith), 120. " There is no plainer evidence of fraud than an absolute paper trans- 
 fer 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, 11 111. 387; 
 Humphries v. Freeman, 22 Tex. 45. 
 
 ^ See ante, p. 316. ° See ante, p. 259. ' See ante, p. 270. 
 
328 TRUSTS OF ASSIGNMENTS. [CHAP. XIII. 
 
 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 receive further illustration under the head of " Fraudu- 
 lent and void assignments." 
 
 ' See ante, p. 271. ' See post, Chap. XXV. 
 
CHAPTER XIV. 
 
 EXECUTION OF THE ASSIGNMENT. 
 
 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 con- 
 veys 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. 
 
 § 244. Execution by Assignor. — It is, of course, indis- 
 pensable that the assignment should be executed by the 
 assignor, or, if there be several, by all of them. This may, 
 however, be done by attorney, under a proper power for that 
 purpose.' In cases of partnership, we have seen that one 
 
 ' A 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 assignors 
 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 execution of the 
 deed, and superseded further proof of the power. Clark v. Mix, 15 Conn. 152. 
 A power of attorney to convey or assign away real estate in payment, or to 
 secure the payment of debts, authorizes the attorney to make an assignment of 
 such real estate for the benefit of creditors. Marshall v. Shibley, 1 1 Kans. 1 14. 
 But it seems that under the New York statute, requiring assignments to be 
 acknowledged, an assignment cannot be executed by an attorney in fact. Adams 
 V. Houghton, 3 Abb. Pr. N. S. 46 ; Cook v. Kelly, 14 Abb. Pr. 446 ; affirming 12 
 Id. 35. But this rule does not preclude the partners who, remain after one of 
 their number has absconded, from' executing an assignment of the assets of the 
 firm. National Bank v. Sackett, 2 Abb. Pr. N. S. 286. And it seems that non- 
 resident members of a firm are not necessarily included in the statutory require- 
 ment of a personal execution and acknowledgment by each of the assignors. 
 Darrow v. Bruff, 36 How. Pr. 479 ; distinguishing Adams v. Houghton, supra. 
 
330 EXECUTION OF THE ASSIGNMENT. [cHAP. XIV. 
 
 partner may execute the assignment in behalf of the firm, 
 if with the concurrence or by the authority of his copart- 
 ners.' The better course is to have it executed by all. 
 But where the assignment was executed by all the partners, 
 it was deemed to be their joint act, and not to pass their 
 individual property, there being no specific reference to 
 their individual property in the body of the assignment." 
 And, notwithstanding the rule that one partner cannot bind 
 his copartners by deed, the mere circumstance that an 
 assignment by one or more of several partners is under 
 seal, 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 essential to the validity of a contract, the addi- 
 tion 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 exe- 
 cuted at the same time, and this faict may be proved by 
 parol. * 
 
 § 245. Execution by Assignee. — Where the assignee is 
 formally named as a party to the assignment, as where it is 
 drawn in bipartite or tripartite form, and especially where 
 the instrument contains any provision for its execution by 
 
 ' See ante, p. 109. In the English case of Bowker v. Burdekin (i i 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. 
 
 ' Derry Bank v. Davis, 44 N. H. 548. 
 
 'Anderson v. Tompkins, i Brock. 456 ; Tapley v. Butterfield, i Mete. 515, 
 519; Everit v. Strong, 7 Hill (N. Y.) 585 ; Deckard v. Case, 5 Watts, 22; Sale v. 
 Dishman's Ex'rs, 3 Leigh, 548 ; McCuUough v. Sommerville, 8 Id. 41 5. 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. 
 
 ■* Robinson v. Crowder, 4 McCord L. 519. 
 
 ' Ante, p. 1 50. 
 
 • Dana v. Bank of the United States, 5 W. & S. 223. 
 
§ 246.] EXECUTION BY CREDITORS. 33 1 
 
 him, or a covenant to 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 assignee does not 
 execute it, or enter into any covenant to perform the trusts. 
 If it is executed by the assignor, and delivered to the as- 
 signee, 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, imme- 
 diately following the signature of the assignor. 
 
 § 246. Execution by Creditors. — Assignments tripartite, 
 as we have seen,^ are drawn with express reference to their 
 being executed by the creditors, as well as the assignor and 
 assignee ; and unless executed by some of the creditors, they 
 are inoperative.* 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 permitted to become parties by signing 
 after the expiration of the time limited, provided they have 
 had seasonable notice of the assignment, or provided proper 
 means have been taken to give the notice.^ In some States, 
 the time for creditors to become parties is fixed by statute. 
 Thus, in Maine, the assignee is required to give three weeks' 
 notice of the assignment, within fourteen days after its exe- 
 cution ; and three months from the execution of the assign- 
 ment are allowed to creditors to become parties.^ 
 
 In Massachusetts, before the statute of 1836, regulating 
 
 ' Flint V. Clinton Co. 12 N. H. 430. 
 
 •' Cunningham v. Freeborn, i Edw. Ch. 256; affirmed on appeal, 11 Wend. 
 240. 
 
 ° Ante, pp. 151, 185. 
 
 ■■ Marston v. Coburn, 17 Mass. 454. But see Shearer v. Loftin, 26 Ala. 703; 
 Gale V. IVlensing, 20 Mo. 461. 
 
 ' Phoenix Bank v. Sullivan, 9 Pick. 410. See Dedham Bank v. Richards, 2 
 Mete. 105. 
 
 • Gen. Stat. (ed. 1867), c. 126, §4. 
 
332 EXECUTION OF THE ASSIGNMENT. [CHAP, XIV, 
 
 assignments, 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 distribution had been made before he re- 
 quested permission to execute it, and although it contained 
 no release to the debtor/ And where the assignment con- 
 tained a release, it was held that a creditor executing 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 attach- 
 ing creditors, because it was not executed by any creditor 
 within a reasonable 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 assignment, is fraudulent and void.'*, 
 
 In Missouri, it has been held that an assignment by a 
 debtor, for the benefit of certain preferred creditors, the bal- 
 ance to be distributed pro rata among the remaining cred- 
 itors, 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 exe- 
 cuted 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 
 
 ' Phoenix Bank v. Sullivan, 9 Pick. 410. See Battles v. Fobes, 21 Id. 239 ; 
 Dedham Bank v. Richards, 2 Mete. loj. 
 
 ' Battles V. Fobes, 21 Pick. 239 ; s. C. 2 Mete. 93. 
 
 ' Shattuck V. Freeman, i Mete. 10. * Ramsdell v. Edgarton, 8 Mete. 227. 
 
 ° Swearingen v. Slicer, 5 Mo. 241. ' Drake v. Rogers, 6 Mo. 317. 
 
 ' Gale V. Mensing, 20 Id. (5 Ben.) 461. 
 
§ 246.] EXECUTION BY CREDITORS. 333 
 
 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 instrument contained a release, will not, 
 after signing, avail him.'' In an English case, where a 
 deed of composition with and assignment in trust for credit- 
 ors was construed to include a release of a debt guaranteed, 
 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 plaintiflFs executed not as creditors but 
 as trustees, and solely for the purpose of accepting and de- 
 claring 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.^ 
 
 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 cred- 
 itors as should become parties to the assignment, 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 and discharge their 
 respective demands," — it was held that the execution of the 
 assignment by the plaintiff, and his acceptance of the trust, 
 operated as a full and immediate discharge and satisfaction 
 
 ' Shearer v. Loftin, 26 Ala. 703. And see Tennant v. Stoney, I Rich. (S. C.) 
 222. 
 
 " See Parsons v. Gloucester Bank, 10 Pick. 533. 
 ° Teed v. Johnson, 34 Eng. L. & Eq. 545. 
 
334 EXECUTION OF THE ASSIGNMENT. [cHAP. XIV. 
 
 of his claims, both as surety and as creditor ; so that a sub- 
 sequent conveyance to him, by the debtor, of other property, 
 as further security for those claims, was without considera- 
 tion and invalid against a creditor not a party to the assign- 
 ment. ' 
 
 § 247. Attestation of Execution. — The assignment, like 
 all other conveyances of property, should be executed before 
 witnesses, who attest it in the usual manner. In New Hamp- 
 shire, an assignment, in order to its validity, must be attested 
 by two witnesses.'' If it be not thus attested, the title to the 
 real estate assigned will remain in the debtor, and be subject 
 to attachment.3 And where a deed is attested by one wit- 
 ness only, notice of the deed will not remedy the defect in 
 the attestation.* 
 
 In California, the assignment must be in writing sub- 
 scribed by the assignor or his agent. It must be acknowl- 
 edged or proved and certified in the mode prescribed by the 
 chapter of the Code on recording transfers of real property,^ 
 and unless these provisions are complied with, the assign- 
 ment is void against every creditor not assenting thereto.^ 
 
 § 248. 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. Thus, in New 
 Hampshire, the assignor is required to make oath " that he 
 has placed and assigned, and the true intention of his assign- 
 ment is to place, in the hands of his assignee, all his property 
 of every description, except such as is by law exempted from 
 attachment and execution, to be divided among all his cred- 
 itors in proportion to their respective claims." ' In Massa- 
 chusetts, under the statute of 1836, c. 233, the debtor was 
 required to make oath, "that he had by such assignment 
 conveyed all his property, not exempted by law from attach- 
 
 ' King V. Moore, i8 Pick. 376. 
 
 " Gen. Stat. (ed. 1867), c. 126, p. 262, § 2. 
 
 = Barker v. Bean, 25 N. H. (5 Fost.) 412. * Id. ibid. 
 
 ' Civil Code, tit. 3, pt. 2, § 3458. • lb. § 3459. 
 
 ' Gen. Stat, of N. H. c. 126, § 2. See Flint v. Clinton Co. 12 N. H. 430. 
 
§ 249.] ACKNOWLEDGMENT OF EXECUTION. 335 
 
 ment, for the benefit of all his creditors," according to the 
 true intent and meaning of the act.' In New Jersey, the 
 debtor is required to verify his inventory by oath or affirma- 
 tion.= In Maine, the assignor is required to make oath to 
 the truth of the assignment, and a certificate of the fact is 
 required to be made thereon by the magistrate administer- 
 ing it. 3 
 
 In Indiana, the assignor is required to make oath before 
 some person authorized to administer oaths, that the assign- 
 ment and schedules contain a statement of all the property, 
 rights and credits belonging to him, or of which he has any 
 knowledge, and that he has not directly or indirectly trans- 
 ferred or reserved any sum of money or article of property 
 for his own use or the benefit of any other person, and has 
 not acknowledged a debt or confessed a judgment to any 
 person or persons for a sum greater than was justly owing 
 to such person or persons, or with the intention of delaying 
 or defrauding his creditors.* 
 
 § 249. Acknowledgment of Execution. — In New York, 
 the statute declares that every assignment in trust for the 
 benefit of creditors " shall be duly acknowledged before an 
 officer authorized to take the acknowledgment of deeds, and 
 the certificate of such acknowledgment shall be duly 
 indorsed upon such conveyance or assignment, before the 
 delivery thereof to the assignee or assignees therein named." ' 
 
 This requirement is mandatory, and not merely directory, 
 and every assignment which does not comply with the stat- 
 ute in this respect is void.* 
 
 The acknowledgment must be made by the debtor in 
 
 ' Stat, of 1836, c. 238, § I ; supplement to Rev. Stat. p. 6. 
 
 = Rev. Stat. (ed. 1874), p. 8, § 2. 
 
 ' Rev. Stat. (ed. 1871), p. 543, § 2. 
 
 ' Stats, of Ind. (2d ed. 1870), vol. i, p. 114, § 2. 
 
 ^ Rev. Stat. (6th ed.) p. 32, § i, Laws of i860, c. 348, § i. 
 
 " Hardmann v. Bowen, 39 N. Y. 196 ; S. C. 5 Abb. Pr. N. S. 332 ; Fairchild v. 
 Gwinne, 16 Abb. Pr. 23; rev'g S C. 14 Abb. Pr. 121. A defective acknowledg- 
 ment cannot be taken advantage of in a collateral proceeding, to shield the as- 
 signee from liability as such. Randall v. Dusenbury, 39 Sup. C. R. (7 J. & S.) 
 177. 
 
336 EXECUTION OF THE ASSIGNMENT. [CHAP. XIV. 
 
 person ; it cannot be made by his attorney, or proved 
 through the medium of a witness." 
 
 And 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 acknowledgment which the statute requires, should be 
 made by all.^ But where there are non-resident members 
 of a firm, they are not necessarily included in the require- 
 ment of a personal execution and acknowledgment by each 
 of the assignors.-* 
 
 The rule that an assignment cannot be executed by an 
 attorney in fact, does not preclude the partners who remain 
 after one of their number has absconded, from executing an 
 assignment of the assets of the firm.= 
 
 § 250. In some other States, also, it is necessary that 
 the execution of the assignment should be acknowledged ' 
 or proved before some proper officer, in order to entitle it 
 to be recorded. This is expressly required by statute in 
 some instances,^ and it seems to be an indispensable formal- 
 ity, wherever a record or registry of the assignment is nec- 
 essary. 
 
 ' Adams v. Houghton, 3 Abb. Pr. N. S. 46. 
 
 " Cook V. Kelly, 14 Abb. Pr. 466 ; s. C. 12 Abb. Pr. 35. 
 
 " Treadwell v. Sackett, 50 Barb. 440. 
 
 * Darrow v. Bruff, 36 How. Pr. 479; and see Baldwin v. Tynes, 19 Abb. Pr. 
 32- 
 
 ' National Bank v. Sackett, 2 Abb. Pr. N. S. 286 ; see Cooke v. Kelly, supra. 
 
 " Thus, in California the assignment is void as against creditors not assenting, 
 unless acknowledged or proved in the manner prescribed ; Civil Code, tit. 3, . 
 pt. 2, §§ 3458, 3459. In Iowa, the assignment must bp acknowledged ; Code of 
 1873, title 14, c. 7, § 2117. So in Indiana; Stats, of Ind. vol. i, p. 114, § 2. Kan- 
 sas ; Gen. Stats. (1868) c. 6, § i. Missouri; Stats, of Mo. (Wagner, 1872), 
 vol. 1, c. 9, § I. Michigan ; see Ryerson v. Eldred, 18 Mich. 12. 
 
CHAPTER XV. 
 
 RECORD OR REGISTRY OF THE ASSIGNMENT. 
 
 After the assignment is executed, there are certain acts 
 which remain to be done on the parts of the assignor and 
 assignee, and sometimes on the part of the creditors, in 
 order to render it fully operative as a transfer, for the pur- 
 poses intended by it ; such as the recording or registry of 
 the instrument — its delivery by the assignor to the assignee 
 — its acceptance by the latter — the delivery of possession of 
 the property assigned — and the assent of the creditors to the 
 assignment. These subjects will be considered in the follow- 
 ing chapters. 
 
 § 251. Record Essential. — In some of the States, an 
 assignment is of no validity against creditors, unless recorded 
 or registered in some public office, within a certain time 
 after its execution. 
 
 Thus, in Pennsylvania, by statute of March 24th, 181 8, 
 § 5,' an assignment is' void as against creditors, unless re- 
 corded within thirty days^ after its execution, in the county 
 where the debtor resides.^ This statute has been held to 
 extend to assignments in trust for payment of particular 
 
 ' Purdon's Digest (Brightley, loth ed.) vol. i, p. 90. 
 
 "^ Where the assignee named in a deed of assignment for the benefit of cred- 
 itors, 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 Penn. St.. 
 
 415- 
 
 ' Stewart v. McMinn, 5 W. & S. 100. It is not sufficient that the deed is 
 recorded in the county in which the property is situated. Schuylkill Bank v.. 
 Reigart, 4 Barr, 477. 
 23 
 
338 RECORD OF THE- ASSIGNMENT. [cHAP. XV. 
 
 creditors, as well as to those for payment of all.' It has 
 been held, also, to comprehend 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 assignment 
 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 assignors ; 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 assigned 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 assign- 
 ments made in the form of absolute conveyances, with sep- 
 arate declarations of trust,^ and to all instruments of transfer 
 for the benefit of creditors, whether in the particular form of 
 an assignment, or not. Hence, a power of attorney, if vir- 
 tually an assignment, must be recorded, to make it valid 
 against the attachment of a 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, as- 
 signed to B., also residing 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 
 
 ' Englebert v. Blanjot, 2 Whart. 240 ; reversing the judgment in I Miles, 224; 
 Murphy's Assignment, 2 Pitts R. 271. 
 ' Flanagin v. Wetherill, 5 Whart. 280. 
 = Schuylkill Bank v. Reigart, 4 Barr, 477. 
 * Watson V. Bagaley, 12 Penn. St. (2 Jones), 164. 
 
§ 251.] RECORD ESSENTIAL. 339 
 
 assignment was not recorded according to the statute, it 
 was held that it might be avoided by the creditors of A.' 
 
 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 for the payment of certain speci- 
 fied creditors ; ^ nor to mortgages in trust to secure creditors/ 
 
 It has been further held in Pennsylvania, that an assign- 
 ment of real estate must, under the general act of March 
 18, 1775 (declaring all deeds and conveyances of land fraudu- 
 lent and void against subsequent purchasers, unless recorded 
 within six months after execution), be recorded in the county 
 in which the land is situated, in order to make it valid 
 against a subsequent purchaser from the assignor, without 
 notice of the assignment ; even though it were duly recorded 
 in the county in which the assignor resided, in pursuance of 
 the act of 1818.= 
 
 By the act of May 6, 1854, § i, 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 request- 
 ing 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 person 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 
 
 ■ Weber v. Samuel, 7 Barr, 499. 
 
 ' Chaffees v. Risk, 24 Penn. St. (12 Harris), 432; approved in Henderson's 
 Appeal, 31 Penn. St. 502. 
 
 ' Guy V. Mcllree, 26 Penn. St. (2 Casey), 92. 
 
 ' Ridgway v. Stewart, 4 Watts & Serg. 383. 
 
 ^ Dougherty v. Darrach,M5 Penn. St. (3 Harris), 399. 
 
34Q RECORD OF THE ASSIGNMENT. [CHAP. XV. 
 
 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, setting 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, 
 trustees 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 
 assignment will still remain valid as against a subsequent 
 voluntary assignee ; " and dissenting creditors can only avoid 
 it pro tanto? 
 
 The deed may be taken to be recorded, by any one of the 
 creditors for whose use the conveyance was made, or any 
 party interested in the trust* 
 
 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, mort- 
 gagee, or creditor, having a lien thereon before the recording 
 in the same county, and not having had previous actual no- 
 tice thereof, shall be affected or prejudiced.^ 
 
 § 252. In Connecticut, it is one of the requisites of a 
 valid assignment, that it be lodged for record in the office of 
 
 ' Laws of 1854, p. 603 ; Purdon's Dig. (Brightley, loth ed.) pp. 1425, 1426. 
 
 ' Seal V. Duffy, 4 Barr, 274. Creditors, by levying on the property assigned, 
 avoid the deed pro tanto only, and are not estopped from availing themselves of 
 the first assignment, to prevent the operation of a second assignment on the prop- 
 erty thus levied on, and included in the first assignment. Id. ibid. 
 
 ' Id. ibid. And see Weber v. Samuel, 7 Barr, 499. 
 
 ' Read v. Robinson, 6 Watts & Serg. 329. 
 
 " Laws of 1855, p. 415; Purdon's Dig. (Brightley, loth ed.) p. 92, § 8; see 
 Philson V. Barnes, 50 Penn. St. 230. 
 
 ° Evans v. Dunkelberger, 3 Grant (Penn.) 1 34. 
 
§§ 253> 254.] RECORD ESSENTIAL. 34I 
 
 the Court of Probate for the district where the assignor or 
 assignees or some of them reside.' But no time is Hmited 
 by the statute within which this must be done ; and if the 
 assignment be recorded before the lien of a creditor attaches, 
 it will prevail against it.° Nor is such record necessary where 
 the parties reside in another State. Thus, where an assign- 
 ment made in Ohio, the assignor and assignee both residing 
 in that State, embraced a debt due from an incorporated 
 company in Connecticut, 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 valid also in Connecticut, against the subsequent attach- 
 ment of a creditor residing in Pennsylvania. ' 
 
 § 253. The Massachusetts statute of 1836 did not require 
 assignments made under it to be recorded, but only notice of 
 them to be published by advertisement.'* This was held to 
 have been intended as legal notice to all creditors,^ and to 
 have been not inconsistent with the general provisions of 
 law as to the registry of conveyances.* By the statute of 
 1838, the assignees are required to record the assignment in 
 every county in which there may be any real estate of the 
 debtor on which it may operate.' 
 
 § 254. In Vermont, it is made the duty of the assignor 
 and assignee to file in the county clerk's office in the county 
 where the assignment is made and the property assigned is 
 
 ' Gen. Stat, of Conn. (rev. 1875), p. 378, § i. In the case of copartnerships 
 and corporations, 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. See § 36. And where the assignment includes part- 
 nership and individual 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 another district, it would seem that the assignment should be 
 recorded in both districts. Coggill v. Botsford, 29 Conn. 439. 
 
 ' Strong v. Carrier, 17 Conn. 319. 
 
 ^ Atwood V. Protection Ins. Co. 14 Conn. 555. 
 
 * Stat, of 1836, c. 238, § 5. 
 
 " Guilford V. Childs, 22 Pick. 434; Wilde, J., Id. 435, 436. See Johnson v. 
 Whitwell, 7 Pick. 71. 
 
 » Wilde, J., in Guilford v. Childs, 22 Pick. 434, 435, 436. 
 
 ' Stat, of 1838, c. 163, § II. 
 
342 RECORD OF THE ASSIGNMENT. [CHAP. XV. 
 
 situated, at the time of making such assignment, a true 
 copy of the assignment and of the inventory of the prop- 
 erty assigned, including all choses in action, and of the list 
 of creditors to be benefited by the assignment, to remain on 
 file for the use and inspection of all persons interested in 
 such assignment.' 
 
 In Maine, the assignee is required to file an attested 
 copy of the assignment in the probate office, within ten 
 days after its execution.^ 
 
 In New Jersey, the assignment must be recorded in the 
 office of the clerk of the county where the debtor resides, 
 having first indorsed upon it by the surrogate, a receipt of 
 the bond required of the assignee. ^ 
 
 In Virginia, all deeds of trust are declared void as to 
 creditors, until admitted to record in the county or corpora- 
 tion wherein the property embraced in the deed may be," 
 provided that where the property is situated within the juris- 
 diction of a corporation or Hustings Court, the record shall 
 be made in the clerk's office of such corporation or Hust- 
 ings 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 registra- 
 tion 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 creditor.^ 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 
 
 ■ Act of Nov. lo, 1857 ; L. of 1857, p. 13, § i ; Gen. Stat. (1870), p. 454, § 3. 
 
 ' Rev. Stats, (ed. 1871), c. 70, p. 543, § 3. 
 
 ' Rev. Stats, (ed. 1874), p. 8, § 4. 
 
 ' See act of Jan. 16, 1867, amending and reenacting § 5 of c. 119, Code of 
 i860, p. 566. See also Blackford v. Hurst, 26 Gratt. 203 ; Burr's Ex'r v. Mc- 
 Donald, 3 Id. 215; Shanks v. Lancaster, 5 Id. 110. 
 
 " Dewey v. Littlejohn, 2 Ired. Eq. 495 ; Ruffin, C. J., Id. 503, citing Davidson 
 v. Cowan, i Dev. Eq. 470. 
 
§ 255-] RECORD ESSENTIAL. 343 
 
 against any person, 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 creditors 
 or purchasers for a valuable consideration, but from the 
 registration of such deed of trust in the county where the 
 land lies, or, in case of personal estate, where the donor 
 resides. =" 
 
 § 255. In Alabama, an assignment must be recorded in 
 the office of the county where the property lies, and also in 
 the country where the grantor resides.^ A deed of trust not 
 delivered for registration, or recorded, until thirty-one days 
 after its execution, has been declared void as against judg- 
 ment creditors not having actual notice of the deed.* 
 
 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 property.^ 
 
 In California, the assignment must be recorded with the 
 county recorder of the county in which the assignor resided 
 at the date of the assignment, or if he did not then reside in 
 the State, with the recorder of the county in which his 
 principal place of business was then situated, or if he had 
 not then a residence or place of business in the State, with 
 the recorder of the county in which the principal part of the 
 assigned property was then situated. If there be more than 
 one assignor, the assignment may be recorded in the county 
 in which any one of them resided at its date, or in which 
 
 ' Burgin v. Burgin, I Ired. L. 453. 
 
 ° Rev. Code of N. Carolina (ed. 1855), c. 27, § 22, p. 245 ; Battle's Rev. p. 
 354. § 12. 
 
 ^ Act of January 11, -1828; Rev. Stat. (1867) §§ 1553, 1561; Cummings v. 
 McCuUough, 5 Ala. 324. 
 
 * Wallis V. Rhea, 12 Ala. 646. 
 
 ' Brown & Morehead's Stat. Law, vol. i, pp. 448, 449; Session Acts of 1836, 
 1837, p. 255; Session Acts, 1838, 1839, p. 96. 
 
 ° See Vernon v. Morton, 8 Dana, 247. 
 
344 RECORD OF THE ASSIGNMENT. [CHAP. XV. 
 
 any one of them not residing in the State, had a place of 
 business.' A compliance with these requirements is essen- 
 tial to the validity of the assignment.^ 
 
 In Indiana, the assignment must, within ten days after 
 its execution, be filed with the recorder of the county where 
 the assignor resides, and until the assignment is recorded as 
 provided, it conveys no interest in the assigned property to 
 the assignee.3 
 
 § 256. In lowa.t Kansas.s Maryland,* Mississippi,' Ten- 
 nessee,* Texas,' and Missouri," assignments and deeds of 
 trusts are required to be recorded. But the recording act of 
 Mississippi 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 fide purchasers and creditors 
 without notice of their existence." 
 
 In Illinois, no record of an assignment of personal prop- 
 erty is necessary where there is an actual delivery of the 
 possession of the property." 
 
 In New York, it is provided that every assignment 
 made under the provisions of the act of i860, shall be re- 
 corded in the clerk's office of the county in which the 
 debtor or debtors resided at the date thereof.'^ But such 
 
 ■ Civil Code, § 3458. ' lb. § 3459. 
 
 ' Stats, of Indiana (ed. 1870), vol. i, p. 114, § 2. 
 
 " Iowa Code (1873), tit. 14, c. 7, § 21 17. But where possession accom- 
 panies the conveyance of personal property, it is not necessary that the deed 
 should be acknowledged and recorded. Meeker v. Saunders, 6 Iowa, 61. 
 
 * Gen. Stats. (1868) c. 6, p. 93, § i. 
 
 ° See Houston v. Nowland, 7 Gill & J. 480 ; Brooks v. Marbury, 1 1 Wheat. 78 ; 
 Farquharson v. Eichelberger, 15 Md. 63. 
 ' Prewett v. Dobbs, 13 Sm. & M. 431. 
 
 * Brevard v. Neely, 2 Sneed, 164. 
 
 ° Act of February 5, 1840; Paschal's Dig. vol. i, p. 833. 
 
 '° Stats, of Mo. (Wagner, 1872), vol. i, c. 9, § i, p. ijo. 
 
 " Palmer v. Cross, i Sm. & M. 48 ; Dobbs v. Prescott, 13 Id. 431, cited and 
 confirmed in Presley v. Rogers, 24 Miss. 520, 524. 
 
 '' Wilson v. Pearson, 20 111. 81 ; Meyers v. Kinzie, 26 111. 36. 
 
 " Laws of i860, c. 348, § 6 ; Rev. Stat. (6th ed.) vol. 3, p. 33 ; Fay's Dig. vol. 
 I. P- 394- 
 
§ 2 57-] NOTICE IN LIEU OF RECORD. 345 
 
 filing in the clerk's oflfice 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 executed 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 sit- 
 uated.^ Neglect to record the assignment does not render 
 it fraudulent.3 
 
 § 257. Notice in Lieu of Record. — The public notice of 
 the assignment, 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, c. 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 creditor, although 
 not recorded in the registry of deeds ; and this, notwithstand- 
 ing the provisions of the Revised Statutes (c. 59, § 28), as to 
 the registry of conveyances of real estate in general.^ In Mis- 
 sissippi, it was held in the case of Dixon v. Doe,^that creditors, 
 equally with subsequent purchasers, were affected by notice of 
 an unregistered deed. This case was referred to by the court 
 in Henderson v. Downing,' without controverting the de- 
 cision, and with no other comment than to say that it would 
 
 ' Simon v. Kaliske, ^ Abb. Pr. N. S. 224 ; S. C. 37 How. Pr. 249. 
 " Scott v. Guthrie, lo Bosw. 408. 
 ' Dwg^^jTMundy, 5 Robt. 63^. Q 
 
 * Van Hook v. Walton, 28 Tex. 59, citing Givens v. Taylor, 6 Tex. 315 ; Ben- 
 nett V. Cocks, 1 5 Tex. S"]. 
 
 ' Guilford v. Childs, 22 Pick. 434. » i Sm. & M. 70. 
 
 ' 24 Miss. (2 Cush.) 106; Yerger, J., Id. 114, 115. 
 
346 RECORD OF THE ASSIGNMENT. [cHAP, XV. 
 
 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.' 
 
 ' Dewey v. Littlejohn, 2 Ired. Eq. 495, 
 
CHAPTER XVI. 
 
 DELIVERY OF THE ASSIGNMENT. 
 
 § 258. In order to complete the transfer intended by the 
 assignment, it is necessary not only that the instrument 
 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 
 circumstances, there was no delivery of the assignment to 
 the assignee until several weeks after its date, the assign- 
 ment 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 indispensable 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 assignee ; 
 otherwise an execution would be preferred.' So, in Massa- 
 chusetts, where an assignment purporting to be an indenture 
 tripartite between the debtor, the assignees, and the cred- 
 itors 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 incom- 
 plete until delivery to them.'' In Tennessee, delivery is an 
 
 ' Van Hook v. Walton, 28 Tex. 59. " Burd v. Smith, 4 Dall. 76. 
 
 ' McKinney v. Rhoads, 5 Watts, 345; see Klapp's Assignees v. Shirk, 13 
 Penn. St. (i Har.) 589. 
 
 * Marston v. Coburn, 17 Mass. 454. 
 
348 DELIVERY OF THE. ASSIGNMENT, [cHAP. XVI. 
 
 essential incident to the proper execution of a deed of trust, 
 as well as of all other deeds.' 
 
 § 259. What Amounts to a Delivery. — A deposit of the 
 deed in the post office, directed to the assignee, who resided 
 at some distance, was held in Pennsylvania to be sufficient, 
 as against an execution which was levied between the 
 deposit in the office and the actual delivery to the assignee." 
 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 creditors, there being no condition annexed to the as- 
 signment, 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 trzist.^ In Pennsylvania, where a debtor exe- 
 cuted an assignment in M. county, and handed it to his son 
 to 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 authority of the grantor.* In Tennes- 
 see, it is held that a delivery, 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 transfer the 
 title." 
 
 § 26.0. Evidence of Delivery. — Where an assignment by 
 an indenture of three parts was signed and sealed, and pur- 
 ported to have been delivered by the debtor, the trustees, 
 and some of the creditors ; and one part was found in the 
 
 ' Brevard v. Neely, 2 Sneed, 164; McKinney, J., Id. 169. 
 
 ^ McKinney v. Rhoads, 5 Watts, 345. 
 
 ' 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, 4 B. & Aid. 440;. Ward v. Lewis, 4 Pick. 518. 
 
 ' Ingraham v. Grigg, 13 Sm. & M. 22 ; but see Webb v. Dean, 21 Penn. St. 
 (9 Har.) 29. 
 
 ' Ingraham v. Grigg, 13 Sm. & M. 22 ; and see Moir v. Brown, 14 Barb. 39, 44. 
 
 ' Read v. Robinson, 6 W. & S. 329. 
 
 ' McKinney, J., in Brevard v. Neely, 2 Sneed, 164, 170, 
 
§ 26o.] EVIDENCE OF DELIVERY. 349 
 
 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 cred- 
 itors in the character of trustee, and made proposals to the 
 creditors in the name of all the 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 hg, requested one of his creditors to execute 
 the indenture, informed such creditor that he had assigned 
 his property for the benefit of his creditors — 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 cred- 
 itors.' 
 
 ' Ward V. Lewis, 4 Pick. 518. See the New York case of Moir v. Brown (14 
 Barb. 39), wliere the evidence showed that the assignment was not delivered to 
 one of the assignees, until after a levy of execution on the property assigned. 
 
CHAPTER XVII. 
 
 AMENDMENTS AND ADDITIONS TO ASSIGNMENTS. 
 
 After an assignment has been executed, it may be cor- 
 rected and amended, if necessary, by the consent of all the 
 parties, or on application to a court of equity. 
 
 § 261. By Consent of Parties. — It may be amended by 
 the consent of parties, so as to purge it of any objectionable 
 features. And where creditors have become parties by act- 
 ually 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 conveyance is rev- 
 ocable until all the creditors have assented, and may be 
 canceled, abrogated, or modified at pleasure by those who 
 are parties to it.-" 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 objectionable 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 con- 
 sent of all the parties, prior to the time when any creditor is 
 
 ' See post, Chap. XX. ' Insurance Co. v. Wallis, 23 Md. 173. 
 
 " Pierce v. Brewster, 32 111. 268. The rule in Illinois seems to follow the En- 
 glish doctrine. (See ante, § 125). The assent of creditors is not presumed, even 
 where the instrument is beneficial ; they are not regarded as parties to it, therefore, 
 unless they were privy to its execution, or have actually assented. Mr. Justice 
 Walker, in Gibson v. Rees (50 111. 383), after citing Wilson v. Pearson (20 
 111. 81), and Pierce v. Brewster (32 111. 268), and English cases, remarks : " These 
 authorities 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." 
 
§ 262. J BY THE COURT, 35 I 
 
 in a position to attack it, it becomes a valid assignment, and 
 the rights of creditors, in respect to the property assigned, 
 must be governed by it.' So, after the execution and deliv- 
 ery 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 California, it is provided by statute that an assignment 
 for the benefit of creditors, which has been executed and re 
 corded so as to transfer the property to the assignee, cannot 
 afterwards be canceled or modified by the parties thereto 
 without the consent of every creditor affected thereby.^ 
 
 § 262. By the Court. — Mistakes in assignments will also 
 sometimes be corrected, and the instruments be reformed by 
 a court of equity, in the absence of any express statute pro- 
 vision to the contrary, on application for that purpose. In a 
 case in Alabama, where a debtor executed a deed of trust to 
 secure certain of his creditors and sureties, and included in 
 it certain notes on which one of the beneficiaries was sup- 
 posed 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 intended and agreed by the as- 
 signor to be included in it, and conveyed to the assignee, but 
 had been, through the mistake of the draftsman, omitted • 
 on the ground that, as the statute of 1828, against fraudulent 
 conveyances, expressly required the assignment to be in writ, 
 ing, and lodged for record in the probate office, the ordinary 
 
 ' Conkling v. Carson, 1 1 111. 503. 
 
 "^ Clap V. Smith, 16 Pick. 247; Hand, J., in Moir v. Brown, 14 Barb. 39, 48. 
 » Civil Code, § 3473 ; Hitt. 8473. 
 
 ' Trapp V. Moore, 21 Ala. 693. See Moale v. Buchanan, 11 Gill & J. (Md.) 
 314- 
 
352 AMENDMENTS AND ADDITIONS. [cHAP. XVII, 
 
 principles which are adopted in chancery, as to the correction 
 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, as to the assignor, 
 if it should become necessary to reform the assignment in 
 consequence of a mistake attending its execution, the ordi- 
 nary 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 fraudulent and void.° 
 
 § 263. In other Cases. — Sometimes the effect of amend- 
 ment has been allowed to be obtained by the mere act of the 
 assignor, by means of a new and distinct instrument. Thus, 
 in Connecticut, 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 cestui que trust, renewing 
 and confirming such deed, exclusive of the exceptionable 
 clause, and assigning the same property for the same purpose, 
 and giving the same authority to the trustee, not by a speci- 
 fication of such property, but by terms, of reference to the 
 former deed, might have effect as a new and independent 
 instrument of conveyance.^ And in a late case in Vermont, 
 where an assignment was defective on account of its contain- 
 ing 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 (Red- 
 field, Ch. J.) said this was not only allowable, but it was cer- 
 tainly 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 
 
 ' Whitaker v. Gavit, 18 Conn. 522. 
 ^ Whitaker v. Williams, 20 Conn. 98 ; Storrs, J., Id. 102. 
 
 ' Ingraham v. Wheeler, 6 Conn. 277. As to the revocation and canceling of 
 assignments, see post, Chap. XXVII. 
 
 ' Merrill v. Englesby, 28 Vt. (2 Wms.) 150, 155, 156. 
 
§ 264.] 
 
 ADDITIONS. 
 
 case, that where an assignment was voidable or inoperative, 
 as to creditors, 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 in a 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 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 property. 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 cred- 
 itor whose lien on the property had already attached.^ 
 
 The insertion of a provision in the assignment, that 
 schedules may be corrected, if necessary, has already been 
 noticed.3 
 
 § 264. Additions. — In regard to additions to assignments, 
 it has been held that a subsequent additional agreement, to 
 be valid, must be made with the consent of all the parties to 
 the instrument.-* The rights of creditors are fixed by the as- 
 signment, and without their knowledge or consent cannot be 
 varied by any subsequent 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 prop, 
 erty for any other purpose than that specified by the assign- 
 
 ■ Id. ibid. 
 
 ^ Porter V. Williams, 9 N. Y. 142; Willard, J., Id. 152. And the same rule 
 was applied where the assignment was invalid by reason of a provision unlaw- 
 fully exempting the assignee from liability. Metcalf v. Van Brunt, 37 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. 
 
 ' See ante, % 151. Dedham Bank v. Richards, 2 Mete. 105 ;'Halsey v. Whit- 
 ney, 4 Mason, 206. 
 
 ■* Ramsdell v. Sigerson, 2 Gilm. 78. 
 23 
 
354 AMENDMENTS AND ADDITIONS. [CHAP. XVII. 
 
 ment, could be upheld.' 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 
 creditors who had not become parties.'' But the operation 
 of an assignment may be extended by a new deed ; as where 
 it directs the appropriation of a surplus in the hands of the 
 assignee, not appropriated by the first deed.^ And supple- 
 mentary assignments are 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.-* 
 
 ' Bell V. Holford, i Duer, 58, 78. 
 
 " Howe V. Newbegin, 34 Me. (4 Red.) 15. 
 
 ^ Flanagin 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. 
 
 ■* See Conkling v. Coonrad, 6 Ohio St. (Critchf.) 61 1 ; Metcalf v. Van Brunt, 37 
 Barb. 621. 
 
CHAPTER XVIII. 
 
 ACCEPTANCE BY THE ASSIGNEE. 
 
 In order to give the assignment validity, and render it 
 operative, it is essential that there should be an accepta7tce 
 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/ 
 
 § 265. When and How to be Signified. — The acceptance 
 should be signified by the assignee immediately on the 
 delivery of the assignment ; 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 subsequent acceptance could not deprive 
 the creditors of their priority." 
 
 The acceptance must be actually signified by the as- 
 signee ; the mere taking the instrument into his hands, and 
 retaining it, amounts to nothing.^ It may be signified verb- 
 
 ' Crosby v. Hillyer, 24 Wend. 280 ; Lawrence v. Davis, 3 McLean, 177 ; Pier- 
 son V. Manning, 2 Mich. (Gibbs), 446 ; Pratt, J., Id. 462. Both the appointment 
 and the acceptance of the trust are necessary to make one an assignee, and when 
 these are denied they are facts to be proved. Dougherty v. Bethune, 7 Ga. 90. 
 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 
 Betliune v. Dougherty, 21 Ga. 257. 
 
 But in the case of Furman v. Fisher, 4 Cold (Tenn.) 626, Mr. Justice Shackel- 
 ford 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 the clerk 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. Bancroft v. Snodgrass, i Cold. (Tenn.) 430. 
 
 ^ Crosby v. Hillyer, 24 Wend. 280 ; see Pierson v. Manning, 2 Mich. 44 ; Sig- 
 gers V. Evans, 32 Eng. Law& Eq. 139. 
 
 ^ Nelson, C. J., in Crosby v. Hillyer, 24 Wend. 284. In Wisconsin, the as- 
 signee is required to indorse his acceptance under his hand and seal, upon the 
 assignment filed with the clerk. Stats, of Wis. (Taylor, 1871), p. 844,. c. 63, § 3., 
 
356 ACCEPTANCE BY THE ASSIGNEE. [CHAP. XVIII. 
 
 ally ; but it is sometimes expressed by the assignee's signing 
 and sealing a written acceptance appended to the assign- 
 ment. Such an acceptance is decisive evidence against him.' 
 Entering into possession of the property assigned, oper- 
 ates as an acceptance of the trusf 
 
 Where an assignment is made to two, and one accepts 
 and the other refuses the trust, the assignment is operative 
 as to the assenting trustee, unless there be a condition that 
 it shall be void, if both trustees do not assent.^ 
 
 § 266. Effect of Acceptance. — By the acceptance of an 
 assignment for the benefit of creditors, the assignee becomes 
 a trustee for the creditors, and equity will compel the exe- 
 cution of the trust for their benefit.* An assignment, once 
 accepted by the assignee, is vested for the benefit of cred- 
 itors, and a subsequent renunciation does not affect the 
 validity of the conveyance.^ But an acceptance by an as- 
 signee who is a creditor, has been held not to bind other cred- 
 itors, 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 prop- 
 erty by virtue of execution, and must take according to the 
 stipulations of the deed of trust.^ 
 
 § 267. Pres2i,7ned Acceptance. — The assent of the trustees 
 is presumed, until the contrary be shown ; and if the assign- 
 ment be made without their knowledge, they may, when 
 
 ' Mead v. Phillips, i Sandf. Ch 83, 85. '^ Price v. Parker, 11 Iowa, 144. 
 
 ' Gordon v. Coolidge, i Sum. 537 ; see King v. Donnelly, 5 Paige, 46 ; Moir 
 V. Brown, 14 Barb. 39, and cases cited by Hand, J., Id. 45. 
 
 " Moses V. Murgatroyd, I Johns, Ch. 119; Shepherd v. McEvers, 4 Id. 136; 
 NicoU 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. 313 ; Pearson v. Rockhill, 4 B. Mon. 296; 
 Furman v. Fisher, 4 Cold. 626 ; Bancroft v. Snodgrass, i Cold. 430. 
 
 ° Seal V. Duffy, 4 Barr, 274 ; see Brooks v. Marbury, 1 1 Wheat. 78 ; Curtis, J., 
 in Stewart v. Spenser, i Curt. 157, 166; McKinney, J., in Brevard v. Neely, 2 
 Sneed, 164, 170,; Bethune v. Dougherty, 30 Ga. 770. 
 
 " Cooke V. Smith, 3 Sandf. Ch. 333. 
 
 ' Harrison v. Mock, 10 Ala. 185. As to the effect of an acceptance by an 
 assignee who is also a creditor, see King v. Moore, 18 Pick. 376; Harrison v. 
 Mock, 16 Ala. 616. 
 
268.J 
 
 PROCEEDINGS WHERE TRUSTEE REFUSES. 357 
 
 it comes to their knowledge affirm it, and it will be bind- 
 ing.' Where the trustee is not present, his assent may be 
 presumed, for the purpose of giving operation to the deed.^ 
 
 § 268. 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 de- 
 volves upon the court of equity having jurisdiction, who 
 may appoint one or more new trustees, if necessary. ' 
 
 In Virginia, the general rule of equity is recognized, 
 that a trust shall never fail for want of a trustee ; and there- 
 fore, if the trustee dies or refuses to accept the trust, or is 
 incapable of performing it, a court of equity will give to the 
 cestuis que triist the proper relief, either by executing the 
 trust, or appointing a trustee for that purpose.'* The same 
 rule is recognized in Georgia, 5 Pennsylvania,* Kentucky,'' and 
 Tennessee.^ But in a late case in Virginia, where a debtor had 
 
 ' Gait V. Dibrell, 10 Yerg. 146; NicoU v. Mumford, 4 Johns. Ch. 522, 529; 
 Brown v. Minturn, 2 Gall. 557 ; Small v. Manvood, 9 B. & Cress. 300; Smith v. 
 Wheeler, I Vent. 128 ; Marbury v. Brooks, 7 Wheat. 556; Weston v. Barker, 12 
 Johns. 276 ; 2 Kent's Com. [533] 692, note. 
 
 - I Am. Lead. Cases, 96; McKinney, J., in Brevard v. Neely, 2 Sneed, 164, 
 170. 
 
 ' 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 mean time attached, 
 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 intermediate inter- 
 ests. See Read v. Robinson (6 W. & S. 329, 332) ; approved by the court iiv 
 Seal v. Duffy, iibi supra. And in a case in the same State, where an assign- 
 ment of all the debtor's estate had been executed and recorded, but the assign- 
 ees never acted nor were others appointed in their stead, and there was no evi- 
 dence 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 the prop- 
 erty remaining unconverted. Webb V. Dean, 21 Penn. St. (9 Har.) 29; Wood- 
 ward, J., Id. 32. 
 
 * Reynolds v. The Bank of Virginia, 6 Gratt. 174. 
 
 ' Dawson v. Dawson, Rice's Ch. 243. 
 
 " Webb V. Dean, 21 Penn. St. (9 Har.) 29. 
 
 ' Harris v. Rucker, 13 B. Mon. 564. 
 
 ' 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 
 
358 ACCEPTANCE BY THE ASSIGNEE. [cHAP. XVIII. 
 
 conveyed a large property, real and personal, 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 ad- 
 minister the trust, under the supervision and control of the 
 court.' 
 
 In Connecticut, if the trustee or trustees neglect or 
 refuse to accept the trust, after being notified, it is made the 
 duty of the Court of Probate to appoint one or more 
 trustees in his or their stead.^ 
 
 § 269. Proceedings where Assignee Renounces after 
 Acceptance. — 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, without the consent of all the 
 parties interested.^ He is not permitted to defeat the trust 
 
 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. 626; Bancroft v: Snodgrass, i 
 Cold. 430. 
 
 ' Reynolds v. The Bank of Virginia, 6 Gratt. 174. The reasons of this decis- 
 ion 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 cred- 
 itors with that of a provision for their payment, or, in other words, a mortgage in 
 trust ; and the court held that it should have been treated as a mortgage, and 
 commissioners appointed as in cases of that kind. 
 
 " Gen. Stats, (rev. of 1875), tit. 13, c. 11, § 13, p. 381, 
 
 ^ Lewin on Trusts, 464 ; Jones v. Stockett, 2 Bland, 409 ; see Strong v. Willis, 
 3 Fla. 124; Bethune v. Dougherty, 30 Ga. 770. This is the general doctrine in 
 regard to trustees. Mr. Perry, in his work on Trusts (vol. 2, p. 558), says: "A 
 mere relinquishment of the trust or of the property, which does not purport to 
 convey the property to some person authorized to receive it, does not discharge 
 the trust," citing Dick v. Pitchford, i Dev. & Bat. Eq. 480 ; Richardson v. Cole, 
 2 Swan, 100; Diefendorf V. Spraker, 10 N. Y. 246; Waugh v. Wyche, 23 L. J. Ch. 
 333; Thatcher V. Candee, 3 Keyes, 157; Webster v. Vanderventer, 6 Gray, 429; 
 Gilchrist V. Stevenson, 9 Barb. 9. 
 
§ 269.] PROCEEDINGS WHERE ASSIGNEE RENOUNCES. 359 
 
 in this way, by his own act ; and if he does so renounce, or 
 refuse to act under the assignment, it is competent 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." Nor can the as- 
 signor appomt a new assignee, even in pursuance of a power 
 reserved in the assignment itself. ^ 
 
 ' Seal V. Duffy, 4 Barr, 274 ; Bell, J., Id. 278 ; see Dawson v. Dawson, Rice 
 Ch. 243. 
 
 '^ Seal V. Duffy, 4 Barr, 274. 
 
 ° See Planck v. Scherraerhorn, 3 Barb. Ch. 644. 
 
CHAPTER XIX. 
 
 DELIVERY OF POSSESSION OF THE PROPERTY ASSIGNED. 
 
 The acceptance of the assignment by the assignee, after 
 its execution and deHvery by the assignor, completes the pro- 
 ceedings necessary to the transfer, between those parties, so 
 far as the instrument itself is concerned ; but there usually 
 remains a very important act to be done, with reference to 
 the property conveyed by it, and which it is now proposed 
 to consider ; namely, the delivery of possession. ' 
 
 § 270. When Essential.— \vl order to complete the trans- 
 fer of the property intended to be conveyed by the assign- 
 ment, 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 oi possession of the property itself to the as- 
 signee. 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 practice for 
 the assignor to retain possession after the assignment, and 
 even to stipulate for such a privilege in the deed itself, it be- 
 comes an important consideration, how far a change of pos- 
 session is actually 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 fraudu- 
 
 ' In connection with the subject of this chapter, see post. Chap. XXX. 
 
 '' Marshall, C. J., in Brashear v. West, 7 Pet. 608, 613. And see Phettiplace 
 V, Sayles, 4 Mason, 312, 321 ; and the argument in Tompkins v. Wheeler, 16 Pet. 
 106, 112; Hempstead V. Johnson, 18 Ark. 123; Wooten v. Clark, 23 Miss. 75; 
 Noble V. Coleman, 16 Ala. 77; Seuter v. Turner, 10 Iowa, 517. See Bump on 
 Fraud. Conv. p. 161. 
 
§ 272.] THE DIFFERENT RULES THAT PREVAIL. 36 1 
 
 lent per se, or only presumptive evidence of fraud, and sus- 
 ceptible of explanation ; ,or, in other words, whether fraud 
 in such a case is an inference of /am to be drawn by the 
 court, and resulting inevitably from the fact, or an inference 
 oi 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. 
 
 § 271. The Different Rtiles that Prevail. — In regard 
 then to the necessity of the delivery of possession of per- 
 sonal property assigned, three different rules appear to have 
 been at different times established in the United States, by 
 decision or statute : first, that such delivery is indispensable 
 to the validity of the assignment, and the want of it is con- 
 clusive evidence of fraud ; second, that the want of posses- 
 sion is only presumptive evidence of fraud, and may be 
 explained so as to be consistent with the validity of the 
 transfer; and third, that non-delivery of possession is not 
 even presumptive evidence of fraud, but is entirely consistent 
 with the validity and operation of the deed, until the sale of 
 the property assigned. 
 
 § 272. Delivery Indispensable. — The first and most rigid 
 of these rules formerly prevailed in the State of Pennsyl- 
 
 ' 2 Kent's Com. [515] 664. 
 
 '' They may be found fully collected and ably commented on in 2 Kent's Com. 
 [515-532] 664-688. And see i Smith's Lead. Cas. (Am. ed. 1852), Note to 
 "Twyne's case [9-14 c] 39-46 ; and the very complete and elaborate note by the 
 American editors. Id. [47-85, ed. 1855] 46-80. See also Bump on Fraud. Conv. 
 Chaps. 5 and 6. 
 
362 DELIVERY OF POSSESSION, [cHAP. XIX. 
 
 vania ; where the deliveiy of possession of personal property 
 assigned was held to be essential .to the validity of the as- 
 signment ; 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. Geesaman.= In the 
 latter case, an assignment in trust for creditors was held void 
 as against a judgment creditor, because the grantor retained 
 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.3 In Carpenter v. Mayer,* the same doctrine 
 was sustained, the court holding that the continuance of pos- 
 session, 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 claimant. 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 design to cover the property, or to 
 delay or hinder creditors ; but it is a question of fraud in law 
 for the court.* 
 
 The rule thus established, however, had been so far re- 
 laxed by the statute of June 14, 1836,' and the construction 
 
 ' 4 Binn. 258. '■' 17 Serg. & Rawle, 251. 
 
 'See Clow v. Woods, 5 Serg. & Rawle, 275, 278; Cunningham v. Neville, 10 
 Id. ■loi ; Babb v. Clemson, Id. 419; Martin v. Mathiot, 14 Id. 214. A reasonable 
 time, however, will be allowed the assignee to take possession. Wilt v. Franklin, 
 t Binn. 502. 
 
 * 5 Watts, 483. ■ 2 Watts & Serg. 147, 1 50. 
 
 ' And see McBride v. Clelland, 6 Watts & Serg. 94. 
 
 ' This statute makes it the duty of the assignee or assignees, within thirty days 
 after the execution of the assignment, to file in the office of the prothonotary of 
 the Court of Common Pleas of the county in which the assignor shall reside, an 
 inventory or schedule of the estate or effects assigned, accompanied with an affi- 
 davit by such assignee, that it is a full and complete inventory. Purdon's Dig. 
 (Brightley, loth ed.) p. 92, pi. 9. 
 
§ 272.] DELIVERY INDISPENSABLE. 363 
 
 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 execution 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 
 assignor to retain possession of the property assigned, when 
 the assignment has been recorded, and the other requisitions 
 of law complied with. And in the later case of Klapp's 
 Assignees v. Shirk,^ the doctrine is laid down, that a volun- 
 tary assignment for the benefit of creditors, in the manner 
 authorized by law, is not avoided by the property being left 
 in the possession of the assignor ; that, to avoid the 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 assignpr and assignee, can reinvest the 
 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 assign- 
 ments for the benefit of creditors. In Hall v. Parsons,' it 
 was held that the same change of possession which was re- 
 
 ' 2 Kent's Com. [522] 673, note e. 
 
 = 5 Watts & Serg. 307. See Dallam v. Fitler, 6 Id. 323 ; Mitchell v. Willock, 
 2 Id. 253. 
 
 ^ 13 Penn. St. (i Harris), 589. See also, Dunlap v. Bournonville, 26 Perm. St. 
 (2 Casey), 72; Milne v. Henry, 40 Penn. St. 352. And see i Smith's Lead. Cas. 
 (Hare & Wallace's Notes, ed. 1855), 72-76. 
 
 * See Boardman v. Keeler, i 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; 
 Farnsworth v. Shepard, 6 Id. 521; Wilson v. Hooper, 12 Id. (2 Weston), 653; 
 Mills V. Warner, 19 Id. (4 Washb.) 609; Walworth v. Readsboro, 24 Id. (i 
 Deane), 252. 
 
 ' 17 Vt. (2 Washb.) 271. The assignment in this case was made before the 
 act of 1843. And see Rogers v. Vail, 1 6 Vt. (i Washb.) 327. 
 
364 DELIVERY OF POSSESSION. [cHAP. XIX, 
 
 quired in case of the sale of personal property, was required 
 where personal property was assigned for the benefit of the 
 assignee as creditor of the assignor, and, after payment of his 
 claims, f r the benefit of the creditors generally/ In Illinois, 
 also, it appears to be the rule, that all 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 reten- 
 tion 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, incapable 
 of being rebutted or explained.^ 
 
 § 273. Possessiojt Prima Facie Evidence. — Another rule 
 in regard to the possession of assigned property is, that pos- 
 session 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 con- 
 clusive evidence of fraud ; and that it may always be ex- 
 plained, so as to show the transfer to have been bojta fide, 
 and upon sufficient consideration. This is the established, 
 rule in Massachusetts,* Connecticut,' New York,^ North' 
 
 ' See Rice v. Courtis, 32 Vt. 460 ; Hanford v. Paine, Id. 442. See I Smith's 
 Lead. Cas. (Hare & Wallace's Notes, ed. 1855), 78, 79. 
 
 "^ Thornton v. Davenport, i Scam. 296; Rhines v. Phelps, 3 Gilm. 455. Sec 
 
 1 Smith's Lead. Cas. (Hare & Wallace's Notes), 55 ; Dexter v. Parkins, 22 111. 143; 
 Ketchum v. Watson, 24 Id. 591 ; Bay v. Cook, 31 Id. 336 ; Corgan v. Frew, 39 
 Id. 31 ; Wilson v. Pearson, 20 Id. 81 ; Green v. Van Buskirk, 38 How. Pr. 52. 
 
 = Anderson v. Fuller, i McMul. Eq. 27, citing Smith v. Henry, i Hill, 22. See- 
 
 2 Kent's Com. [522] 672, note c; i Smith's Lead. Cas. (Hare & Wallace's Notes), 
 65-67 ; Terry v. Belcher, 1 Bailey, 568 ; Smith v. Henry, 2 Id. 118 ; Kennedy v. 
 Rose, 2 Mills, 125 ; De Brodleben v. Beekman, i Dessau. 346. 
 
 ' Boyden v. Moore, 11 Pick. 362; Macomber v. Parker, 14 Pick. 497 ; Fletcher 
 V. Willard, 14 Id. 464; Allen v. Wheeler, 4 Gray, 123. 
 
 " Ingraham v. Wheeler, 6 Conn. 277 ; Osborn v. Tuller, 14 Id. 530 ; Strong v. 
 Carrier, 17 Id. 319; see Kirtland v. Snow, 20 Id. 23 ; i Smith's Lead. Cas. 76, •]■] 
 (Am. ed. 1855). 
 
 ° See post, p. 366. 
 
§ 273-] POSSESSION PRIMA FACIE EVIDENCE. 365 
 
 Carolina/ Indiana," and Arkansas ;3 and appears to prevail 
 also in Maine/ New Hampshire/ New Jersey/ Ohio/ Mis- 
 souri/ Kentucky/ Tennessee/" Virginia/' Georgia/" Ala- 
 bama,'3 Texas/* Mississippi/^ Louisiana/^ Wisconsin/^ and 
 Michigan.'^ 
 
 ' Dewey v. Littlejohn, 2 Ired. Eq. 495 ; Hardy v. Skinner, 9 Ired. L. 191. But 
 see Gaither v. Mumford, i N. C. Term R. 167. 
 
 "Caldwell v. Rose, i 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. ibid. Caldwell 
 V. Williams, i Ind. (Carter), 405. And see i Smith's Lead. Cas. (Am. ed. 1852), 
 56; Id. (ed. 1855), 57. 
 
 ^ 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, 5 Id. 224; Hemp- 
 stead V. Johnson, 8 Id. 123. 
 
 * The decisions in this State, and those which follow, are mostly in cases of 
 sales and mortgages. Reed v. Jewett, 5 Greenl. 96; Holbrook v. Baker, Id. 309 ; 
 Brinley V. Spring, 7 Id. 241 ; Ulmer v. Hills, 8 Id. 326; Cutter v. Copeland, 18 
 Me. (6 Shep.) 127 ; Bartlett v. Blake, 37 Id. 124 ; Googins v. Gilmore, 47 Id. 9. 
 
 " Haven v. Law, 2 N. H. 13 ; Coburn v. Pickering, 3 Id. 415 ; Lewis v. Whitte- 
 more, 5 Id. 364; Ash v. Savage, Id. 545; Kendall v. Fitts, 2 Fost. I. See i 
 Smith's Lead. Cas. (Am. ed. 1855), 63, 64. 
 
 ■ Sterling v. Van Cleve, 7 Halst. 285 ; Hendricks v. Mount, 2 South. 738 ; 
 Bank of New Brunswick v. Hassert, Saxt. i ; Cumberland Bank v. Hann, 4 
 Harris. 166: Miller v. Pancoast, 5 Dutch. 250. 
 
 ' Barr v. Hatch, 3 Ohio (Ham.) 527 ; Shaw v. Lowry, Wright Ch. (Ohio), 190; 
 Hombeck v. Van Metre, 9 Ohio, 153. See i Smith's Lead. Cas. (Am. ed. 1852), 
 56; Id. (ed. 1855), 80. 
 
 = Milburn v. Waugh, 11 Mo. 369; Kuykendall v. McDonald, 15 Id. 416; Claf- 
 lin V. Rosenberg, 42 Id. 439; s. c. 43 Id. 593 ; State v. Tasker, 31 Id. 445 ; State 
 v. Smith, 31 Id. 566; State v. Evans, 38 Id. 150; Howell v. Bell, 29 Id. 135. See 
 I Smith's Lead. Cas. 82. 
 
 " Vernon v. Morton, 8 Dana, 247 ; Christopher v. Covington, 2 B. Mon. 357. 
 But see Gen. Stat. (ed. 1873), p. 489, § 3. 
 
 '° Callen v. Thompson, 3 Yerg. 475 ; Darwin v. Handley, Id. 502; Maney v. 
 Killough, 7 Id. 440; Mitchell V. Beal, 8 Id. 142; i Smith's Lead. Cas. 81 ; see 
 Ragan v. Kennedy, I Tenn. 91. 
 
 '' Davis v. Turner, 4 Gratt. 422. See Curd v. Miller's Ex'rs, 7 Id. 185. See 
 Bump on Fraud. Conv. pp. 149, et seq. 
 
 "^ Fleming v. Townsend, 6 Ga. 103 ; Carter v. Stanfield, 8 Id. 49 ; i Smith's 
 Lead. Cas. 82. 
 
 '^ Noble v. Coleman, 16 Ala. ']'] ; Dearing v. Watkins, Id. 20 ; Millard v. Hall, 
 23 Id. 209. See I Smith's Lead. Cas. 55-57; Constantine v. Twelves, 29 Ala. 
 607. 
 
 " Bryant V. Kelton, i Tex. 415 ; McQuinnay v. Hitchcock, 8 Id. 33; Van Hook 
 V. Walton, 28 Id. 59; Howerton v. Holt, 23 Id. 51. 
 
 " Summers v. Roos, 43 Miss. 749 ; Jayne v. Dillon, 27 Id. 283 ; Rankin v. 
 HoUoway, 3 Sm. & M. 614; Comstock v. Rayford, i Sm. & M. 423; s. C. 12 
 Sm. & M. 369. 
 
 '° Keller v. Blanchard, 19 La. Ann. 53; Gruce v. Sanders, 21 Id. 463; Haile v- 
 Brewster, 13 Id. 155 ; see Zacharie v. Kirk, 14 Id. 433. 
 
 "Whitney v. Brunette, 3 Wis. 621; Smith v. Welch, 10 Id. 91; BuUis v. 
 Borden, 21 Id. 135. 
 
 " Jackson v. Dean, i Doug. 519. 
 
366 DELIVERY OF POSSESSION. [cHAP. XIX. 
 
 § 274. The Rule in New York. — In New York, the 
 question as to the necessity of a delivery of possession of 
 goods sold, mortgaged 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 pro- 
 vide that " every sale made by a vendor, of goods and chat- 
 tels in his possession, or under his control ; and every as- 
 signment of goods and chattels by way of mortgage or se- 
 curity, or upon any condition whatever, unless the same be 
 accompanied by an immediate delivery, and be followed by 
 an actual and continued change of possession, of the things 
 sold, mortgaged or assigned, shall \>q presumed to be fratid- 
 ulent and void, as against the creditors of the vendor, or 
 the creditors of the person making such assignment, or sub- 
 sequent purchasers in good faith ; and shall be conchisive 
 evidence of fraud, unless 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 is to throw upon the vendee, mortgagee 
 or assignee of personal property who suffers the possession 
 to remain unchanged, the burden of destroying the pre- 
 sumption of fraud which the fact of withholding possession 
 raises.^ It is further declared that the question of fraudu- 
 lent intent shall be deemed a question of fact, and not of 
 law^ 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 
 
 ' See a review of the cases in Bump on Fraud. Conv. pp. 137, et seq. ; also in 
 2 Kent's Com. [526-529] 679-684, and note. 
 
 " 3 Rev. Stat. (6th ed.) p. 143, § 5. 
 
 » 2 Kent's Com. [529] 681, note a. See Williams v. Lowndes, i Hall, 579, 
 596. 
 
 * 3 Rev. Stat. (6th ed.) p. 145, § 4. 
 
 ° 2 Kent's Com. [529] 681-684, note, where the cases are reviewed. In Vance 
 V. Phillips (6 Hill, 433), it was decided that where the validity of a sale of chattels 
 depends 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 
 
§ 2 74-] THE RULE IN NEW YORK, 367 
 
 competent 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, without 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 execution 
 of the assignment, was left in possession, to sell the goods 
 and collect the accounts for the sole benefit of the assignees, 
 they paying 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 assignees, 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 pos- 
 session, 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 accom- 
 panied by an immediate delivery of the assigned property, 
 and is followed by an actual and continued change of pos- 
 session, the courts are bound to presume it fraudulent and 
 void, as against creditors ; and to regard it as conclusively 
 so, unless they are satisfied that it was made in good faith, 
 and without any intent to defraud. Several decisions to 
 the same point have been made by the vice chancellor of 
 
 the first circuit.^ The circumstance of leaving the house- 
 
 ^ J . 
 
 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. See, also, Edgell v. Hart, 
 13 Barb. 380 ; and see i Smith's Lead. Cases (Am. ed. 1855), 68-71. 
 
 ' See the observations of Wing, P. J., in HoUister v. .Loud, 2 Mich. (Gibbs), 
 
 309. 313- 
 
 ' 7 Paige, 163 ; afSrmed on appeal, 20 Wend. 507. ° i Barb. S. C. 210. 
 
 = Van Nest v. Yoe, i Sandf. Ch. 4; Mead v. Phillips, Id. 83; Cram v. Mitchell, 
 
368 DELIVERY OF POSSESSION. [CHAP. XIX. 
 
 hold 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 
 transaction valid, where the assignor continues in posses- 
 sion.' And the possession of things in action remaining in 
 the assignor after they hav^ been assigned for creditors, re- 
 quires explanation, as well as that of goods and chattels.^ 
 And in a case where a substantial portion of the assigned 
 property, consisting principally of promissory notes and 
 household furniture, was suffered to remain in the assignor's 
 possession for three months after the execution of the 
 assignment, it was held indispensable, in order to rebut the 
 presumption of fraud, that the assignee should prove the 
 existence of the indebtedness in consideration of which the 
 assignment was ostensibly made."* 
 
 The rule in New York may now be regarded as settled 
 that the fact of there being no change of possession is pre- 
 sumptive evidence of fraud, and conclusive, unless rebutted 
 by affirmative evidence of good faith and the absence of an 
 intent to defraud. ^ 
 
 § 275. The Rtile 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 
 
 Id. 251; see also Hart v. Acker, and Scholefield v. Hull, cited in Edwards on 
 Receivers (ed. 1857), 408, 410; see also the later case of Pine v. Rikert, 21 Barb. 
 469 ; and see post. Chap. XXX. 
 
 ' Cram v. Mitchell, ubi supra. ' Dewey v. Adams, 4 Edw. Ch 21. 
 
 ' Mead v. Phillips, I Sandf. Ch. 83. 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. [186] 70, § 5), 
 which requires the immediate delivery, and an actual and continued change of 
 possession of goods and chattels sold, mortgaged, or assigned, has been repeat- 
 edly held not to embrace choses in action. Paige, P. J., in Browning v. Hart, 
 tibi 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. 
 
 " Jacobs v. Remsen, 36 N. Y. 668 ; and see Terry v. Butler, 43 Barb. 395 ; 
 Van Buskirk v. Warren, 39 N. Y. 119; Miller v. Lockwodd, 32 N. Y. 293; 
 Thompson v. Blanchard, 4 N. Y. 303. 
 
 " Mead v. Phillips, i Sandf. Ch. 83. 
 
§ 2 75-] RULE IN UNITED STATES COURTS. 369 
 
 the case of Hamilton v. Russell,' the strict rule was laid 
 down by the Supreme Court, that an absolute bill of sale 
 of a personal chattel by an insolvent, was fraudulent 
 against creditors, unless possession of the property assigned 
 or transferred, accompanied or followed the deed and that 
 the absence of such possession was not merely evidence of 
 fraud, but was a circumstance, per se, which made the trans- 
 action fraudulent. In the subsequent case of the 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 indem- 
 nity of a surety of the grantor. In Conard v. Atlantic 
 Insurance Company,^ the court avoided expressing an opin- 
 ion on the question whether, in any case, the want of pos- 
 session of the thing sold, constitutes, per se, a badge of 
 fraud, or is only prima facie a presumption of fraud ; Mr. 
 Justice Story, who delivered the opinion of the court, ob- 
 serving 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 earner case,' in 
 the Circuit Court of Massachusetts, adopted the more 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 titist for the benefit of creditors ; observ- 
 ing that the continuance of the possession with the donor 
 until the trust could be executed, might not be so incompat- 
 ible with the deed as to render it absolutely void under all 
 circumstances. The court, however, as in Conard v. 
 Atlantic Insurance Company, declined expressing any opin- 
 
 ' I Cranch, 309. '' 3 Cranch, 73. = i Pet. 386. " Id. 449. 
 
 ' Meeker V. Wilson, i Gall. 419. "By the common law, a grant or assign- 
 ment 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 accom- 
 panies 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 transaction, as to creditors, void." Story, J., Id. 
 422, 423. 
 
 ' II Wheat. 78. 
 34 
 
370 DELIVERY OF POSSESSION. [cHAP. XIX. 
 
 ion on this point, further than to say, that it was not sup- 
 posed to be decided in Hamilton v. Russell. 
 
 § 276. 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 posses- 
 sion by an assignor 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 trust, 
 already mentioned as peculiar to the Southern States, which 
 are executed by way of security to creditors, and which pro- 
 vide 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 Jhese instruments, as of mortgages, dis- 
 penses 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 possession until the 
 day of payjnent be past' Thus, in Virginia, delivery 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 
 inconsistency of the debtor's possession with the deed is the 
 matter which constitutes fraud.^ In Mississippi,* and Ala- 
 bama,5 possession by the debtor until the sale, is not incon- 
 sistent with the deed, and raises no presumption of fraud. 
 In the last-named State, it has been decided that where a 
 deed of assignment is not fraudulent on its face, the posses- 
 
 ' I Tuck. Com. [338] 327 ; Hempstead v. Johnson, 18 Ark. 309. 
 
 M Tuck. Com. [340] 329; Land V. Jeffries, 5 Rand. 211, 252; and see i 
 Smith's Lead. Cas. (Am. ed. 1855), 58-63. 
 
 " Land v. Jeffries, ubi suf>ra. 
 
 * Layson v. Rowan, 7 Rob. (La.) i ; 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, c. 3, has not been reenacted. Inger- 
 soU V. Kendall, 13 Sm. & M. 611. 
 
 ' Ravisies v. Alston, 5 Ala. 297. But possession after the sale is evidence of 
 fraud, though capable of being rebutted by showing some sufficient reason why 
 the possession was permitted to remain. Id. ibid. ; McGee v. Carpenter, 4 Id. 
 469; see I Smith's Lead. Cas. (Am. ed. 1852), 55 ; Id. (ed. 1855), 55-57. 
 
§ 2 77- J THE PREVAILING RULE. ,^ 371 
 
 sion and use of the property by the assignor, in conformity 
 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 consistent with the terms of the deed, is 
 not a badge of ft aud ; nor is it a circumstance from which 
 an inference of fraud would necessarily arise.'' A similar 
 practice of retaining possession until a sale under a deed of 
 trust, prevails in North Carolina ; the courts approving it 
 as being more convenient for all parties that the possession 
 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 retained by the trustees to aid them in exe- 
 cuting the trust, and so remained in possession of the goods 
 conveyed, such continued possession was held to be no evi- 
 dence of fraud.'' The same rule, as already mentioned, now 
 prevails also in Pennsylvania, the record of the assignment 
 and a compliance with other statutory requisitions being 
 held to dispense with the necessity of a delivery.' In this 
 State, indeed, an assignment duly recorded stands upon the 
 footing of a transfer by law ; because, as the statute gives 
 the creditors a right 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.^ 
 
 § 277. The Prevailing Rule and Exceptions. — On the 
 whole, the predominant rule in the United States appears 
 
 ' Abercrombie v. Bradford, 16 Ala.. 560. 
 
 " Hopkins v. Scott, 20 Ala. 179; Ligon, J., Id. 184. 
 
 ' Dewey v. Littlejohn, 2 Ired. Eq. 495, 507. 
 
 * Vernon v. Morton, 8 Dana, 247 ; see Christopher v. Covington, 2 B. Mon. 
 357 ; but see Gen. Stats. (1B73), p. 489, § 3. 
 
 " Mitchell V. Willock, 2 W. & S. 253 ; Klapp's Assignees v. Shirk, 13 Penn. 
 St. (I Har.) 589. 
 
 ° I Smith's Lead. Cas. (Am. ed. 1852), 70, 71 ; Id. (ed. 1855), 75. 
 
372 DELIVERY OF POSSESSION. [cHAP. XIX. 
 
 to be, that possession must accompany and follow a deed 
 of assignment by a debtor ; and the possession of the as- 
 signor, after the transfer, unless explained, will render the 
 assignment void as against creditors. But this rule is lim- 
 ited and quaHfied by several exceptions, which will now be 
 noticed. Thus, the rule applies in a peculiar manner to per- 
 sonal property. The provision of the New York statute 
 confines it, in terms, to " goods and chattels ; " ' and the 
 distinction 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.^ 
 
 Another exception to the rule has been admitted, where 
 the possession of the grantor or assignor is consistent with 
 the deed ; ^ -XhsA. is, with its general nature and object,' as 
 well as with its express provisions. The mere circumstance 
 that the deed contains an express provision for the. contin- 
 uance of possession in the grantor, will not take the case 
 out of the rule, where it is inconsistent with the character 
 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 assignor's continuing in pos- 
 
 ' 3 Rev. Stats. (6th ed.) p. 143, § 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 imputation of fraud. Every v. 
 Edgerton, 7 Wend. 259. In Jackson v. Cornell (i Sandf. Ch. 348), the posses- 
 sion of real estate assigned continuing in the assignor, was considered to be 
 evidence of fraud. It appeared in this case, that the assignor had collected the 
 rents of the property assigned, and retained a portion for his own use. 
 
 ^ Church, J., in Strong v. Carrier, 17 Conn. 319. 
 
 ' Sherman, J., in Barr v. Hatch, 3 Ohio (Ham ) 527. 
 
 ■* 4 Mason, 312, 321. 
 
 ^ For the reason of the distinction, see Id. 321, 322; Tompkins v. Wheeler, 16 
 Pet. 1 1 2, arg. 
 
 " Stoiy, J., in Meeker v. Wilson, i Gall. 419, 423; Putnam, J., in Bartlett v. 
 Williams, i Pick. 295 ; Marshall, C. J., in Brooks v. Marbury, 1 1 Wheat. 78 ; and 
 see Dawes v. Cope, 4 Binn. 258; Gibson, J., in Clow v. Woods, 5 S. & R. 278, 
 279; Land v. Jeffries, 5 Rand. 211, 252. 
 
 ' Lord Mansfield, in Cadogan v. Kennett, Cowp. 432, 436. 
 
 = I Tuck Com. [338] 327; Id. [341] 330. 
 
§ 2 78. J TIME AND MODE OF DELIVERY. 373 
 
 'session. Thus, in Tompkins v. Wheeler ' (which was a case 
 of an assignment directly to creditors), after the assignment, 
 the creditors for whose benefit it was made neglected to ap- 
 point an agent or trustee to execute it, and the property 
 assigned remained in the hands of the assignor. The prop- 
 erty consisted principally of choses in action, which the 
 assignor went on to collect, and divided the proceeds among 
 the creditors under the assignment. No one of the credit- 
 ors was dissatisfied, and at any time they could have taken 
 the property out of the hands of the assignor. It was held 
 by the Supreme Court of the United States, that leaving 
 the property in the hands of the assignor, under these cir- 
 cumstances, did not affect the assignment, or give a right to 
 a creditor not prefeired by it to set it aside. 
 
 Finally, the application of the rule requiring a delivery 
 of possession 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 following. 
 
 § 278. Time and Mode of Delivery. — As a general rule, 
 in order to avoid all ground of objection to the validity of 
 the assignment, possession of the personal property assigned 
 should always, if practicable, accompany the assignment. But 
 where, from the circumstances of the property, immediate 
 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 possession of the 
 property within a reasonable time after it comes within his 
 reach."" And even where the property assigned is, in its 
 
 ' 16 Pet. 106. And see Steel v. Brown, i Taunt. 381. 
 
 '' Story, J., in Conard v. Atlantic Insurance Company, i Pet. 386, 449 ; Harris 
 V. D'Wolf, 4 Id. 147, 151 ; Meeker V. Wilson, i Gall. 419, 423 ; Wheeler v. Sum- 
 ner, 4 Mason, 183 ; D'Wolf v. Harris, Id. 515 ; Bholen v. Cleveland, 5 Id. 174 ; 
 Brown v. Mintum, 2 Gall. 557 ; Portland Bank v. Stacy, 4 Mass. 661 ; Gardner 
 V. Howland, 2 Pick. 599 ; Hodges v. Harris, 6 Id. 360; Dawes v. Cope, 4 Binn. 
 258 ; Carpenter v. Mayer, S Watts, 485 ; Eagle v. Eichelberger, 6 Id. 29 ; Lang- 
 don V. Horton, i Hare (23 Eng. Ch. R. Am. ed.) 549. Bump on Fraud. Conv. p. 
 198. 
 
374 DELIVERY OF POSSESSION, [cHAP. XIX. 
 
 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 execution 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 constructive delivery, where this is imprac- 
 ticable ;■* 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 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 ma- 
 turity ; nor afterwards, but to prevent the parties bound from 
 acquiring equities against the holder, to which they might be 
 entitled, if not notified.^ 
 
 § 279. 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 as- 
 signee, of the bill of lading and an invoice, with an assign- 
 ment indorsed ; ' and an assignment and delivery of a duplicate 
 
 ' Ingraham v. Wheeler, 6 Conn. 277. ° Wilt v. Franklin, i Binn. 502. 
 
 ^ See ante, p. 360. * See infra, § 279. 
 
 " United States v. Banlc of the United States, 8 Rob. (La.) 262. 
 " Id ibid. ' Parker, C. J., in Gardner v. Howland, 2 Pick. 599, 602. 
 
 ' This is the rule in regard to sales and mortgages of vessels. 2 Kent's Com. 
 [132, 133] 175, 176. 
 
 ° See Gardner v. Howland, 2 Pick. 602, 603 ; Balderston v. Manro, 2 Cranch 
 
§ 2 79-] CONSTRUCTIVE DELIVERY. 375 
 
 of the invoice alone, where there was no other paper in the 
 hands of the assignor, has been held sufficient as a symbol- 
 ical 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 property 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 
 assignment 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 were a good 
 assignment of the property 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 law- 
 ful title. Thus, in a case in Massachusetts, where the goods 
 assigned had been previously 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 possession 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 
 
 C. C. 623. W^here 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, I Hare (23 Eng. Ch. R. Am. ed.) 549. 
 
 ' Gardner v. Howland, 2 Pick. 602, 603. 
 
 ^ Conard v. Atlantic Insurance Co. i Pet. 386. ' 4 Mason, 515. 
 
 * Mann v. Huston, i Gray, 250; Dewey, J., Id. 253. A symbolic delivery, by 
 a transfer of the keys of the place where the goods are stored, makes a valid 
 transfer of the title. BuUis v. Montgomery, 50 N. Y. 352 ; citing HoUingsworth 
 V. Napier, 3 Caines, 182, note a; Dunham v. Pettee, 8 N. Y. 508. So, where the 
 assignor secured a third person to execute to- the assignee 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, 32 111. 357. 
 
 ' Hitchcock V. St. John, i Hoff. Ch. 511, 522. 
 
376 DELIVERY OF POSSESSION. [cHAP. XIX. 
 
 a symbolical delivery, the assignment, although accompanied 
 by a schedule of the goods, was declared void.' In Massa- 
 chusetts, a delivery of a portion of the goods, in token of a 
 delivery of the whole, was held to be a constructive delivery 
 of goods embraced in the assignment, which were at a dis- 
 tance 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.'' 
 
 § 280. Actual and Contimied Change. — It is a further 
 rule, that possession of the goods assigned must not only be 
 actually changed, but such change must be contimied. This 
 is the express language of the statute in New York,^ and 
 was formerly the declared rule in Pennsylvania.'' The as- 
 signee must not only take but keep possession, and there 
 must be no redelivery to the assignor. = 
 
 As to the character of the possession thus dehvered, it 
 is also held that it must be an exclusive one. A joint pos- 
 session by the assignor and assignee, of personal property 
 assigned, is colorable, and an evidence of fraud, unless tex- 
 plained. ^ 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 possession in that 
 capacity. 
 
 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 delivering his opinion in this 
 
 ' Cunningham v. Neville, 10 Serg. & Rawle, 201. This was before the act of 
 June 14, 1836. 
 
 " Legg V. Willard, 17 Pick. 140. " 3 Rev. Stat. (6th ed.) p. 143, § 5. 
 
 ^ Young V. McClure, 2 Watts & Serg. 147. 
 
 ' As to the effect of a lease of the property by the assignee to the assignor, see 
 Hitchcock V. St. John, i Hoff. Ch. 511 ; Dewey v. Adams, 4 Edw. Ch. 21. 
 
 ° This is the rule in Indiana. Caldwell v. Rose, Smith, 190; Caldwell v. Wil- 
 liams, I Ind. (Carter), 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 vendor. Hall v. Parsons, 17 Vt. (2 Washb.) 271. 
 
 ' I Hoff. Ch. 511. 
 
§ 28l.] RETENTION OF PART. ^in 
 
 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 pos- 
 session and control, the exclusion of the assignor, and the 
 notorious and avowed dominion of the assignee. A pos- 
 session 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."" 
 
 § 281. Retention of Part. — Where an assignment of the 
 debtor'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 action. ^ In a 
 case in New York, it was held that, although it is a gen- 
 eral rule that to give full effect to an assignment of per- 
 sonal property, delivery of the property and a continued 
 change of possession are requisite, and the assignor's con- 
 tinuing 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 assigned property accompanying the 
 assignment, the assignor's retaining some property that he 
 might have assigned, or that (being covered by the general 
 terms of his assignment) he might nave delivered under 
 it, is not an act that of course makes his whole assignment 
 void.* 
 
 ' In 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. 
 
 ^ And see the opinion in Lee v. Huntoon, ubi supra ; and see Hall v. Wheeler, 
 13 Ind. 371. 
 
 •' Pike V. Bacon, 21 Me. 280; see Wilson v. Forsyth, 24 Barb. 105. 
 
 ' Gould, J., in Wilson v. Forsyth, 24 Barb. 127, 128 ; but see Mead v. Phillips, 
 I Sandf. Ch. 83. 
 
378 DELIVERY OF POSSESSION. [cHAP. XIX. 
 
 § 282. Delivery of Chattel not in Schedide. — On the 
 other hand, a delivery of more property than has been spe- 
 cifically conveyed, as of an article not named in the schedule 
 annexed, will sometimes bind the assignor. Thus, in Mas- 
 sachusetts, where a debtor assigned property described in 
 a schedule, in trust for his creditors, and afterwards deliv- 
 ered to the assignee a chattel not included in the schedule, 
 either knowing that it was not so included therein, or in- 
 tending, whether it was so included or not, that it should 
 be appropriated to the benefit of his creditors ; it was 
 held that the property in the chattel passed to the assignee 
 in trust for the creditors, and that the assignor could not 
 reclaim it.' 
 
 ' Faxon v. Durant, 9 Mete. 339. 
 
CHAPTER XX. 
 
 ASSENT OF CREDITORS. 
 
 § 283. 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, the parties 
 so interested 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 assignments by insolvent or em- 
 barrassed debtors, being the bejiefit of their creditors, a 
 desire for the most effectual accomplishment of that object 
 would seem naturally to lead a debtor, whose circumstances 
 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, never- 
 theless, clearly unnecessary to the validity of a voluntary 
 assignment by a debtor, that the creditors should be con- 
 sulted previous to making it ;^ and probably, in the majority 
 of actual cases, creditors are not only not consulted, but not 
 
 ' Marshall, C. J., in Brashear v. West, 7 Pet. 608, 613. 
 
 '' Brashear v. West, 7 Pet. 608, 613 ; 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, ii Id. 552, 564 ; Allen, P., in 
 Dance V. Seaman, Id. 778, 781. Seethe exception in Pennsylvania. Resolution 
 of January 21, 1843 ; Laws of 1843, p. 367, c\\s.^post, p. 385. 
 
380 ASSENT OF CREDITORS. [cHAP. XX. 
 
 even apprised of the debtor's intention. Circumstances, in- 
 deed, often render 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 him- 
 self in full out of property intended for general and equal 
 distribution. 
 
 It has sometimes been held, however, that after an as- 
 signment 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 
 i s correct, becomes an important consideration, which will 
 form the Subject of the present chapter. 
 
 The necessity of assent, it may be observed, depends in a 
 material degree upon the form of the assignment itself, as 
 being either to an assignee in trust, or directly to creditors. 
 
 § 284. Assent to Assignments to Trustees. — Where the 
 assignment 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 neces- 
 sary to its validity ; and the legal estate or title will pass to 
 the assignee without such assent, so as to prevent a judg- 
 ment 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 established 
 principle of the common law,^ that it is not necessary to the 
 
 ' NicoU 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. IVTon. 252; Abercrom- 
 bie V. Bradford, 16 Ala. 560; The Governor, use, &c. v. Campbell, 17 Id. 556; 
 Rankin v. Lodor, 21 Id. 380 ; 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. 
 
 ° Bat see, as to the rule in England, post, p. 387 ; and see Gibson v. Rees, 50 
 111. 383. In some of the States, by statutory enactment the assent of creditors 
 
§ 284.] ASSENT TO ASSIGNMENTS TO TRUSTEE. 38 1 
 
 creation of a trust by deed in favor of any persons, that the 
 cestui qtie 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 is shown. 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 suf- 
 ficient, in general, that in such cases there is a competent 
 grantor to convey, and a competent grantee to take the 
 property.* " Deeds of trust," observes Chief Justice Mar- 
 shall, " are often made for the benefit of persons who are ab- 
 sent,^ 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 parties 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 release or other condition is stipu- 
 lated for on behalf of the debtor, but the property is to be 
 distributed equally among all the creditors, pro rata, the 
 assent of the creditor must be presumed ; for the trust can- 
 not 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 
 
 is presumed. See Iowa Code (1873), § 21 16; Price v. Pari<er, 11 Iowa, 144 ; Gen. 
 Stats, of N. H. (1867), c. 126, § 3. The assent of creditors is presumed, unless 
 their dissent is made Icnown to the assignee within thirty days after public 
 notice given of the assignment. But when the assignment is not in accord- 
 ance with the terms of the statute, the assent of creditors is not presumed. Derry 
 Bank v. Davis, 44 N. H. 548. So where the assignment is invalid. Fellows v. 
 Greenleaf, 43 N. H. 421. 
 
 ' Story, 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 them. North v. Turner, 9 Serg. & Rawie, 224. 
 
 " Marshall, C. J., in Brooks v. Marbury, ii Wheat. 78, ^7. 
 
 * 4 Mason, 206. 
 
382 ASSENT OF CREDITORS. [cHAP. XX. 
 
 debtor can pay. If then, in such 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 creditors," observes Mr. Justice 
 McLean, in the case of Lawrence v. Davis,' " and which was 
 manifestly for their advantage, will be presumed to have been 
 done with their assent, unless the contrary appear." 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 t that " where the deed is ab- 
 solute on its face, without any condition whatever attached 
 to it, and is for the benefit of the grantees, the presumption 
 is, in the absence of all evidence to the contrary, that the 
 grantees accepted the deed." 
 
 § 285. 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 valid- 
 ity of an assignment 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 preferences * or without' 
 In North Carolina, it has been held that the assent of cred- 
 itors to a deed of assignment in trust, is to presumed, 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 
 
 ' 3 McLean, 177. 
 
 ° Brooks V. Marbury, n Wheat. 78 ; Brashear v. West, 7 Pet. 608, 613. 
 
 = 16 Pet. 118. 
 
 * Id. 119, Thompson, J. 
 
 ' NicoU V. Mumford, 4 Johns. Ch. 522, 529; Cunningham v. Freeborn, 11 
 Wend. 240, 248. 
 
 ' Cunningham v. Freeborn, 1 1 Wend. 240, 248. 
 ' NicoII V. Mumford, 4 Johns. Ch. 522, 529. 
 
 * Ingram v. Kirkpatrick, 6 Ired. Eq. 462. Chief Justice RufKn, 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. 
 
§ 285.] THE RULE IN VARIOUS STATES. 383 
 
 Rankin v. Lodor,' in the Supreme Court of the State, the 
 general doctrine was stated by Phelan, J., who, in deliver- 
 ing the opinion of the court, laid it down as a " settled legal 
 proposition," that where the provisions of a deed of assign- 
 ment 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 recog- 
 nized,5 but it was further said : " Such assignment will not 
 be considered beneficial unless the deed devotes the prop- 
 erty absolutely, and under all circumstances, to the payment 
 of the debts secured,^ nor where it provides for the delay of 
 the creditors secured to be paid.' In other words, the neces- 
 sity 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 con- 
 veyance of the property mentioned in it, until it is assented 
 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.' 
 
 ' 21 Ala. 380. 
 
 ' As authority for these propositions, the learned judge (Id. 389, 390), cited 
 Robinson v. Rapelye, 2 Stew. 86 ; Ashurst v. Martin, 9 Port. 566 ; Wiswall v. 
 Ross, 4 Port. 321 ; Gazzam v. Poyntz, 4 Ala. 374 ; Kinnard v. Thompson, 12 Id. 
 487; Governor, use, &c. v. Campbell, 17 Id. 566 ; Brown v. Lyon, 17 Id. 659; 
 Elmes V. Sutherland, 7 Id. 262 ; Mauldin v. Armistead, 14 Id. 702 ; Abercrombie 
 V. Bradford, 16 Id. 560; 2 Story's Eq. § 1036. 
 
 » 24 Ala. 149. " 18 Ala. 301. 
 
 * Chilton, J., Id. 303, citing Kinnard v. Thompson, and Gazzam v. Poyntz. 
 
 " Chilton, J., Id. ibid, citing Dubose v. Dubose, 7 Ala. 235 ; Allen v. Mont- 
 gomery & W. P. R. R. Co. 1 1 Id. 437. 
 
 ' Chilton, J., Id. ibid, citing Lockhart v. Wyatt, 10 Ala. 231 ; Hodges v. 
 Wyatt, Id. 271. 
 
 » 21 Ala. 333, 335. 
 
 ' The learned judge here cites Nelson v. Dunn, 1 5 Ala. 502 ; Lockwood v. 
 
384 ASSENT OF CREDITORS. [cHAP. XX. 
 
 But where the deed is absolute in its terms, and conveys 
 property to the trustees for the benefit of certain spec- 
 ified creditors, who have not executed it, but whose debts 
 are not posponed 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 convey- 
 ance." ' In Rankin v. Lodor,^ Phelan, J., in delivering the 
 opinion 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, gen- 
 erally, where a man seeks to postpone the payment of his 
 debts, by conveying property in trust to secure or pay 
 them. In such a case, a// the creditors must assent, to give 
 an^ validity to the deed, because that is the manifest inten- 
 tion of the grantor." ^ The qualities requisite in a deed of 
 assignment 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: "Wherfe a deed of as- 
 signment' 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 prop- 
 erty conveyed absolutely and unconditionally to the pay- 
 ment of their debts, and the trustee did not participate in 
 the fraudulent intent ; but such assignment will be void as 
 against creditors who have acquired a lien on the property 
 before an actttal assent is given." * 
 
 Nelson, 16 Id. 294; Smith v. Leavitts, 10 Id. 93; Graham v. Lockhart, 8 Id. 9; 
 and Elmes v. Sutherland, 7 Id. 262. 
 
 ' The learned judge cites Kinnard v. Thompson, 12 Ala. 487; Maulden v. 
 Armistead, 14 Id. 702 ; and Lockwood v. Nelson, 16 Id. 295. 
 
 '•' 21 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. Suth- 
 erland, 7 Ala. 262 ; Hodge v. Wyatt, 10 Ala. 271, and Kemp & Buckey v. Porter, 
 7 Ala. 138." 
 
 * The learned judge cites Elmes v. Sutherland, 7 Ala. 262. ' 18 Ala. 301. 
 
 ° Id. Ibid. ; and see Benning v. Nelson, 23 Ala. 801 ; Shearer v. Loftin, 26 
 Id. 703; Ashley v. Robinson, 29 Id. 112; England v. Reynolds, 38 Id. 370; 
 Hodges V. Wyatt, 10 Id. 271. 
 
§ 285. J THE RULE IN VARIOUS STATES. 385 
 
 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 payment of creditors, their 
 assent will be presumed, unless their dissent be expressed.'' 
 In Tennessee, the assent of creditors will always be pre- 
 sumed, provided all the formalities of execution essential to 
 the validity of the deed have been complied with.s In 
 Louisiana, the assent of creditors is presumed, in case of an 
 assignment for the benefit of all the creditors, where no re- 
 lease 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 creditors, containing no provisions prejudicial to 
 their interests, need not be signed by them ; their assent 
 thereto will be presumed.' 
 
 And this is the rule in Maryland,^ Arkansas,^ Ohio,'° and 
 Texas." In Iowa and New Hampshire, by statutory enact- 
 ment, the law presumes the assent of creditors to assign- 
 ments executed for their benefit.'^ In Rhode Island,'^ assign- 
 ments without the assent of creditors are held valid. 
 
 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 
 
 ' Reinhard v. Bank of Kentucky, 6 B. Mon. 252. 
 
 ' Stewart v. Hall, 3 B. Mon. 218. 
 
 ' Suydam v. Dequindre, Harring. Ch. 347. 
 
 * Jones V. Dougherty, 10 Ga. 273 ; McBride v. Bohanan, 50 Ga. 155. 
 
 'Brevard v. Neely, 2 Sneed, 164; Furman v. Fisher, 4 Cold. 626; but see 
 Mills V. Haines, 3 Head, 332. 
 
 ° Fellows V. The Vicksburgh Railroad & Banking Co. 6 Rob. 246. 
 
 ' Duval V. Raisin, 7 Mo. 449; and see Major v. Hill, 13 Id. 247; Gale v. Men- 
 sing, 20 Id. 461. 
 
 ° Kalkman v. McElderry, 16 Md. 56. " Hempstead v. Johnson, 18 Ark. 123. 
 
 " Hyde v. Olds, 12 Ohio St. 591. " Green v. Banks, 24 Tex. 508. 
 
 " See ante, p 380, note 2. 
 
 " Sadlier v. Fallon, 4 R. I. 490 ; see Daniels v. Willard, 16 Pick. 36. 
 25 
 
386 ASSENT OF CREDITORS. [cHAP. XX. 
 
 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 assented to it, even where it is made for the 
 benefit of all the creditors, without preferences, and contains 
 no stipulation that the creditors should release their demands, 
 or take upon themselves any onerous condition ; and the 
 assent of creditors will not be presumed. ^ 
 
 This rule appears to have been altered by the act of 
 1836,'* since repealed.^ Mr. Justice Wells, in a late case,* 
 observes: "Independently 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 attach- 
 ments, except so far as assented to by the creditors for whose 
 benefit they were made. If assented to by creditors, such 
 
 ' United States v. Bank of the United States, 8 Rob. (La.) 262. See i Am- 
 Lead. Cas. 95 ; Klapp's Assignees v. Shirk, 13 Penn. St. (i Harris). 589. 
 
 ° Resolution of January 21, 1843; Laws of 1843, p. 367 ; Dunl. L. p. 886, c. 
 572 [884, ed. 1853] ; Purd. Dig. (ed. 1873), p. 90, pi. i. 
 
 ° Russell V. Woodward, 10 Pick. 408 ; Widgery v. Haskell, 5 Mass. 144, 154 ; 
 Stevens v. Bell, 6 Id. 339, 342; Ingraham v. Geyer, 13 Id. 146; Marston v. 
 Coburn, 17 Id. 454. 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, i6 Id. 335, 339. 
 
 ■• Stats, of 1836, c. 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 Cunningham 
 V. Freeborn, 1 1 Wend. 240, 248, 249 ; Parsons, C. J., in Widgery v. Haskell, 5 
 Mass. 1 54, 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, c. 238, § 7. See Dewey, J., in Shattuck v. Freeman, i Mete. 10, 13. 
 
 ' Nat. Mech. & Trad. Bank v. Eagle Sugar Refinery, 109 Mass. 38. 
 
 ' May V. Wannemacher, 1 1 1 Mass. 202. 
 
§ 286.] ■ THE ENGLISH RULE. 387 
 
 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 con- 
 ditions of the assignment 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 acquiesence. 
 
 § 286. The English Rule. — In England, it has been set- 
 tled 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 Chamber, it was held that where a debtor 
 conveys property in trust for creditors, to whom the convey- 
 ance is not communicated, and the creditors are not in any 
 manner privy to it, the conveyance operates not as an assign- 
 ment, 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 principle of the decisions in Wallwyn v. 
 Coutts,3 and Garrard v. Lord Lauderdale,-* which have been 
 so frequently cited and commented upon in our own courts.^ 
 Indeed, there is a class of cases, which establish the necessity 
 of the creditors being actual parties to deed, in order to 
 render it anything more than a mere revocable deed of 
 agency.^ In Smith v. Keating, already cited, the court 
 
 '6 M. Gr. & Scott, 136. 
 
 ° The 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. 
 
 ^ 3 Merivale, 707. ■* 3 Simon, i. 
 
 'By McCoun, V. C, in Cunningham v. Freeborn (i Edw. Ch. 263); by Nel- 
 son, 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 
 the United States v. Hoyt (i Blatchf. C. C. 332, 334) ; and those of Pearson, J., in 
 Stimpson v. Fries, 2 Jones Eq. 156. Mr. Justice Walker, in tibson v. Rees, 
 50 111. 383. 
 
 ° See ante, pp. 152, 153. 
 
388 ASSENT OF creditors: [chap. XX, 
 
 (Parke, 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 communi- 
 cated 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.^ 
 
 § 287. 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 instrument complete and operative.* Where the cred- 
 itors 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, other- 
 wise 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 
 
 »6M. Gr. & Scott, 158. 
 
 " 32 Eng. L. & Eq. 139. And see Acton v. Woodgate, 2 Myl. & K. 492; 
 Paige V. Broom, 4 Russ. 6. 
 
 ' This appears from the cases of Estwick v. Caillaud (5 Term R. 420), and 
 Ingliss V. Grant (Id. 530). 
 
 ' See the opinion of Parker, C. J., in Hastings v. Baldwin, 17 Mass. 552, 556; 
 Camp V. Mayer, 47 Ga. 414. In May v. Wannemacher (iii Mass. 202), Mr. Jus- 
 tice Wells said : " In cases of assignment by a 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 Gal^v. Mensing, 20 Mo. 461 ; and see anU, p. 185. 
 
 ^ 2 Story's Eq. Jur. § 1036 a ; Garrard v. Lord Lauderdale, 3 Sim. i, cited 
 ibid.; but see a«;^^, p. 152. 
 
§ 288.] ASSIGNMENTS DIRECTLY TO CREDITORS. 389 
 
 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 pre- 
 sumption of assent does not arise, because it involves a 
 question of discretion, upon which different minds may 
 draw different conclusions.'' So, where the assignment con- 
 tains clauses restricting the rights of creditors or limiting 
 the liability of the assignee.^ " 
 
 Where an assignment is made with preferences to cer- 
 tain creditors, and the preferences are given uncondition- 
 ally, their assent will be presumed.-* So, where the pre- 
 ferred creditors are to be paid in full.= 
 
 § 288. Assent to Assignments Directly to Creditors. — 
 Where the assignment is directly to the creditors, their as- 
 sent is always required to give it validity, on the ground 
 that it requires the agreement of two parties to make a con- 
 tract.* In making an assignment of property, as in every 
 other case of contract, the assent of at least two persons . is 
 necessary to its validity. A debtor cannot change his rela- 
 tion to his creditors, by a voluntary assignment of his prop- 
 
 ' Lawrence v. Davis, 3 McLean, 177. See the opinion of McCoun, V. C, in 
 Cunningham v. Freeborn, i Edw. Ch. 262. 
 
 '' Story, J., in Halsey v. Whitney, 4 Mason, 206, 215 ; Swearingen v. Slicer, 5 
 Mo. 241 ; Wakeman v. Grover, 4 Paige, 23. 
 
 ' "No assent can' be presumed when the assignment requires that the cred- 
 itors shall give to the debtor a credit for the balance that remains due after the 
 proceeds are distributed (Todd v. Bucknam, 1 1 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 the assignee is limited to actual receipts or willful defaults (Brown v. 
 Warren, 43 N. H. 430; Spinney v. Portsmouth Co. 25 N. H. 9), or where the 
 assignees are not to be responsible for the neglect of each other (Spinney v. Ports- 
 mouth Co. 25 N. H. 9)." Bump on Fraud. Conv. p. 341. 
 
 * Wheeler v. Sumner, 4 Mason, 183 ; Ward v. Lewis, 4 Pick. 518 ; Brown v. 
 Lyon, 17 Ala. 659. 
 
 * New England Bank v. Lewis, 8 Pick. 113 ; De Forest v. Bacon, 2 Conn. 633 ; 
 North v. Turner, 9 S. & R. 244 ; Copeland v. Weld, 8 Greenl. 41 1 ; Reinhard v. 
 Bank of Kentucky, 6 B. Mon. 252. 
 
 ° NicoU V. Mumford, 4 Johns. Ch. 422, 529 ; Cunningham v. Freeborn, 1 1 
 Wend. 240, 248, 249 ; Jones v. Dougherty, 10 Ga. 273 ; Lawrence v. Davis, 3 
 McLean, 177 ; 2 Kent's Com. [533] 692, note. 
 
390 ASSENT OF CREDITORS. [CHAP. XX. 
 
 erty to them. If, therefore, he make an assignment, and 
 his creditors do not accept it, there is no change of prop- 
 erty, and legal redress is open to the creditors as before the 
 attempted assignment' 
 
 § 289. Assent, how and when Given. — The assent of 
 the creditors 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,3 or by verbally assenting to it, in terms,"* or by actually 
 receiving the benefit of it,^ or by claiming such benefit,^ or 
 by taking legal measures to obtain such benefit.^ Where 
 signature is required, it is not essential to the validity of the 
 assignment that the creditors should sign at the time of exe- 
 cution by the other parties. It is sufficient, except against 
 intervening attaching creditors, if this is done afterwards,* 
 and within the time limited for that purpose, by statute, or 
 by the assignment itself' Where a specific time is pre- 
 scribed for the creditors to come in and assent to the assign- 
 ment, 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 ab- 
 sence from the country or some other cause, any creditor 
 
 ' McLean, J., in Lawrence v. Davis, 3 McLean, 177. 
 
 ° See ante, p. 152. 
 
 " See Bank of Bellows Falls v. Deming, 17 Vt. (2 Washb.) 366. 
 
 * Wiley V. Collins, 11 Me. (2 Fairf.) 193 ; Brooks v. Marbury, ii Wheat. 78. 
 
 '• Brooks V. Marbury, ubi supra ; Brown v. Mintum, 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 assignment." 
 Moule V. Buchanan, 11 Gill & J. 314; Lanahan v. Latrobe, 7 Md. 268; see 
 Haskins v. Olcott, 13 Ohio St. 211 ; Frierson v. Branch (Sup. Ct. Ark.) Cent. Law 
 Jour. May 26, 1876. 
 
 " Garland, J., in United States v. Bank of the United States, 8 Rob. (La.) 262, 
 412. 
 
 ' See United States v. Hoyt, i Blatchf. C. C. 332. 
 
 ' Halsey v. Whitney, 4 Mason, 206, 215 ; Wheeler v. Sumner, Id. 183. 
 
 " Phoenix Bank v. Sullivan, 9 Pick. 410. 
 
§ 289.] ASSENT HOW AND WHEN GIVEN. 391 
 
 has not, within the time prescribed, had any knowledge of 
 the existence of the assignment.' 
 
 And a creditor may lawfully qualify his assent by limit- 
 ing 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 assignment 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 con- 
 dition to their participation in the residue.^ 
 
 In a case in Massachusetts, where a debtor before exe- 
 cuting a bipartite deed of assignment in trust, called on one 
 of his creditors, to prevent his being surprised that he was 
 about assigning his property, 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 creditor, was in sub- 
 stance 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 there- 
 in.'* In a 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 cred- 
 itors assented, provided the provisions of the deed were sat- 
 isfactorily arranged ; and they required an early answer, and 
 no answer was given, but a deed of trust was executed three 
 months afterwards, with provisions in it materially different 
 from those proposed ; it was held that the creditors were 
 not bound to accept the deed.^ 
 
 ' 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, 2 Id. 18; see 
 Broadbent v. Thornton, 4 De G. & S. 65. 
 
 ' Deering v. Cox, 6 Me. 404. 
 
 ' Brown v, Lyon, 17 Ala. 659. 
 
 ' Fall River Iron Works Company v. Croade, 1 5 Pick. 1 1 . 
 
 ' Rapley v. Cummins, 1 1 Ark. 689. 
 
392 ASSENT OF CREDITORS. [CHAP. XX. 
 
 § 290. 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 be- 
 ing executed by them), it is not necessary that all 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.' 
 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 render 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-assent- 
 ing creditors, though good as to those assenting.^ In Ala- 
 bama, it has been declared as the general doctrine on 
 this point, that where a debtor seeks to postpone the pay- 
 ment of his debts, by conveying property in trust to secure 
 or pay them, all the creditors must assent to the deed to give 
 it any 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 assign- 
 ment for his benefit, though other creditors refuse to partici- 
 pate in the deed.^ 
 
 § 291. Assent by Attorney. — The assent of creditors to 
 a deed of trust made by 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 
 
 ' Story, J., in Halsey v. Whitney, 4 Mason, 206, 215, 231. 
 
 " 17 Mass. 556. 
 
 ' Woodward, J., in Adams v. Blodgett, 2 Woodb. & Minot, 237 ; Russell v. 
 Woodward, 10 Pick. 408 ; Morton, ]., in Fall River Iron Works Co. v. Croade, 15 
 Id. II, 15, 16; and in Everett v. Walcott, Id. 94, 97 ; May v. Wannemacher, in 
 Mass. 202. 
 
 * Rankin v. Lodor, 21 Ala. 380, 390. 
 
 ' Mauldin v. Armistead, 14 Ala. 702 ; and see Shearer v. Loftin, 26 Id. 703. 
 
 " Hatch V. Smith, 5 Mass. 53. 
 
§§ 292-94-] PRESUMPTION OF ASSENT. 393 
 
 within the scope of his authority, it may be inferred that 
 they sanctioned what was thus for their benefit' 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.^ 
 
 § 292. 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 assent, it is still valid to re- 
 lease the debt, and bind in this respect the rights of the firm.'* 
 
 § 293. Limitation of Time to Assent. — The assent to an 
 assignment 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 pre- 
 cluded from any participation in the fund, the creditor's only 
 claim is upon the surplus reserved to the debtor, if any 
 should remain after satisfying the debts of the creditors who 
 accept their proportion of the trust fund upon the terms pro- 
 posed.^ 
 
 § 294. Presumption of Assent from Lapse of Tim,e. — 
 The acceptance of the trust by the trustees of a debtor, and 
 the acquiescence 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 
 
 ' Vernon v. Morton, 8 Dana, 247. 
 
 " Hatch V. Smith, 5 Mass. 42, 51 ; Parrot v. Wells, 2 Vern. 127 ; Johnson v. 
 Ogilby, 3 P. Wms. 277. 
 
 ^ Hatch V. Smith, ubi supra ; Johnson v. Ogilby, iibi supra. 
 
 " Story, 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. 58; McBride v. Hagan, i Wend. 326; Salmon v. 
 Davis, 4 Binn. 375 ; Emerson v. Knower, 8 Pick. 63 ; Ball v. Dunsterville, 4 
 Term R. 313. 
 
 ' Phoenix Bank v. Sullivan, 9 Pick. 410; see Raworthv. Parker, 2 K. & J. 163. 
 
 ° De Caters v. Le Ray De Chaumont, 2 Paige, 490. 
 
 ' Burke's Estate, 1 1 Par. Sel. Cas. (Penn.) 470. Where the assignment pro- 
 vided for the distribution of the property among such creditors as should execute 
 it before a specified day — held that where the parties assumed to act under the 
 
394 ASSENT OF CREDITORS. [CHAP. XX. 
 
 subject of direct inquiry by the pleadings in an action 
 brought in their behalf.' 
 
 §295. Assent to Void Assignment. — The assent of credit- 
 ors will sometimes have the effect of giving validity to a 
 void assignment. Thus, in a case in Vermont, it has been 
 held that an assignment which is void or inoperative 
 under the act of 1843, declaring certain general assignments 
 void, will, if assented to by the creditors, become operative 
 and binding upon them.= The court (Redfield, Ch. 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 to them. And this making it binding upon these credit- 
 ors, it is binding upon the other creditors, if it be such 
 a disposition of the effects as the creditor 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 assignees, the creditors having an opportunity to observe 
 the suspicious nature of the transaction, does not purge the 
 contract of fraud, even as to them, and the fraud pervades 
 and vitiates the whole assignment.* And in a case in the 
 Circuit Court for the District of Rhode Island, where a 
 fraudulent assignment had been assented to by certain cred- 
 itors, after attachments by other creditors, it was held that 
 
 instrument, 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 grantor, and 
 the trustee, and such creditors continued to remain inactive for nearly thirteen 
 years after the revocation, it was held that such prolonged inaction 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, 50 111. 383. 
 
 " Brashear v. West, 7 Pet. 608 ; and see Major v. Hill, 13 Mo. 247. 
 
 " Merrill v. Englesby, 28 Vt. (2 Wms.) 150. 
 
 ' Id. 157. See also White v. Banks, 21 Ala. 705; Geisse v. Beall, 3 Wis. 367. 
 
 ' Caldwell v. Williams, I Ind. (Cart.) 405. 
 
§ 295-J ASSENT TO VOID ASSIGNMENT. 395 
 
 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/ 
 
 But the assent of creditors to a void assignment must be 
 actually given, and will not be presumed. In the case last 
 cited, Mr. Justice Curtis declared himself not prepared to 
 hold that the assent of creditors to a void deed is to be pre- 
 sumed, because the whole 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 extraneous 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." 3 Nor will such an assent be presumed to the preju- 
 dice of the just rights of third persons ; a legal fiction is not 
 to be permitted so to operate. In fictione juris semper 
 cequitas existit. 
 
 ' Stewart v. Spencer, i Curt. 167. The learned judge cites Boyd v. Dunlop, i 
 Johns. Ch. 482 ; Harris v. Sumner, 2 Pick. 129; Halsey v. Whitney, 4 Mason, 218. 
 '' I Curt. 167. 
 ' The learned judge quotes Hosmer, C. J., in Camp v. Camp, 5 Conn. 309. 
 
CHAPTER XXI. 
 
 TIME WHEN THE ASSIGNMENT TAKES EFFECT. 
 
 § 296. 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 trust created by it. 
 
 An assignment to a trustee for creditors, where it is de- 
 livered by the assignor into the hands of the assignee, and is 
 at once accepted by the latter, becomes immediately opera- 
 tive, and takes full effect as a transfer of the property.' But 
 where an interval elapses between actual delivery to the as- 
 signee, and his acceptance, the assignment will be held to 
 take effect, as against creditors, only from the time of • ac- 
 ceptance. Thus, wjiere 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 
 assignors ; it was held that the judgment creditors had ob- 
 tained 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 in- 
 terval 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 
 
 ' Read v. Robinson, 6 Watts & Serg. 329, 332; Wilson v. Pearson, 20 111. 81 ; 
 Bell, J., in Seal v. Duffy, 4 Barr, 274, 276, 277 ; Klapp's Assignees v. Shirk, 13 
 Penn. St. (i Har.) 589; see Brooks v. Marbury, 11 Wheat. 78, cited by Curtis, J., 
 in Stewart v. Spenser, i Curt. 157, 166. 
 
 ^ Crosby v. Hillyer, 24 Wend. 280 ; see ante, Chap. XVIII. 
 
§ 297-] WHEN ASSIGNMENT TAKES EFFECT. 397 
 
 trustee ; and the assent of the latter may be presumed in the 
 first instance, for the purpose of giving operation to the 
 deed.' So, where the assignment was in the form of a let- 
 ter 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.^ In Pennsylvania, the act of May 3, 1855, providing 
 for the recording of assignments by non-residents of the 
 State, declares that every such assignment may take effect 
 from its date ; provided that no bona fide purchaser, mort- 
 gagee or creditor having a lien on the property assigned be- 
 fore the recording, and not having had previous actual no- 
 tice thereof, shall be affected or prejudiced.^ 
 
 § 297. 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 prop- 
 erty was made, and a week afterwards an agreement was in- 
 dorsed thereon, with consent of all those concerned, accord- 
 ing to the original intention, giving priority to a large debt 
 due to the United States, the assignment was held to take 
 effect from the first date, unaffected by any intervening 
 events.^ In the same State, the statute of 1836, c. 240, con- 
 cerning assignments, was held to protect property assigned, 
 from attachment, from the time when the assignment was 
 made, and before notice given, if notice were afterwards 
 given according to the requirements of the statute.* And 
 
 " Skipwith's Ex'or v. Cunningham, 8 Leigh, 271 ; Wilt v. Franklin, i Binn. 
 502 ; McKinney v. Rhoads, 5 Watts, 343 ; Read v. Robinson, 6 Watts & Serg. 
 329. And see Moore v. Collins, 3 Dev. 126 ; Ward v. Lewis, 4 Pick. 518 ; Mer- 
 rils V. Swift, 18 Conn. 257 ; Greene v. Mowry, 2 Bailey (S. C.) 163 ; West v. Tup- 
 per, I Id. 193; I Am. Lead. Cas. 96. 
 
 " Dargan v. Richardson, Cheves L. 197 ; Shubar v. Winding, Id. 218. 
 
 ' Laws of 1855, p. 415 ; Purdon's Dig. (ed. 1857), p. 1112 ; see Boyer's Es- 
 tate, 51 Penn. St. 432. 
 
 * I Tucker's Com. [269] 261 ; see Burgin v. Burgin, I Ired. L. 453 ; Hutchin- 
 son's Code (Miss.) 606, § 5; Henderson v. Downing, 24 Miss. (2 Cush.} 114. 
 
 * Fox V. Adams, 5 Greenl. 245. 
 
 ° Fiske V. Carr, 20 Me. (7 Shep.) 301 . 
 
398 WHEN AjSSIGNMENT TAKES EFFECT, [CHAP. XXI. 
 
 where an assignment under that statute included bank stock, 
 and notice was given to the bank, it was held that the prop- 
 erty did not pass until the entry on the books of the bank 
 required by the statute of 1838, c. 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, al- 
 though 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 surrender of the property." 
 
 In Alabama, an assignment devoting the assigned prop- 
 erty unconditionally to the payment of the debts of the pre- 
 ferred creditors, is complete and executed, as to them, imme- 
 diately 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.^ 
 
 ' Fiske V. Carr, 20 Me. 301. 
 
 ° Keyes v. Brush, 2 Paige, 311. 
 
 ^ Brown v. Lyon, 17 Ala. 659. But when the balance was to be distributed 
 ai»ong 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. 
 
CHAPTER XXII. 
 
 OPERATION OF AN ASSIGNMENT. 
 
 § 298. It has already been seen that an assignment in trust 
 for the benefit of creditors, when once accepted by the as- 
 signee, operates as a conveyance and not as a mere power ; ' 
 and cannot be revoked by the assignor,'' or defeated by the 
 renunciation of the assignee.^ A deed conveying property 
 in trust, absolutely, for the benefit of specified creditors, if boita 
 fide, is valid as a conveyance, in consequence of the presumed 
 assent of the creditors, and is not a mere povs^er 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 encumber it by mortgage as against 
 the creditors, and he retains nothing except the equitable 
 and incidental right to discharge the trusts by payment of 
 the debts before sale, and thus entitle himself to a reconvey- 
 ance of the w^hole estate, or to claim a reconveyance of the 
 residue remaining unsold after the debts are discharged, 
 or payment of the residue of the proceeds of the sales. ^ It 
 
 ' ' Dwight V. Overton, 35 Tex. 390. 
 
 ' Hall V. Denison, 17 Vt. (2 Wash.) 310 ; Ingram v. Kirkpatrick, 6 Ired. Eq. 
 462 ; Sevier v. McWhorter, 27 Miss. (5 Cush.) 442. As to revocation, see post. 
 Chapter XXVII. 
 
 ' Seal V. Dufiy, 4 Barr, 274. As to amendments to assignments, see ante. 
 Chapter XVII. 
 
 * Kinnard v. Thompson, 12 Ala. 417. 
 
 ' Briggs V. Palmer, 20 Barb. 392; Johnson, J., Id. 405; Pettit v. Johnson, 15 
 Ark. 55. And see Klapp's Assignees v. Shirk, 13 Penn. St. (i Harris), 589. The 
 grantor in a deed of trust to secure the payment of debts has no such interest in 
 the property (while the deed is in full force), as is the subject of execution at law. 
 The whole title to the property is the trustee. Cornish v. Dews, 18 Ark. 172; 
 Pettit V. JoJinson, 15 Ark. 55; Biscoe v. Royston, 18 Ark. 509. 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, 
 
400 OPERATION OF AN ASSIGNMENT. [cHAP. XXII. 
 
 operates to create at once the relation of trustee and cestui 
 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 knowledge or privity." It operates 
 also as a quit-claim of the assignor's interest in the property- 
 conveyed, in the same plight and condition as he himself 
 held it, and will not defeat preexisting liens, nor can the 
 trustees be regarded as purchasers, nor the cestuis que trust 
 as creditors, within the registry acts.^ But it will not operate 
 to defeat the right of creditors to set aside a previous fraud- 
 ulent sale and transfer of his property by the debtor, whether 
 it be for the benefit of preferred creditors, or of all the cred- 
 itors equally.* 
 
 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 benefit by the court, the whole trust 
 becomes vested in them in equity, under the immediate ad- 
 ministration of the court ; and therefore an assignment 
 recorded is, in effect, a transfer to the creditors by the act of 
 law.= 
 
 In cases free from fraud, assignments usually operate ac- 
 cording to their precise tenor and purport, and to the inten- 
 tion of the assignors 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 gen- 
 eral assignments are prohibited, they are declared to operate 
 
 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 complainant's debt. Cornish v. Dews, 
 supra. 
 
 ' Hall V. Denison, 17 Vt. 310 ; Ingram v. Kirkpatrick, 6 Ired. Eq. 462. 
 
 = Id. ibid. 
 
 " W^alker v. Miller, 11 Ala. 1067. 
 
 * Brownell v. Curtis, 10 Paige, 210; Browning v. Hart, 6 Barb. S. C. 91 ; Leach 
 V. Kelsey, 7 Id. 466. 
 
 ' I Smith's Lead. Cas. (Am. ed. 1852), 70, 71 ; Id. (ed. 1855), 75. 
 
 ° See HoUins v. Mayer, 3 Md. Ch. Dec. 343. 
 
299-] EFFECT ON CORPORATION. 
 
 401 
 
 and inure to the equal benefit of all the creditors, although 
 preferences have been expressly given by them. 
 
 § 299. Effect on Corporation. — It seems to have been 
 formerly doubted whether a general assignment by a cor- 
 poration, of all its property, did not operate as a dissolu- 
 tion 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 that 
 such an assignment does not operate, per se, as a dis- 
 solution, or surrender of its franchises ; ° nor does it oper- 
 ate as a transfer of these franchises to the grantees,^ the 
 power of alienation not extending to that subject.'' In a 
 case in New York, it was held that although a corpora- 
 tion can make a voluntary assignment, it cannot transfer to 
 the assignee the power of its officers ; that the assignment 
 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 con- 
 fers upon the corporate body and its officers.' It was 
 further held that the corporation is not dissolved by the 
 
 ' Dissenting, in Beaston v. The Farmers' Bank of Delaware, 12 Pet. 138. 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 incapable, in future, of performing any of its corporate 
 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.95, 108), that the power of a single partner to make a general 
 assignment of the partnership property, has been objected to, on the similar 
 ground of its producing a dissolution of the partnership. But this view was 
 expressly combated by Chief Justice Marshall, in Anderson v. Tompkins, i Brock. 
 461. 
 
 '' Town V. Bank of River Raisin, 2 Dougl. (Mich.) 530 ; Parsons v. Powder 
 Works, 48 N. H. 66 ; Germantown Pass. R. Co. v. Fitler, 60 Penn. St. 125; 
 Angel & A. on Corp. p. 808. 
 
 = De Ruyter v. St. Peter's Church, 3 N. Y. 238 ; Huribut v. Carter, 21 Barb. 
 221 ; see Germantown Pass. R. Co. v. Fitler, 60 Penn. St. 125 ; Ohio Life Ins. Co. 
 v. Merchants' Ins. Co. 11 Humph. (Tenn.) i. 
 
 ■* It is sometimes the practice to reserve to the corporation, by the terms of the 
 assignment, the franchises, rights, and powe/s necessary to their corporate exist- 
 ence. This was done in the assignment mentioned in Bowen v. Lease, 5 Hill, 
 221, 222. 
 
 ' Huribut V. Carter, 21 Barb. 221, 224. 
 
 36 
 
402 OPERATION OF AN ASSIGNMENT. [cHAP. XXII, 
 
 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 before.' In 
 Pennsylvania, it is provided by the statute relating to assign- 
 ments 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 : i, for the purpose of suing and 
 being sued, and for continuing all suits and proceedings at 
 law or in equity, pending for or against the bank ; 2, for the 
 purpose of making such assurances, conveyances, and trans- 
 fers, and doing all such acts, matters, and things, as may be 
 necessary or expedient to make the said assignments or the 
 trusts thereof effectual ; 3, for the purpose of citing the 
 trustees to account, and compelling them to execute 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 a bank, though in itself valid, was a 
 good cause of forfeiture of its charter.^ 
 
 § 300. Effect on Partnership. — An assignment by an 
 insolvent firm, of all its assets for creditors, necessarily works 
 a dissolution of the partnership, where no provision is made 
 to continue the business.* So an assignment by one part- 
 ner, of all his interest in the firm property, to the other part- 
 ner or partners, works a dissolution of the firm.' 
 
 ' Id. ibid. 
 
 " Act of April 16, 1850, § 27 ; Purdon's Dig. (loth ed. Brightley), p. 144. 
 
 ' The State v. The Real Estate Bank, 5 Pike, 595 ; cited, with approval, by 
 Johnson, J., in Hurlbut v. Carter, 21 Barb. 224. 
 
 " McKelvy v. Blair, Am. L. T. vol. 6, p. 65 ; Brown v. Agnew, 6 W. & S. 238; 
 Gordon v. Freeman, 11 111. 14; Parsons on Part. 400. 
 
 ' Horton's Appeal, 13 Penn. St. 617 ; see ante, p. 114; Parsons on Part. 400. 
 
CHAPTER XXIII. 
 
 THE LEX LOCI IN ITS APPLICATION TO ASSIGNMENTS. 
 
 § 301. It frequently happens that among the property 
 intended to be conveyed by an assignment for the benefit of 
 creditors, is comprised property in other States, or debts due 
 from citizens of other States ; and it becomes an important 
 subject of inquiry, how far the assignment will operate to 
 transfer such property, or protect it from the local remedies 
 of creditors. 
 
 Three different systems of laws may be applied to the 
 determination of questions which thus arise, namely, the law 
 of the place where the litigation is had, the law of the place 
 where the property is situated, and the law of the place 
 where the assignment is made, which are designated in the 
 books, respectively, as the lex fori, lex rei slice, and lex loci 
 contraclus. 
 
 § 302. 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 qualifications, that their validity is to be tested 
 by the law of the place where the contract is made. If valid 
 there, they will be everywhere sustained, and foreign tribu- 
 nals on principles of international and interstate comity will, 
 in determining their force and sufficiency, regard them in the 
 light of the law where they were made.' 
 
 ' Thus in The Baltimore & Ohio R. R. Co. v. Glenn (28 Md. 287), a very care- 
 fully argued and adjudged case, an assignment executed by a Virginia corpora- 
 tion in the State of Virginia, but containing reservations which would render it 
 invalid under the laws of the State of Maryland, was sustained by the courts ot 
 the latter 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 
 
404 THE LEX LOCI. [cHAP. 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 assign- 
 ment, valid by the laws of one of the United States — 
 though assumed to be void if it had been made in an- 
 other — will carry property in that other, against an attach- 
 ing creditor there. And in the Pennsylvania case of Law 
 v. Mills,3 it was decided that the validity of a voluntary 
 assignment of personal property in trust for creditors de- 
 pends 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. 
 
 Mr. Chief Justice Green, in Frazier v. Fredericks,* re- 
 marks : " The general principle is fully and unequivocally 
 settled, that personal property is transferable according to the 
 law of the country where the owner is domiciled. A trans- 
 fer 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."' 
 
 upon those laws. It is a general principle, admitting of few exceptions, that in 
 ■construing 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 
 obligations created by it ; " citing De Sobry v. De Laistre, 2 Har. & J. 191 ; Washer 
 V. Everhart, 3 Gill & J. 244 ; Hall v. Mullen, 5 Har. & J. 193 ; 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, 35 Barb. 663. 
 
 ' Story's Confl. L. § 423 a. The general principle is that an owner has the 
 disposing 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 sev- 
 eral States of the American Union, which, though foreign to some purposes, are 
 united for many others. Shaw, C. J., in Means v. Hapgood, 19 Pick. 105, 107. 
 
 ' 2 Wall. Jr. 131. = 18 Penn. St. (6 Harris), 185. 
 
 ' 24 N. J. L. 166; see Varnum v. Camp, i Green, 329. 
 
 ^ The general rule is that the operation of a contract and the rights of the parties, 
 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, 36 Ala. 689 ; 
 Maguire v. Pingree, 30 Me. 508; Carnegie v. Morrison, 2 Mete. 381 ; Loan Co. v. 
 
§ 303-] TRANSFERS UNDER BANKRUPT LAWS. 405 
 
 The general principle is not universally true, but is sub- 
 ject to several exceptions. The necessary intercourse of man- 
 kind requires, to use the language of Chancellor Kent, that 
 the acts of parties valid, where made, shall he recognized in 
 other countries, provided they be not contrary to good 
 morals, nor repugnant to the policy and positive institutions, 
 of the State.' 
 
 § 303. Transfers under Bankrupt and Insolvent Laws. 
 — In considering the qualifications of and exceptions to this 
 general rule of law, it may be primarily observed that 
 there is a clear and well defined distinction, supported by the 
 weight of American authority, between involuntary trans- 
 fers of property, such as work by operation of law under 
 foreign bankrupt assignments and insolvent laws, and a vol- 
 untary 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.'' A general assignment under the insolvent laws 
 
 Turner, 13 Conn. 249 ; Watson v. Brewster, i Penn. 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. Har- 
 ris, 14 B. Mon. (Ky.) 556; De Sobry v. De Laistre, 2 Har. & J. (Md.) 191 ; Pitkin 
 V. Thompson, 13 Pick. 64; Thompson v. Ketchum, 8 Johns. 189; Sherrill v. Hop- 
 kins, I 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 in- 
 validate the assignment under the law of New York, and certain of the assigned 
 property situated in the State of New York was taken into possession by the as- 
 signees, 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. 
 
 ' 2 Kent's Com. 455. 
 
 'Walters v. Whitlock, 9 Fla. 86; Hutcheson v. Peshine, i6 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, 
 5 N. Y. 320 ; Willets v. Waite. 25 N. Y. 577 ; Zipsey v. Thompson, i Gray, 243 ;, 
 Clarke v. Booth, 17 How. U. S. 377 ; Harrison v. Sterry, 5 Cranch, 302; Blake v. 
 Williams, 6 Pick. 303; Lanfear v. Sumner, 17 Mass. no; Dalton v. Currier, 40- 
 N. H. 237 ; Saunders v. Williams, 5 N. H. 213 ; Ogden v. Saunders, 12 Wheat. 215. 
 
4o6 THE LEX LOCI. [cHAP. XXIII. 
 
 of one State, can 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 State where the property is 
 actually situated.'' The reason of this rule, seems to be 
 that inasmuch as the conveyance 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 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 Massachusetts,* " than we can of a will 
 not proved and recorded in this Commonwealth." 
 
 § 304. Real Estate. — The general nile of comity above 
 stated does not extend to real estate. The title and dispo- 
 sition 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 effect 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 voluntary assign- 
 ments.' 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 
 executed, acknowledged and recorded according to the laws 
 of Maryland, will not operate to transfer real estate in the 
 latter State.^ It was held, however, that such a deed, if it 
 
 ' Hutcheson v. Peshine, 16 N. J. Eq. 167. = Kelly v. Crapo, 45 N. Y. 86. 
 
 ^ Hutcheson v. Peshine, supra. ' Osborn v. Adams, 18 Pick. 248. 
 
 ' Wilde, J., in Osborn v. Adams, 18 Pick. 245, 247 ; citing McCormick v. Sul- 
 livant, 10 Wheat. 202 ; see Story Confl. of Laws, c. 10. 
 
 " Dundas v. Bowler, 3 McLean, 399. 
 
 ' Story's Confl. of Laws, § 423 a ; 2 Kent's Com. [408] 498, note ; McCullough's 
 Heirs v. Roderick, 2 Ohio, 234 ; Rogers v. Allen, 3 Id. 488. 
 
 ' 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 
 
§ 304-] REAL ESTATE. 407 
 
 embraced the rights and credits of the debtor, would trans- 
 fer to the trustees for the benefit of his creditors, the bal- 
 ance of the purchase money of such real estate, where the 
 debtor had, previously to its execution, contracted toxsell 
 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 land 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 assign- 
 ment as to the purposes of the conveyance, and which was 
 duly executed and recorded according to the law of Massa- 
 chusetts, it was held that the statutory assignment in Con- 
 necticut was void in regard to land in Massachusetts ; and 
 that the second deed, being ancillary to the statutory assign- 
 ment, was without consideration and void, as against cred- 
 itors in Massachusetts who attached the land after such 
 deed had been recorded.^ So where land situated in Iowa, 
 where preferences are not allowed, was conveyed by general 
 assignment for the benefit of creditors, executed in the Dis- 
 trict 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 assignment in favor of all creditors in 
 proportion to their respective claims. ^ 
 
 But in a case in New York, where a debtor residing in 
 
 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. Zacherie, 
 3 How. 483, and referring to Ingraham v. Geyer, 13 Mass. 146, contra. 
 
 ■' Houston V. Nowland, supra. 
 
 '' Osborn v. Adams, 18 Pick. 245. In Connecticut, assignments are required 
 to embrace all the property of the assignor, both real and personal, except such 
 as is exempt from execution, and except real estate situated out of the State. Gen. 
 Stat. (rev. of 1875), p. 378, § i. 
 
 " Loving V. Pairo, 10 Iowa, 282. 
 
408 THE LEX LOCI. [cHAP. XXIII„ 
 
 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 enforce 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 residing 
 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/ 
 
 But the rule above stated does not apply to assignments 
 of instruments conveying interests in real estate, such as 
 mortgages ; and such assignments are governed by the law 
 of the place where they are made.^ 
 
 § 305 The Lex Fori Governs the Remedy. — As to all 
 questions touching the remedy to be allowed on a contract, 
 and the proper course of enforcing it, these are to be deter- 
 mined by the law of the place where suit is brought/ 
 
 § 306. 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 terri- 
 torial limits, and where such laws and contracts made under 
 them are admitted in other States, it is only on a principle 
 of comity, which is always subject to the exception that no 
 State will enforce a contract which is against its well settled 
 policy or direct legislation. Voluntary assignments by 
 
 ' Slatter v. Carroll, 2 Sandf. Ch. 573. 
 
 ° D'lvernois v. Leavitt, 23 Barb. 63, 64, 80. 
 
 ^ Dundas v. Bowler, 3 McLean, 399. 
 
 ' Ch. J. Gibson, in Speed v. May, 17 Penn. St. 95 ; Bennett, J., in Jones v. 
 Taylor, 30 Vt. 48 ; Harrison v. Starry, 5 Cranch, 289 ; and see the following cases, 
 in several of which the questions arose on contracts other than assignments. 
 Smith V. Atwood, 3 McLean, 545 ; Jones v. Jones, 18 Ala. 248 ; Dundas v. Bow- 
 ler, 3 McLean, 396 ; Cox v. Adams, 2 Ga. 1 58 ; Brent v. Shouse, 1 5 La. Ann. 
 110; De Sobry v. De Laistre, 2 Har. & J. (Md.) 191 ; Dakin v. Pomeroy, 9 Gill 
 (Md.) i; Pitkin v. Thompson, 13 Pick. 64; Smith v. Spinola, 2 Johns. 198; 
 Andrews v. Herriot, 4 Cow. 508 and note ; Gulick v. Lodor, 13 N. J. L. 68 ; Mc- 
 Kissick V. McKissick, 6 Humph. 75. 
 
§ 306.] ASSIGIS^MENT REPUGNANT TO THE LAWS. 409 
 
 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 valid- 
 ity and effect in other States.' 
 
 Thus, in Massachusetts, in a case where a debtor resid- 
 ing in 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- 
 holden to be void as against a creditor 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, w^here 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 subsequently 
 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 citi- 
 zen of Massachusetts ; and it appeared that such debt was 
 not wanted to satisfy the debts due to the assignees— it was 
 held that the assignment was invalid as against such attach- 
 ment, 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 a citizen.'' 
 
 ' Parker, C. J., in Blake v. Williams, 6 Pick. 286 ; Porter, J., in Olivier v. 
 Townes, 2 Mart. N. S. (La.) 93. 
 
 '^ 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 Greenl. 245. 
 
 " Fall River Iron Works Company v. Croade, 15 Pick. 11. 
 
 * Boyd V. Rockford Mills, 7 Gray, 406. But an assignment of property in 
 
4IO THE LEX LOCI. [cHAP. XXIII. 
 
 § 307. The courts have in some instances sustained and 
 applied the law of the place where the personal property- 
 is situated in favor of attaching creditors, as against the 
 title of the assignee acquired under an assignment ex- 
 ecuted and vahd under the laws of the forum. Thus, in 
 the New York case of Guillander v. Howell/ where an 
 assignment giving preferences was rriade in New York to 
 a resident of that State, and certain personal property 
 embraced in the assignment, situated in the State of New 
 Jersey, was subsequent to the assignment seized under 
 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 v. Van Buskirk,^ which went through 
 all the courts, is an important and instructive case. The facts 
 were as follows: On the third 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 
 ipdebtedness to Van Buskirk and others, executed and de- 
 livered (in the State of New York) to them a chattel mort- 
 gage on the safes. Two days after this. Green, also a cred- 
 itor 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 tak- 
 ing and converting the safes. He defended the taking and 
 
 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, i8o; and 
 .■see Martin v. Potter, ii Gray, 37 ; Benedict v. Parmenter, 13 Id. 88. 
 
 ' 6 Am. Law Reg. 522, and note; s. C. 35 N. Y. 657. 
 
 ' 38 How. Pr. 52. 
 
§ 307-J THE LEX REI SIT^. 
 
 411 
 
 conversion under the Illinois attachment proceedings, but 
 judgment was nevertheless rendered against him in the lower 
 courts, which was affirmed on appeal to the Court of Ap- 
 peals, but reversed in the Supreme Court of the United 
 States. The decisions 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 there- 
 fore 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 " to entertain an appeal under the constitutional 
 provision that full faith and credit shall be given in each 
 State to the public acts, records, and judicial proceedings of 
 every other State,^ and considering 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, qiwad creditors, by reason of 
 want of delivery of the property,' and that the lien of the 
 attachment proceedings was therefore valid, the full faith 
 and credit required by the Constitution to be given to the 
 judicial proceedings of other States, required the New York 
 court to respect the title of the attachment creditor in Illi- 
 nois. 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, 
 
 ' 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. 
 
 " Const, sec. I, art. IV. ' 38 How. Pr. 52 ; s. C. 7 Wall. 139. 
 
 ° The policy of the law of Illinois will not permit the owner of personal prop- 
 erty to sell it and still continue in possession. Davenport v. Thornton, 2 111. ; 
 Strawn v. Jones, 16 111. 117 ; Martin v. Dryden, 6 111. 187 ; Robertson v. Burnell, 
 10 111, 282. 
 
412 THE LEX LOCI. [CHAP. XXIII. 
 
 wherever 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 situs 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 pre- 
 vails. 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 trans- 
 fer from that of the State where the owner lives." ^ 
 
 § 308. 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 posses- 
 sion necessary to render the transaction complete and per- 
 fect against creditors has, however, 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 attachiug 
 creditor ; ^ but in a later case where the facts were similar, ex- 
 cept that the change of possession, while such as might sat- 
 isfy 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 Ockerman v. Cross,^ the assignment was valid under 
 the laws of Canada, where it was executed, but was not 
 
 ' Green v. Van Buskirk, 38 How. Pr. 59 ; s. C. 7 Wall. 139. 
 ° Ibid. p. 60. ^ Hanford v. Paine, 32 Vt. 442. 
 
 " ' Rice V. Courtis, 32 Vt. 460 ; and see Mead v. Dayton, 28 Conn. 33 ; Koster 
 V. Merritt, 32 Conn. 246. 
 
 " 54 N. Y. 29. This case is distinguished by the learned judge in his opinion 
 from Guillanderv. Howell, 35 N. Y. 657. 
 
§ 309-] TRANSFERS OF CHOSES IN ACTION. 413 
 
 " prepared, acknowledged, or recorded," in conformity with 
 the provisions of the New York statute. The possession of 
 the property in New York was actually 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 in this State. The assignment in other 
 respects was not repugnant to the laws of New York. In 
 Philson V. Barnes,' the property attached was claimed by an 
 assignee under an assignment executed in Maryland, but 
 not recorded in compHance 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.^ 
 
 § 309. Transfers of Choses in Action. — With regard to 
 choses in action, it has been said that they can have no situs 
 other than that of the creditor. The prevailing rule in ref- 
 erence to this species 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 pay- 
 able at the residence of the creditor if not expressed other- 
 wise, and a tender to be good, must be made to the cred- 
 
 " 50 Penn. St. 230. 
 
 '' Forbes v. Scannell, 13 Cal. 241. The lex loci of the assignment in this case 
 was held to be the particular law applicable to Americans residing in Chma, and 
 not the general law prevailing in the Chinese Empire. Id. 139. 
 
 ' See Mowry v. Crocker, 6 Wis. 326 ; Smith v. Chicago & N. W. R. R. Co. 23 
 Wis. 267 ; Noble v. Smith, 6 R. I. 446 ; Speed v. May, 17 Penn. St. 92. 
 
 • 35 N. Y. 657. 
 
414 THE LEX LOCI. [CHAP. XXIII. 
 
 itor. 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 jurisdiction of another gov- 
 ernment, a sale or a contract valid where made is valid 
 everywhere." 
 
 In the case of Caskie v. Webster,' in the Circuit Court 
 of the United States for the Third Circuit, a citizen of Vir- 
 ginia had made an assignment, valid by the laws of that 
 State, of all his property to another citizen of that State, for 
 the benefit of such of his creditors as should assent to cer- 
 tain terms set forth in it, and which were not allowed by 
 the laws of Pennsylvania. Several creditors, chiefly of Vir- 
 ginia, assented. One item of the property assigned was a 
 debt due by a resident of Pennsylvania ; and before the 
 assignee could get the money from this debtor, a Pennsyl- 
 vania 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 Penn- 
 sylvania. For the creditor, Ingraham 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 situs, and 
 follows the person of the creditor. A voluntary assignment 
 of it by the creditor, which is valid by the law of his dom- 
 icile, whether such assignment be called legal or equitable, 
 will operate as a transfer of the debt, which should be re- 
 garded 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 
 
 ' 2 Wall. Jr. 131. 
 
§ 3IO-] THE DOMICILE OF THE PARTIES. 415 
 
 the law of the owner's domicile, is valid everywhere." After 
 observing that such decisions as Ingraham v. Geyer are not 
 binding as authority beyond the States in which they were 
 made, the court conclude as follows : " Sitting here as a 
 court of the United States, we do not think that the differ- 
 ent States of this Union are to be regarded, as a general 
 thing, in the relation of States foreign to each other. Espe- 
 cially ought they not to be so regarded in regard to questions 
 relating to the commerce of the country, which is coexten- 
 sive with our whole land, and belongs not to the States, but 
 to the Union." 
 
 § 310. The Domicile of the Parties. — Another general 
 consideration governing the application of the rule giving 
 effect to assignments, as between different States, is the 
 residence or domicile of the parties affected by their opera- 
 tion. The important qualification of the rule of comity^ 
 which has just been noticed, is limited in its terms to citi- 
 zens of the State where the provisions of the assignment are 
 sought to be enforced. As against citizens of other States, 
 and especially as against citizens of the State where the 
 assignment was made, the rule appears to hold without 
 qualification, that an assignment valid by the laws of the 
 State in which it is 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 con- 
 trary 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 of New Jersey, was attacked by a non- 
 resident judgment creditor, on the ground that the assign- 
 
 ' 19 N. J. Eq. 462 ; reversing S. C. 18 N. J. Eq. 366. 
 
4l6 THE LEX LOCI. [cHAP. XXIIL 
 
 ment was invalid under the New Jersey statute prohibiting 
 preferences, Mr. Chief Justice Beasley, after showing that 
 the conveyance as to its ceremonious parts was in compli- 
 ance with the laws of New Jersey, and that the assignment 
 could therefore be avoided only on the ground that it was in 
 discordance with the policy of the laws of that State, pro- 
 ceeded as follows : " I can imagine nothing that can be set 
 up to invalidate it except the idea that the distribution of 
 the assignment to which this 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 com- 
 pletely 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 regulations of this deed as they 
 are now drawn in question. It is true that this assignment 
 has created preferences which are forbidden by our laws, and 
 that therefore 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 cred- 
 itors under an assignment legal by the laws of the debtor's 
 domicile ? Have we any statute inconsistent with such a dis- 
 position 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 voluntary 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 
 lex 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 
 
 ' 2 Vroom. 90. 
 
§ 3IO.] THE DOMICILE OF THE PARTIES. 417 
 
 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 Massachusetts, as against a citizen Of 
 Rhode Island who had attached a portion of the property in 
 Massachusetts ; it being valid against attaching 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, an 
 assignment made in New York, and valid there, was held 
 valid against a subsequent attachment, by a citizen of New 
 York, of property in Massachusetts, although such assign- 
 ment would have been invalid in Massachusetts, against dis- 
 senting creditors.3 So, in the case of Bholen 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 creditors ; and, be- 
 fore 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 bcr 
 ing 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 payment of particular creditors, by preference, 
 made in another State, under whose laws it was valid, be- 
 ween parties all of whom resided in that State, the prop- 
 erty having been delivered to the assignees by the effect 
 of the notice of the assignment previously served on gar- 
 nishees, would protect 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.s 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 
 
 ' Whipple V. Thayer, 16 Pick. 25. ' Daniels v. V^illard, Id. 36. 
 
 ' Burlock V. Taylor, Id. 335. ' 5 Mason, 174. 
 
 " Richardson v. Leavitt, i La. Ann. 430. 
 27 
 
41 8 THE LEX LOCI. [cHAP. XXIII. 
 
 citizen of Ohio, in trust for his creditors, but the assignment 
 was not lodged for record in the office of any court of pro- 
 bate 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 prop- 
 erty for the benefit of creditors was made by a citizen of 
 Massachusetts, in conformity with the laws of that State, it 
 was held to operate to transfer a debt due from a citizen of 
 New Hampshire, as against creditors 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." 
 
 § 311. Assignments with Preferences. — ^We may now 
 consider the principles stated in their application to assign- 
 ments giving preferences. In regard to voluntary assign- 
 ments with preferences, it is laid down by Mr. Justice Story ,' 
 that they must, as to their validity and operation, be governed 
 by the lex loci contractzis. If 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 litigation and dis- 
 cussion. But it is, as the same author remarks,* a very differ- 
 ent question whether they shall be permitted 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 Pennsylvania, and giving preferences, though not in 
 conformity, in this respect, with the laws of Louisiana, was 
 
 ' Atwood V. Protection Insurance Company, 14 Conn. 555. 
 " Sanderson v. Bradford, 10 N. H. 260. The same principle was applied in 
 the case of Thurston v. Rosenfield, 42 Mo. 474. 
 ' Story's Confl. of Laws [ed. 1852], § 423 f. 
 * Id. ibid, citing Andrews v. His Creditors, 1 1 La. 476, 477. 
 
§ 31 I-] ASSIGNMENTS WITH PREFERENCES. 419 
 
 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 creditors of the assignor, 
 legal and valid by the laws of the State in which it was made, 
 and accompanied by delivery,' will be respected 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,3 in the Circuit Court of the United States for 
 Ohio, where an assignment made in Pennsylvania, and giv- 
 ing preferences as then allowed in that State, included a 
 mortgage of land in Ohio, where, by statute, assignments 
 with preferences were declared to inure to the benefit of all 
 the creditors ; it was held to operate according to its terms, 
 unaffected by the Ohio statute. But in Delaware, it has 
 been decided 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 assignment of property in Massa- 
 chusetts made in New York by insolvent citizens of that 
 State, and giving preferences to certain creditors also citi- 
 zens of New York, was held to be ineffectual as against 
 a subsequent attachment made in Massachusetts by a citizen 
 of that State.s j^ deciding this case it was remarked by the 
 court (Thomas, J.), that "the law of New York, propria 
 vigor e, cannot 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 directly conflict with the policy of our 
 own." And again, " No comity can require us to give effect 
 to an assignment made in another State, which is not only 
 
 ' It 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 Olivier v. 
 Townes (2 Mart. N. S. [La.] 93), and the court supposed the case of Ingraham 
 V. Geyer (13 Mass. 146), to turn on the same point. 
 
 ' United States v. Bank of the United States, 8 Rob. (La.) 262. Cited and 
 relied on in Forbes v. Scannell, 13 Cal. 242. 
 
 " 3 McLean, 397. " Maberry v. Shisler, i Harn (Del.) 349. 
 
 ' Zipcey v. Thompson, i Gray, 243. 
 
420 THE LEX LOCI. [cHAP. XXIIL 
 
 against our well settled policy but against our direct legisla- 
 tion, and the effect of which would be to give a preference 
 to citizens of other States over those of our own." ' 
 
 ' Id. 245. In the Georgia cases of Strieker v. Tinkham (35 Ga. 177), and 
 Mason v. Strieker (37 Ga. 262), where the assignment executed in Tennessee cov- 
 ered 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 Mississippi case of Kitchen v. 
 Reinsky (42 Mo. 427), which was an assignment executed in New York between 
 citizens of that State, in an action between the assignee and an attaching cred- 
 itor, 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 thie State 
 of New York, it is to be so 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. 
 
CHAPTER XXIV. 
 
 CONSTRUCTION OF ASSIGNMENTS. 
 
 After an assignment bas gone into operation, 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 submission of such a question to the jury is error.' 
 Thus, they may be called upon to determine the general 
 character of the instrument, as whether it is to be regarded 
 as an assignment or a mortgage ; "" or to pronounce upon its 
 general effect, as tending to hinder, delay or defraud cred- 
 itors ; or upon the tendency of some particular trust or pro- 
 vision to the same result ; or, finally, to interpret some 
 clause, or words, or even a single word, where the object 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 construc- 
 tion of assignments is that well-known one expressed by 
 the maxim, ut res magis valeat qtiam per eat, the instrument 
 in question shall rather be made available than suffered to 
 
 ' Sheldon v. Dodge, 4 Den, 217; Cunningham v. Freeborn, 3 Paige, 557; 
 Goodrich v. Downs, 6 Hill, 438. 
 
 'See ante, p. 13. 
 
 ' 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. 
 XXV. 
 
422 CONSTRUCTION OF ASSIGNMENTS. [cHAP. XXIV. 
 
 fail.' Such a construction will be given to the assignmen 
 as will carry into effect the intention of the parties.^ The 
 deed is to be construed by the res gestcB ; and thus courts 
 are permitted to look to the circumstances and motives 
 which led to its execution, and the objects to be accom- 
 plished.3 Where it is ambiguous in its terms, and admits of 
 two constructions, 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 statute), if other- 
 wise 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.^ 
 
 The portions or clauses of an assignment which most 
 frequently become the subjects of judicial construction or 
 interpretation are those containing a description of the 
 property assigned, and a designation of the debts to be 
 paid ; those containing stipulations for a release of the 
 debtor ; and those conferring particular powers on the as- 
 signee. 
 
 § 312. Description of Property — what Passes by the 
 Assignment. — Under this head,* the following cases of con- 
 struction have been decided in Pennsylvania. A. & B. 
 partners in trade, conveyed to C. " all their, the said A. & 
 
 ' Cowen, 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 de- 
 clares that in the construction of eveiy instrument creating or conveying, or 
 authorizing the creation or conveyance of any estate or interest in lands, it shall 
 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; (6th ed.) vol. 2, p. 1130. 
 
 " Coverdalev. Wilder, 17 Pick. i8i. 
 
 ° Bellamy v. Bellamy's Adm'r, 6 Fla. 62. 
 
 * 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. 
 
 ° Darling v. Rogers, 22 Wend. 483. " See also Chap. VI. 
 
§ 312.] DESCRIPTION OF PROPERTY. 
 
 423 
 
 B.'s, real and personal estate, whatsoever and wheresoever, 
 and all their estate, right, title and interest in the same," 
 &c., 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 deed 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 part- 
 ners were mentioned together ; and if a surplus remained 
 after satisfying their creditors, it was directed to be "re- 
 turned, reconveyed 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 
 assignment.^ 
 
 Where an assignment for the benefit of creditors recited 
 that the assignor was willing to assign "all his goods, chat- 
 tels, and effects," and then proceeded to grant, transfer, &c., 
 " the following named goods and chattels, viz. : " enumerat- 
 ing certain articles of household furniture, agricultural im- 
 plements, 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 obtained 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, administrators, and assigns, for his 
 
 ' Wharton v. Fisher, 2 S. & R. 178. ■■ Dowdel v. Hamm, 2 Watts, 61. 
 
424 CONSTRUCTION OF ASSIGNMENTS. [CHAP. XXIV. 
 
 own sole and proper use, without the control of any per- 
 son whomsoever, " and without being subject or liable to his 
 debts, contracts or engagements." During the lifetime of 
 B., C. made 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 nature and kind soever, and wheresoever the same may 
 be, merchandise, 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 lands in Florida, from cutting and 
 removing the timber therefrom.^ 
 
 In a case in Maine, under the statute of 1836, concern- 
 ing assignments, 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 property assigned, subject to 
 such further enlargement or diminution in value, as a partic- 
 ular 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 certifi- 
 cate 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 personal estate had been bequeathed, charged 
 with the payment of debts, assigned " all his share and claim 
 in and to the personal estate of the testator, and in and to 
 
 ' Stuckert v. Harvey, i Miles, 247. 
 
 '- Sibbald's Estate, 18 Penn. St. (6 Har.) 249. 
 
 = Pike V. Bacon, 21 Me. (8 Shep.) 280. 
 
§ 312.] WHAT PASSES BY THE ASSIGNMENT. 425 
 
 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, subsequently 
 to the assignment, other assets were discovered, and received 
 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 re- 
 ceived 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 ques- 
 tion.' 
 
 In a case in Florida, where an assignment, after speci- 
 fying certain slaves by name, and also enumerating other 
 personal property of the debtor, contained a general clause 
 conveying " all his personal effects of every name, na- 
 ture, and description," &c., 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 
 before specified by name, and especially where the res gesta 
 favors that construction ; but not to pass real estate or 
 equity of redemption in land.^ In the same case it was held 
 that where an assignment conveyed "all the future cotton 
 crops made on said plantation," 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 fidu- 
 ciary license, lease, or conveyance thereof, and of all that 
 was necessary to the management of the plantation and 
 appropriation of the crops, for the objects and purposes of 
 the trust. 3 
 
 In England, under an assignment to creditors, by a 
 
 ' Couch V. Delaplaine, 2 N. Y. 397. 
 
 " Bellamy v. Bellamy's Adm'r, 6 Fla. (Papy), 62. ' Id. ibid. 
 
42(3 CONSTRUCTION OF ASSIGNMENTS. [cHAP. XXIV. 
 
 debtor, of all his stock in trade, book and other debts, 
 goods, securities, chattels and effects whatsoever, except the 
 wearing apparel of himself 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.' 
 
 § 3 1 3. Designation of Debts to be Paid. — Where an as- 
 signment 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 as- 
 signees was a member, was within the provision for a pref- 
 erence." But an assignment to two persons to secure their 
 liabilities for the assignor, does not secure their several lia- 
 bilities.3 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 othei-wise, 
 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 responsibilities, 
 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 discharge 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," &c., 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 provision in the assign- 
 
 ' Ivison V. Gassiot, 27 Eng. Law & Eq. 483. 
 
 ° Wilson V. Hanson, 12 Me. 58. 
 
 " Yelverton v. Shelden, 2 Sandf. Ch. 481. 
 
 • Barnum v. Hempstead, 7 Paige, 568, 570, 571. 
 
§ 3 1 3-] DESIGNATION OF DEBTS TO BE PAID. 427 
 
 ment.' In another case, in the same State, under an assign- 
 ment made for the payment (among others) of "all accom- 
 modation notes subscribed or indorsed for the assignors, so 
 as to exonerate the makers or indorsers of the said notes 
 from their liability therefor," it was held, ist, that a bill 
 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 preference given by this 
 clause ; 2d, that the holders of such accommodation notes 
 were entitled to be paid only what remained, after deduct- 
 ing the balance due to the assignors from the subscribers or 
 indorsers on other accounts.^ And in a recent case in the 
 same State, where the Bank of the United States had made 
 an assignment of assets exceeding twelve millions of dollars, 
 to pay depositors and holders 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 exceptions ; 
 and the assignment further provided that the bank had 
 "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," except, &c., "and of the interest to 
 accrue upon them," &c., 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 being for one 
 thousand pounds sterling with interest, which were issued 
 for a loan of money to the bank, and which were not de- 
 signed to be a part of the circulation 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 
 
 ' Bank of Pennsylvania v. McCalmont, 4 Rawle, 307. 
 
 " Da Costa v. Guieu, 7 S. & R. 462. 
 
 ' Hogg's Appeal, 22 Penn. St. (10 Har.) 479. 
 
428 CONSTRUCTION OF ASSIGNMENTS. [cHAP. XXIV. 
 
 Other sums to divers donees, the clauses directing such pay- 
 ments 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, subsequently given by A. 
 B. without consideration and as voluntary gifts. ^ 
 
 In Alabama, it has been held that a deed of trust provid- 
 ing that the trustee should first pay all debts described in 
 the deed, for which the complainant was liable, or liable in 
 any other manner, and afterwards providing for creditors gen- 
 erally, 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 Tennessee, where a deed of 
 trust purported to convey property " as a security for all the 
 debts for which the cestui qtce trust, therein named, had be- 
 come Kable," it was held that it was not to be construed as 
 merely for the indemnity of the said cestui que trust alone, 
 but that every other creditor having an interest under the 
 same, had a right to compel the trustee to appropriate the 
 proceeds of the property to the satisfaction of his debt, even 
 in the event of the discharge of the cestui que trust named 
 from all liability ; 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 Massachusetts, where, in a schedule of pre- 
 ferred demands annexed to an assignment, a debt was desig- 
 nated as " S. & T.'s drafts (accepted by the debtors), for 
 which they hold a mortgage of B. W.," &c., it was held that 
 the trust was not personal to S. & 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.^ So, 
 in New York, where an assignment contained a clause 
 
 ' Greenfield's Estate, 24 Penn. St. (12 Har.) 232. ° Id. ibid. 
 
 " Gilchrist V. Gilmer, 9 Ala. 985. " Jones v. Hamlet, 2 Sneed, 256. 
 
 ° Ward V. Lewis, 4 Pick. 518. See Heilner v. Imbrie, 6 Serg. & Rawle, 401. 
 
§ 3 1 3- J DESIGNATION OF DEBT TO BE PAID. 429 
 
 directing the assignee to pay, in the first class of debts, every 
 sum of Tnoney owing by the assignors, whether then due or 
 to become due, and payable thereafter, for which D. and F. 
 were indorsers or sureties, &c., it was held that under this 
 provision of the assignment, persons who had accepted and 
 paid drafts drawn upon them by the assignors, on the credit 
 of property consigned to the drawees, to be sold on commis- 
 sion, and which drafts had been indorsed by D. and F. were 
 not entitled to be paid the amount of such drafts, out of the 
 assigned funds, as preferred creditors 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 
 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 assign- 
 ment.° 
 
 So, where the assignor, as a part of the class of his pre- 
 ferred debts under the 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 assignor 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 entitled 
 to be placed in the class of preferred creditors, in the dis- 
 tribution 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 oc- 
 curred in Pennsylvania. In Heilner v. Imbrie,'* the facts 
 were these : A. & B. by deed conveyed all their estate in 
 
 Doolittle V. Southworth', 3 Barb. S. C. 79. ' Id. ibid. 
 
 " Pratt V. Adams, 7 Paige, 615. * 6 Serg. & Rawle, 401. 
 
430 CONSTRUCTION OF ASSIGNMENTS. [cHAP. XXIV. 
 
 trust to pay " ist, the following named persons [naming 
 them] the following sums, &c., for money lent," &c. " 2d, 
 to pay and satisfy the following named persons the follow- 
 ing sums of money, being for notes lent and indorsements, 
 to wit : C. & Co., 2,053 dollars ; to D. k. E., 6,490 dollars." 
 " Provided that no one of the debts before mentioned, shall 
 have any preference, but the same shall be paid ratably, ac- 
 cording to their respective amounts," &c. And "provided 
 that no one of the creditors preferred and named as afore- 
 said, 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 
 dollars, 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 assignors 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. person- 
 ally, but to the four notes indorsed by them ; and that D. 
 & E., in whose hands they were, might recover 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 assign- 
 ment was made by P. S. & 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 Dorrowed by 
 the said firm from individuals or firms, and for which either 
 the bond or promissory note of P. S. & Co. has been given, 
 and fully to indemnify and save harmless all and every in- 
 dividual and firm, of and from all loss for or by reason of 
 
 ' 5 Whart. 95. 
 
§ 3 1 3-] DESIGNATION OF DEBT TO BE PAID. 431 
 
 any. promissory note, draft or bill of exchange, drawn, in- 
 dorsed or accepted, or signed by him or them, for the accom- 
 modation of the said parties of the first part." The plaintiffs 
 had, about a year before 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. S. & Co., they had been taken. The method pursued 
 by the parties was this : When a note became due, P. S. & 
 Co. took a new note for the amount they wished renewed, 
 adding interest, to the counting-house of the plaintiffs, and 
 received from them their check or money for the amount of 
 the new note ; P. S. & 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 en- 
 titled, in respect 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 gen- 
 eral assignment of his property in trust for the benefit of his 
 creditors provided 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 attachment, became a party 
 to the indenture, but the action was not discontinued. The 
 assignor died, and a commission of insolvency was issued 
 
 ' 17 Pick. 178. 
 
432 CONSTRUCTION OF ASSIGNMENTS. [CHAP. XXIV. 
 
 upon his estate ; and so the attachment was dissolved. The 
 attaching creditor summoned in the administrator, and recov- 
 ered judgment. Upon a bill in equity, brought by the 
 attaching creditor and the attaching ofificer against the as- 
 signees, 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 assignment 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 assignment ; and that he was 
 entitled to recover the amount of his original claim, with so 
 much of the costs as had accrued before the execution of the 
 assignment. 
 
 In Colgin v. Redman' (an Alabama case), a deed of 
 trust contained 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," 
 &c. [naming them]. "The above demands compose the first 
 class of preferred creditors, being principally indorsers, se- 
 curities, and those who advanced money to tbe said party of 
 the first part ; and all are to be first satisfied and discharged 
 in full. The second class comprises the following claims," 
 &c. [naming them], " which shall be paid ratably and pro- 
 portionably after the entire discharge of the debts in the first 
 class enumerated." It was held that the word "order" re- 
 ferred 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 follow : 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 contain- 
 
 ' 20 Ala. 651. ' 8 How. 414. 
 
§ 3I3'] DESIGNATION OF DEBTS TO BE PAID. 433 
 
 ing the following provisions, viz. : It recited are linquishment 
 of dower by his wife in property previously 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 arising from sales, until he should have remitted' 
 the sum of fifteen thousand dollars, 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 ex- 
 ceed the sum of fifteen thousand dollars, then to be divided 
 among such cxtASiors, pari passu ; and out of further remit- 
 tances there was to be paid the sum of twelve thousand dol- 
 lars to his wife as a compensation for her relinquishrnent 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, leav- 
 ing the partnership creditors to be paid out of the partner- 
 ship funds. 
 
 In the late New York case of The Bank of Silver Creek 
 v. Talcott,' an assignment of individual and partnership prop- 
 erty, made by persons indebted both individually and as 
 copartners, after appropriating 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 assignees as follows, viz. : 
 That by and with the residue and remainder of the net pro- 
 ceeds and avails of the assigned property, if any there should 
 be, the assignees should pay and discharge all copartnership 
 
 ' 22 Barb. 550. 
 28 
 
434 CONSTRUCTION OF ASSIGNMENTS. [CHAP. XXIV. 
 
 debts and demands of the assignors, for which the assignees 
 and A. T. were severally and jointly liable, as drawer, in- 
 dorser, 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 further, that, until there was some 
 evidence to show 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 omis 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 con- 
 sequent delay, and that the assignees must necessarily wait 
 the termination of proceedings against A. T. H., or until the 
 statute of limitations should attach, the delay was not of that 
 character condemned by the statute. 
 
 § 314. Stipulation for Release of Assignor. — Where an 
 assignment was made in favor of such creditors as should 
 "within sixty days from the date of the instrument," exe- 
 cute a release, it was held that the day of the date was 
 excluded.' But where the time given for executing a re- 
 lease expired on Sunday, it was held that that day was in- 
 cluded, so that a creditor executing a release on the succeed- 
 ing Monday, was out of time.'' 
 
 ' Pearpoint v Graham, 4 Wash. C. C. 232. 
 ' Pearpoint v. Graham, 4 Wash. C. C. 232. 
 
§ 3I4-] STIPULATION FOR RELEASE OF ASSIGNOR. 435 
 
 Where the maker of a note, which was indorsed, made 
 a general assignment of his property in trust to pay his 
 debts, which was executed by the holder and by the in- 
 dorser of the note, and which contained a general release of 
 all claims against the assignor, " provided that nothing con- 
 tained in the assignment should be construed to impair or 
 affect any lien or pledge theretofore 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 in- 
 dorser, he having agreed to the release by becoming a party 
 to the assignment/ 
 
 Where an assignment was made in trust to pay cred- 
 itors of the first class their debts ; creditors of the second 
 class their debts, the payment to be ratably made, in pro- 
 portion to their respective demands ; 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 assignment, of all the releasor's demands, 
 must be construed [to include] 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 as- 
 signment ; and so, although the assignor afterwards takes 
 the benefit of an insolvent law, and returns the mortgage as 
 due.3 
 
 The following cases of construction in Pennsylvania are 
 referable to this head. In Cheever v. Imlay,-* the facts were 
 these : An assignment was made by a debtor to trustees, i, 
 for the payment of certain specified debts, if there should be 
 
 ' Gloucester Bank v. Worcester, 10 Pick. 528. 
 
 ' Wilson V. Kneppley, 10 S. & R. 439. 
 
 » Matlack's Appeal, 7 W. & S. 79. ■* 7 S. & R. 510. 
 
436 CONSTRUCTION OF ASSIGNMENTS. [cHAP. XXIV. 
 
 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, 3, 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 a dividend, although he executed a re- 
 lease before the assignees had declared or paid a dividend, 
 and a surplus remained after paying the first class of cred- 
 itors. 
 
 In Sheepshanks v. Cohen,' the facts were as follow : 
 An assignment was made by A. B. of all the effects belong- 
 ing to the firm of Y. & B. or to B. B. & Co., or to B. B. in 
 his individual capacity, in trust, to paysuch creditors of Y. 
 & B. and of 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 plaintiff, 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 insuffi- 
 cient. 
 
 In Beckwith v. Brown ' (a Rhode Island case), the as- 
 signment provided, by its first three clauses, for the payment 
 of certain preferred debts, and, by its fourth clause, for the 
 payment of those not preferred ; and concluded with a pro- 
 viso that the creditors should execute a full discharge of 
 their claims to the assignor, as a condition of taking under 
 the assignment, and that in case any creditor should neglect 
 to execute such discharge, his dividend should result to the 
 assignor. It was held that the provision for the return of 
 
 M4S. &R. 35. ''2R. I. 311. 
 
§ 3 1 5-] AUTHORITY TO ASSIGNEE. 437 
 
 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 re- 
 leasing creditor of a subsequent class was not entitled to have 
 such sum returned 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 re- 
 quire 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 dividend.' 
 
 § 315. Authority to Assignee. — An authority given to 
 assignees, in an assignment, " to manage and improve " the 
 assigned property, is not to be construed, in the absence of 
 anything else in the instrument favoring such a construc- 
 tion, as empowering the assignees 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.^ 
 
 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. ^ 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 concerned, 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.^ 
 
 ' Jewett V.Woodward, i Edw. Ch. 195. 
 
 ' Hitchcock V. Cadmus, 2 Barb. S. C. 381. 
 
 " Neally v. Ambrose, 21 Pick. 185. * Clark v. Fuller, 21 Barb. 128. 
 
 ' Meacham v. Sternes, 9 Paige, 398. 
 
38 CONSTRUCTION OF ASSIGNMENTS. [CHAP. XXIV, 
 
 In a case in New York, before the vice chancellor of 
 tie first circuit, the facts were these. N. G. C. owed the 
 Manhattan Company, and on the 15th December, 1836, 
 ave them his bond and a mortgage on real estate. On the 
 2th March, 1841, they foreclosed, sold, and bought in; and 
 here was a deficiency for which (under a transcript of their 
 ecree), they issued a fi. fa. which was returned nulla bona. 
 )n the 9th October, 1838, the said N. G. C. had made a 
 eed of trust embracing the mortgaged premises, upon trust 
 3r the trustee to sell subject to mortgages, or free from in- 
 umbrances, and paying them off out of purchase money, 
 nd in the mean time collect rents ; and after payment of 
 axes and other ordinary charges, upon trust to pay, first, 
 he Greenwich Bank a specified sum ; and afterwards cer- 
 ain other creditors. The trustee collected and held rents ; 
 nd the Manhattan Company now filed their bill, claiming 
 hem to make up the balance due them under the fore- 
 ;losure. It was held (on a general demurrer interposed), 
 hat the rents which the trustee received were not a trust 
 und to keep down interest, and that they belonged to the 
 jreenwich Bank, and should be paid in part of their debt' 
 
 § 316. Liability of Trustee. — A provision in a deed of 
 Lssignment, that the trustee shall be liable only for his own 
 lefaults, and not for the acts of his agents, rpust, on its face, 
 )e understood to import that he shall not be liable for the 
 icts of such agents as are necessary to enable him to exe- 
 :ute the trust, selected in good faith, with a due regard to 
 heir fitness, and with a proper supervision exercised over 
 hem.= 
 
 § 3 1 7. Effect of Release Stibsequent to the Assignment. — 
 The following case was decided in the New York Court of 
 \ppeals. The maker of a note made an assignment to one 
 )f the holders, for the benefit of his creditors, in which the 
 
 ' Manhattan Company v. Greenwich Bank, 4 Edw. Ch. 315. 
 
 = Ashurst V. Martin, 9 Port. 566 ; and see Litchiield v. White, 3 Sandf. S. C. 
 
 45- 
 
§ 3 1 8.] CONSTRUCTION OF PARTICULAR WORDS, 439 
 
 indorser was named and preferred as a creditor, to the 
 amount of the note, and the holders were named and pre- 
 ferred 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 
 agreeing in consideration thereof and of one dollar, to dis- 
 charge the maker from all claims and demands, existing in 
 their favor respectively against him, over and above what 
 they might realize under the assignment, 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 discharged or suspended, the instrument being regarded 
 as only applicable to their other demands against the 
 maker ; and it was therefore further held that their right 
 to recover against the indorser was not affected by such in- 
 strument.' 
 
 § 318. 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, &c. 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 or ownership of a thing which is 
 wrongfully detained from him." Hence, the right to re- 
 cover against the plaintiflF, 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 seizure, is a claim 
 
 ' Coddington v. Davis, i N. Y. 186. 
 
 " Dowdel V. Hamm, 2 Watts, 63, Rogers, J. 
 
440 CONSTRUCTION OF ASSIGNMENTS. [cHAP. XXIV. 
 
 against such plaintiff, and will pass under a general assign- 
 ment made of all dues " and claims " by the defendant in 
 such suit.' 
 
 ' 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, i Wis. 286; Crawford, J., Id. 313-315. 
 
CHAPTER XXV. 
 
 FRAUDULENT AND VOID ASSIGNMENTS. 
 
 § 319. 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 
 fails to comply with some merely formal statutory requisi- 
 tion. On the other hand, an assignment may be fraudulent, 
 without being necessarily actually void. A fraudulent assign- 
 ment, 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."" 
 
 § 320. Good Faith — Fraud. — The great and indispens- 
 able requisite in all voluntary assignments by debtors is good 
 faith ; the great and fatal objection — fraud, or the intent 
 to defraud creditors.^ It is not enough that an assignment 
 
 ' A deed of assignment, fraudulent on its face as to creditors is capable of 
 confirmation by them : and after the deed has been executed, and the assenting 
 creditors have been paid from the effects assigned, the transaction, as to them, vvili 
 not be disturbed. Vi^hite v. Banks, 21 Ala. 705. And see Merrill v. Englesby, 
 28 Vt. (2 Wms.) 150; Geisse v. Beall, 3 Wis. 367; Hone v. Henriques, 13 Wend. 
 240 ; Bodley v. Goodrich, 7 How. 277. 
 
 '^ Merrill v. Englesby, ubi supra ; Edwards v. Mitchell, i Gray, 239, 242 ; Big- 
 elow V. Baldwin, Id. 245, 247. 
 
 ' Mclntyre v. Benson, 20 111. 500. 
 
442 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 be for valuable consideration ; it must be bona fide also.' 
 But we have already seen that in all assignments for the pay- 
 ment 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 prominence and 
 importance. 
 
 By the term " good faith," as commonly understood in 
 our law, and in the civil law from which it has been derived,' 
 is meant sincerity or honesty of purpose, as distinguished 
 from what was termed in the language of the old law of 
 England, "covin," "collusion," 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, expressed, from an early period in English law, the 
 quality specially required in conveyances affecting creditors, 
 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 fide 
 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 application 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 expresses the pre- 
 cise nature of the quality required in these transfers by 
 
 ' Lord Mansfield, in Cadogan v. Kennett, Cowp. 434 ; i Stoiy's Eq. Jur. § 353; 
 Marshall, C. J., in United States v. Hooe, 3 Cranch, 73 ; Wilde, J., in Johnson v. 
 Whitwell, 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. 
 
 ^ In 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. 2 Rev. Stat. (2 ed.) [137] 72, § 4. 
 
 ° S.ee Brissonius De Verb. Signif. voce, bona fides, bona fide. 
 
 * Cadogan v. Kennett, Cowp. 432, 434. ' See fast, p. 445. 
 
§§ 321, 322.] STATUTE OF I3 ELIZABETH. 
 
 443 
 
 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 draftsman, with- 
 out any communication with the assignor, and merely with 
 a view to greater supposed precision of expression and more 
 entire conformity with long-established precedents, have been 
 made the sole grounds of decisions declaring the instruments 
 containing them fraudulent and void as against creditors. 
 
 § 321. The Statute of 13 Elizabeth, c. 5, and its Re- 
 enactments. — The rules by which the courts are now gener- 
 ally governed in pronouncing upon the character of assign- 
 ments, as being fraudulent and void against creditors, are 
 founded upon certain statutes, called statutes " against fraudu- 
 lent conveyances,"^ being re-enactments in various forms of 
 the celebrated English statute of 13 Elizabeth, c. 5.3 Allu- 
 sion 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 provis- 
 ions, and the construction which has been given to them, and 
 to their re-enactments in the United States. 
 
 The entire statute, with the exception of its purely obso- 
 lete portions, is in the following words : 
 
 §322. "For the avoiding and abolishing of feigned, 
 covinous and fraudulent feoffments, gifts, grants, alienations, 
 conveyances, bonds, suits, judgments and executions, as well 
 of lands and tenements as of goods and chattels, more com- 
 monly used and practiced in these days, than hath been seen 
 or heard of heretofore ; which feoffments, gifts, grants, alien- 
 ations, conveyances, bonds, suits, judgments and executions, 
 
 ' See the opinion of Randall, J., in Ex parte Breneman, Crabbe, 456, 463. 
 ^Sometimes called statutes "against fraudulent -intents in alienation," and 
 statutes "against alienations with intent to defraud." 
 ^ Made perpetual by statute 29 Eliz. c. 5. 
 
444 FRAUDULENT ASSIGNMENTS. [CHAP. XXV. 
 
 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, penal- 
 ties, forfeitures, heriots, mortuaries and reliefs ; not only to 
 the let or hinderance 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 commonwealth or civil society can be 
 maintained or continued : 
 
 " 2. Be it therefore declared, ordained and enacted, by 
 the authority 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 execution, 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 or for any intent or purpose before declared or ex- 
 pressed, shall be from henceforth deemed and taken (only 
 as against that person or persons, his or their heirs, succes- 
 sors, executors, administrators, and assigns, and every of 
 them, whose actions, suits, debts, accounts, damages, penal- 
 ties, forfeitures, heriots, mortuaries and reliefs, by £uch guile- 
 ful, covinous, or fraudulent devices and practices, as is afore- 
 said, are, shall, or might be in any wise disturbed, hindered, 
 delayed or defrauded), to be clearly and utterly void, frustrate 
 and of none effect ; any pretense, color, feigned considera- 
 tion, 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 
 
 ' This section is given for the purpose of showing the penal character of the 
 statute, remarked upon post, in this chapter. 
 
§ 3 2 2. J STATUTE OF 1 3 ELIZABETH. 445 
 
 fraudulent feoffment, gift, grant, alienation, bargain, con- 
 veyance, bonds, suits, 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 tenth 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, tenements and hereditaments, leases, rents, com- 
 mons 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 
 feoffment, 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 imprison- 
 ment 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, here- 
 ditaments, 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 fide lawfully conveyed 
 or assured to any person or persons, or bodies politic or cor- 
 porate, not having at the time of such conveyance or assur- 
 ance to them made, any manner of notice or knowledge of 
 
446 FRAUDULENT ASSIGNMENTS. [CHAP. XXV. 
 
 such covin, fraud or collusion as is aforesaid ; anything be- 
 fore mentioned to the contraiy hereof notwithstanding." 
 
 § 323. 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.'' In some of the States 
 it has been incorporated into the code of statute law without 
 chanee, and is still referred to " 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 languge has been entirely dis- 
 pensed with, and its provisions condensed into a few sen- 
 tences. 
 
 § 324. The New York Statute. — In New York, the 
 provisions of the statute of 13 Elizabeth were re-enacted, 
 almost literally, by the act of February 26th, 1787,^ the 
 
 ' I Story's Eq. Jur. § 253. See 4 Kent's Com. [462, 463] 510. 
 
 = N. Y.— 3 Rev. Stat. (6th ed.) p. 145. Ala.— Rev. Code of Ala. (1867), p. 
 412, § 1865. Ark.— Rev. Stat. (1874), p. 562, §2954. Cal.— Civil Code, Hittell 
 (§ 3439), § 8439. Conn. — Gen. .Stat. (rev. of 1875), p. 345, c. iii. Ga. — Code 
 of Ga. (ed. 1873), § 1952. 111.— Rev. Stat. (1874), p. 540, §4. Ind.— i Rev. Stat. 
 (G. & H. 1870), p. 352 Kans.— Gen. Stat. (1868), p. 504. Ky.— Gen. Stat. (1873), 
 p. 488. Mich. — 2 Compiled Laws(i87i), p 1460. Neb. — Gen. Stat. (1873), p. 
 395. Miss. — Rev. Code of Miss. (1871), p. 624, § 2893. Minn. — i Stat, at Large 
 (Bisseli, 1873), p. 691. N.J. — Rev. Stat. (1874), p. 301. Penn. — Purdon's Dig. 
 (Brightley), p. i486, § i. R. L— Gen. Stat. (1872), p. 349, c. 162. S. C— Rev. 
 Stat. (1873), p. 425, § 14 Tenn.— Stat, of Tenn. (1871), § 1759. Vt.— Gen. Stat. 
 (1870), p. 672, § 32. Va.— Code of Va. (1873), p. 896, c. 114. Wis.— Stat, of 
 Wis. (Taylor, 1871), p. 1257. 
 
 " I Rev. Laws (ed. 1813), 75-79. This act includes the provisions of the 27 
 Eliz. c. 4, and several other English statutes. The following are the words of 
 the act, so far as it copies the provisions of the English statute given in the text. 
 
 " IL And for the avoiding and abolishing of all 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, which 
 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, penalties, forfeit- 
 ures and demands, not only to the let or hindrance of the due course and execu- 
 tion of law and justice, but also to the overthrow of all true and plain dealing, 
 bargaining and chevisance between man and man, without which no common- 
 wealth or civil society can be maintained or continued, — Be it further enacted by 
 the authority aforesaid. That all and every feoffment, gift, grant, alienation, bar- 
 gain and conveyance of lands, tenements, hereditaments, goods and chattels, or 
 of any of them, or of any lease, rent, common or other profit or charge out of the 
 same lands, tenements, hereditaments, goods or chattels, or any of them, by 
 writing or othei-wise, and all and eveiy bond, suit, judgment, and execution, at 
 any time had or made, or hereafter to be had or made, to or for any intent or 
 purpose before declared and expressed, shall be from henceforth deemed and 
 
§ 324-] THE NEW YORK STATUTE. 447 
 
 phraseology being carefully preserved, and only such por- 
 tions omitted as were, in their nature, wholly inapplicable. 
 The Revised Statutes condensed them into the following 
 sections : 
 
 " Every conveyance or assignment, in writing or other- 
 wise, of any estate or interest in lands, or in goods or things 
 in action, or of any rents or piofits issuing therefrom, and 
 every charge upon lands, goods or things in action, or upon 
 the rents or profits thereof, made with the intent to hinder, 
 delay, or defraud creditors, or other persons, of their lawful 
 suits damages, forfeitures, debts or demands, and every 
 bond or other evidence of debt given, suit commenced, 
 decree or judgment suffered, with the like intent, as against 
 
 taken (only as against that person or persons, his, her, or their heirs, successors, 
 executors, administrators and assigns, and every of them, whose actions, suits, 
 debts, accounts, damages, penahies, forfeitures, and demands, by such guileful, 
 covinous, or fraudulent devices and practices as aforesaid, are or shall, or may be, 
 in any wise disturbed, hindered or defrauded), to be clearly and utterly void, frus- 
 trate, and of none effect ; any pretense, color, feigned consideration, expressing 
 of use, or any other matter or thing to the contrary notwithstanding. 
 
 "IV. And be it further enacted by the aiUhority aforesaid. That all and 
 every the parties to such feigned, covinous or fraudulent feoffment, gift, grant, 
 alienation, bargain, lease, charge, conveyance, bonds, suits, judgments, executions 
 and other things before expressed, or being privy or knowing of the same, or any 
 of them, who at any time hereafter shall wittingly and willingly put in use [ure] 
 avow, maintain, justify or defend the same, or any of them, as tnae, simple, and 
 done, had or made bona fide, and upon good consideration, or shall alien or assign 
 any the lands, tenements, goods, leases, or other things before mentioned, to him, 
 her or them conveyed as aforesaid, or any part thereof, shall incur the penalty 
 and forfeiture of one year's value of the said lands, tenements 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 m.oney as is or shall be 
 contained in any such covinous and feigned bond ; the one moiety whereof to be 
 paid to the people of the State of New York, and the other moiety to the party or 
 parties grieved by such feigned and fraudulent feoffment, gift, grant, alienation, bar- 
 gain, conveyance, bonds, suits, judgments, executions, leases, rents, commons, 
 profi s, charges, and other things aforesaid ; to be recovered in any court of record, 
 by action of debt, bill, plaint or information. 
 
 " VI. Provided always, and be it further enacted by the authority aforesaid. 
 That this act or anything therein contained, shall not extend or be construed to 
 impeach, defeat, make void, or frustrate, any conveyance, assignment of lease, 
 assurance, grant, charge, lease, estate, interest or limitation of use or uses, of, in, 
 to or out of any lands, tenements or hereditaments, goods or chattels, at any time 
 heretofore had or made, or hereafter to be had or made, upon or for good consid- 
 eration, and bona fide, to any person or persons, bodies politic or corporate, not 
 having at the time of such conveyance or assurance to him, her or them made, 
 any manner of notice or knowledge of such covin, fraud or collusion as is afore- 
 said ; * * * * anything before in this act to the contrary in any wise 
 notwithstanding." 
 
448 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 the persons so hindered, delayed, or defrauded, shall be 
 void."' 
 
 " Every person being a party to any conveyance or as- 
 signment of any estate or interest in lands, goods, or things 
 in action, or of any rents or profits issuing therefrom, or to 
 any charge on any such estate, interest, rents or profits, 
 made or created with intent to defraud prior or subsequent 
 purchasers,^ or to hinder, delay, or defraud creditors or 
 other persons ; and every person being privy to, or know- 
 ing of such conveyance, assignment, or charge, who shall 
 willingly put the same in use,' as having been made in good 
 faith, shall, upon conviction, be adjudged guilty of a misde- 
 meanor."* 
 
 § 325. The statute of 13 Elizabeth, c. 5, has always been 
 considered by high authority as declai atory of the common 
 law,= the antipathy of which against fraud has already been 
 noticed ; * its object being to give that law greater efficiency 
 
 ' 2 Rev. Stat. (2d ed.) [137] 72, § i. This section has been re-enacted ve7-baHm 
 in Michigan (Rev. Stat. ed. 1838, p. 331, c. 3, § i ; Comp. Laws (1871), p. 1460) ; 
 Wisconsin (Rev. Stat. ed. 1849, p. 390, § i ; 2 Taylor (1871), p. 1257, § i). 
 
 " This clause has been taken from the statute 27 Eliz. c. 4. 
 
 ^ The w^ord here written use is, in the English statute, ure, for which use, how- 
 ever, is frequently substituted in the modern books, possibly on the idea of its 
 being a misprint. But ure is a genuine Law French word (appropriated, like 
 many others in the old English law, without translation or change), having the 
 sense of effect, and constituting the root of the still familiar word enure ; as will 
 at once appear from the old French phrase, mise en ure, of which " put in ure," 
 is, in part, a literal translation. 
 
 ' 2 Rev. Stat. (2d ed.) [690] 576, § 3 (6th ed. p. 909.) This section, which em- 
 braces the penal provisions of the old statute, has been entirely separated from the 
 other, which embodies the remedial provisions. A similar course was pursued in 
 revising the statutes of Vermont and Illinois. Rev. Stat, of Vt. (ed. 1870), p. 672, 
 tit. 34, c. 113, §§ 32, 33. Rev. Stat, of 111. (ed. 1874), p. 541, c. 59, § 6 ; and p. 
 370, c. 38, § 122. In New Hampshire and Maine, the penal portion only seems 
 to have been enacted. Rev. Stat, of N. H. (ed. 1867), p. 517, §§ 2, 3. Rev. Stat, 
 of Me. (ed. 1867), p. 858, c. 126, § 3. And see the Pennsylvania act of March 
 13, i860, Purdon's Dig. (Brightley, loth ed.), p. 351, § 188. In Connecticut, the 
 two provisions are united. Stat. (ed. 1854), p. 570 (ed. 1875), p. 345. 
 
 ° 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 En- 
 glish statute is introduced, as implying a legislative recognition of the common law. 
 Twyne's Case, 3 Co. 82 b ; Co. Litt. 76 a, 290 b ; Roberts on Fraud. Conv. 8, 9 ; 
 see 2 Kent's Com. [515] 665. 
 
 ° Lord Mansfield, in Cadogan v. Kennett (Cowp. 434), 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. c, 5, and 27 Eliz. c. 4." 
 
§ 32 5-] THE NEW YORK STATUTE. 449 
 
 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 subjects of judicial construction and 
 application, and they have been carefully retained in nearly 
 all the American statutes." They have become, in short, 
 the familiar test words by which the validity of voluntary 
 assignments is now every day tried in our courts. The fact 
 that the three words, "delay," "hinder," and "defraud," have 
 been in so many ifistances retained without the least change, 
 while the language of other clauses in immediate connection 
 with them has been condensed to the utmost degree,^ shows 
 that each of these words was supposed to have a peculiar and 
 appropriate meaning which could not be dispensed with, and 
 that "delaying and hindering" creditors, was not considered 
 altogether synonymous with " defrauding " them. In their 
 actual application, 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 assailed in the courts ; on that of 
 hindrance 2xvdi delay, and on that oi fraud. These seem^ 
 indeed, to present two general points of view in which the 
 provisions of the statute may be considered ; and it is ac- 
 
 ' 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 fraud from circumstances, and expects that 
 it be manifest or plainly inferable, statutes have been framed of preventive effi- 
 cacy, whose object it has been to embarrass deceitful contrivances, by requiring, 
 as the characteristics of honesty and truth, certain badges or distinctions which 
 it is impossible or difficult for fraud to assume." Rob. Fraud. Conv. 11, 12 ; see 
 Bump op Fraud. Conv. pp. 66, 67. 
 
 "' The Ohio statute is an exception; the single word "defraud" alone being 
 used. Swan's Stat. (ed. 1841), p. 422, c. 52, § 2; Id. (ed. 1854), p. 435, c. 49,. 
 § 2 ; see the observations of Bartley, J., in Hoffman v. Mackall, 5 Ohio St. (Critchf.) 
 133. But see act of 1859, Rev. Stat. (.S. & C.) p. 713, § 85. 
 
 = 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. 
 
 29 
 
4.50 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 cordingly 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 defratid, 
 against which its provisions seem to be more distinctly 
 directed. 
 
 § 326. 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 qui tarn action as covinous and fraudulent), 
 Lord Ellenborough, in delivering his opinion sustaining the 
 judgment, remarked as follows: " It is not every feoffment, 
 judgment, &c., which will have the effect of delaying or hin- 
 dering the creditors of their debts, &c., that is therefore 
 fraudulent within the statute ; for such is the effect pro tanto 
 of every assignment 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, &c., must be devised of malice, fraud, 
 or the like, to bring it within the statute." "The act of 
 parliament," his lordship further observed, "was meant to 
 prevent deeds, &c., fraudulent in their concoction, and not 
 merely such as, in their effect, might delay or hinder other 
 creditors." In the case of Pickstock v. 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. 
 
 § 327. The views of Lord Ellenborough appear to be 
 fully borne out by the words of the English statute, the very 
 verbiage of which furnishes an important aid to its construc- 
 
 ■ 4 East, I, 13. " 3 M. & S. 371. 
 
§ 32 7-J HINDRANCE AND DELAY OF CREDITORS. 45 1 
 
 tion. The conveyances, &c., which it declares void and 
 seeks to abolish, are designated as "feigned, covinous and 
 fraudulent," such as were " devised and contrived of malice, 
 fraud, covin, collusion or guile ; to the end, purpose, and 
 intent to delay, hinder or defraud." The words " malice, 
 fraud, covin, collusion or guile," are among the most import- 
 ant ones in the whole statute ; their very redundancy evinc- 
 ing 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 involved a high degree of 
 moral fraud or actual dishonesty^ calling not only for repres- 
 sion but absolute punishment, appears from the third section, 
 by which the parties to such conveyances and transactions 
 aire made to incur the penalty and forfeiture of one year's 
 value of the lands, tenements, &c., 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 pen- 
 alty of one half year's impriso7iinent, " without bail or main- 
 prize." == Hence it was 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 
 
 ' 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 over- 
 throw 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 ui)on "pretense, color, feigned consideration," &c. In the third section, 
 the designation of " feigned, covinous and fraudulent," is again applied to the 
 feoffments, conveyances, &c., which are prohibited ; and they are contrasted with 
 such as are " true, simple, bona fide, and upon good, firm consideration " The 
 bonds prohibited are also described as " covinous and feigned " The language 
 of the kindred statute of 27 Elizabeth, c. 4, which also was directed, in terms, 
 against fraudulent and covinous conveyances, though in behalf of a different class 
 of pereons, 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 ana lawful considerations." 
 
 " By the Maine statute, the parties are punishable by fine not exceeding one 
 thousand dollars, and imprisonment less than one year. Rev. Stat. (ed. 1857), p. 
 691, c. 126, § 2; ed. 1871, p. 858, c. 136, § 3. And see the Pennsylvania act of 
 March 31, i860, Purdon's Dig. (Brightley, loth ed.) p. 351, § 188. 
 
452 FRAUDULENT ASSIGNMENTS. [cHAP. XXV, 
 
 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 qui 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 
 his opinion : " It makes one shudder to think that persons 
 who appear, like the defendants, to have acted most hon- 
 estly, should have been in any hazard of being subjected to 
 punishment for having endeavored to procure an equal dis- 
 tribution of their debtor's effects amongst all his creditors." ' 
 
 § 328. 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 w^ords of Lord LUenborough, that " it is not every con- 
 veyance that has the effect of delaying or hindering creditors 
 that is, in itself, fraudulent. In some degree, it is the effect 
 of every assignment of a debtor's property, for the benefit of 
 creditors, to produce hindrance and delay." The learned 
 
 ' 4 East, 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- 
 
 = 6 Cow. 284. 
 
 ' Wilder v. Fondey (or Winney), 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, &c. 
 
 * 8 Rob. (La.) 402. 
 
§ 328.] HINDRANCE AND DELAY OF CREDITORS, 453 
 
 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 
 trust tends, in some degree, to hinder and delay those cred- 
 itors who are not provided for ; but it does not thence fol- 
 low that they are of necessity fraudulent." And in Ingra- 
 ham V. Grigg,^ 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 Carolina, 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 exclu- 
 sive satisfaction 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, col- 
 lusion, or covin, to the end, purpose, and intent to delay, 
 hinder, and defraud creditors." In Virginia, in the case of 
 Dance v. Seaman,' it was said by the court (Allen, P.), " The 
 fact that creditors may be. delayed or hindered, is not, of it- 
 self, sufficient to vacate such a deed, if there is absence of 
 fradulent 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. 
 Bellamy's Adm'r.* In Michigan, in the case of Hollister v. 
 
 ' 8 Wheat. 229. " 1 1 Sm. & M. 469, 539. 
 
 ' 13 Sm. & M. 22. * I Ii-ed. L. 490. 
 
 " II Gratt. 778, 782. ° 6 Fla. 62, 102. 
 
454 FRAUDULENT ASSIGNMENTS. [cHAP. XXV, 
 
 Loud,' the language and object of the statute were com- 
 mented on by Wing, P. J., from whose opinion the follow- 
 ing are extracts : " It must be shown, then, by the complain- 
 ant, that the parties to the deed entered 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 cred- 
 itor in an especial 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 obstruct creditors, it is 
 not therefore void. ''■ * To render it fraudulent, it must 
 be done, with the intent to hinder, delay, or defraud ; 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 
 incgptioii and intention fraudulent and void. It is the fraudu- 
 lent intention, the mala fnens, with which the conveyance is 
 made that constitutes the fraud against which the denuncia- 
 tions of the statute are directed." ^ 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 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 
 
 ' 2 Mich. (Gibbs), 309. = 2 Mich. (Gibbs), 313. 
 
 = 2 Mich. (Gibbs), 316. « 7 ind. (Port.) 17. 
 
 ° S Ohio St. (Critchf.), 124, 133, 134. 
 
§ 328.J HINDRANCE AND DELAY OF CREDITORS. 455 
 
 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 assignments, although 
 designed manifestly to deprive particular creditors of speedy 
 remedies at law, and thus hinder and delay them in the col- 
 lection of their debts, or to deprive some of that full satisfac- 
 tion of their debts, which, by their superior diligence in 
 prosecuting their suits, they would otherwise certainly have 
 obtained, are upheld as valid and effectual. Although, in 
 one sense, there is a manifest intent to hinder and delay one 
 or more creditors, 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 circum- 
 stances, and unable to pay all his debts, he can do no act 
 more just and equitable than to surrender and assign his 
 property in trust for the benefit of all his creditors. In such 
 situation all the law can reasonably demand is a faithful ap- 
 plication 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 incident to a just and law- 
 ful act. And such mere incident to such laudable act can- 
 not 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 con- 
 templation of insolvency, shall be deemed an act of dis- 
 honesty. If authority be necessary to sustain so plain a 
 proposition, reference is made to Meux v. Howell, 4 East, 
 I ; Wilder v. Winne, 6 Cow. 284, and 4 Wend. 100." In 
 New York, it was held by the Court of Appeals, in Nichol- 
 
456 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 son V. Leavitt ' (Gardiner, J.), that where the delay to cred- 
 itors necessarily results from a fair exercise of the debtor's 
 right to make an assignment with preferences, it is not pro- 
 hibited by any statute. 
 
 § 329. In the case of Nicholson v. Leavitt,'' in the Su- 
 perior Court of the city of New York, the construction of 
 the words of the statute now under consideration, was exam- 
 ined at great length by Duer, J., who delivered the opinion 
 of the court. The following 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, 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 construction 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 delay them in the 
 collection of their debts, by withdrawing the property from 
 the reach of any legal process to which they might wish to 
 resort. Not only is such its necessary effect, but the actual 
 intent of the debtor is to place the property beyond the im- 
 mediate power and action of his creditors, by preventing 
 them from obtaining any judgments 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 pro- 
 ceedings against himself as their debtor, and to delay them 
 from receiving any portion of their debts until they shall be- 
 come entitled to a dividend under the assignment ; and the 
 
 ' 6 N. 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. 
 
 ' 4 Sandf. S. C. 252, 284. The judgment in this case was reversed in the 
 Court of Appeals, 6 N. Y. 510. 
 
§ 33°- J HINDRANCE AND DELAY OF CREDITORS. 457 
 
 intent thus to hinder and delay them is not only to \)& plainly 
 deduced from the nature of the trust, but not uHfrequently 
 is confessed 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 assign- 
 ment, 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 of such assign- 
 ments, notwithstanding the objections made against them. 
 
 § 330. From the views expressed in the foregoing cases,'' 
 
 ' 3 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 hteral extent." To show 
 this, the learned judge quotes the words of the present New York statute (remark- 
 ing that those of the English statute, and of the former acts of our legislature 
 upon the subject, are substantially the same), that "eveiy assignment made with 
 the intent to hinder, delay, or defraud creditors, &c., shall be void " — dwells on the 
 apparent departure frota them involved in the doctrine now established (that, al- 
 though 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 ap- 
 plied 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 creditors is manifest, it is just as 
 certain that there was no intent to cheat or defraud them ; and the reasonable con- 
 struction 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 explanation given may be to the present New York statute, and 
 however necessary to reconcile with its languge the decisions under it, it seems 
 hardly called for 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 statute, appear to involve any violation of that statute. A marked 
 distinction between 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. 
 
 -■ Tlie rule as laid down in the text has been ratified and confirmed by several 
 later decisions. In the 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. Labeaume, 19 Mo. 17 ; Potter 
 v. McDowell, 31 Mo. 62. This is the rule also in Illinois. Myers v. Kinzie, 26 
 111. 36. So in the case of Bailey v. Mills (27 Tex. 434), it was said, " It is not a 
 sound objection 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 opinion was expressed in Carlton v Baldwin (22 Tex. 724). So in True v. 
 Congdon (44 N. H. 48) : " But if such assignment was made bona fide, and with 
 
458 FRAUDULENT ASSIGNMENTS. [CHAP. XXV. 
 
 the 4-ule of construction seems deducible — that, in order to 
 bring an assignment by a debtor within the statute oi fraztdu- 
 lent 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 fraudtdent one. 
 But there is a class of cases which have established 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. Kennett,' 
 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 
 
 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 i^^ 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 (i Head, 
 57S), 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. 357. 
 
 ' 2 Cowp. 432. 
 
 '' It may appear strange that the statute of Elizabeth should have been so libe- 
 rally construed by the courts, in aid of the equitable remedies of creditors, when 
 they are both, in their terms, petial 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 qui.lity, being partly reme- 
 dial and partly penal ; and it is in view of this double quality that they have been 
 held to admii of the application of two opposite principles of construction. Sir 
 William Blackstone has alluded to the apparent inconsistency 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 -con- 
 tradiction 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 ipon 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 trans- 
 action, here it is to be construed liberally." The learned commentator then refers, 
 in illustration of the last proposition, to this very statute of 13 Eliz. c. 5, which, 
 under the words "to defiaud creditors and others," was held to extend to a gift 
 made to defraud the queen of a forfeiture, i Bl. Com. 88, 89. Mr. Serjeant 
 
§ 33I-] HINDRANCE AND DELAY OF CREDITORS. 459 
 
 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 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 in- 
 tention, by being itself turned into a strong presumptive 
 indication of fraudulent design." ' 
 
 § 331. 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 detrimental to the interests of creditors, 
 than of any really fraudulent or dishonest design established 
 against the debtor in any particular case. Hence, assign- 
 ments have been repeatedly adjudged to be void on the 
 ground of the mere "intent to hinder and delay," as distinct 
 
 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 con- 
 strued with more indulgence than the latter." i Steph. Com. 73; Piatt v. Sheriifs 
 of London, Plowd. 36: Bones v. Booth, W. Black. 1226. Mr. Roberts observes 
 under this head : " The principle of expounding 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 quce sunt favorabilia animcE, 
 quamvis sunt damnosa rebus, fiat aliquando extensio statuti." — Rob. Fraud. 
 Conv. 542, 543; Wimbish v. Tailbois. Plowd. 39; i Co. 131 ; Farmer's Case, 3 
 Co. 78; Fitzherbert's Case, 5 Co. 80. 
 
 ' Rob. Fraud. Conv. 32. "The hardship of such presumptions," he further 
 observes, "-(if any there be), is outweighed bytheir 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 re- 
 spect to our transactions with each other is for the public good, it is only neces- 
 sary that it be clear and ostensible ; and no man can reasonably complain of a re- 
 striction upon his individual which benefits him in his social capacity, if the terms 
 of that restriction be intelligible, general and certain." Id. 32, 33. The same 
 ground of public policy is taken by Coulter, J., in the late case of Mitchell v. 
 Stiles, 13 Penn. St. (i Har.) 306, 309. And see Foote v. Cobb, 18 Ala. 585. 
 
 * Lord Mansfield, in 2 Burr. 1072, states the distinction between presumptions 
 grounded upon evidence, and presumptions of law, which are not to be contradicted. 
 The statutory presumption alluded to in the text [Mr. Roberts' text] seems to be a third 
 sort, depending upon an artificial rule of construction." 
 
460 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 (otherwise than by judicial implication) from the "intent 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 
 consideration.' 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 con- 
 sideration, or for the just and equitable purpose of securing 
 an equal distribution of the effects among all the creditors." ^ 
 And in the case of Nicholson v. Leavitt,-* the Court of Ap- 
 peals of New York adopt the view that an intent to defraud 
 is implied in the intent to hinder and delay ; the court ob- 
 serving, in answer to the argument, that an intent to hinder 
 and delay creditors, there being no intent to defraud them, 
 v/ill not make an assignment illegal, and that a positive in- 
 tent to defraud must exist — that " a positive intent to defraud 
 always does exist where the inducement to the trust is to 
 hinder and delay creditors, since the right of a creditor to 
 receive his demand when due is as absolute as the right to 
 receive it at all." In this case, the mere insertion, in an as- 
 
 " Bowman v. Draughan, 3 Stew. 243; PuUiam v. Newbuny, 41 Ala. 168 ; cit- 
 ing Terrell v. Green, ii 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. 
 
 '^ 8 Dana, 247, 263. This case is cited, and its doctrine approved by the vice 
 chancellor of the first circuit, in Van Nest v. Yoe, i Sandf. Ch. 4. But the opinion 
 in Vernon v. Morton, above quoted, is qualified in some degree by what immedi- 
 ately follows the extract given in the text : " But to defeat the deed, the fraudulent 
 intent must he. 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." 
 
 ' So in the case of Keteltas v. Wilson, 36 Barb. 298, it was said : "When it 
 appears from the evidence that the intent of the debtor was to delay creditors and 
 effect a settlement, even though the terms of the instrument were in themselves 
 unobjectionable, the assignment will be declared fraudulent." And where the as- 
 signor testified in effect that his intent in making the assignment was to accom- 
 phsh a settlement, and he was corroborated in his evidence by the assignee, this 
 was regarded as conclusive evidence of an intent to hinder and delay creditors, and 
 the assignment was adjudged void. Work v. Eilis, 50 Barb. 512. But see 
 Whedbee v. Stewart (40 Md. 414), where Bartol, C. J., observed : " In dealing with 
 this subject the law does not regard the motive of a party unless it be evidenced 
 by some illegal act." 
 
 '6N. Y. 510. 
 
§ 33^-1 HINDRANCE AND DELAY OF CREDITORS. 461 
 
 signment, of a clause authorizing the assignees to sell the 
 assigned property 07z credit, was held to vitiate the whole in- 
 strument, and was viewed by the court as being, " in con- 
 science and in law, a fraud and nothing else." ' Indeed, there 
 are cases which proceed, professedly, on the ground, not so 
 much of any achial intent on the part of the debtor to hin- 
 der and delay, as of the effect of the transfer itself, in hinder- 
 ing and delaying. In Buck v. Sherman,' it was held in 
 Michigan, that " fraud in fact, or an express intent to commit 
 fraud, is not necessary in order to render a conveyance fraud- 
 ulent as against creditors. It is sufficient if the effect of the 
 conveyance is to delay or hinder creditors in the collection 
 of their debts." In the later case of Hollister v. Loud,^ in 
 the same State, it is true, a very different doctrine was main- 
 tained, it being distinctly held that " if the effect of a con- 
 veyance be to hinder, delay or obstruct creditors, it is not 
 therefore void." But in the case of Pierson v. Manning,* 
 decided by the same court about the same time, it was held 
 that, " If an assignment by a debtor in failing circumstances 
 is drawn in such a manner as that it must necessarily, in its 
 execution, tend to hinder or delay creditors unprovided for 
 in the collection of their debts, then the legal presumption 
 arising upon the face of the instrument is, that it was so 
 framed with that intent. No other presumption could legally 
 arise upon it. ' The law presumes every man to intend the 
 legal consequences which must naturally flow from his own 
 voluntary acts,' = and every man is held responsible accord- 
 
 •6 N. Y. 517. 
 
 ' 2 Doug. 176. And see Arthur v. The Commercial and Railroad Bank of 
 Vicksburg, 9 Sm. & M. 394 ; Cunningham v. Freeborn, 3 Paige, 564 ; Webb v. 
 Daggett, 3 Barb. S. C. 9. In Leitch v. Hollister (4 N. Y 211, 214), Gardner, J., 
 speaking of creditors who are excluded from the benefits of an assignment, ob- 
 serves : "They are necessarily hindered and delayed, and consequently, in legal 
 contemplation, defrauded." And even in England, it has been said in a recent 
 case : " Every deed which has the effect of withdrawing property from a creditor, 
 is strictly a deed made with the intent Xa delay, within the second section of the 13 
 Eliz." Maule, J., in Janes v. V/hitbread, 20 Law J. C. P. N. S. 217. 
 
 " 2 Mich. (Gibbs), 309, cited ante, p. 454 ; Wing, P. J., Id. 316. 
 
 ' 2 Id. 445 ; Pratt, J., Id. 454. 
 
 ' See this maxim commented on by Comstock and Paige, JJ., in Curtis v. 
 Leavitt, 15 N. Y. (i Smith), in, 204. 
 
462 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 ingly." In Mitchell v. Stiles,' in the Supreme Court of 
 Pennsylvania, it was said by Coulter, J., of the conveyance 
 under consideration : " Whatever the private or actual intent 
 of the deed may have been, it wears the marks which, for 
 the benefit of creditors, as a matter of public policy, the law 
 construes into badges of fraud. * * * Its whole scope 
 and effect were to delay, hinder and obstruct creditors. It 
 is therefore void." In Florida, in the case of Gibson v. 
 Love,° it was held that where the legal effect of a convey- 
 ance is to delay, hinder and defraud creditors, no matter 
 what the actual intention may have been, it s a fraud in law, 
 and the courts are bound so to declare it. And it has been 
 said by an able American writer, in summing up the law on 
 this point, that " an assignment in trust for creditors which 
 by its provisions tends to hinder or delay creditors, is fradu- 
 lent and void in law." ^ 
 
 § 332. It is clear, however, from the language of the 
 English statute of 13 Elizabeth, that its provisions were 
 directed exclusively against conveyances made with an actual 
 INTENT, on the part of debtors, to hinder, delay or defraud 
 creditors, as distinguished from the mere effect or operation 
 of such conveyances. The expressions in the preamble — 
 " devised diVidi contrived," "to the end, purpose, and intent to 
 delay," &c., leave no room for doubt on this point. Hence, 
 it has sometimes been very expressively designated as the 
 "statute against fraudulent intents in alienation." It would 
 further appear from the language of the English statute (and 
 
 ' 13 Penn. St. (i Har.) 306, 309. It was further said, in this case, by the 
 learned judge whose remarks are quoted in the text : " I don't perceive any force 
 in the argument that all assignments for the benefit of creditors produce delay and 
 hindrance. And so perhaps they do ; but it is delay unavoidably incident to, and 
 resulting from the execution and performance of such assignments.. Delay is 
 incident to all human affairs. We cannot annihilate space and time. But in this 
 and all its kindred cases, the delay is by the will of the grantor, and the hindrance 
 and obstruction to the creditors are stipulated for in the deed. A very different 
 affair indeed. And it is irom this circumstance the law infers the intent." Id. 309, 
 310. 
 
 - 4 Fla. (Hogue), 217. 
 
 ° Wallace's Note to i Am.Lead. Cas. fed. 1852), 96; citing Sheldon v. Dodge, 5 
 Den. 217 ; Bodley v. Goodrich, 7 How. 277 ; Hart v. McFarland, 13 Penn. St. 185 
 
§ 332-J HINDRANCE AND DELAY OF CREDITORS. 463 
 
 the remark seems applicable to its more literal re-enact- 
 ments in the United States),' that the intent to delay and 
 hinder, thus contemplated as a ground of avoiding a con- 
 veyance, was a malicio7is intent, having some particular, 
 determinate aim to injure creditors — or a covinous or guileful 
 intent, carried out by the collusive aid of others, and exhib- 
 ited in the false show or color given to the transaction itself 
 — or in short, a fraudulent intent, in the intenser sense of 
 the term, justifying the description of the transaction as an 
 offense.'' The expressions " devised and contrived of malice, 
 fraud, covin, collusion or guile," have an obvious reference 
 to the succeeding words "delay" and "hinder," to qualify 
 which they appear to have been purposely introduced ; and 
 in that connection, they are appropriate and significant ; 
 while, as applied to the word '' defraud," which needs no such 
 exposition, they not only lose their significance, but become 
 superfluous.^ Again, the pejial character of the statute 
 serves to throw a valuable light upon its meaning and object, 
 in the particular under consideration. The intent must have 
 been such as to give a criminal complexion to the transac- 
 tion, sufficient to subject the offender (as Blackstone terms the 
 party), to the severe penalties of forfeiture of the subject of it, 
 and a half year's close imprisonment. A party would hardly 
 have been held liable to punishment like this, for a mere "in- 
 tent to delay " a creditor, apart from motives of malice, covin 
 or fraud. Another illustration is presented by the proviso 
 contained in the sixth section — that the statute should not ex- 
 tend to conveyances made "upon good consideration " (that 
 is, for the benefit of actual creditors), "and bona fide" (that 
 is, free fi^om all deceptive colors, secret trusts, and collusive 
 practices). This furnishes an auxiliary test, as to cases fall- 
 
 ' The present statutes of New Jersey and North Carolina are of this descrip- 
 tion. 
 
 '^ So it is characterized by Blackstone, distinct from any reference to its penal 
 consequences, and merely as an act to be avoided, i Bl. Com. 88. 
 
 This is on the supposition that the manifestly labored phraseology of the 
 statute had some determinate purpose, and was not adopted from a mere fondness 
 for verbosity, with which many of the old statutes, and this, in particular, are 
 sometimes charged. 
 
464 FRAUDULENT ASSIGNMENTS. [CHAP. XXV. 
 
 ing within the statute, which is referred to in the books as 
 frequently as the positive enactment contained in the second 
 section. Thus, in Cadogan v. Kennett,' already cited, Lord 
 Mansfield said, " The question in every case is, whether the 
 act done is a bona fide transaction, or whether it is a trick 
 and contriva7ice to defeat creditors." The same test has been 
 referred to as decisive, by Mr. Justice Story,^ and Chief 
 Justice Marshall.^ 
 
 § 333- The views just presented rest, it will be seen, 
 essentially, upon the more literal construction of the English 
 statute. A much greater latitude has, however, been some- 
 times taken in expounding it, in which its supposed general 
 object and policy appear to have been principally regarded.'' 
 Additional reasons in behalf of the more liberal system of 
 interpretation present themselves, when we come to examine 
 the American statutes, particularly those which have been 
 enacted in a condensed form, on a revision of previous laws. 
 In the process of compression usually adopted in these cases, 
 not only has much matter that was available for purposes of 
 exposition been thrown out, but the whole frame-work of 
 the statute has been changed, and, in some respects a nev/ 
 statute substituted. Thus, in New York, the statute has no 
 longer a formal preamble, expressly declaring its object to be 
 — "for the avoiding and abolishing oi feigned, covinous, and 
 fratidulent conveyances," " devised and contrived of malice, 
 fraud, covin, collusion or guile, to the end, purpose, and intent 
 to delay, hinder, or defraud creditors," — every one of which 
 expressions savors of actual fraud in a strong degree,^ and 
 points to the source of the intent with great significance ; 
 but ''every conveyance or assignment," &c., "made with the 
 intent to hinder, delay, or defraud creditors," is declared to 
 be void. Again, the penal provisions, to which allusion has 
 been made, as tending, by their close connection with the 
 
 ' 2 Cowp. 432, 434. ■>■ Story's Eq. Jur. § 353. 
 
 " United States v. Hooe, 3 Cranch, 73. 
 
 '' See Rob. on Fraud. Conv. 13-15, 32, 33, 189, 405. 
 
 ' See the opinion of Allen, Senator, in Seward v. Jackson, 8 Cow. 441. 
 
§ 335-] HINDRANCE AND DELAY OF CREDITORS. 465 
 
 Others, to preserve a stricter system of construction on the 
 part of the courts, have been entirely omitted as a constit- 
 uent portion of the statute, and transferred to the widely 
 distinct head of criminal law. Lastly, the important proviso 
 by which the statute was expressly declared not to extend to 
 any conveyances made " upon good consideration and bona 
 fide" has not been re-enacted ; thus depriving the courts of 
 a valuable auxiliary test of the quality of conveyances by 
 debtors, and confining them to the single import of the 
 words, " intent to delay, hinder or defraud," of which so 
 much has already been said. These circumstances seem 
 sufficient to account for, if not to justify, the more liberal 
 system of construction which has come to prevail in the 
 courts of New York, and which, under the former statute, 
 might perhaps have been exposed to the charge of undue 
 extension. 
 
 § 334. More might be said, with a view to elucidate from 
 the language of the statute, the nature of the hindrance and 
 delay of creditors, and of the inte^tt to hinder and delay 
 them, contemplated by it ; and the words themselves might 
 be subjected to a minuter examination and analysis, in order 
 to ascertain, not only their true individual import, but also 
 the extent to which their mere connection and collocation 
 may have imparted to them a sense which, individually, they 
 might not have admitted. But, waiving such inquiries, the 
 terms in question will, in what remains to be said under the 
 present head, be considered in a more practical light, and 
 with reference to such actual decisions as may have tended,, 
 either directly or indirectly, to define and explain them. 
 
 § 335- The term delay has an obvious reference to time, 
 and hindrance to the interposition of obstacles in the way of 
 a creditor ; but, to a certain extent, the one involves and in- 
 cludes the other. In point of fact, and as actually applied 
 by the courts, they are always taken together. The follow- 
 ing are prominent instances in which assignments have been 
 declared void on the ground of hindrance and delay : where 
 
 30 
 
466 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 the time of sale/ or of collection by the assignee,^ or of 
 finally closing the trust,^ has been by the terms of the assign- 
 ment, unreasonably or indefinitely postponed ; where the as- 
 signee has been expressly authorized to sell at retail, and on 
 credit, ■* or on credit simply ■,^ where the assignment has been 
 made with a view to prevent a sacrifice of the property ; * 
 where the proceeds of the assigned property have been di- 
 rected to be used in defending all suits which might be 
 brought by creditors to recover their debts ; ^ and where 
 creditors who should sue have been expressly debarred from 
 the benefit of the assignment,' or postponed until all the 
 other creditors are paid.' All these were instances of delay- 
 ing and hindering creditors in the prosecution of their reme- 
 dies, in the strict sense of the terms used in the statute. 
 
 § 336. Intent to Defeat Execution and Prevent Sacri- 
 fice of Property. — A purpose on the part of the assignors in 
 making the assignment, to protect their property from exe- 
 cution and legal process is consistent with the legalized 
 object of assignments,'" and there is no legal duty imposed 
 upon debtors to disclose to their creditors their intention of 
 making such a disposition of their property." But where 
 the assignors, after judgment had been obtained against 
 
 ' Hafner v. Irwin, 1 Ired. L. 490. 
 
 ^ Storm V. Davenport, i Sandf. Ch. 135. See ante, p. 285. 
 ' Arthur V. Com. R. R. Bank of Vicksburg,. 9 Sm. & M. 394. See ante, p. 287. 
 ' Meacham v. Sternes, 9 Paige, 398, 406, Walworth, C. 
 ' Barney v. Griffin, 2 N. Y. 365 ; Nicholson v. Leavitt, 6 N. Y. 510. 
 " Van Nest v. Yoe, i Sandf Ch. 4; Vernon v. Morton, 8 Dana, 147. But see 
 Cason V. Murray, 15 Mo. 378. Se:e.post, § 336. 
 
 ' Planck V. Schermerhorn, 3 Barb. Ch. 644; Mead v. Phillips, i Sandf Ch. 83- 
 
 ' Spence v. Bagwell, 6 Gratt. 444 ; Berry v. Riley, 2 Barb. S. C. 307. 
 
 " Marsh v. Bennett, 5 McLean, 117. 
 
 '° Jackson V. Cornell, i Sandf Ch. 348; Pike v. Bacon, 21 Me. 281; Place v. 
 Miller, 6 Abb. Pr. N. S. 178; Hoffman v. Mackall, 5 Ohio St. 124 ; Baldwin v Peet, 
 22 Tex. 708 ; Stewart v. English, 6 Ind. 176 ; HoUister v. Loud, 2 Mich. 309 ; see 
 Heydock v. Stanhope, 40 N. H. 237; and see Bump on Fraud. Conv. p. 358, and 
 the following English cases : Riches v. Evans, 9 C. & P. 640 ; Johnson v. Osenton, 
 L. R. 4 Ex. 107 ; Lee v. Green, 35 Eng. L. & Eq. 261 ; Bowen v. Brainridge, 6 C. & 
 P. 140; Wolverhampton Bank v. Marston, 7 H. & N. 147 ; Wilt v. Franklin, i 
 Binn. 502 ; Pickstock v. Lyster, 3 M. & S. 373 ; but see contra, Dalton v. Currier, 
 40 N. H. 237. 
 
 " Place v. Milkr, 6 Abb. Pr. N. S. 178. 
 
§§ 337. 338-] FRAUDULENT INTENT. 467 
 
 them, obtained a stay of execution on the pretense that 
 they had a defense to the action, which, however, they had 
 not, and on the assurance of their attorney that they would 
 not make an assignment, and meanwhile executed an as- 
 signment giving preferences, the assignment was held void 
 as being made with the intent to hinder and delay the judg- 
 ment creditors.' 
 
 § 337. Fraud, and Fraudulent Intent. — Whatever may 
 be said of the effect, under the statute, of a mere intent to 
 delay or hinder creditors, apart from any actually fraudulent 
 design on ^ the part of the debtor, there is no doubt that an 
 intent to defraud, properly established, will always avoid an 
 assignment. There is no room for discussion of the quality 
 of the intent in this case ; the expression sufficiently defines 
 itself 
 
 The intent of the assignor, in making the assignment, is 
 the material consideration in determining as to its validity, 
 in cases where it is assailed as fraudulent. And the prevail- 
 ing rule in New York " and in many other States,^ is that 
 a fraudulent intent on the part of the debtor alone, is suffi- 
 cient to avoid the assignment, without proof of any notice 
 of or participation in the fraud on the part of the assignee 
 or creditors, although in other States the rule has been 
 held otherwise.* 
 
 § 338- Fraudulent Intent, how Ascertained. — One of 
 
 ' Jacques v. Greenwood, 12 Abb. Pr. 232. 
 
 " In the case of Rathbun v. Platner (18 Barb. 272), it was held that an assign- 
 ment by a debtor, with the fraudulent intent to hinder, delay and defraud his 
 creditois, is void, although his assignees are free from all imputation of partici- 
 pating in his fraudulent designs, and are themselves bona fide creditors of the as- 
 signor. See Mathews v. Poultney, 33 Barb. 127; Wilson v. Forsyth, 24 Barb. 
 105 ; Griffin v. Marquardt, 17 N. Y. 28. 
 
 ^ Ruble V. McDonald, 18 Iowa, 493 ; Kayser v. Heavenrich, 5 Kans. 324, 340 ; 
 Gere v. Murray, 6 Minn. 305; Stickney v. Crane, 35 Vt. 89; Lampson v. Arnold, 
 19 Iowa, 479; Baldwin v. Feet, 22 Tex. 708. 
 
 " Byrne v. Becker, 42 Mo. 264 ; State v. Keeler, 49 Mo. 548 ; Sipe v. Earman, 
 26 Gratt. 563; Wilson v. Eifler, 7 Cold. 31 ; Marbury v. Brooks, 7 Wheat. 556; 
 S. C. II Wheat. 78; Abercrombie v. Bradford, 16 Ala. 560; Governor v. Camp- 
 bell, 17 Id. 566; Gates V. Labeaume, 19 Mo. 17; Bancroft v. Blizzard, 13 Ohio, 
 30; Thomas v. Talmadge, 16 Ohio St. 433. 
 
468 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 the most important considerations connected with the sub- 
 ject of the present chapter, relates to the process or medium 
 by which, in judicial investigations of the character of as- 
 signments, the fact of fraudulent intent is to be ascertained 
 and made apparent. 
 
 In New York, it has been enacted by the Revised Stat- 
 utes, that the question of fraudulent intent, in all cases aris- 
 ing under the statute, shall be deemed a question of fact, 
 and not of law.'' This provision was framed with an obvious 
 reference to the well-known apportionment of judicial func- 
 tions between the court and jury, in trials at law ; and its 
 principal object was to take from the court the** power to 
 infer fraud, or a fraudulent intent,^ as a conclusion of law, 
 and to transfer it to the jury to ascertain as a matter of fact, 
 from evidence presented in the ordinary way. It has also 
 been said to have been designed to abolish the doctrine of 
 constructive fraud, of which more will be said hereafter. 
 But the provision has not proved operative to the full ex- 
 tent apparently contemplated by it, from the following 
 (among other) considerations. The appropriate tribunals 
 for the investigation of the legal quality of assignments — 
 those, indeed, in which alone they can be directly assailed 
 on the ground of fraud, and with an express view to their 
 overthrow — are courts of equity, which, from the nature of 
 their constitution, do not admit of the participation of a 
 jury in the judicial functions.^ Hence it was well remarked 
 by Mr. Justice Nelson, in the case of Cunningham v. Free- 
 born,'* that "the question of fraudulent intent is undoubtedly 
 made by statute a question of fact, and when before a tribu- 
 nal in which questions of fact are to be tried by a jury, must 
 be found by the jury. But in a court of equity, these ques- 
 
 ' 2 Rev. Stat. 137 ; 3 Rev. Stat. (6th ed.) p. 145, § 4. A similar provision has 
 been enacted in other States. 
 
 '^ A distinction has been taken between these terms, and the statute provision 
 held to apply exclusively to the latter. Sttpost, p. 470. 
 
 ° Assignments by debtors for the benefit of creditors are, in a peculiar sense, 
 the objects of chancery jurisdiction. Jones v. Dougherty, 10 Ga. 273. 
 
 * II Wend. 240, 251. 
 
§ 339-] FRAUD IN LAW AND IN FACT. 469 
 
 tions may be, and usually afe, determined by the court ; and 
 it necessarily follows that there the fraudulent intent must 
 thus be found." ' 
 
 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 narrow it still further, by hold- 
 ing that in cases where the question has actually been sub- 
 mitted,to a jury, as belonging to them to determine, 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 intent 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. 
 
 § 339. 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 books, 
 —fraud in law, and fraud in fact. " Fraud," said Mr. Jus- 
 tice Buller, in Estwick v. Caillaud,"* " is sometimes a ques- 
 tion 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 
 
 ' But in Baldwin v. Peet (22 Tex. 708), it was said : " A court of equity, having 
 a right to find the facts from the evidence, might well infer from those established 
 and patent facts the additional and important fact of fraudulent intent, and 
 having thus found it, declare the legal consequence by setting aside the deed as 
 void, just the same as though the fraudulent intent were confessed in the petition. 
 This power of a court of equity, of finding one material fact which is not admitted 
 by inference and deduction from those that are admitted, does not pertain to our 
 courts in causes involving principles of equity any more than those involving 
 questions of lavy as contradistinguished from equity." 
 
 " Vance v. Phillips, 6 Hill, 433 ; see Cunningham v. Freeborn, 1 1 Wend. 240. 
 
 ' 6 Hill, 438. * 5 Term R. 420. 
 
470 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 law." Perhaps it would be more accurate to say that fraud 
 is never purely a question of law, nor exclusively a question 
 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 men- 
 tioned the question of fraud properly belonged ; and in 
 some of them the propriety 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 tQ 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 facts. It 
 is the judgment of law on facts and intents, as has been 
 frequently observed by judges of the greatest eminence." 
 The same opinion was repeated by Woodworth, J., in Jack- 
 son V. Mather.3 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 to a 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 Ver- 
 planck 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 mentioned, making the 
 question of fraudulent intent in all cases a question of fact. 
 That those cases were considered to have abolished the dis- 
 tinction between fraud in law and fraud in fact, appears from 
 the emphatic language used by the Supreme Court in Jack- 
 son v. Timmerman.' "There is," said the court (Suther- 
 
 ' Foster v. Woodfin, 1 1 Ired. L. 339. " 9 Johns. 342. 
 " 7 Cow. 301, 304. 
 
 " 8 Id. 406, 435 ; see Jackson v. Peek, 4 Wend. 300. ° 12 Johns. 536. 
 
 ' Duer, J., in Nicholson v. Leavitt, 4 Sandf. S. C. 287. ' 7 Wend. 436, 438. 
 
§ 339-] FRAUD IN LAW AND IN FACT. 47 1 
 
 land, J.), "no such thing as fruad in law, as distinguished 
 from fraud in fact. What was formerly considered as fraud 
 in law, or conclusive evidence of fraud, and to be so pro- 
 nounced by the court, is now hut 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 distinc- 
 tion being drawn between fraud and fraudulent intent. 
 "The Revised Statutes," it was said, "have not made the 
 fraud itself a question of fact, neither, indeed, was it pos- 
 sible 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 law, and 
 not of fact. The object of the statute was to reach a par- 
 ticular class of cases, where the conveyance would not neces- 
 sarily have the effect to defraud creditors or others of their 
 rights, and where the question of fraud must, of course, 
 depend upon the intent 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. Justice Nelson, which I regard as un- 
 answerable, that whenever an assignment contains pro- 
 visions which are calculated per se to hinder, delay, or de- 
 fraud 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 if in opposition to the plain 
 
 ' 3 Paige, 557, 564 ; and see remarks of Nelson, J., s. C. 11 Wend. 240, 251. 
 
 ■' 6 Hill, 438 ; and see Webb v. Daggett, 2 Barb. S. C. 9. 
 
 ° 17 N. Y. 9. * II Wend. 240, 251. 
 
472 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 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 consequence of his acts." ' 
 
 It has been thought that the later cases in this State 
 revive the doctrine of constructive fraudj" which the pro- 
 vision 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 perpetrate a positive 
 fraud or injury upon other persons, are yet, by their ten- 
 dency to deceive or mislead other persons, or to violate 
 private or public confidence, or to impair or injure the 
 public interests, deemed equally reprehensible 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, em- 
 braces all those agreements and other acts of parties which 
 operate, directly or virtually, 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 abus- 
 ing 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 posi- 
 tive and intentional fraud from those of a mere constructive 
 
 ' See remarks of Ingraham, J., in Wakeman v. Dalley, 44 Barb. 503. Mr. Jus- 
 tice Atwater (Gere v. Murray, 6 Minn. 305), referring to the New York cases, 
 makes the following observations : " We gather as a result of their investigations 
 (the N. Y. 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 declare whether 
 such intent be fraudulent or otherwise." 
 
 " Duer, J., in Nicholson v. Leavitt, 4 Sandf. S. C. 287. 
 
 ' I Story's Eq. Jur. § 258. 
 
§ 340-] FRAUD, HOW ESTABLISHED. 473 
 
 nature, which the law pronounces fraudulent upon prin- 
 ciples of public policy. Indeed, they are often found mixed 
 up in the same transaction," &c.' 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.^ 
 
 § 340.- 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 
 
 ' Id. § 349. " A constructive fraud," says a learned judge, speaking 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 assignnjent, 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 voluntaiy convey- 
 ance by a solvent grantor was held to be fraudulent against subsequent creditors 
 or purchasers." Duer, J., in Nicholson v. Leavitt, 4 Sandf. S. C. 287. 
 
 ^ In 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. 
 In California, where the question of fraudulent 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 law to be only presumptive, the jury have the power, upon consid- 
 ering the whole case, to find against such presumption. Billings v. Billings, 2 Cal. 
 109, 113, 114; and see the observations of Pratt, J., in Piersori v. Manning, 2 Mich. 
 (Gibbs), 445,455,456. 
 
 In Missouri, the rule is thus laid down by Mr. Justice Scott (Johnson v. McAl- 
 lister's Assignee, 30 Mo. 327) : " We have never adopted, in this State, the course 
 of decisions in New York under the statute concerning fraudulent conveyances. 
 Our courts do not hear extrinsic evidence in relation to the validity of a convey- 
 ance, and then, on such evidence, as a matter of law, pronounce the conveyance 
 void. When a conveyance, on its face, is fraudulent and void, the court will de- 
 clare it so. But when it appears to be fair, and its validity depends on extrinsic 
 evidence, that evidence is submitted to a jury, who will determine as a matter of 
 fact whether it is fraudulent or not." 
 
 = Sutherland, J., in Grover v. Wakeman, 11 Wend. 187, 192 ; Hempstead v. 
 Johnson, 18 Ark. 123 ; Thornton v. Hook, 36 Cal. 223; Bump on Fraud. Convey. 
 p. 559, and cases cited ; Roberts on Fraud. Conv. 528. 
 
 * Vernon v. Morton, 8 Dana, 247 ; Grover v. Grover, 3 Md. Ch. Dec. 29 ; Park- 
 hurst V. McGraw, 24 Miss. 134; Henckley v. Hendrickson, 5 McLean, 170; Wilson 
 V. Lott, 5 Fla. 305 ; i Story's Eq. Jur. § 190 ; Blow v. Gage, 44 111. 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. 
 
474 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 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 charge in a bill that it was 
 made to defraud creditors, as the complainant is informed 
 and believes, not verified by the oath of any person hav- 
 ing personal knowledge of the alleged fraud, is not suffi- 
 cient to entitle the plaintiff to an injunction against the 
 assignees. 5 
 
 § 341. But, though fraud cannot be presumed in the 
 absence of evidence, it may always be preswmed, that is, 
 inferred from circumstances shown in evidence. And it is 
 by this indirect or presumptive method that it is, in fact, 
 usually made out and proved — what is called direct or posi- 
 tive proof of fraud being rarely attainable.^ Hence it is well 
 settled that fraud or fraudulent intent may be proved by 
 circumstances.' In regard to the character or strength of 
 the evidence in such cases, it is a further rule that fraud will 
 not be presumed from slight circumstances, or circumstances 
 of an equivocal tendency,^ or circumstances of mere sus- 
 
 ' Kellogg V. Slauson, 15 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 veiy limited sense. Allegations 
 of fraud are seldom, almost never, sustained by that direct and plenaiy proof which 
 excludes all presumption. Black, C. J., in Kaine v. Weigley, 22 Penn. St. (10 Har.) 
 179 ; Reed v. Noxon, 48 111. 323. 
 
 '■' Brown v. Bartee, 10 Sm. & M. 268-274 ; Garland, J., in United States v. Bank 
 of the United States, 8 Rob. (La.) 403. 
 
 ' Bogert V. Haight, 9 Paige, 297 ; Walworth, C, Id. 302 ; Parkhurst v. McGraw, 
 24 Miss. 134 ; Hollister v. Loud, 2 Mich. (Gibbs), 309, 324, 325 ; i Story's Eq. Jur. 
 § 190 ; but see Rob. Fraud. Conv. 528. 
 
 * Dunham v. Gates, 3 Barb. Ch. 196 ; Buck v. Sherman, 2 Doug. (Mich.) 176; 
 Hollister v. Loud, ubi supra ; Blow v. Gage, 44 111. 208 ; Nye v. Van Husan, 6 
 Mich. 329. 
 
 ' Bogert V. Haight, 9 Paige, 297. 
 
 ' Kaine v. Weigley, 22 Penn. St. (10 Har.) 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. 
 
 ° Wing, P. J. in Hollister v. Loud, 2 Mich. 309, 324, 325, and cases cited ibid. 
 
§ 342-] FRAUD, HOW ESTABLISHED. 475 
 
 picion, leading to no certain results.' But circumstances 
 affording a strong presumption will be deemed sufficient 
 evidence.'' It has been said that the proof should be so 
 clear and conclusive as to leave no rational doubt upon the 
 mind.3 Fraud will not be presumed where the facts out of 
 which it is supposed to arise may well consist with honesty 
 and pure intention.* 
 
 § 342. The grounds upon which fraud is established 
 against assignments may 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 
 is susceptible (as just indicated) of a threefold subdivision, 
 which has been very fully and clearly stated by a learned 
 judge in an important case,= in the following terms : " A 
 conveyance made by an insolvent debtor, may be fraudulent 
 on its face, containing provisions which the law deems nec- 
 essarily, and under all circumstances, fraudulent in their 
 operation ; or it may be void as against creditors, solely by 
 
 ' Fisher, J., in Parkhurst v. McGraw, 24 Miss. 134, 136, 137; i Story's Eq. 
 Jur. 8 190. 
 
 '' Fisher, J., in Parkhurst v. McGravv, ubi supra ; McDaniel v. Baca, 2 Cal. 
 326. 
 
 ^ Wing, P. J., in HoUister v. Loud, ubi supra, citing Buck v. Sherman, 2 Doug. 
 CMich.) 176. IButin 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 evidence and require 
 a case absolutely free from doubt, and was therefore objectionable. See Bump 
 on Fraud. Conv. pp. 560 et seq. 
 
 * 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 
 upon 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 evi^'ence 
 courts of law would not always deem sufficient proof to justify a verdict at law." 
 I Story's Eq. Jur. § igo. 
 
 ' Curtis, J., in Stewart v. Spencer, i Curt. 157, 159. 
 
476 FRAUDULENT ASSIGNMENTS. [CHAP. XXV. 
 
 reason of matter dehors the deed, from a want of considera- 
 tion, or of good faith ; or it may have the effect to defeat or 
 delay creditors by reason of some provision in the deed, 
 operating 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 creditors, and so would not render the 
 deed invalid." 
 
 § 343. Fraud on the Face of the Deed. — Assignments 
 are constantly 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 impor- 
 tant instances of which are the following : 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 creditors ;^ as 
 by stipulating for the payment of 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 stip- 
 ulating for the possession of the property assigned ;* or im- 
 posing coercive terms upon creditors ; ' or reserving a power 
 of interfering with and controlling the application of the 
 assigned property or its proceeds, as by declaring new pref- 
 erences ; ^ or reserving a power of revocation in any form ; ' 
 or finally, where they contain any provision expressly in- 
 tended to hinder, delay or defraud creditors, of which suffi- 
 cient has already been said. 
 
 ' Mackie v. Cairns, 5 Cow. 547 ; Goodrich v. Downs, 6 Hill, 438 ; Leitch v. 
 HoUister, 4 N. Y. 211 ; Ziegler v. Maddox, 26 Md. 575 ; Bigelow v. Stringer, 40 
 Mo. 195, where the cases are collected. 
 
 - Gazzam v. Poyntz, 4 Ala. 374 ; Henderson v. Downing, 24 Miss. 106. 
 
 ° Harris v. Sumner, 2 Pick. 129. 
 
 * Mackie v. Cairns, 5 Cow. 547. 
 
 ' Goodrich v. Downs, 6 Hill, 438 ; Barney v. Grififin, 2 N. Y. 365. 
 
 ° Brooks V. Wimer, 20 Mo. 503 ; Stanley v. Bunce, 27 Mo. 269 ; Read v. Pel- 
 letier, 28 Id. 173 ; Billingsley's Adm'r v. Bunce, 28 Id. 547. 
 
 ' Grover v. Wakeman, 11 Wend. 187; Marsh v. Bennett, 5 McLean, 117. 
 
 ' Sheldon v. Dodge, 4 Den. 217; Gazzam v. Poyntz, 4 Ala. 374. 
 
 ° Cannon v. Peebles, 4 Ired. L. 204. 
 
§ 343-] FRAUD ON THE FACE OF THE DEED. 477 
 
 Where the fraud thus appears on the face of the deed, the 
 courts usually assume to pass upon it, without the interven- 
 tion of a jury, it being of that character already described as 
 fraud in law. When the court can see that a deed is fraud- 
 ulent on its face, it has been said, there is nothing for a jury 
 to pass upon. If the law imputes 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 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 uncon- 
 ditional, and that it contains by legal implication a resulting 
 trust, the legal construction 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.^ 
 
 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 allowing any inquiry into the actual 
 intent of the debtor, the law takes the deed itself as evidence, 
 and from that alone infers the intent ; it presumes such in- 
 tent to have been fraudulent : it " imputes " to the debtor an 
 unlawful design^ in making the deed; it "construes" the 
 terms of the deed into " badges of fraud," and condemns it 
 
 ' Green v. Trieber, 3 Md. 11 ; Inloes v. Am. Ex. Bank, 11 Id. 173; Rosen- 
 burg V. Moore, 11 Id. 376 ; Bigelow v. Stringer, 40 Mo. 195 ; State v. Benoist, 37 
 Id 500. 
 
 " Dargan, C. J., in Johnson v. Thweatt, 18 Ala. 741, 744. 
 
 ° 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, 335, 338 ; BiUings v. Bilhngs, 
 2 Cal. 107 ; Jenness v. Doe, 9 Ind. 461 ; Kavanagh v. Beckwith, 44 Barb. 192. 
 
 ' Jessup V. Johnston, ubi supra. 
 
 ' Roberts on Fraud. Conv. 32 ; Bump on Fraud. Conv. p. 70. 
 
478 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 accordingly.' This presumption is sometimes founded on a 
 single provision in the deed, occasionally on a Ytry few 
 words,' but more commonly on various provisions taken 
 together.3 
 
 § 344. 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, &c. The question in such 
 cases is one of fact for the jury ; and the fraud is inferred 
 from the circumstances proved, in the ordinary mode of pre- 
 sumption from facts. 
 
 § 345. Fraud, from both Sources. — Finally, fraud may 
 be established from the terms of the assignment in connection 
 with evidence of extrinsic facts."* " It is often a question of 
 intrinsic difficulty to determine, from the terms of the deed 
 itself, whether it is conclusively fraudulent, or whether its 
 provisions, though somewhat suspicious, may not be con- 
 sistent 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 sub- 
 mit the question of intent to the jury, who will take into 
 consideration not only such suspicious provisions, but also 
 
 ' Green v. Trieber, 3 Md. 11 ; Mitchell v. Stiles, 13 Penn. St. (i Har.) 306, 
 309 ; Pierson v. Manning, 2 Mich. 445, 456 ; Oliver Lee & Co. Bank y. Talcott, 19 
 N. Y. 146. 
 
 ' In Nicholson v. Leavitt (6 N. Y. 510), the decision declaring the assignment 
 void was founded upon the three words — " or upon credit." In Brigham v. Til- 
 linghast (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 
 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 follow- 
 ing remarks of Dargan, C. J., in Johnson v. Thweatt (18 Ala. 741, 747), may be 
 inserted here. " I do not intend to lay down any fixed rule, and say that a partic- 
 ular provision or feature in a deed shall in all cases be deemed conclusive evi- 
 dence of fraud, where the deed is not a general assignment for the benefit of cred- 
 itors, but is intended as a security for particular debts, or to protect particiilar 
 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 court is 
 bound to pronounce the deed fraudulent and void." 
 
 * The case of Stewart v. Spencer (i Curt. 157, 159), was decided upon evidence 
 of this character. 
 
§ 346-J INDICIA OR BADGES OF FRAUD. 479 
 
 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 ex- 
 plained 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." == 
 
 § 346. 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 assign- 
 ments may be adjudged fraudulent The distinctive char- 
 acter of these "badges" (or "marks," as they are otherwise 
 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 sus- 
 
 ' Dargan, C. J., in Johnson v. Thweatt, 18 Ala. 741, 744. 
 
 ' Chilton, 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 cause, as well as 
 from the general character, terms and provisions of the deed of assignment 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 character 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. 
 
 " See Bump on Fraud. Conv. c. 4, " Badges of Fraud ;'' Cunningham v. Free- 
 born, II Wend. 240 ; Williams v. Jones, 2 Ala. 314. 
 
 ' Garland, J., in United States v. Bank of the United States, 8 Rob. (La.) 403 ; 
 Coulter, J., in Mitchell v. Stiles, 13 Penn. St. (i Har.) 306, 309. 
 
 ' Cunningham v. Freeborn, 11 Wend. 240. 
 
 " Coulter, J., in Mitchell v. Stiles, 13 Penn. St. (i Har.) 306, 309. 
 
480 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 picion of a fraudulent design. The insertion of unusual 
 clauses,' and the absence of the ordinary and proper append- 
 ages of the instrument, such as schedules,^ belong to this 
 class. Among the more common badges of fraud, of an ex- 
 trinsic character, are — the appointment of objectionable per- 
 sons as assignes ^ — 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 transfer,* and its being made on the eve of judgments,' 
 also fall under this division. 
 
 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 circum- 
 stances, which are taken and weighed together, in judging of 
 their effect ; and it is their connection and united tendency 
 which usually gives them force. A circumstance which, of 
 itself, would be of trifling importance, acquires strength as a 
 badge of fraud, from its combination with others. 
 
 § 347. The Statute of 3 Henry VII, c. 4, and its Re- 
 enactments. — In addition to the statute of 13 Elizabeth, c. 5, 
 and its re-enactments in the United States, which have just 
 been considered, there is another class of statute provisions 
 by which the courts are governed in pronouncing upon the 
 character of assignments, as being fraudulent and void 
 against creditors. These may be termed by way of distinc- 
 tion, " 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 VII, c. 4, passed A. D. 
 1487, by which, after reciting that "oftentimes deeds of 
 gift of goods and chattels have been made with intent to 
 
 ' Twyne's Case, 3 Co. 80. 
 
 ° Wilt V. Franklin, i Binn. 502. See ante, pp. 171, 179. 
 ' See ante, pp. 118, 119. * See ante, p. 127. 
 
 ' See ante, p. 364, and post. Chap. XXX. 
 " Twyne's Case, 3 Co. 80 ; Hafner v. Irwin, i Ired. L. 490. 
 ' Williams v. Jones, 2 Ala. 314. This is not now usually regarded as an im- 
 portant circumstance against an assignment. See ante, p. 466. 
 
§ 347-1 THE STATUTE OF 3 HENRY VII, C. 4. 481 
 
 defraud creditors of their duties, and that the person or per- 
 sons that maketh the said deed of gift goeth to sanctuary or 
 other places privileged, and occupieth and liveth vvith the 
 said goods and chattels, their creditors 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."' 
 
 This provision M^as re-enacted in New York, by the act 
 of February 26th, 1787, in the following words : 
 
 " All deeds of gift and conveyances of goods and chat- 
 tels, made or to be made in trust to the use of the person or 
 persons making the same deed of gift or conveyance, shall be 
 and hereby are declared to be, void and of none eflFect." ^ 
 
 In the Revised Statutes of 1830, the same provision was 
 again enacted in the following words : 
 
 " 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 sub- 
 sequent, of such person." ^ 
 
 The same provision has been re-enacted in the States of 
 New Jersey,"* Indiana,^ Michigan,^ Wisconsin,'' Oregon,* 
 Missouri,' Alabama,'" Minnesota," and Kansas." 
 
 ' 2 Statutes at Large, 370. The principle of this provision may be traced to art 
 earlier period. By the statute of 50 Edw. Ill, c. 6, after a recital similar to that 
 of the 3 Hen. VII, but applying to tenements as well as chattels, it was ordained 
 " that if it be found that such gifts be so made by collusion, that the said credit- 
 ors shall have execution of the said tenements and chattels, as if such gifts had 
 not been made." i Statutes at Large, 332; Crabb's His. Eng. Law, 274; An- 
 gell 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. Id. ibid.; Dyer, 295, a, b; Co. Litt. 76 a. 
 
 " I Rev. Laws (1813), p. 75, § i. 
 
 = 3 Rev. Stat. (6th ed.) p. 142 ; 2 R. S. 135, § i. 
 
 * Rev. Stat. (ed. 1874), p. 301, § 11. ' i Stats, of Ind. (G. & H.) p. 353, § 18. 
 
 ° 2 Comp. Laws (ed. 1857), p, 944, § i (3182.) 
 
 ' 2 Stats, of Wis. (Taylor, 1871), p. 1255. 
 
 " Gen. Laws (1872), p. 522, § 45. » i Stats, of Mo. (Wagner), p. 279. 
 
 " Code of Ala. (ed. 1867), p. 411, § 1861. 
 
 " I Stats, at Large (Biss.) p. 690. " Gen. Stats, of Kans. (1868), p. 504. 
 
 31 
 
482 FRAUDULENT ASSIGNMENTS. [CHAP, XXV. 
 
 It will be seen that the provisions of this statute, and its 
 re-enactments, are expressly confined to transfers oi personal 
 property — "goods and chattels," or "goods, chattels and 
 things in action." Hence it was designated, in a case in 
 the New York Court of Appeals, as " the personal statute 
 of uses," and "the statute oi personal uses!' ^ 
 
 It will be further seen that, although the preamble of the 
 English statute contains the expression, "intent to defraud," 
 which is so prominent in the statute of 1 3 Elizabeth, yet the 
 enacting part is absolute and unqualified, declaring the con- 
 veyances void, whatever the intent may have been. The en- 
 actments in the United States, which are without any pre- 
 amble or recital, are equally broad and absolute in their terms. 
 
 § 348. The principle of this provision of the statute of 3 
 Henry VII, was the same with that of the subsequent statute 
 of 27 Henry VIII, c. 10 (usually known as "the statute 
 of uses"), the doctrine established being the very equitable 
 one, that where a debtor created a trust in personal prop- 
 erty 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 the whole legal title, 
 or, what was the same thing, the legal possession, was in the. 
 grantor cestui giie trust. 
 
 On comparing the provisions of these two statutes — of 
 13 Elizabeth and 3 Henry VII — and their re-enactments in 
 the United States, it will be found that, while the former 
 deals with the intents of grantors, and admits of every refer- 
 
 ' Comstock, J., in Curtis v. Leavitt, 15 N. Y. 119, 122 ; Brown, J., Id. 147, 149. 
 
§ 349-J THE STATUTE OF 3 HENRY VII, C. 4. 483 
 
 €nce 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 consid- 
 erations of intent, and free from all reference to extrinsic 
 facts ; ' and has been well said to " furnish a simple, unvary- 
 irig 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 
 belonging, in every case, to the division already described as 
 fraud in law, or fraud per se? 
 
 § 349. On a further comparison of these two statutes 
 and their re-enactments, particularly as they form a part of 
 the statute law of the State of New York, another distinc- 
 tion becomes apparent, namely : that while the provisions 
 of the " statute against fraudulent conveyances" are found 
 constantly referred to- and relied on by the courts, through- 
 out the long series of adjudications upon assignments to be 
 found in the reports — those of the "statute against convey- 
 ances in trust for the use of the grantor," have been referred 
 to and followed in comparatively a very few cases. Indfeed, 
 it was said in the case of Curtis v. Leavitt,'* that prior to the 
 case of Goodrich v. Downs, of which more will be said pres- 
 
 ' Comstock, J., in Curtis v. Leavitt, 15 N. Y. (i Smith), 119, 120. 
 
 " Id. 119. 
 
 ' If 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 vifould 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 opinion 
 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 practices 
 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." Com- 
 :stock, J., in Curtis v. Leavitt, 15 N. Y. (i Smith), 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 modem re-enactments, declare them to be 
 provisions 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 thing's in action." * 
 
 ' 15 N. Y. (I Smith), 117, Comstock, J. ; Id. 147, Brown, J. 
 
484 FRAUDULENT ASSIGNMENTS. [CHAP. XXV.. 
 
 ently, the last-named statute had not been refeired to in this 
 State in more than a single case.' The reason of this omis- 
 sion 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 prominently referred to, and in fact, distinctly 
 relied upon, as decisive authority for declaring an assign- 
 ment by a debtor in failing circumstances, 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 void 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 assign- 
 ment for the return to the assignor of any surplus proceeds 
 of the property assigned, after paying certain of the assign- 
 or'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 declared was, or would be, in point of fact, of 
 no benefit to the assignor, 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 decis- 
 ions. ^ 
 
 From all these cases it will appear that the language of 
 this statute against conveyances in trust for the use of the 
 
 ' Mackie v. Cairns, 5 Cow. 580. A similar omission of reference to this stat- 
 ute in the English cases, was noticed by Comstock, J., ubi supra. 
 
 = 6 Hill, 438. 
 
 ^ This case, so far as it may be understood to have turned upon the statute, 
 has been overruled. See Curtis v. Leavitt, 1 5 N. Y. 9, and referred to in text, post, 
 p. 485; see Comstock, J., in Collom v. Caldwell, 16 N. Y. 485. 
 
 * Mackie v. Cairns, 5 Cow. 547 ; Grover v. Wakeman, 11 Wend. 187. 
 
 " Barney v. Griffin, 2 N. Y. 365 ; Leitch v. HoUister, 4 Id. 211. 
 
§ 350-J THE STATUTE OF 3 HENRY VII, C. 4. 485 
 
 grantor, like that of the statute against fraudulent convey- 
 ances, has been very liberally construed by the courts. The 
 statute of 3 Hen. VII, c. 4, as may be gathered from its 
 preamble, seems to have been directed against those palpably 
 fraudulent descriptions of transfer by which a debtor, intend- 
 ing 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 professedly, and 
 indeed actually, for the benefit of creditors, and so far unob- 
 jectionable or commendable, but containijig a trust in favor 
 of the assignor, or a reservation to him on a certain contin- 
 gency, 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. 
 
 § 350. 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 farther. In this case, a trust and banking company,^ 
 having become greatly embarrassed in its affairs, and being 
 in danger of insolvency, had adopted the plan of issuing 
 bonds, first for a million, and then for half a million of dol- 
 lars, which were intended to be sold in England, in order to 
 raise money for the uses of the company. To secure the 
 payment of these bonds, the company executed two deeds 
 of trust, by which it assigned to trustees a large amount of 
 bonds and mortgages. By the terms of the deeds, the trus- 
 tees 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 hold it in trust 
 for the bondholders. After payment of all the bonds, and 
 the expenses of the trusts, the deed provided that the trus- 
 tees should hold the assigned property in trust for the com- 
 pany", and should transfer and dispose of the same as the 
 
 ' 15 N. Y. (i Smith), 9 ; see 17 Barb. 309. 
 
 '^ The North American Trust and Banking Company, organized under the gen- 
 eral banking act of the State, with a capital of two millions of dollars. 
 
486 FRAUDULENT ASSIGNMENTS. [CHAP. XXV,. 
 
 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 Good-^ 
 rich V. Downs, was prominently relied on. But the court 
 held that the statute applied only to conveyances, &c., 
 wholly or primarily for the use of the grantor,' and not to 
 conveyances for other and active purposes, where the reser- 
 vations 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 
 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 pronounced, the statute 
 relied on had been mentioned only once.^ The court fur- 
 ther held that if the statute could be considered applicable 
 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 pur- 
 poses for which it was made, and that it did not avoid the 
 entire instrument which contained the invalid use.* 
 
 ' The language of Comstock, J., is : " This statute, then, only avoids convey- 
 ances, &c., which are wholly to the use of the grantor." 15 N. Y. (i Smith), 123. 
 
 ' Comstock, J., Id. 1 14-124; Brown, J., Id. 147-149. The court understood 
 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., Id. 115. The court were of opinion that these propositions, if not individually 
 unsound, were certainly so in their aggregate result and influence upon instru- 
 ments of the class to which they were applied in the case cited. Id. 116. 
 
 * Comstock, J., Id. 117 ; Brown, J., Id. 147. 
 
 ■* Comstock, J., Id. 123, 124. This case is understood as overruling Goodrich 
 V. Downs, supra ; see CoUom 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 
 
§ 35 1-] HOW ASSIGNMENTS ARE CONSIDERED. 487 
 
 § 351. Hozv Assignments are Considered. — In determin- 
 ing whether an assignment is or is not fraudulent against 
 creditors, the question is said to be, not whether fraud may 
 be committed by the assignee, 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 subsequent fraudulent or illegal acts of the par- 
 ties can invalidate it.'' 
 
 An assignment cannot be defeated by proof that the as- 
 signees abused their trust, misappropriated the property, or 
 acted however dishonestly in its disposal.^ This is on the 
 
 of the grantor, Mr. Justice Wright summarized the construction of this provision 
 in the following words : First, the conveyance was of both real and personal es- 
 tate, 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 
 vaUd. Second, the statute only avoids conveyances, &c., 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 
 sustained by the valid purposes for which it was made. The meaning of this, 
 statute (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 convey- 
 ances, &c., wholly^ 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 pur- 
 poses, such as to secure debts or procure money on loan, 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 containsthe invalid use. And see re- 
 marks of Robertson, 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. 5871, where partnership property was as- 
 signed 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 this statutory 
 provision. 
 
 In Spies v. Boyd (i 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, 1 5 N. Y. 9 ; and see McLean v. 
 Britton, 19 Barb. 450. 
 
 ' Ward 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 Penn. 
 St. (I Har.j 589 ; Shattuck v. Freeman, i Mete. 10. See McGuire v. Faber, 25 
 Penn. St. (i Cas.) 436; Governor v. Campbell, 17 Ala. 566; Gates v. Labeaume, 
 19 Mo. (4 Benn.) 17 ; Pierce v. Jackson, 2 R. I. 35. 
 
 ' Cuyler v. McCartney, 40 N. Y. 221 ; Meeker v. Saunders, 6 Iowa, 61 ; Savery 
 V. Spaulding, 8 Iowa, 239 ; Beck v. Parker, 65 Penn. St. 262 ; Guerin v. Hunt, 6 
 Minn. 375; Hotop v. Durant, 6 Abb. Pr. 371, note; Hempstead v. Johnston, iS 
 Ark. 123 ; Mathews v. Poultney, 33 Barb. 127; Cox v. Piatt, 32 Barb. 126. 
 
488 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 principle that where a conveyance is not fraudulent at \.he 
 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 about the 
 time of the transfer, are admissible as part of the res gestcs^ 
 And where the evidence shows that the assignor and assignee 
 are combined in a conspiracy to defraud the 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 suchproof 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 gestce.^ 
 
 An assignment, if good when made, cannot be affected 
 by an act of the legislature afterwards passed, on the ground 
 that it was then known to the assignor that such act was 
 about being passed.^ Nor will a previous fij^ud always in- 
 validate an assignment, or render it liable to be set aside as 
 fraudulent.' On the other hand, an assignment, if fraudulent 
 and void when executed and delivered, will not be rendered 
 operative and valid by any subsequent act of the assignor.^ 
 
 ' Shep. Tpuchst. (>"], cited Beck v. Parker, 65 Penn. 262. 
 
 "^ Cuyler v. McCartney, 40 N. Y. 221 ; Smith v. Mitcliell, 12 Ivlich. i8o; Flani- 
 gan V. Lampman, 12 Id. 58; Bates v. Ableman, 13 Wis. 644. 
 
 " Cuyler v. McCartney, 40 N. Y. 221. 
 
 ' Howard v. Snelling, 32 Ga. 195 ; Bullis v. Montgomery, 50 N. Y. 352 ; Dun- 
 kee V. Cliambers, 57 Mo. 575; Norton v. Kearney, 10 Wis. 443; Bates v. Able- 
 man, 13 Id. 644 ; Savery v. Spaulding, 8 Iowa, 239. And see Wyckoff v. Carr, 
 8 Mich. 44 ; Hargrove v. Millington, 8 Kans. 480 ; Baldwin v. Buckland, 1 1 Mich. 
 389- 
 
 ^ Bump on Fraud. Conv. p. 549. See Adams v. Davidson, 10 N. Y. 309 ; see 
 this case commented on in Cuyler v. McCartney, 40 N. Y. 221. 
 
 " Dana v. Bank of the United States, 5 W. & S. 223. 
 
 ' Reinhard v. Bank of Kentucky, 6 B. Mon. 252 ; Cooke v. Smith, 3 Sandf. Ch. 
 333- 
 
 * AveriU V. Loucks, 6 Barb. S. C. 470; Bridges v. Woods, 16 Md. loi. See 
 Chap. XVII. 
 
§ 352-J ASSIGNMENTS VOID IN PART. 489 
 
 § 352. Extent to which Assignments may be Avoided. — 
 " It is a general, though not a universal rule," observes Chan- 
 cellor 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 in toto, and it is not permitted to stand as a security for 
 v\fhat is really due, or for any purpose 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 law, good as to part and void 
 as to the residue. But where the deed is only constructively 
 fraudulent, it is otherwise."' 
 
 The principle that where an assignment is fraudulent as 
 to any of its provisions, it is void in toto as against creditors 
 who are entitled by law to take advantage of the fraud, has 
 received the sanction 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.' 
 
 In New York, it was held by the chancellor, in Wake- 
 man V. Grover,'* that an assignment which is void in part, on 
 the ground of being against the provisions of a statute, is 
 void in toto, and no interest passes thereby to the assignee 
 
 ' 2 Tucker's Com. [443] 432. 
 
 " Pierson v. Manning, 2 Mich. (Gibbs), 446, 460 ; Caldwell -i. Williams, i Ind. 
 (Carter), 405, 411 ; Burke v. Murphy, 27 Miss. (5 Cush.) 167 ; Redfield, C. J., in 
 Mussey v. Noyes, 26 Vt. (3 Deane), 462, 472 ; i Am. Lead. Cas. 73, 74, citing 
 Mackie v. Cairns, 5 Cow. 549, 580; Goodrich v. Downs, 6 Hill, 438, 440: Fiedler 
 V. Day, 2 Sandf. S. C. 594, 597; Harris v. Sumner, 2 Pick. 129, 137; McClurg v. 
 Lecky, 3 Penr. & W. 83, 94; Irwin v. Keen, 3 Wheat. 347, 355 ; Halsey v. Whit- 
 ney, 4 Mason, 207, 230; Ticknor v. Wiswall, 9 Ala. 305, 311, ; Kissam v. Edmon- 
 ston, I Ired. Eq. 180, 184 ; Hafner v. Irwin, i Ired. L. 490, 498. 
 
 ' Pratt, J., in Pierson v. Manning, 2 Mich. 460; Perkins, J., in Caldwell v. 
 Williams, i Ind. 411 ; Redfield, C. J., in Mussey v. Noyes, 26 Vt. 472. 
 
 ■* 4 Paige, 23, 24, 37 (citing Hyslop v. Clarke, 14 Johns. 458 ; Austin v. Bell, 20 
 Id. 442) ; affirmed on appeal, Grover v. Wakeman, 1 1 Wend. 187. Redfield, C. J., 
 in Mussey v. Noyes (26 Vt. [3 Deane], 462, 472), refers to Wakeman v. Grover, 
 and also to Ames v. Blunt (5 Paige, 13), and Pratt 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. 
 
490 FRAUDULENT ASSIGNMENTS. [CHAP. XXV. 
 
 as against the creditors who did not assent to it/ And in 
 the later cases of Rogers v. De Forest,^ and Barnum v. Hemp- 
 stead,3 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 
 conveyance is inoperative, and will not transfer the title 
 in the assigned property to the trustees. In Goodrich v. 
 Downs,* it was held by the Supreme Court, that if any part 
 of an assignment be contrary to the statute for the protec- 
 tion 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 established. It was held that an assignment 
 may be void or invalid in part, and yet be valid and opera- 
 tive in its general effect, even when what is void or inopera- 
 tive is declared so by statute, unless the statute declares the 
 zvhole deed to be void.* Accordingly it was decided, that 
 
 ' Mr. Justice Scales, in Howell v. Edgar (4 111. 417, 419), in commenting upon 
 this distinction, observes: "' The statute,' says Lord Hobert, 'is like a tyrant; 
 when he comes he makes all void ; but the common law is like a nursing father, and 
 makes void only that part where the fault is, and preserves the rest, i Mod. 35. 
 But the commonlaw doth divide according to common reason, and having made 
 that void which is against law, lets the rest stand as it is.' 14 Hen. VIII, fol. 15 ; 
 Hob. 14 ; 9 Pet. 679. On the other hand, in Tenner's Case (Coke, 76), it is said ; 
 ' The common law doth so abhor fraud and covin that all 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 i;ase of Hyslop v. Clarke {14 Johns. 464), seems to think that 
 the better opinion is, that at the common law a deed fraudulent in part is alto- 
 gether void. I think the better reason is found in the former opinion in making" 
 void only so much as is .contrary to law." 
 
 ' 7 Paige, 272. '' 7 Paige, 568. 
 
 ' 6 Hill, 438. " 22 Wend. 483. 
 
 ° Opinion of Cowen, J., Id. 490. So in 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. 
 
§ 352-] ASSIGNMENTS VOID .IN PART. 49 1 
 
 an assignment in trust to sell or mortgage real estate was 
 valid as to the trust to sell, 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 confess- 
 edly valid if it stood alone, it could not be defeated or de- 
 stroyed by the mere addition of the unauthorized trust to 
 mortgage.' 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 diffi- 
 culty in applying this construction of the statute, where the 
 two trusts are wholly separate, though in the same instru- 
 ment : 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 pur-^ 
 poses are in the alternative, or when they are mixed and 
 complicated together, the separation 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 object 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 accu- 
 rate rule. This is, in substance, that when a will is good in 
 part and bad in part, "the part otherwise 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 inde- 
 pendent that it would have stood, had the testator been 
 aware of the invalidity of the rest.'' * * * Nor is this 
 
 ' Opinions of Cowen, J., 22 Wend. 487, 490 ; and of Verplanck, S., Id. 493, 494. 
 
 ^ 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, 318), in the Court of 
 
492 FRAUDULENT ASSIGNMENTS. [cHAP. XXV. 
 
 confined to devises ; the prevailing doctrine of equity (and 
 in many cases of our common and statute law also) is, that 
 when good and bad provisions are mixed in a deed, the good 
 shall be saved, so far as consistent 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 in toto" was particularly considered, and its ap- 
 plication to the case in question explicitly disclaimed. 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 neverthe- 
 less stand, provided a separation can be made. The excep- 
 tions are : First, where a statute, by its express terms, de- 
 clares the whole deed or contract void on account of some 
 provision which is unlawful ; 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 n part 
 and valid in part, is subject to the following further excep- 
 tions. 
 
 § 353. An assignment of different kinds of property in 
 trust, may be valid in respect to some portions of the prop- 
 
 Chancery. See also the case of Salmon v. Stuyvesant, 16 Wend. 321 ; Root v. 
 Stuyvesant, 18 Id. 257; Parks v. Parks, 9 Paige, 106, 117. 
 
 ' Darling v. Rogers, 22 W"end. 494, 495. 
 
 " 15 N. Y. (i Smith), 9. A distinction appears to be taken in the New York 
 cases between conveyances rendered void by fraud and trusts which are pro- 
 hibited as being liable to abuse or contrary to public policy. Thus, as we have 
 seen ante, p. 486, note 4, it has been held that under the " statute of personal 
 uses," only so much of the trusts as is obnoxious to the statute fails; and the 
 cases cited in the text lay down a similar principle as to an invalid trust to mort- 
 gage coupled with a valid trust to sell. 
 
 ^ Comstock, J., Id. 96, 97. See also Id. 123, 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. 483) ; Patterson v. Jenks (2 Pet. 235) ; 
 Norton v. Simmes (Hob. 12c); 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 pro- 
 visions may be meritorious or harmless." Dunkin, C, in Henderson v. Haddon, 
 12 Rich. Eq. 407. 
 
§ 353-] ASSIGNMENTS VOID IN PART. 493, 
 
 erty, and invalid 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 exe- 
 cuted 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 debt." So, 
 in North Carolina, it has been held that although one of 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 bona 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 cred- 
 itor, if he did not participate in the fraud of the grantor.* 
 But in a late case in New York, it was held that an assign- 
 ment, if fraudulent in respect of a principal preferred debt, 
 is void in toto, although another preferred debt, and the un- 
 preferred debts provided for, be all due in good faith. ^ 
 
 An assignment may be void as to certain parties, 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 creditors, it may be void 
 as to one assignee, and valid as to another. Thus, where a 
 debtor assigns property to two persons by one instrument, 
 "to hold to them respectively in the proportions which the 
 debts due to them respectively bear to each other," and the 
 
 ' Rogers v. De Forest, 7 Paige, 272 ; Forbes v. ScannelJ, 13 Cal. 242; see 
 Rome Ex. Bank v. Fames, 4 Abb. Ct. App. Dec. 83. 
 ^ Billups V. Sears, 5 Gratt. 31. 
 ' Harris v. De Graffenreid, 1 1 Ired. L. 89. 
 ■" Anderson v. Hooks, 9 Ala. 704. 
 
 '" Fiedler v. Day, 2 Sandf. S. C. 594; see ante, p. 143, n. 3. 
 ' As to who may vacate assignment, see post, Chap. XLIV. 
 ' Seal V. Duffy, 4 Penn. St. 274. 
 
494 FRAUDULENT ASSIGNMENTS. [CHAP. XXV. 
 
 assignment is fraudulent and void as to one of the assign- 
 ees, it is nevertheless valid as to the other, if innocent of the 
 fraud.' 
 
 So an assignment, though voidable against such cred- 
 itors as think proper to disaffirm it, is valid in favor of such 
 as choose to affirm it, and to insist upon their rights as 
 against the assignee.^ An assignment confessedly fraudu- 
 lent is good as to creditors who assent to it.^ 
 
 § 354. Finally, an assignment though void as against 
 creditors, 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 de- 
 layed, hindered or defrauded" by it. = The assignor is es- 
 topped by his own deed,^ and the assignee, as to those cred- 
 itors 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 
 creditors-; and he must account for the assigned property 
 accordingly, although he has surrendered up the assignment 
 and taken a new one upon different trusts.' 
 
 ' Prince v. Shcpard, 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. 
 
 ^ Ames v. Blunt, 5 Paige, 13 ; Mills v. Argall, 6 Id. 577 ; Bradford v. Tappan, 
 1 1 Pick. 76. 
 
 ' Hone V. Henriques, 13 Wend. 240; Bodley v. Goodrich, 7 How. 277; see 
 Geisse v. Beall, 3 Wis. 367 ; White v. Banks, 21 Ala. 705. 
 
 •" Ames V. Blunt, 5 Paige, 13; Mills v. Argall, 6 Id. 577 ; Jackson v. Cadwell, 
 I Cow. 622 ; Bradford v. Tappan, 1 1 Pick. 76 ; Norris v. Norris' Adm'r, 9 Dana, 
 318 ; Dearman v. Radcliffe, 5 Ala. 192 ; Van Winkle v. McKee, 7 Mo. 435 ; Bige- 
 low v. Baldwin, i Gray, 245 ; Whitney v. Freeland, 26 Miss, (4 Gush.) 481 ; Bel- 
 lamy 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. Id. ibid ; 
 Cushwa v. Cushwa, 5 Md. 44 ; see Laney v. Laney, 2 Ind. (Cart.) 642 ; George v. 
 Williamson, 26 Mo. 190; see Bump on Fraud. Conv. p. 443. 
 
 ^ See the statute, ante, p. 447. 
 
 ' Dearman v. Radcliffe, 5 Ala. 192. 
 
 ' Mills V. Argall, 6 Paige, 577 ; see Bellamy v, Bellamy's Adm'r, 6 Fla. 62. 
 
CHAPTER XXVI. 
 
 ASSIGNMENTS CONSIDERED IN CONNECTION WITH OTHER TRANS- 
 FERS BY THE ASSIGNOR. 
 
 An important point of view in which assignments may 
 be considered, 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 them- 
 selves affect such transfers. 
 
 § 355- Assignments in Connection with Mortgages. — 
 An assignment will sometimes be rendered void by its con- 
 nection with mortgages executed by the assignor to certain 
 creditors, and giving them preferences to others. Thus, in 
 Massachusetts, where an insolvent debtor, while the statute 
 of 1836 was in force, gave instructions, at the same time, for 
 drawing a mortgage of a part of his property to secure the 
 payment of certain creditors in full, and a general assign- 
 ment 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 assign- 
 ment ; and the mortgage was executed by the debtors, and 
 accepted by one of the mortgagees, before the execution of 
 the assignment, but the assignment 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 together 
 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 
 
 " Perry v. Holden, 22 Pick. 269. 
 
496 OTHER TRANSFERS. [CHAP. XXVI. 
 
 the same day, and nearly at the same time with making an 
 assignment under the statute, debtors gave certain mort- 
 gages to certain creditors, by which preferences were given 
 to such creditors — it was held that the fact that a debtor had 
 thus given preferences by anterior acts, though it might sub- 
 ject him to disabilities, did not render the assignment void,, 
 whatever effect it might have upon the security thus given, 
 if the creditor knew of the debtor's intention.' The dis- 
 tinction taken in this last case was that the mortgages were 
 distinct acts, not constituting one transaction with the assign- 
 ment, as in the previoiis case ; there being no privity and no 
 communication between the mortgagees and the assignee, 
 and it not appearing that the mortgagees knew of the intent 
 of the debtors to make an assignment.^ In a later case in 
 the same State, there were mortgages executed in connection 
 with an assignment, under the following 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 per- 
 sonal property. He thereupon directed his attorney to pre- 
 pare, I, a mortgage of his personal property, to secure B., 
 another of his creditors ; 2, a mortgage of the same prop- 
 erty, subject to the first mortgage, to secure A. ; 3, a gen- 
 eral assignment of all his property to B. under the statute of 
 1836, c. 238, subject 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 pre- 
 pared ; A. not knowing of the mortgage to B. till he re- 
 ceived the mortgage to himself, and having no knowledge of 
 the assignment until after it was executed and delivered, and 
 never afterwards assenting thereto. The mortgage to B. 
 having been adjudged void, because it was part of the assign- 
 ment, 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 mortgaged property against the attaching creditors of 
 
 ' Fairbanks v. Haynes, 23 Pick. 323. = Shaw. C. J., Id. 325. 
 
§ 355-] MORTGAGES. 49/ 
 
 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 
 Hampshire and Connecticut. Thus, in the former State, a 
 mortgage executed by a debtor on the same day on which 
 he made an assignment, does not necessarily render the as- 
 signment invalid. It is, however, a circumstance to excite 
 suspicion ; and if it was part of the same transaction, and re- 
 sorted 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 afterwards on the same day made a general assign- 
 ment of his property, including the mortgaged premises, to 
 two of said creditors in trust for all his creditors, under 
 the statute of 1828, c. 3 — 'it was held that the mortgage and 
 assignment, not exfecuted 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 parts of the same 
 transaction ; and both instruments were accordingly held 
 valid. 3 
 
 In a case in Iowa, a debtor made five chattel mort- 
 gages to secure 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 addition 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.* 
 
 ' Housatonic Bank v. Martin, i Mete. 294. 
 
 " Rundlett v. Dole, 10 N. H. 458. 
 
 ' Bates V. Coe, 10 Conn. 280. ■* Burrows v. Lehndorf, 8 Iowa, 96. 
 
 32 
 
-498 OTHER TRANSFERS. [CHAP. XXVI. 
 
 So in another case,' in the same State, where a debtor 
 ■conveyed a portion of his property to two creditors by mort- 
 gage, without their knowledge, and at the same time con- 
 veyed the remainder to a 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 therefore void. 
 
 But in a later case,^ in the same State, where an insolv- 
 ent firm executed a deed of certain property to one of their 
 creditors, transferred 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 
 lof their property for the benefit of remaining creditors pro 
 rata — it was held competent for the debtor to give prefer- 
 ences 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. Justice Cole, in dehvering the opinion of the court, 
 makes use of the following observations : " Tlie fact that the 
 two or more conveyances were made at nearly the same 
 ^time, has no necessary influence upon determining their 
 identity of transaction. To illustrate, a debtor may execute, 
 at the same time, two notes to different creditors for differ- 
 ent 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 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 trans- 
 action and parts of the same transfer. They are so treated be- 
 . cause they are between the same parties, and relate to the same 
 subject-matter, and are based upon the same consideration." ' 
 
 ' Cole V. Dealham, 13 Iowa, 551. ^ Lampson v. Arnold, 19 Iowa, 480. 
 
 = Citing Henshaw v. Sumner, 23 Pick. 446 ; Brown v. Foster, 2 Mete. 1 52 ; 
 Bates V. Coe, 10 Conn. 280 ; see Lampson v. Arnold, supra, affirmed in Lyon v. 
 Mcllvaine, 24 Iowa, 9. In Mower v. Hanford (6 Minn. 535), Mr. Justice Atwater 
 
§ 356.] JUDGMENTS. 499 
 
 § 356. Assignments in Connection with Judgments. — 
 An invalid assignment will sometimes have the effect of 
 rendering void a judgment confessed by the debtor in con- 
 nection 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 reservation, 
 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 assignments should be adjudged invalid, 
 connecting the judgment, and 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 exe- 
 cuted 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 trans- 
 action, and the judgment was not impaired by the abortive 
 attempt to aid it by the assignment.'' In another case, 
 where a debtor confessed a judgment to certain creditors, 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 assign- 
 said : '' There is no conclusion of law from the fact that several deeds were exe- 
 cuted 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 ^. 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. 445), where a debtor, for the purpose of giving a 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 transac- 
 tion, and void under the statute, as not providing for an equal distribution. 
 
 ' Mackie v. Cairns, 5 Cow. 547; see D'lvernois v. Leavitt, 23 Barb. 63, 64. 
 So in the case of Mitchell v. Gendell (7 Phila. 107), where an assignment was 
 made in trust for the benefit of creditors which was not recorded, and by an ar- 
 rangement between the parties, a sheriff's sale was had, at which the assignees 
 became the purchasers, they agreeing to hold the property in trust for the pur- 
 poses 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. 
 ^ Lansing v. Woodworth, i Sandf. Ch. 43, 45. 
 
500 OTHER TRANSFERS. [CHAP. XXVT. 
 
 ment was declared to be collateral to the judgment and levy, 
 and intended as additional security to the judgment cred- 
 itors, and was not, in any event, to stand in conflict with, 
 or lessen, abate, or affect the execution or the force and 
 effect of the levy, and the lien created thereby, it was held 
 that the assignment was void as containing objectionable 
 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, con- 
 fessed a judgment to the creditor, under which the property 
 was afterwards sold, it was held to be no fraud upon the 
 other creditors.'' 
 
 § 357. Assignments in Connection with other Trans- 
 fers. — In Massachusetts, it was held under the statute of 
 1836, c. 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 cred- 
 itors the day before making 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 personal estate by two partners, for the benefit of such 
 creditors as should become parties, one of the assignors con- 
 veyed some real estate (a pew) to the assignees by a separate 
 deed, for the purposes 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 treat- 
 
 ^ Dunham v. Waterman, 17 N. Y. 9; rev'g 3 Duer, 166; and see D'lvernois. 
 V. Leavitt, 23 Barb. 63. 
 
 '^ McBroom v. Turner, i Stew. 72. 
 
 ^ Brown v. Foster, 2 Mete. 152; Macomber v. Weeks, 3 Mete. 512. 
 
 ' Id. ibid. 
 
§ 357-] TRANSFERS. 501 
 
 ing them would be to consider them as one legal act, the 
 deed being subsidiary to the assignment' 
 
 But where a debtor conveyed personal property to trus- 
 tees 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 as- 
 signed 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 continue the business with the merchant's 
 sister, who was to be allowed 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 pre- 
 ferred creditors — it was held that the sale was fraudulent and 
 void as against creditors who had not affirmed the assign- 
 ment ; that the assignee was not such a bona fide purchaser 
 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 prop- 
 erty 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 bona fide purchaser without notice of the fraud.' 
 
 ' Woodward v. Marshall, 22 Pick. 468 ; Morton, J., Id. 474. 
 
 " Fiedler v. Day, 7, Sandf. S. C. 594. 
 
 ' Cooke V. Smith, 3 Sandf. Ch. 333. In Loeschick v. Baldwin (38 N. Y. 326), 
 ■where the debtor sold certain of his property on long credits, and a short time 
 thereafter 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- 
 
502 
 
 OTHER TRANSFERS. [CHAP. XXVI„ 
 
 Where a debtor makes a fraudulent transfer of his whole 
 property, 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 judgment creditor from bringing an action, 
 in the nature of a bill in equity against the debtor and the 
 purchasers, to subject the property fraudulently transferred, 
 or its proceeds, to the payment of the judgment.' 
 
 § 358. Assignments in Connection with Subsequent In- 
 struments. — Where a failing debtor assigned by deed all 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 exe- 
 cuted a writing referring to said assignment, and confirming 
 it except as to the provision for a discharge, it was held that 
 such writing was a new and valid assignment, and that the 
 assignee was entitled to a reasonable time after its execution, 
 to take possession of the property .=' 
 
 § 359. Assignments in Connection with Other Assign- 
 ments. — A conveyance apparently valid cannot be deemed 
 fraudulent merely because the same grantors had previously 
 made a conveyance of the same property, which was aban- 
 doned as fraudulent and void.^ In a case in New York, 
 where a voidable assignment was surrendered up to the as- 
 signor, 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 
 lien upon the trust property, or a right of preference previ- 
 
 signment would for that reason have been fraudulent and void as to the creditors, 
 so delayed. The question of fact, however, was found otherwise. 
 
 ' Leach v. Kelsey, 7 Barb. S. C. 466. In Ogden v. Peters (15 Barb. 560), the 
 court did not think it necessary to 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 ; " S. C. 21 N. Y. 23. 
 
 " Ingraham v. Wheeler, 6 Conn. 277. As to the effect of subsequent instru- 
 ments executed by the creditors, see Coddington v. Davis, I N. Y. 186. 
 
 " Vernon v. Morton, 8 Dana, 24.7. 
 
§ 359-] OTHER ASSIGNMENTS. 505 
 
 ous to the execution of the last assignment, could not im- 
 peach 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 pay a particular debt, and the 
 surplus after such payment to be returned to him, and at the 
 same time expressed 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 de- 
 fense to a bill filed against this trustee for an account, by a 
 second trustee to whom the same property was conveyed a 
 day afterwards in trust for the payment of other creditors,, 
 the mere intention to secure the creditors having no opera- 
 tion until carried out by some formal and legal 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 pref- 
 erences 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 appHed in the 
 first place to the payment of his individual creditors, 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 in- 
 dividual creditors of the assignors at the time of making the 
 assignment.3 
 
 ' Mills V. Argall, 6 Paige, 577. Aliter where creditors have acquired liens. 
 See Porter v. Williams, 9 N. Y. 142. And see Seal v. Duffy, 4 Barr, 274 ; Johnson 
 V. Whit well, 7 Pick. 71. As to amending and revoking assignments, see ante^ 
 Chap. XVII, and/wif, Chap. XXVII. 
 
 " Palmer v. Yarborough, i Ired. Eq. 310. 
 
 ' Bogert V. Haight, 9 Paige, 297. 
 
504 OTHER TRANSFERS. [CHAP. XXVI. 
 
 § 360. 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 debtors failed to comply with the terms of 
 the release, and subsequently executed a general assignment, 
 by which they preferred, first, certain confidential creditors ; 
 secondly, the creditors who had executed the conditional re- 
 lease ; and, thirdly, the residue of the creditors were to be 
 paid — the release was not regarded as a part of the trans- 
 action so as to make the preference conditional. 
 
 ' Spaulding v. Strong, 37 N. Y. 135; rev'g S. C. 36 Barb. 310; and 'see 
 Renard v. Graydon, 39 Barb. 548 ; Ppwers v. Graydon, 10 Bosw. 630. 
 
CHAPTER XXVII. 
 
 REVOCATION AND CANCELLATION OF ASSIGNMENTS. 
 
 § 361. An assignment 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 instru- 
 ment, necessary after execution. There have been cases, 
 however, in which, after the execution and delivery of an 
 assignment, it has been thought advisable or actually neces- 
 sary that a new and different instrument should be sub- 
 stituted ; and various modes have been adopted of disposing 
 of the deed already executed — such as a formal revocation 
 by the assignor'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 reassignment of the property 
 for the same purpose ; ^ and sometimes these acts are done 
 with the concurrence of other parties.* Under what circum- 
 stances, and to what extent, such acts of revocation or can- 
 cellation of an assignment once executed and delivered are 
 valid, so as to have the effect intended by them, are import- 
 ant considerations, which claim some attention in closing 
 the present division of the subject. = 
 
 In England, as has been shown under a previous head, 
 the doctrine 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 
 
 ' Vernon v. Morton, 8 Dana, 247. = Mills v. Argali, 6 Jaige, 577. 
 
 ' Hone V. Woolsey, 2 Edw. Ch. 289 ; Small v. Sproat, 3 Mete. 303. 
 ■* As to what amounts to an annulling of an assignment, see Ward v. Lewis, 4 
 Pick. 520. 
 
 ' In connection with the subject of this Chapter, see ante. Chap. XVII. 
 
506 REVOCATION OF ASSIGNMENTS. [cHAP. XXVII. 
 
 revocable at the. pleasure of the assignor.' But in the 
 United States, where, as a general rule, the assent of cred- 
 itors, or their union as parties to the assignment, is not neces- 
 sary to its validity, the prevailing doctrine is, that an assign- 
 ment 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 creditors, 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 de- 
 pend considerably upon circumstances, such as the time of 
 the revocation or cancellation, the motive or purpose of the 
 act, and the assent or dissent of creditors. 
 
 § 362. Thus, after the rights of creditors have once actu- 
 ally attached, ■• or after notice of the assignment to those pro- 
 vided for by it,= or after notice by creditors to the assignee 
 of their desire and intention to avail themselves of the as- 
 signment,^ or after they have taken steps to enforce the 
 trust, as by filing a bill praying for the distribution of the 
 fund according to the provisions of the deed,' or after any 
 of the trusts have been actually executed ' — it is too late to 
 
 ' See ante, pp. 151, 152, note 2. 
 
 ' Hall V. Dennison, 17 Vt. (2 Wash.) 310; Walker v. Crowder, 2 Ired. Eq. 
 478, 485 ; Ingram v. Kirkpatrick, 6 Ired. Eq. 462 ; Sevier v. McWhorter, 27 Miss. 
 (5 Cush.) 442 ; Furman 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 acceptance on the part of the creditors. Gait v. Dibrell, 10 Yerg. 
 (Tenn.) 626 ; Brevard v. Neely, 2 Sneed (Tenn.) 164; Mills v. Harris, 3 Head 
 (Tenn.) 332 ; Gibson v. Chedic, i Nev. 497 ; McKinley v. Combe, i Mont. 105 ; 
 Pitts V. Viley, 4 Bibb, 446. The assent of creditors to a fraudulent assignment 
 will not be presumed. Ashley v. Robinson, 29 Ala. 112; and see cases ante, pp. 
 383, 384. Nor will their assent be assumed where no action has been taken 
 under the assignment for many years. Gibson v. Rees, 50 111. 383. 
 
 ° See Ward v. Lewis, 4 Pick. 522. 
 
 * McCoun, V. C, in Hone v. Woolsey, 2 Edw. Ch. 289, 292. 
 
 ' Petrikin v. Davis, i Morris, 296. 
 
 " Ward v. Lewis, ubi supra. ; Brevard v. Neely, 2 Sneed, 164 ; Brown v. Cham- 
 berlain, 9 Fla. 464. 
 
 ' Robertson v. Sublett, 6 Humph. 313 ; Jones v. Dougherty, 10 Ga. 273, 
 
 ° Petrikin v. Davis, ubi supra ; Gibson v. Rees, 50 111. 383 ; Dwight v. Over- 
 ton, 35 Tex. 390; Furman v. Fisher, 4 Cold. (Tenn.) 626; Gait v. Dibrell, 10 
 Yerg. (Tenn.) 146, 158; Brevard v. Neely, 2 Sneed (Tenn.) 164. 
 
§ 362.] REVOCATION OF ASSIGNMENTS. 507 
 
 revoke the assignment. Especially is this the case where 
 the 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 subsequently 
 the assignor and assignee, without the knowledge or con- 
 sent of M., canceled the deed ; and the assignor executed 
 another assignment, putting M., K. and certain other cred- 
 itors 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.' 
 
 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 whenever consistent 
 with the rights of creditors, will be sustained. Thus, where 
 debtors made an assignment to trustees for their crieditors, 
 which contained a clause constructively fraudulent, and the 
 trustees reassigned all the property to the assignors, who 
 then made another 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.'' 
 
 Assignments are sometimes canceled with the consent 
 
 ' Messonier v. Kauman, 3 Johns. Ch. 3. 
 
 " Hone V. Woolsey, 2 Edw. Ch. 289. The 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 
 assignees ; 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 assignment, 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. (2 Wms.) 1 50 ; Conkling v. Con- 
 rad, 6 Ohio (Critch.) 611; Conkling v. Carson, 11 111. 503; Brahe v. Eldridge, 
 17 Wis. 184. 
 
5o8 REVOCATION OF ASSIGNMENTS. [cHAP, XXVII. 
 
 ■of creditors, or at their instance. Thus, in Massachusetts, 
 where an insolvent debtor made an assignment under the 
 statute of 1836, c. 238, of all his property, which was insuffi- 
 cient to satisfy the debts of the creditors 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.' 
 
 The death of a debtor who has assigned his property to 
 trustees for the benefit of creditors, does not operate as a re- 
 vocation of the trust.'' 
 
 ' Small V. Sproat, 3 Mete. 303. 
 
 ' Jones V. Dougherty, 10 Ga. 273 ; Dwight v. Overton, 35 Tex. 390. 
 
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. 
 
 § 363. In the preceding chapters, a view has been pre- 
 sented of the acts of the assignor in creating the trust, by 
 execution of the deed of assignment, and of the nature, opera- 
 tion, and other incidents of the instrument itself. The next 
 general division of the subject embraces the acts and proceed- 
 ings of the assignee, in execution of the trust, of which an 
 outline 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 
 understanding have been had with the assignor, or if the 
 assignment has 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 assign- 
 ment (where such notice is necessary), ^ executing, in some 
 States, a bond with sureties for the faithful per/ormance 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 preparations 
 made for exposing the property for sale, at the earliest prac- 
 
 ' 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. 
 
 •" Ante, Chap. XVIII. ' See post, Chap. XXIX. 
 
 ' See :post. Chap. XXX. " See post. Chap. XXX. 
 
5IO PROCEEDINGS BY ASSIGNEE. [cHAP. XXVIII. 
 
 ticable period." Out of the proceeds of the sale and collec- 
 tions, after deducting the expenses of the trust,'' distribution 
 is made among the creditors entitled under the assignment, 
 and dividends are usually paid from time to time, as moneys 
 come to the assignee'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 assignment 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 ex- 
 pressed, is to proceed with as little delay as possible, con- 
 sistently 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 exe- 
 cution of the trust, he must be governed by the directions 
 contained in the assignment itself, where they are not over- 
 ruled 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. ^ 
 
 § 364. 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 col- 
 lect the debts by process of law. These powers are usually 
 given in terms by the assignment itself, and sometimes they 
 are expressly defined by statute, of which more will be said 
 under another head.' 
 
 § 365. The liability of the assignee follows as a legal con- 
 
 ' See post. Chaps. XXXIV, XXXV. « See post. Chap. XXXVI. 
 
 = See post. Chap. XXXVII. ' Sttpost, Chap. XXXVIII. 
 
 ' See post. Chap. XXXIX. 
 
 " Morton, J., in Woodward v. Marshall, 22 Pick. 474. 
 
 ' Litchfield v. W^hite, 3 Sandf. S. C. 545 ; see post. Chap. XXXII. 
 
 ' See post. Chap. XXXII., 
 
§ 365-] EXECUTION OF THE TRUST. ' 51I 
 
 sequence of his acceptance of the trust, and the duties which 
 the assignment devolves upon him.' It is frequently ex- 
 pressly 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 misconducts, 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 
 
 The Court, of Chancery, or Supreme Court having 
 equity powers, is the proper tribunal before which an as- 
 signee may be called to account, unless a different provision 
 has been made by statute. In some of the States, partic- 
 ular courts are designated as having special jurisdiction over 
 assignees and their accounts ; as, in Connecticut the Court 
 of Probate,' in New Jersey the Orphan's Court of the 
 county,* in Pennsylvania the Court of Common Pleas of 
 the county,' in Missouri the Circuit Court,^ in Vermont the 
 Chancellor of the Circuit.' 
 
 More will be said of the duties, rights, powers, and lia- 
 bilities of assignees, under the appropriate heads in the fol- 
 lowing chapters. 
 
 ' See ante, p. 330. 
 ' See ante, p. 331. 
 ^ See post. Chap. XXXI. 
 
 ' See further, as to the liability of assignees, /orf. Chap. XL. 
 ' Rev. Stat. (ed. 1849), p. 363, c. 4, §§ 66, et seq. 
 ' Rev. Stat. (ed. 1847), p. 318, § 7. 
 
 ' Act of June 14, 1836; Dunlop's L. (ed. 1853), p. 688; Pardon's Dig. (ed. 
 1857), pp. 802-805. 
 
 ^ I Rev. Stat. (ed. 1855), c. 8, p. 202. 
 
 ' Act of Nov. 19, 1852, §§ 6, 7; Laws of 1852, p. 15. 
 
CHAPTER XXIX. 
 
 NOTICE OF THE ASSIGNMENT. 
 
 One of the first acts of the assignee, on receiving the as- 
 signment, is to give public notice of it, which is usually done 
 by advertisement in one or more newspapers,, stating, in sub- 
 stance, that the debtor has made an assignment of all his es- 
 tate to the assignee, for the benefit of his creditors, and re- 
 questing creditors to present their claims, and debtors to ac- 
 count and make payment to him. 
 
 § 366. By Statute. — In some States, notice of the assign- 
 ment is expressly required by statute. Thus, in Maine, the 
 assignee is required to give notice of the assignment within 
 fourteen days after its execution, by advertisement for three 
 weeks successively in some newspaper, if any, printed in the 
 county where either assignor lives ; if not, in the State pa- 
 per ; and three months from the execution of the assign- 
 ment are altowed to creditors to become parties.' In New 
 Jersey, the assignee, on assuming the trust, is required to 
 give three weeks' public notice to the creditors that the as- 
 signment has been made, and that the creditors present their 
 claims under oath or affirmation. Such notice is to be given 
 by advertising in two of the newspapers printed in the State, 
 circulating in the neighborhood where the creditors reside, 
 and one or more newspapers in any other State where it 
 shall be known that any creditor of the assignor resides.^ In 
 Massachusetts, under the statute of 1836, the assignees were 
 required, as soon as might be after the assignment, to give 
 notice thereof by advertisement, which was required to be 
 published not less than once a week, for three weeks suc- 
 
 ' Rev. Stat. (ed. 1857), c. 70, p. 438, § 4. 
 - Rev. Stat. (ed. 1874), p. 9, § 3. 
 
§■366.] BY STATUTE. 513 
 
 cessively.' In Missouri, the assignee, atter appointing a day 
 within six months after the date of the assignment, and a 
 place when and where he will proceed to adjust and allow 
 demands against the estate, is required to give notice of 
 such time and place, by advertisement published in some 
 newspaper printed in the county, or if there be none, in the 
 one nearest the place where the inventory is filed, for three 
 months ; and also, whenever the residence of any of the 
 creditors is known to him, by letter, addressed to such cred- 
 itors, for the same length of time.'' 
 
 In Vermont, it is held that where an insolvent has as- 
 signed all his choses in action for the benefit of creditors, 
 notice must be given. to the debtors, as is required in ordi- 
 nary cases of assignment of a chose in action, in order to 
 perfect it as against bona fide creditors and subsequent pur- 
 chasers. ^ 
 
 In New Hampshire, the assignee is required to give no- 
 tice of his appointment by publication and by posting notices 
 in the town where the debtor resided, and by such further 
 notice to creditors residing out of the county, by mail or 
 otherwise, as the judge may order, and for each week's neg- 
 lect to give either of said notices, he shall be charged by 
 the judge in his account the sum of five dollars.* 
 
 In Indiana, after complying with the requirements as to 
 filing the assignment and schedules, and giving the bond, 
 the assignee is directed forthwith to give notice of his ap- 
 pointment, by publication three weeks successively in some 
 newspaper printed and published in the county, if any there 
 be, and if not, by written notices, put up in at least five of 
 the most public places in the county, and by publication of 
 the same in some newspaper printed and published nearest 
 thereto, for the time and in the manner mentioned in refer- 
 
 ' Stats, of 1836, c. 238, § s. 
 
 ^ Stats, of Mo. (Wag. 1872), pp. 153, 154, §§ 20, 21. 
 
 ' Ward V. Morrison, 25 Vt. 593. 
 
 ' Gen. Stat. (ed. 1867), p. 263, c. 126, § 10. 
 
 33 
 
514 NOTICE OF THE ASSIGNMENT. [CHAP. XXIX. 
 
 ence to publication in the county where the assignor re- 
 sides.' 
 
 In Iowa, the assignee is required to forthwith give notice 
 of the assignment by publication in some newspaper in the 
 county, if any, and if none, then in the nearest county thereto, 
 which publication shall be continued, at least, six weeks, and 
 shall also forthwith send a notice by mail to each creditor 
 of whom he shall be informed, directed to their usual places 
 of residence, and notifying the creditors to present their 
 claims under oath to him, within three months thereafter.-' 
 
 In New York, the assignee may be authorized by the 
 county judge to advertise for creditors to present to him their 
 claims, with the vouchers, duly verified, on or before a day 
 to be specified in such advertisement or notice, not less than 
 three months from the date of the first publication of such 
 notice, which advertisement shall be by publication once in 
 each week, for four successive weeks, in such newspaper 
 printed in the county where such assignment was made, as 
 the county judge shall designate in the order authorizing 
 such publication ; and if the assignee have reason to believe 
 that any creditor entitled to share in the distribution of such 
 trust estate resides out of the State, he shall also cause such 
 notice to be published once in each week, for six successive 
 weeks, in the official newspaper of the State, and the as- 
 signee or assignees of such debtor or debtors shall, by the or- 
 der or decree of the said county judge, made on the final ac- 
 counting of such assignee, be protected against any claim or 
 demand not presented in compliance with such notice before 
 such accounting shall be had.^ 
 
 In Ohio, the assignee is required to cause notice to be 
 given in some newspaper of general circulation within the 
 county, for three successive weeks, of his appointment as as- 
 signee, and requiring creditors to present their claims.-* 
 
 'Stat, oflnd. (G. & H.) p. 115, §6. = Iowa Code (1873), p. 384, § 21 19. 
 
 = Laws of 1874, c. 600; 3 Rev. Stat. (6th ed.) p. 32. As to the effect of this 
 notice in protecting assignee upon accounting, see j*o.r/, Chap. XXXIX. 
 ' I Rev. Stat. (S. & C.) p. 710, § 4. 
 
^§ 367, 368. J OBJECT AND EFFECT OF NOTICE. 515 
 
 Notice is sometimes required to be given by the terms 
 or necessary effect of the assignment itself; in which case it 
 must, of course, be complied with. 
 
 The recording of an assignment is, in some States, suf- 
 ficient notice to creditors in the absence of fraud.' 
 
 . § 367. Object and Effect of Notice. — The object of giv- 
 ing notice 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 as- 
 signor, 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 assign- 
 ment, cannot defeat the rights of the assignee by payment to 
 the insolvent. 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, subsequently acquired.'' 
 
 In Maine, no property assigned for the benefit of credit- 
 ors is liable to attachment for six months after the first pub- 
 lication of the notice ; nor is the assignee, during that time, 
 liable to the trustee process on account thereof' 
 
 § 368. Effect of Omission of Notice. — But the neglect 
 of the assignee to give the public notice required by the as- 
 signment, does not divest the title to the property assigned ; * 
 
 ' Farquharson v. Eichelberger, 1 5 Md. 63. But the filing of an assignment in 
 the county clerk's' office in New York is not constructive notice of the conveyance 
 of real estate. Simon v. Kaliske, 6 Abb. Pr. N. S. 225. 
 
 ^ Tibbetts v. Weaver, 5 Strobh. 144; Mowry v. Crocker, 6 Wis. 326; Gordon 
 V. Freeman, 1 1 111. 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 le- 
 gal right. Forepaugh v. Appold, 17 B. Mon. (Ky.) 625. " Notice is indispensa- 
 ble to charge the debtor with the duty of payment to the assignee, so that if with- 
 out notice he paid the debt to the assignor, or it was recovered by process against 
 him, he would be discharged from the debt." Story Confl. Laws, § 396. 
 
 = Rev. Stat. (ed. 1871), p. 544, c. 70, § 7. 
 
 * See Baldwin v. Patton, 10 Watts, 60. But by statute in Maine (Rev. Stat. ed. 
 1 87 1, p. 544, c. 70, § 4), the assignment is not valid unless the notice is given as re- 
 quired. 
 
51 6 NOTICE OF THE ASSIGNMENT. [CHAP. XXIX, 
 
 and it has been held not to be necessary that the creditors 
 for whose benefit the assignment is made should have notice 
 of it, provided they afterwards assent to the provisions made 
 for their benefit.' And notice of the assignment to a bank 
 in which the debtor has funds deposited, is held to be neces- 
 sary 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.^ 
 
 ' Marbury v. Brooks, 7 Wheat. 556. 
 
 ' Beckwith v. Union Bank, 4 Sandf. S. C. 604 ; affi'd on appeal, 9 N. Y. 2ii. 
 
CHAPTER XXX. 
 
 TAKING POSSESSION OF THE PROPERTY ASSIGNED. 
 
 A very important 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 assignor, so far as it may be necessary to give validity 
 and operation to the assignment, has already been consid- 
 ered in a former chapter.' 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 en- 
 tire renunciation of all control over the property, so as to 
 give every quality of reality and good faith to the trans- 
 action. Among the acts most expressive for this purpose, 
 are the ordinar)^ 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 evidences of debt or 
 title to property. 
 
 § 369. 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 posses- 
 sion, and not depend upon the assignor to give it. He 
 should immediately enter on the premises where the busi- 
 ness has been transacted, assume the management of the 
 business itself,^ take possession of the books of account,^ 
 
 ' See ante. Chap. XIX. 
 
 " As to continuing the business, set ^osi. Chap. XXXIII. 
 
 ' In 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 subject to their order from the date of the notes, and considered their prop- 
 erty ; and the debtor afterwards made a general assignment of his property, in- 
 cluding 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 themselves, 
 
5l8 TAKING POSSESSION OF PROPERTY. [cHAP. XXX., 
 
 divest the assignor of all control of the property,' and re- 
 move 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.'' 
 The business, if continued, should not be permitted to go 
 on as before ; the change implied by the assignment must 
 be made apparent by outward unequivocal acts, such as 
 the presence and supervision of the assignee, and the keep- 
 ing 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.3 
 
 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, still 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 cred- 
 itors ; 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 suffer- 
 ing the property 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 defrauding the creditors 
 
 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. 
 
 ' As to employing the assignor as agent, seeposi, p. 521 ; and see anU, p. 262. 
 
 " Butler V. Stoddard, 7 Paige, 163; Connah v. Sedgwick, i Barb. S. C. 210; 
 Van Nest v. Yoe, i Sandf. Ch. 4; Curriev. Hart, 2 Id. 353; Wilson v. Ferguson^ 
 10 How. Pr. 175 ; Cummings v. McCullough, 5 Ala. 324; Adams v. Davidson, 10 
 N. Y. 309 ; Smith v. Leavitts, 10 Ala. 92 ; Moffat v. Ingham, 7 Dana, 495 ; Par- 
 ker V. Jervis, 3 Abb. Ct. App. Dec. 449 ; Ball v. Loomis, 29 N. Y. 412 ; Miller v.. 
 Halsey, 4 Abb. Pr. N. S. 28. 
 
 ' Connah v. Sedgwick, i Barb. S. C. 10 ; see Pine v. Rickert, 21 Id. 469. 
 
§ 370-] ASSIGNOR IN POSSESSION. 519 
 
 of the assignor/ In a case in Texas, wliere a merchant in 
 failing circumstances made an assignment of his stoclc, book 
 accounts, &c., to a trustee for the benefit of his creditors, 
 preferring some to others, and afterwards continued to 
 manage and control the business, on what agreement did 
 not appear, there being no provision therefor in the assign- 
 ment, 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 conveyed 
 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 furni- 
 ture 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 assign- 
 ees (who were young men in his employ) ; and the assignor 
 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.3 
 
 § 370. How far the Assignor may be left in Posses- 
 sion. — What has been said as to a change of possession, conse- 
 quent upon a voluntary assignment, is, of course, inapplicable 
 in those States where such a change is not essential to the 
 
 ' Pine V. Rickert, 21 Barb. 469. And in Dolson v. Kerr, 12 Sup. Ct. R. (5 
 Hun), 643, where at 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 assignor and his wife — held that the assignment was void as tending to 
 hinder, delay and defraud creditors. 
 
 '^ Wright V. Linn, 16 Tex. 34. 
 
 = Caldwell v. Williams, I Ind. (Cart.) 405, 407 ; and see Smith v. Mitchell, 12 
 Mich. 180; Flanigan v. Lampman, 12 Mich. 58; Constantine v. Twelves, 29 Ala. 
 607. 
 
520 TAKING POSSESSION OF PROPERTY. [CHAP. XXX. 
 
 validity of the transfer.' But even where it is held to be in- 
 dispensable, it does not imply an immediate and total exclu- 
 sion of the assignor from the premises or property assigned. 
 Thus, he may be left for a limited time in possession of the 
 house or farm which he has occupied with his family, to- 
 gether with the furniture, implements, &c., 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. In a 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 posses- 
 sion of part of the property assigned ; to live in the house 
 and on the farm ; to have the custody and use of the farm- 
 ing 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 assignee, and in 
 furtherance of the objects of the assignment during the pro- 
 ceedings 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 Michigan, where the assignees allowed one of the as- 
 signors 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 mean time 
 taking the crops from the premises, and expressing their in- 
 tention to charge the assignor occupying the premises the fair 
 rent — it was held that such fact, in the absence of any under- 
 
 ' See ante, p. 370. In Flanigan v. Lampman (12 Mich. 58), Mr. Justice 
 Christiancy made these observations: ''Possession of the assigned property by 
 the assignor, 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 as- 
 signment should be allowed to be shown as bearing upon the question of intent." 
 
 ' Strong V. Carrier, 17 Conn. 319. 
 
§ j7^-] assignor as agent. 521 
 
 standing 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 
 business operations, the rule is usually more strict ; but even 
 in these cases, it is subject to the qualification noticed under 
 the next head. 
 
 § 371. I/ow far the Assignor may act as Agent of the 
 Assignee. — The object of the rule just mentioned, requiring 
 a change in the possession of assigned property, and in the 
 mode of transacting the assignor's business, is to exclude the 
 assignor from all control over the property which he has for- 
 mally 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 intended 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 availing himself of the 
 services of the assignor for the same purpose. Indeed, these 
 services are in many cases important, and in some indispen- 
 sable to the due and faithful execution of the trust ; "" and 
 they are sometimes stipulated for in the terms of the assign- 
 ment itself.3 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 
 
 » HoUister v. Loud, 2 Mich. (Gibbs), 310 ; Wing, P. J., Id. 319. 
 
 " 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. 
 
 ' Marks v. Hill, 15 Gratt. 400. 
 
 • Hitchcock V. St. John, ubi supra; Nicholson v. Leavitt, 4 Sandf. S C. 252, 
 272; s. C. 6 N. Y. 510; 10 N. Y. 591 ; Vernon v. Morton, tcbi supra ; Shattuck 
 V. Freeman, i Mete. 10, 14 ; Clark v. Craig, 29 Mich. 398 ; Blow v. Gage, 44 111. 
 208; Hall V. Wheeler, 13 Ind. 371 ; 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, 4 B. 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, 3 W. & S. 307; Deckhard 
 V. Case, 5 Watts, 22 ; Bump on Fraud. Conv. p. 380. 
 
522 TAKING POSSESSION OF PROPERTY. [CHAP. XXX. 
 
 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 action. 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 de- 
 fraud creditors.' 
 
 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 employ- 
 ment advertised for at least three successive weeks.^ It is 
 
 ' Browning v. Hart, 6 Barb. S. C. 91 ; Nicholson v. Leavitt, ubi sufira. See 
 Jackson v. Cornell, i Sandf. Ch. 348. In a case in Illinois, where a debtor in fail- 
 ing circumstances, and after suit brought, made a bill of sale of a stock of goods, 
 &c., to a creditor, by way of preference, and delivered them to the purchaser, who 
 employed the trader as his agent and principal clerk, and leased to him the house- 
 hold furniture — it was held that, though the emplojTnent 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, 14 111. 386. 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 busi- 
 ness at the same place, had the sign changed to his own name, opened a set of 
 books, and procured another book-keeper, the vendors remaining 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 corresponding change of 
 possession, under the circumstances, as would authorize the court to say, as mat- 
 ter of law, that the sale was void as against creditors. Dunlap v. Bournon- 
 ville, 26 Penn. 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 for- 
 mer clerks were discharged by the assignor and all again employed by the as- 
 signee to take charge of and remain with the goods of the assignee. 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 con- 
 tinued change of possession. 
 
 " Gen. Stat. (rev. of 1875), p. 383, tit. 18, c. 11, § 24. But if such appoint- 
 ment is made without the assent of the Court of Probate, and before an inventory 
 is returned, it renders the assignment fraudulent in law and void as against cred- 
 itors. Peck V. Whiting, 21 Conn. 206. This course, of publicly advertising the 
 agency of the assignor, was approved by the assistant vice chancellor, in Hitch- 
 cock v. St. John, Hoff. Ch. 511, 521. 
 
§§372>373-] NOT IN assignor's hands. 525 
 
 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 fideh 
 ity and for the rendering of a true account of the property 
 and of its disposal to the court/ 
 
 § 372. 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 on a sale to the 
 debtor, the conditions not , being performed, he is liable in 
 equity to the seller for the proceeds of the goods, unless they 
 have been applied under the trust without notice.^ 
 
 § 373- Taking Possession of Property not in Assignor's 
 Hands. — ^The assignee is entitled to the possession of the 
 debtor's property, wherever it may be, or in whoseso- 
 ever 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 as- 
 signee should, as soon as possible, give notice to the master ; 
 and if neither the vessel nor cargo return in specie, so that no 
 possession 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 em- 
 braced in the assignment, and conveyed by it, is in the hands 
 of third persons claiming some lien upon it. In such cases, 
 the assignee should take the necessary steps for ascertaining 
 
 ' Rev. Stat. (rev. of 1875), p. 383, § 24. " Sttpost, Chap. XL. 
 
 ^ Haggerty v. Palmer, 6 Johns. Ch. 437. 
 
 '' Wheeler v. Sumner, 4 Mason, 183 ; Meeker v. Wilson, i Gall. 419, 423, 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 Kelly v. Crapo, 45 N. Y. 86. 
 
 ' Parker, C. J., in Gardner v. Rowland, 2 Pick. 599, 602; Dawes v. Cope, 4 
 Binn. 258 ; Bholen v. Cleveland, 5 Mason, 174 ; and see ante, p. 374. As to a 
 constructive taking of possession, see ante, p. 374 ; Griffin v. Alsop, 4 Cal. 406, 
 
524 TAKING POSSESSION OF PROPERTY. [cHAP. XXX. 
 
 the particulars of such property, by demanding access to or 
 inspection ®f 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 au- 
 thority of the assignee, accompanied by notice and evidence 
 of such authority. A demand by the assignor will not ena- 
 ble the assignee to maintain his suit for conversion.'' 
 
 In Connecticut, it has been provided by the statute reg- 
 ulating assignments, that whenever any person shall have in 
 his custody or possession, or under his control, any goods or 
 chattels belonging to an estate assigned, or any bills, bonds, 
 notes, accounts, or anything belonging to such estate, 
 whether claiming any lien thereon or not ; and, on demand 
 ■of the same by the trustee, shall refuse to deliver them, or 
 give a satisfactory account of them to the trustee, or, if 
 claiming to have a lien thereon, shall refuse to disclose the 
 amount of his claim, and when and how the same accrued, 
 and all particulars in relation thereto ; or shall refuse to 
 exhibit any document or writing relating thereto, or to fur- 
 nish to the trustee an inventory of the property upon which 
 he claims to have a lien, or to give the trustee and appraisers 
 reasonable access to the assigned property, that they may 
 make an inventory thereof, the Court of Probate in which 
 the estate is pending for settlement, upon application of the 
 trustee, may cite such person to appear before it, and may 
 examine him on oath concerning the matters complained of ; 
 and if such person shall refuse to appear, or be examined, 
 or to answer the interrogatories put to him by the court, or 
 to give reasonable access to the assigned property, the court 
 may issue a warrant for the commitment of such person to 
 prison. 3 
 
 § 374. Taking Possession of Leasehold Premises^- — 
 Where a debtor, being also a lessee of premises (such as a 
 
 ' And see Mann v. Huston, i Gray, 250. 
 
 ^ See Griffin v. Alsop, 4 Cal. 406. ' Rev. Stat. (ed. 1875), p. 392, § 30. 
 
§ 374-] LEASEHOLD PREMISES. 525 
 
 Store used for the sale of goods), makes a general assign- 
 ment 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 assignor, and to enter under it, he be- 
 comes so bound.^ Taking possession of the premises, for 
 the purpose of selling the goods assigned, and actually sell- 
 ing them thereon, amounts in law to such an acceptance, 
 and binds the assignee accordingly.^ And it is immaterial 
 how long the possession is retained, as when once the elec- 
 tion is made, the assignee cannot recede from it.'* The case 
 is different where the assignee enters only for the purpose 
 of obtaining possession of the goods.' 
 
 ' Pratt V. Levan, I Miles (Pa.) 358. But where the existence of the lease was 
 not disclosed to the assignee, who collected from subtenants of a small portion 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 rot thereby made 
 liable on the lease for rent accruing subsequent to the assignment. Dennistown 
 V. Hubbell, 10 Bosw. 155 ; but see Jones v. Housman, lo Bosw. 168. 
 
 = Goldthwaite, J., in Dorrance v. Jones, 27 Ala. 630, 633 ; citing Carter v. 
 Hammett, 12 Barb. 253; Bourdillon v. DaJton, i Esp. Cas. 233; Copeland v, 
 Stevens, i R & Aid. 593. In the case of Hovarty v. Davis (16 Md. 313), which 
 was ver}' 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 Turner 
 V. Richardson, 7 East, 336; and Gibson v. Courthope, i D. & R. 201 ; 16 Eng. 
 C. L. 33. In Jermain v. Pattison (46 Barb, g), where the assignees leased the- 
 premises for the best they could obtain, and paid to the landlord all that they re- 
 ceived, which was accepted by him, and they surrendered 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. 
 
 " Goldthwaite, J., ubi supra, citing Welch v. Myers, 4 Camp. 368 ; Clark v. 
 Hume, R. & M. 207. See the New York case of Miir v. Glinsman, in the Supe- 
 rior Court, Jan. Gen. Term, 1856. But in the case of Journeay v. Brackley, in the. 
 N. Y. 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 a short 
 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. 
 
 * Goldthwaite, J., ubi supra. 
 
 " Id. ibid, citing Hanson v. Stephenson, i B. & Ad. 305. 
 
CHAPTER XXXI. 
 
 INVENTORY AND APPRAISEMENT OF THE PROPERTY.— BOND BY 
 
 THE ASSIGNEE. 
 
 § 375- O^^ ^^ the earliest duties of an assignee is to 
 ascertain the extent and particulars of the assigned property. 
 A very material guide for this purpose is the inventory 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.' 
 
 In some of the States, before the assignee can proceed 
 to act under the assignment, he is required by statute to 
 have the property inventoried and appraised, and to give 
 bond for the faithful execution of the trust. In Rhode 
 Island, New Jersey, Pennsylvania, Missouri, and Indiana,'' 
 the inventory and appraisement are the first acts required. 
 In Maine and Connecticut, the bond is first in order ; one 
 of the conditions of the bond in Maine being the return of 
 an inventory. 
 
 § 376. Maine. — Thus, in Maine, the assignee, before 
 entering upon his duties, is required to give bond with suffi- 
 cient sureties living in the county, to the judge of probate, 
 in such sum as he orders, conditioned as follows : First, to 
 make and return into the probate office, within ten days 
 after the time allowed for creditors to become parties to the 
 assignment,' a true inventory, on oath, of all the real estate, 
 goods, chattels, rights, and credits of the assignor, which have 
 
 ' See the observations of Sandford, A. V. C, in Cram v. Mitchell, i Sandf. Ch. 
 255. 
 
 = I Stat, of Ind. (ed. 1870), p. 114, § 67; Black v. Weathers, 26 Ind. 242. 
 
 = This period is three months from the execution of the assignment. See ante, 
 p. 512, 
 
§§ 377' 378-] VERMONT — CONNECTICUT. 527 
 
 come to his possession or knowledge, whether contained 
 in the assignment or not, and the names of all the creditors 
 who have become parties thereto, with a list of their re- 
 spective claims ; Second, to make proportional distribution 
 of all the net proceeds of such estate among such creditors 
 as become parties to the assignment ; Third, to render a 
 true account of his doings, on oath, to the judge of probate, 
 within six months, and at any other time when cited by the 
 judge.' This bond must be filed and approved by the judge 
 within ten days after the execution of the assignment.'' 
 
 The assignment is not valid against attaching creditors 
 unless the bond is filed and approved by the judge of pro- 
 bate within ten days after the execution of the assignment.' 
 
 § 377. In Vermont, the assignee is required to execute 
 to the Probate Court for the district in which the assignor 
 resides, a good and sufficient bond with sureties to the satis- 
 faction of said court, conditioned for the faithful perform- 
 ance of the trust, and this bond is required to be given at 
 the time of making the assignment.'' 
 
 If a copy of the assignment and inventory and the bond 
 are not executed and filed as required, the property assigned 
 is liable to trustee process and to attachment and execution 
 at the suit of the creditors of the assignor, the same as if no 
 assignment had been made, but not after such copies and 
 bond have been executed and filed, and so far the assign- 
 ment is for such cause operative against the creditors of the 
 assignor, but no farther. ^ 
 
 § 378. In Connecticut, the trustee is required to give 
 good and sufficient bond with surety, to the judge of the 
 Court of Probate and his successors in office, in such sum as 
 
 ' Rev. Stat. (ed. 1871), p. 544, c. 70, § 3. 
 
 Md. § 5. = Id. § 5. 
 
 " Act of November 10, 1857, § 2; Laws of 1857, p. 13. This was in amend- 
 ment of the act of November 14, 1855, § 2, which allowed ten days after the mak- 
 ing of the assignment for the execution of the bond. Gen. Stat. (1870), p, 454, 
 §4. 
 
 " Gen. Stat. (1870), p. 454, § 6. 
 
528 INVENTORY OF THE PROPERTY. [cHAP. XXXI. 
 
 the court shall require, conditioned for the faithful execution 
 of the trust, according to law ; and the court may at any 
 time require further bond with like condition, if, in their 
 opinion, the bond already given is insufficient ; and on fail- 
 ure of the trustee to procure such bond, the court may re- 
 move him and appoint another trustee in his stead.' The 
 trustee is further required, with the assistance of two or 
 more disinterested and judicious persons, under oath, ap- 
 pointed by the court, to make within such time as the court 
 shall prescribe, not exceeding two months from the time of 
 making the assignment, a true and perfect inventory and ap- 
 praisement of the estate assigned, according to its just value ; 
 and also to make an inventory of the credits and choses in 
 action, and cause duplicates to be made of such inventories, 
 one of which is to be sworn to by the trustee, and depos- 
 ited with the court, and the other to remain with the trustee.'' 
 
 § 379. In Rhode Island, the assignee may be required, 
 on application of any creditor interested in the assignment, 
 and upon cause shown, to render on oath an inventory of 
 all the effects, estate, and credits conveyed by the assign- 
 ment, so far as the same can be ascertained ; and to give 
 bond with sufficient sureties, for the faithful performance of 
 the trusts. The power to require such inventory and bond 
 is given to the Supreme Court, or a justice in vacation, to 
 whom the inventory must be rendered. The bond must be 
 given to the clerk of such court for the time being, in the 
 in the county where the process is commenced, the sureties 
 to be approved by the court or justice, and is declared to 
 inure to the benefit of all the creditors interested in the as- 
 signment, according to its provisions.^ If the assignee neg- 
 lect or refuse to render such inventory, or give such bond 
 when so required, the court or justice is authorized to re- 
 move him, and to appoint one or more suitable persons to 
 
 ' Gen. Stat. (rev. of 1875), p. 382, tit. 18, c. ii, § 15. 
 ^ Gen. Stat. (rev. of 1875), p. .387, §§ i et seq. 
 ^ Gen. Stat. (ed. 1872), p. 404, §§ 11, 12. 
 
§§ 380, 381.] NEW HAMPSHIRE — NEW YORK. 529 
 
 receive, hold, and dispose of the assigned property, with 
 all the rights and estates, and subject to all the duties and 
 liabilities of the assignee so removed.' 
 
 § 380. In New Hampshire, the assignee is required 
 Avithin ten days after the execution of the assignment, to file 
 in the office of the register of probate of the county where 
 the debtor resides, a copy of such assignment, a schedule of 
 all the property embraced in it, and the estimated value 
 thereof, and the incumbrances thereon, and a list of the 
 names and residences of all the creditors of the debtor, and 
 the amount and nature of their respective claims, verified 
 by the oaths of the debtor and assignee to be true according 
 to the best of their information, knowledge and belief'' 
 
 The assignee is also required to give to the judge of 
 probate for the county a good and sufficient bond with 
 sureties for the faithful performance and discharge of his 
 duties, which bond shall be approved by the judge and 
 filed, and shall inure for the benefit of the debtor and all his 
 creditors, and may be prosecuted in the manner provided for 
 administration bonds.^ 
 
 If the assignee fail to file the copy of assignment, sched- 
 ule and list of creditors within ten days, or such bond in five 
 days, or within such further time as the judge may allow, he 
 shall cease to be assignee, and the judge shall have the same 
 jurisdiction to require a new bond and to remove any as- 
 signee, as is provided by law in the case of administrators.* 
 
 § 381. In New York, every debtor making an assign- 
 ment under the act of 1860,' is required at the date thereof, 
 or within twenty days thereafter, to make and deliver to the 
 county judge * of the county in which such debtor resided at 
 the date of the assignment, an inventory or schedule con- 
 
 ' Ibid. p. 405, § 13; seeEarlev. Willard, 2 R. I. 517. 
 
 " Gen. Stat. (ed. 1867), p. 262, c. 126, § 4. ■ ' Id. ibid. § 7. 
 
 • Gen. Stat. (ed. 1867), p. 263, c. 126, § 8. 
 
 • Laws of i860, c, 348, § 2 ; 3 Rev. Stat. (6th ed.) p. 32 ; Fay's Dig. vol. I, p. 394. 
 
 • This includes the judges of the Court of Common Pleas in and for the city 
 and county of New York. In the Matter of Morgan, 56 N. Y. 629. 
 
 34 
 
530 INVENTORY OF THE PROPERTY. [cHAP. XXXI^ 
 
 taining, (i), a full and true account of all the creditors of 
 such debtor or debtors ; (2), the place of residence of each 
 creditor, if known to such debtor, and if not known the 
 fact to be so stated ; (3), the sum owing to each creditor 
 and the nature of each debt or demand, whether arising on 
 written security, account, or otherwise ; (4), the true cause 
 and consideration of such indebtedness in each case, and the 
 place where such indebtedness arose ; (5), a statement of 
 any existing judgment, mortgage, collateral or other security 
 for the payment of any such debt ; (6), a full and true in- 
 ventory of all such debtor's estate at the date of such assign- 
 ment, both real and personal, in law and in equity, and the 
 incumbrances existing thereon, and of all vouchers and 
 securities relating thereto, and the value of such estate 
 according to the best knowledge of such debtor ; (7), an 
 affidavit shall be made by such debtor and annexed to and 
 delivered with such inventory or schedule, that the same is 
 in all respects just and true according to the best of such 
 debtor's knowledge and belief' 
 
 § 382. By the amendatory act of 1874, it is provided that 
 in case the debtor shall omit or refuse to make and deliver 
 such inventory or schedule and affidavit, the assignment 
 shall not for such reason become invalid and be ineffectual ; 
 but in such case the assignee or assignees named in such as- 
 signment may, within six months after the date thereof, 
 cause to be made and filed in the clerk's office of the county 
 where such debtor or debtors resided or conducted their 
 business at the date of such assignment, an inventory or 
 schedule of all the property of such debtor which he or they 
 may be able to find ; and for that purpose the county judge 
 of such county may at any time compel such delinquent 
 debtor to disclose any knowledge or information he may 
 
 " Scott V. Guthrie, lo Bosw. 408 ; Cook v. Kelly, 14 Abb. Pr. 467. The inven- 
 tory should be filed in the same office where the assignment is recorded. Act of 
 i860, § 6 ; see ante, p. 344. In New York city, the inventory is deposited with 
 the clerk of the Court of Common Pleas, who is deputy county clerk for the special 
 purpose. See Produce Bank v. Baldwin, 49 How. Pr. 277, rev'd ; and see Albany 
 L. J. Dec. 9, 1876. 
 
§ 3^3-] NEW YORK. 531 
 
 have relative to the matters hereinbefore mentioned, in the 
 manner prescribed in the fourth section of the act." 
 
 § 383. By the third section of the act of 1 860, as amended, 
 it is provided that the assignee or assignees named in such 
 assignment shall, within ten days after the delivery to the 
 county judge of the inventory or schedules above specified, 
 (and before he shall have power or authority to sell, dispose 
 of, or convert to the purposes of the trust any of the assigned 
 property), enter into a bond to the people of the State of 
 New York, in an amount to be ordered and directed by the 
 county judge of the county where such debtor or debtors 
 resided at the date of such assignment, with sufficient sureties, 
 to. be approved of by such judge, and conditioned' for the 
 faithful discharge of the duties of such assignee or assignees, 
 and for the due accounting for all moneys received by such 
 assignee or assignees, which bond shall be filed in the county 
 clerk's office where the assignment is recorded.^ 
 
 The question has been several times before the courts 
 whether a compliance with this section is essential to the 
 validity of the assignment. It was directly before the Court, 
 of Appeals in the case of Juliand v. Rathbone,^ and Mr. Jus- 
 tice Grover, in delivering the opinion of the court, after dis- 
 cussing the provisions of the statute, remarked : " I think 
 the true construction of the statute makes a strict observance 
 of sections two + and three essential to the validity of the as- 
 
 ' Previous to this amendment, it had been decided by the Court of Appeals, in 
 Juliand v. Rathbone, 39 N. Y. 369, that the making and delivery of the inventory 
 and schedules were a necessary part of a valid assignment, and a prerequisite of 
 vesting an absolute title to the property in the assignee. This decision reversed 
 Juliand v. Rathbone, 39 Barb. 97, and Hardmann v. Bowen, 39 N. Y. 196. The 
 cases in the courts below were conflicting. In Juliand v. Rathbone (39 Barb. 
 97) ; Van Vliet v. Slauson (45 Barb. 317) ; Evans v. Chapin (12 Abb. Pr. 161 ; s. 
 C. 20 How. Pr. 289) ; Barbour v. Everson (16 Abb. Pr. 366); Read v. Worthing- 
 ton (9 Bosw. 617), it was held that the statute was in this respect simply directory. 
 The cases of Camp v. Marshall (2 Abb. Pr. N. S. 373) ; Fairchild v Gwynne (i& 
 Abb. Pr. 23 ; S. C. 14 Abb. Pr. 121), however, held a contrary opinion. 
 
 ' Laws of 1875, c. 56 ; 3 Rev. Stat. (6th ed.) p. 33. 
 
 = 39 N. Y. 369 ; see Camp v. Marshall, 2 Abb. Pr. N. S. 373 ; Fairchild v. 
 Gwynne, 16 Abb. Pr. 366; Hodges v. Bungay, 10 Sup. Ct. R. (3 Hun), 594. But 
 see contra, ]n\\a.nA v. Rathbone, 39 Barb. 97; Van Vliet v. Slauson, 45, Barb. 
 317; Evans v. Chapin, 20 How. Pr. 289; Barbour v. Everson, 16 Abb. Pr. 366. 
 
 * This decision was prevous to the amendment of 1874 ; see preceding section. 
 
532 INVENTORY OF THE PROPERTY. [CHAP. XXXI. 
 
 signment, and that a non-compliance renders the assignment 
 void as to creditors whenever their rights to the property 
 attached. The point has since been raised in the Court of Ap- 
 peals, in the case of Syracuse & N. Y. R. R. Co. v. Collins/ 
 and Thrasher v. Bentley.^ Neither of these cases is reported 
 in full. The first one seems to have been decided upon the 
 authority of Hardmann v. Bowen,' and no allusion is made 
 to Juliand v. Rathbone.'' The decision is reported as hold- 
 ing that, " An assignment properly executed is operative 
 from the time it is made, and the filing, giving bond, and 
 other things required, are to be done afterwards within the 
 time named in the act." 
 
 InThrasher v. Bentley, the objection was taken that the 
 bond was approved by the special county judge of MorTroe 
 county, instead of by the county judge. It was held that, 
 " Even if the bond was invalid for that reason, it did not affect 
 the validity of the assignment," but it was also held that the 
 bond was properly approved by special county judge. 
 
 The case of Juliand v. Rathbone has not been overruled 
 Tinless such is the effect of Thrasher v. Bentley and Syracuse 
 R. R. Co. V. Collins. The question may therefore still be 
 regarded as an open one. 
 
 In the late case of Van Horn v. Elkins,^ which was the 
 case of an application on the part of an assignee in bank- 
 ruptcy for the appointment of a receiver of the assigned 
 estate, on the ground, among others, that the conventional 
 assignee had failed to file the bond required within the time 
 specified, the general term of the first department, in re- 
 versing the order appointing the receiver, held that the 
 assignment was not void because of the omission to file the 
 necessary bond.* 
 
 " 57 N. Y. 641. ^ 59 N. Y. 649. 
 
 ' 39 N. Y. 196. ' 39 N. Y. 369. 
 
 ' Not yet reported. Gen. Term First Dept. Oct. term, 1876. 
 
 ' Mr. Justice Brady, in delivering the opinion of the court, after considering the 
 •statute and its amendments, observes ; " When the assignor omits or refuses to 
 make the inventory, a case is presented for which in reference to the bond of the 
 assignees no provision is made, and upon a strict construction of the statute no 
 bond could be exacted in such a case, because the contemplated inventory is not 
 
§ 384-] NEW JERSEY — PENNSYLVANIA. 533 
 
 § 384. In New Jersey, the assignee is required, immedi- 
 ately on assuming the trust, to exhibit to the surrogate of 
 the county where the debtor resides, under oath or affirma- 
 tion, a true inventory and valuation of the debtor's estate, 
 so far as has come to his knowledge, and then and there tO' 
 enter into bond to the ordinary of the State, in double the 
 amount of the inventory and valuation, with sufficient se- 
 curity for the faithful performance of the trust. The bond,, 
 inventory, and valuation, are to be filed in the surrogate's 
 office before the assignee can proceed to execute the trust/ 
 
 In Pennsylvania, the assignees are required, within thirty 
 days after the execution of the assignment, to file in the 
 office of the prothonotary of the Court of Common Pleas; 
 of the county in which the assignor shall reside, an inven- 
 tory or schedule of the estate or effects assigned, accom- 
 panied with an affidavit by the assignees that the same is a 
 full and complete inventory of all such estate and effects, so 
 far as the same has come to their knowledge." Appraisers 
 are then alppointed by the Court of Common Pleas, or any 
 judge thereof in vacation, who, having been first sworn or 
 affirmed, are required to proceed forthwith to make an ap- 
 praisement of the estate and effects assigned, and having 
 completed the same, to return the inventory and appraise- 
 ment to the court, where it is filed of record.^ As soon as 
 such inventory and appraisement have been filed, the as- 
 signees are required to give a bond or bonds, with at least 
 two sureties, to be approved by one of the judges of the 
 
 given. The assignees nevertheless would not only then have the right them- 
 selves to make the inventory, but to invoke the power of a court to assist in its 
 preparation. An inchoate right to the property would in the mean time vest in 
 them for the purposes of the trust (Juliand v. Rathbone, 39 N. Y. 369), although 
 they would not be empowered to dispose of it until the required bond was given. 
 The object of the inventory is to aid in determining the amount of the bond to be 
 given. It seems, therefore, taking all the provisions of the act of i860 and its 
 amendments into consideration, that the omission to execute and file a bond 
 would not per se invalidate an assignment, and such appears to have been the 
 decision of the Court of Appeals in the case of Thrasher v. Bentley (59 N. Y. 
 648), the report of which is, however, meagre and unsatisfactory." 
 
 ' Rev. Stat. (ed. 1874), p. 9, § 3 ; see Laws of 1876, c. i6o. 
 
 ' Purdon's Dig. (Brightley, loth ed.) p. 92, pi. 9 ; see Reigart's Appeal, 4. 
 Penn. St. 479 ; Baldwin v. Patton, 10 Watts, 60. 
 
 ' Purdon's Dig. (Brightly, loth ed.) p. 92, pi. 10, 11, 12. 
 
534 INVENTORY OF THE PROPERTY. [cHAP. XXXI. 
 
 court, in double the amount of the appraised value of the 
 estate assigned.' The statute prescribes the form of the 
 bond,= which is to be filed in the office of the prothonotary 
 of the court, and to be entered by hirn of record, and is de- 
 clared to inure to the use of all persons interested in the 
 property assigned.^ 
 
 § 385. In Ohio, the assignee, within ten days after the 
 delivery of the assignment to him, and before disposing of 
 the property so assigned, is required to enter into an under- 
 taking payable to the State, in such sum and with such sure- 
 ties as shall be approved by the judge, conditioned for the 
 faithful performance by said trustee of his duties according 
 to law, on which undertaking any person injured by the 
 misconduct or neglect of duty of the assignee in regard to 
 said trust, may bring an action in his own name against the 
 assignee and his sureties, to recover the amount to which he 
 may be entitled by reason of the delinquency.'' His failure 
 to comply with this requirement will empower the probate 
 judge to remove the assignee and appoint another in his 
 stead. 5 
 
 The assignee, within thirty days after entering upon 
 the discharge of the trust, unless for good cause shown, 
 the probate judge shall allow a longer time, shall file 
 in the office of the probate judge, an inventory verified 
 under oath, of the property, money, rights and credits of the 
 assignor, which shall have come into his possession or 
 knowledge.^ The property so inventoried is to be appraised, 
 
 ' Ibid. pi. 13. A bond with a single surety is not void. Mears v. Common- 
 ■wealth, 8 Watts, 223. But the giving this bond is not a condition precedent ; and a 
 sale by the assignee without giving it is good. Dallarn v. Fitler, 6 W. & S. 323 ; 
 Heckman v. Messinger, 49 Penn. St. 465. If he neglects to file an inventory or 
 give bond, the remedy is to cite him before the court to show cause why he 
 should not be dismissed. Id. Ibid. The assignee is answerable, though he has 
 jiot given bond. Whitney's Appeal, 22 Penn. St. (10 Har.) 500. 
 
 " Purdon's Dig. (Brightley, loth ed.) p. 93, pi. 14. ' Ibid. pi. 14. 
 
 * Act of March 16, i860 ; Rev. Stat. (S. & C.) p. 709, § i. 
 
 ° Ibid. § 2, amended by act of April i6, 1874; Sayler Stat. vol. 4, pp. 32, 50, c. 
 27, §4. 
 
 " Ibid. 
 
^§ 386, 387.] IOWA INDIANA. 535 
 
 and schedules of the debts and liabilities of the assignor 
 ;are also to be filed/ 
 
 § 386. In Iowa, in addition to the schedule required 
 to be annexed to the assignment, the assignee is directed 
 forthwith to file with the clerk of the District or Circuit 
 Court of the county where the assignment is recorded, a true 
 and full inventory and valuation of the estate, under oath, 
 so far as the same has come to his knowledge, and to then 
 and there enter into bonds to the clerk for the use of the 
 • creditors, in double the amount of the inventory and valua- 
 tion, with one or more sufficient sureties to be approved by 
 the clerk for the faithful performance of the trust, and the 
 assignee may thereupon proceed to perform any duty neces- 
 sary to carry into effect the intention of said assignment.'' 
 But the assignment shall not be declared void for the want 
 of any list or inventory. ^ 
 
 The assignee shall from time to time file with the clerk, 
 an inventory and valuation of any additional property which 
 may come into his hands under the assignment, after the 
 filing of the first inventory, and the clerk may require him 
 to give additional security.* 
 
 § 387. In Indiana, the assignee is required = within thirty 
 days after entering upon the duties of his trust, to make 
 and file, under oath, a full and complete inventory of all 
 the property, real and personal, the rights, credits, interests, 
 profits and collaterals which shall have come to his hands, 
 or of which he may have obtained knowledge as belonging 
 to the assignor. And it is further made his duty, whenever 
 any property not mentioned in said inventory comes to his 
 
 " Ibid. ' Code of Iowa (1873), p. 383, § 2118. 
 
 ' Ibid. p. 384, § 2124. The failure of the assignee to file an inventory as re- 
 quired by the statute, does not render the assignment void. Price v. Parker, 1 1 
 Iowa, 144; Wooster v. Stanfield, 11 Iowa, 128. Before filing the inventory or 
 bond, the assignee may bring an action of replevin to recover the assigned prop- 
 erty. Price V. Parker, ubi supra. An imperfect or defective inventory cannot be 
 ireated as a nullity. Drain v. Mickel, 8 Iowa, 438. 
 
 ' Code of Iowa (1873), p. 385, § 2125. 
 
 ' Stat, of Ind. (G. & H. 1870), p. 115, § 6. 
 
536 INVENTORY OF THE PROPERTY. [cHAP. XXXI, 
 
 hands, or when he obtains satisfactory information of the 
 existence of such property, to file an additional inventory of 
 the same. Appraisers are then appointed, whose duty it 
 then is to make an appraisal of the property, under oath.' 
 
 § 388. In Missouri, it is made the duty of the assignee, 
 within thirty days after the execution of the assignment, to 
 file in the office of the clerk of the Circuit Court of the 
 county in which the assignor, or if there be more than one 
 in which any one of them, shall reside (unless longer time be 
 allowed by the judge of the court), an inventory of the prop- 
 erty and effects assigned, verified by his affidavit.^ Ap- 
 praisers are then appointed by the Circuit Court or a judge 
 in vacation, who, having first taken oath, proceed to ap- 
 praise the property and effects inventoried,^ and are required 
 to file the appraisement in the office of the clerk of the 
 Circuit Court within five days after completing it.'* As soon 
 as the inventory and appraisement are filed, the assignee is 
 required to give bond, with at least two sufficient sureties,, 
 to be approved by the court, or judge or clerk in vacation, 
 in once and a half the amount of the appraisement.' The 
 statute prescribes the form of the bond,* which is required 
 to be filed in the office of the clerk of the court in which 
 the inventory is filed, and to be recorded and presented, if 
 taken in vacation, to the Circuit Court at the next session.'^ 
 The court approve or reject the bond taken in vacation, and 
 the approval or rejection is to be entered on record.^ If the 
 bond is rejected, the assignee is required to give a new bond 
 within such time as the court may direct, not exceeding 
 thirty days ; and if he fail so to do, his authority to further 
 act as assignee is to be deemed revoked.' The first bond 
 is to be valid until the new one is given, notwithstand- 
 ing its rejection, and the new one when approved relates 
 
 ' Ibid. p. 1 16, §§ 7, 8. •" Gen. Stats. (Wagner), vol. I, c. 9, § 2_ 
 
 " Id. §§ 3, 4. " Id. § 5- 
 
 ' Id. § 8. • Id. § 9. ' Id. § 10. 
 
 "Id. §11. » Id. § 12. 
 
§§ 389. 390'] MARYLAND — CALIFORNIA. 53/ 
 
 back and is operative from the date of the assignment' 
 Any person injured by breach of the condition of the bond 
 may sue thereon in the name of the State for his use." If 
 the assignee neglects to file an inventory or give bond as re- 
 quired, he may be cited to show cause why he should not be 
 dismissed.3 
 
 § 389. In Maryland, every trustee to whom any estate, 
 real, personal or mixed, is limited or conveyed for the 
 benefit of creditors, is required to file with the clerk of the 
 court in which the deed or instrument creating the trust is 
 recorded, a bond in such a penalty as the clerk may pre- 
 scribe, being as nearly as can be ascertained double the 
 amount of the trust estate, with, sureties to be approved by 
 the clerk conditioned for the faithful performance of the 
 trust ; and it is further provided that no title shall pass to 
 any trustee until such bond shall be filed and approved, and 
 no sale made by any such trustee without such bond shall be 
 valid or pass any title to such properry or estate.'' 
 
 If the trustee fail or refuse to give the bond for three 
 months after the assignment is recorded, he may be removed 
 and a new trustee appointed.^ 
 
 § 390. In California, the provisions of the civil code in 
 reference to inventoiy and bond to be given and filed by the 
 assignee are substantially the same as those of the New York 
 act of 1860,^ and it is also provided that until the inventory 
 and affidavit have been given and the bond filed, the assignee 
 has no authority to dispose of the estate, or convert it to the 
 purposes of the trust' 
 
 ' Id. § 13- ' Id. § 14. 
 
 ' Id. § 26, p. 207. But 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 assignment. Hardcastle v. Fisher, 24 Mo. 70. 
 
 * Law of Md. 1874, c. 483, § 107. 
 
 'Id. §§ 109, no. 
 
 ' See anU, p. 529 ; see Civil Code, §§ 3462, 3467 ; Hitt. §§ 8462, 8467. 
 
 ' Ibid. § 3468 ; Hitt. § 8468. 
 
CHAPTER XXXII. 
 
 RIGHTS, DUTIES, AND POWERS OF THE ASSIGNEE. 
 
 The rights and powers with which the assignee becomes 
 invested by the assignment, and the duties to which it sub- 
 jects him, have already been generally noticed. In the 
 present chapter they will be considered more particularly. 
 
 § 391. 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 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 sub- 
 ject to the right of set-off in the debtors.' He takes interests 
 
 ' Luckenbach v. Brickenstein, $ W. & S. 145. In California, it is provided by 
 the Civil Code (§ 3460 ; Hitt. § 8460), that an assignee for the benefit of creditors 
 is not to be regarded as a purchaser for value, and has no greater rights than the 
 assignor had in respect to things in action transferred by the assignment. 
 
 '^ Moody v. Litton, 2 Ired. Eq. 382 ; Frov\r v. Downman, 1 1 Ala. 880. 
 
 ° Leger v. Bonaffe, 2 Barb. S. C. 475 ; Addison v. Burckmyer, 4 Sandf. Ch. 
 498; Reed v. Sands, 37 Barb. 185; Van Heusen v. Radcliffe, 17 N. Y. 580; 
 •O'Hara v. Jones, 46 111. 288; Willis v. Henderson, 4 Scam. 13 ; Stovf v. Yar- 
 wood, 20 111. 497 ; Goodwin V. Mix, 38 111. 115; Mellon's Appeal, 32 Penn, St. I2i ; 
 Plunkett V. Carew, i Hill Ch. (S. C.) 169 ; Thorpe v. Dunlap, 4 Heisk. (Tenn.) 
 €74 ; 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 
 Mete. (Ky.) 391 ; Roberts v. Corbin, 26 Iowa, 311;. 
 
 ' Corning v. White, 2 Paige, 567 ; Haggerty v. Palmer, 6 Johns. Ch. 437 ; 
 Walker v. Miller, 11 Ala. 1067 ; Tibbets v. Weaver, 5 Strobh. 144. 
 
 ° Coming v. White, 2 Paige, 567. 
 
 ' Fry V. Boyd, 3 Gratt. 73 ; See Ainslie v. Boynton, 2 Barb. S. 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, II Ired. 505. As to what debts can be set off, ste.post, p. 555. 
 
§ 39I-] HOW THE ASSIGNEE TAKES. 539 
 
 of devisees in land subject to legacies charged upon them.' 
 He takes buildings subject to liens for materials." And he 
 takes deposits in bank subject to any lien of the bank exist- 
 ing at the time of the assignment.^ He takes real estate 
 subject to the equitable lien of the vendor for purchase 
 money.* 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 attach- 
 ments made within sixty days preceding the execution of 
 the assignment, all such attachments being declared by the 
 statute to be dissolved. = 
 
 In the case of Dey v. Dunham,^ in the Court of Chan- 
 cery in New York, it was held that a general assignee in 
 trust for creditors was to be considered as a bona fide pur- 
 chaser as against a prior unrecorded mortgage, he not having 
 had due notice of such.' 
 
 But in a later case,^ in the same State, where a debtor 
 had executed a chattel mortgage upon certain furniture as 
 security for rent, but the mortgage was unrecorded, and the 
 debtor subsequently executed a general assignifient 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 pro- 
 ceeds of the furniture against the assignee of the lease. In 
 Missouri, assignees have been treated as bona fide ■^M.rcY^d&ets 
 
 ' Swoyer's Appeal, $ Barr, 377. 
 
 ^ Twelves v. Williams, 3 Whart. 485. 
 
 ' Beckwith v. Union Bank, 4 Sandf. S. C. 604 ; affi'd 9 N. Y. 211. 
 
 - Corn V. Saus, 3 Mete. (Ky.) 391 ; Thorpe v. Dunlap, 4 Heisk. (Tenn.) 674. 
 
 ■■ Gen. Stat. (rev. of 1875), p. 393, tit. 18, c. 11, § 25. 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. 
 
 ° 2 Johns. Ch. 188 ; reversed on other grounds in 15 Johns. 555. 
 
 ' This was a case of deed with defeasance, the deed only being recorded. 
 
 ' Van Heusen v . Radcliff, 17 N. Y. 580, Denio, J., discussing Dey v. Dun- 
 ham, supra ; Haggerty v. Palmer, 6 Johns. Ch. 437 ; Slade v. Van Vechten, 1 1 
 Paige, 21. 
 
540 DUTIES OF THE ASSIGNEE. [cHAP. XXXII. 
 
 for a valuable consideration." And the same rule appears to 
 prevail in Virginia." 
 
 So in Michigan, in the case of Hollister v. Loud,^ an as- 
 signee was held by the Supreme Court to be, in legal con- 
 templation, a purchaser for a valuable consideration. ■* But 
 in the later case of Pierson v. Manning,^ in the same court, 
 the doctrine was denounced as "an absurdity."* And the 
 prevailing rule now is, that neither the assignee nor the cred- 
 itors whom he represents are purchasers for a valuable con- 
 sideration, 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 Massachusetts, a general assignment of a debtor's prop- 
 erty, in trust for the payment of his debts, and containing 
 a release of such debts by the creditors, was held not to con- 
 stitute the assignees bona fide purchasers for a valuable con- 
 sideration as against one having an equitable title to a portion 
 of the property, unless it be shown that some new responsi- 
 bility was incurred on the credit of the property, or that the 
 creditors would not have become parties to the indenture if 
 they had known that such portion of the property was held 
 by the debtor in trust.' And in New York, it has been held 
 
 ' Gates V. Labeaume, 19 Mo. 17 ; see Wise v. Wimer, 23 Id. 237; Hardcastle 
 V. Fisher, 24 Id. 70. 
 
 ° Evans v. Greenhow, 15 Gratt. 153 ; Exchange Bank v. Knox, 19 Gratt. 739. 
 In the case of Wickham v. Martin (13 Gratt. 427), it was held that where an insolv- 
 ent 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 pay- 
 ment of his debts, the trustee having no notice of the fraud, the trustee is a pur- 
 chaser for value without notice. 
 
 '' 2 Mich. (Gibbs), 309. 
 
 'Wing, P. J., Id. 312, citing 2 Johns. Ch. 189; 10 Pick. 413; 2 Kent's 
 Com. 533; Roberts on Fraud. Conv. 434; Gorham v. Reeves, i Smith (Ind.) 
 239- 
 
 ' 2 Mich. (Gibbs), 445. ' Pratt, J., Id. 433. 
 
 ' Haggerty v. Palmer, 6 Johns. Ch. 437 ; Knowles v. Lord, 4 Whart. 500 ; 2 
 Kent's Com. [532] 689, note; see Walker v. Miller, 11 Ala. 1067 ; Maas v. Good- 
 man, 2 Hilt. (N. Y.) 275; Griffin v. Marquardt, 17 N. Y. 28 ; Ried v. Sands, 37 
 Barb. 185 ; WiUis v. Henderson, 5 111. 13. 
 
 ' Frow V. Downman, 11 Ala. 880 ; Clark v. Flint, 22 Pick. 231. 
 '■' Clark V. Flint, 22 Pick. 231. 
 
§ 392.] DUTIES AND POWERS OF ASSIGNEE. 541 
 
 that where an execution is in the hands of the sheriff at the 
 time of a general assignment of the property of the defend- 
 ant in the execution for the payment of his debts, the lien 
 6f the execution upon the personal property liable to seizure 
 and sale thereon is paramount to the title of the general as- 
 signee, the latter not being a bona fide purchaser within the 
 intent and meaning of the Revised Statutes, which protects 
 the title of bona fide purchasers who have purchased between 
 the delivery of the execution to the sheriff and an actual levy 
 upon the property.' 
 
 § 392. 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 possession of the property assigned, to con- 
 vert it into money by the process of collection and sale, and 
 to distribute the proceeds among the creditors entitled. 
 The first of these duties has already been particularly con- 
 sidered.^ The others will be treated of in like manner, 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 purpose of obtaining their advice or assent 
 to his proceedings.'' He may avail himself of the assistance 
 of the assignor, but should not allow him to direct as to the 
 management and disposal of the property.^ He must be 
 governed throughout by the terms and provisions of the 
 deed, so far as they can be legally pursued.' 
 
 ' Slade V. Van Vechten, 11 Paige, 21. 
 
 ' See Chap. XXX. ' See Chaps. XXXV, XXXVI, XXXVIII. 
 
 * McLellan's Appeal, 26 Penn. St. (2 Cas.) 463. In Bullitt 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. 
 
 ' In the case of Mussey v. Noyes (26 Vt. [3 Deane], 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 discussed, and under the advice so obtained they had acted. See also Forbes 
 V. Scannell, 13 Cal. 242. 
 
 " Caldwell v. V\^illiams, i Ind. (Cart.) 405, 407. 
 
 ' Id. ibid. ; Page v. Olcott, 28 Vt. (2 Wms.) 469. The duties and obligations 
 
542 DUTIES OF THE ASSIGNEE. [CHAP. XXXII. 
 
 All the acts of trustees within the scope of their authority 
 conferred by the deed, and within the duties imposed by law,, 
 bind the creditors, the debtor and themselves : unauthorized 
 acts do not, and they 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 ex- 
 pressly provided by statute that, " When the trusts shall be ex- 
 pressed in the instrument creating the estate, every sale, con- 
 veyance or other act of the trustees in contravention of the 
 trust shall be absolutely void." So when the assignees recon- 
 veyed certain of the trust property to the assignor before the 
 payment of all the debts provided 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 — held 
 that the assignees had no power to reconvey before the exe- 
 cution 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 incon- 
 sistent with the deed.' But it is said that the rule which 
 prohibits a trustee from acquiring an interest adverse to his 
 cestui que trust does not apply to a bona fide creditor who 
 has become trustee ; and that such trustee may purchase a 
 judgment against his cestui que trusts In the process of 
 collection, sale, and distribution, he is bound to use all rea- 
 sonable dispatch.' And in general, he is bound not to do 
 anything which can place him in a position inconsistent 
 
 of the assignee are created by the deed, and they can neither be enlarged, dimin- 
 ished, or varied by any arrangement between the cestuis que trust without his con- 
 sent. Geisse v. Beall, 3 Wis. 367. 
 
 ' Field V. Flanders, 40 111. 470. '' i Rev. Stat. 730, § 65. 
 
 ' So in Indiana. I Rev. Stat, of Ind. (ed. 1870), p. 631, § 5 ; see Hodgson v. 
 Macey, 8 Ind. 122 ; Wright v. Bundy, 11 Id. 400. 
 
 * Briggs V. Davis, 20 N. Y. 15, 21. 
 
 ° Harrison v. Mock, 10 Ala. 185. 
 
 ' Prevost V. Gratz, Peters C. C. 373. 
 
 ' Paige v. Olcott, 28 Vt. 469. This is made the subject of express provision, by" 
 the Vermont act of November 19, 1852, § 5. 
 
§ 393-] CUSTODY OF PROPERTY, 543 
 
 with the interests of the trust, or which can have a tendency 
 to interfere with his duty in discharging it.' 
 
 § 393. Custody of Property. — An important part of the 
 assignee's duties relates to the custody and management of 
 the property, 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 pur- 
 pose.= Thus, he may effect and continue necessary insur- 
 ance,' 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 stat- 
 ute.5 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 assignment, without interfering with the 
 right to the other property assigned.* But he cannot im- 
 prove real estate by erecting buildings, or do any other act 
 tending to delay creditors.' Where the property assigned 
 is growing crops, he may employ the necessary assistance to 
 harvest and secure them.^ 
 
 In regard to personal property, the assignee has a simi- 
 lar 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 oppor- 
 tunity to sell, it must be taken care of till a favorable change 
 in the market occurs.^ And if it be unsalable, he may com- 
 
 ' Bellamy v. Bellamy's Adm'r, 6 Fla. 62 ; Hamilton v. Wright, i Bell's (Scotch) 
 Appeal Cas. 574. 
 
 ^ 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 dele- 
 gate his duties under the assignment, to a stranger. Small v. Ludlow, i Hilt. (N. 
 Y.) 1 89. As to his power to convey by attorney, see post. Chap. XXXV. 
 
 ^ Harris, J., in Whitney v. Krows, 11 Barb. 198, 201, 202. 
 
 * Id. ibid. ' Rev. Stat. (ed. 1847), p. 319, § 13. 
 " Pratt V. Levan, i Miles, 358. 
 
 ' Hitchcock V. Cadmus, 2 Barb. S. C. 381 ; Hurlbut, J., Id. 383, 385. 
 
 • Harris, J., in Whitney v. Krows, 11 Barb. 202. 
 
 ° This, of course, is subject to the general rule against delaying sales, hereafter 
 noticed. 
 
544 DUTIES OF THE ASSIGNEE. [cHAP. XXXII. 
 
 plete 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. ^ 
 
 § 394. Powers in General. — The assignee is clothed with 
 all the necessary powers to obtain possession of the property 
 assigned, and to collect the debts by process of law ; and 
 in some States he may avoid a previous fraudulent assign- 
 ment.'' 
 
 He may attack the validity of a judgment entered upon 
 the confession of his assignor, ^ and he may contest for the 
 benefit of creditors the claims of a mortgagee under a de- 
 fective mortgage, to a preference in the distribution of the 
 proceeds.* 
 
 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.^ 
 
 As incident to his general powers, the assignee has 
 power to appoint 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 serv- 
 ices.' 
 
 § 395- The powers of an assignee are sometimes ex- 
 
 ' Morton, J., in Woodward v. Marshall, 22 Pick. 474. 
 
 = Sseposi, Chap. XXXIII-. ' Rev. Stat. (ed. 1847), p. 319, § 13. 
 
 ' Van Heusen v. Radcliffe, 17 N. Y. 580; Englebert v. Blanjot, 2 Whart. 240; 
 overruling, as to this point, the case of Thompson y. Dougherty, 12 S. & R. 448; 
 and see Brownell v. Curtis, 10 Paige, 210, 211 ; see the New York act of April, 
 17, 1858. 
 
 ' Nichols V. Kribs, 10 Wis. 79. 
 
 • The Sixth Ward Building Assoc, v. Willson, 41 Md. 506. 
 
 ' Moddewell v. Keever, 8 W. & S. 63. 
 
 ' Briggs v. Palmer, 20 Barb. 392, 404; Briggs v. Davis, 21 N. Y. 574; S. C. 
 20 N. Y. 15. 
 
 " Vernon v. Morton, 8 Dana, 247 ; see anU, p. 310. In a head note to Cannon 
 V. Kelly, 12 Sup. Ct. (S 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. The case is not reported in full. 
 
§ 395-] POWERS IN GENERAL. 545 
 
 pressly defined by statute. Thus, in New Jersey, it is de- 
 clared that every assignee shall have as full power and au- 
 thority to dispose of all estate, real and personal, assigned, 
 as the debtor had at the time of the assignment ; and to sue 
 for and recover, in the proper name of the assignee, every- 
 thing belonging or appertaining to the estate, real or per- 
 sonal, of the debtor ; and shall have full power and author- 
 ity to refer to arbitration, settle, and compound, and to 
 agree with any person concerning 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 any assignee or other trustee of the property 
 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, in- 
 cluding 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 who shall, in fraud of 
 the rights of creditors and others, have received, taken, or 
 in any manner interfered with the estate, property, or effects 
 of any insolvent corporation, association, partnership or 
 individual, shall be liable in the proper action, to the trus- 
 tees of such estate or property for the same, or the value of 
 any property 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 apply for the benefit of creditors, all property conveyed 
 or transferred by the assignor, previous to and in contem- 
 
 ' Rev. Stat. (1874), p. 10, § 13. In Van Keuren v. McLaughlin (21 N. J. Eq. 
 163), where it was ascertained that a previous absolute conveyance by the assign- 
 or was, in fact, a mortgage, and that a certain other absolute conveyance exe- 
 cuted by the assignor, was fraudulent 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. 
 
 " Act of April 17, 1858, § I ; Laws of 1858, c. 314, p. 506; 3 Rev. Stat. (6th 
 ed.) p. 146, § I. 
 
 ' Id. § 2. 
 
 35 
 
546 DUTIES OF THE ASSIGNEE. [CHAP. XXXII. 
 
 plation of the assignment, with the design to defeat, delay- 
 er 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 power and authority to dispose of all estate, real and 
 personal, assigned, as the debtor had at the time of the as- 
 signment, 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. He 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 fraudulent and void as 
 against attaching creditors, is equally void as against him.' 
 
 And in Michigan,* Minnesota,^ and some other States, 
 it is provided by statute that every beneficial power, and the 
 interest of every person entitled 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 
 vested, under any general assignment of the estate and 
 effects of such person for the benefit of creditors, made pur- 
 suant to law. 
 
 The powers of surviving and substituted assignees, and 
 the liability of assignees in general, will be considered here- 
 after, under distinct heads. 
 
 ' Rev. Stat. (ed. 1871), p. 545, c. 70, § 8. An assignee may maintain a bill to 
 recover 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. 
 
 ' Iowa Code (1873), p. 385, § 2127. 
 
 ° Gen. Stat. (rev. of 1875), p. 378 ; see Shipman v. JEtna. Ins. Co. 29 Conn. 245 ; 
 Robertson v. Todd, 31 Conn. 555 ; Thomas v. Beck, 39 Conn. 241 ; Crosvvell v. 
 AUis, 25 Conn. 301 ; Palmer v. Thayer, 28 Conn. 257; Calhoun v. Richards, 30 
 Conn. 210. 
 
 ' Compiled Laws (1871), p. 1337, §4172. 
 
 ' I Stat, at Large (Bissel), p. 511. 
 
CHAPTER XXXIIl. 
 
 TO WHAT EXTENT THE ASSIGNOR'S BUSINESS MAY BE CON- 
 TINUED BY THE ASSIGNEE. 
 
 § 396. As a general rule, the effect of a general assign- 
 ment of a debtor's property is to put an end to the trans- 
 action 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 continua- 
 tion of the business for a limited time, with a view to the 
 more beneficial execution of the trust. The cases in which 
 stipulations of this kind have been sustained, were consid- 
 ered under a previous head.' 
 
 Independently, however, of any authority contained in 
 the assignment, 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 assignment, and he has a large amount 
 of material on hand for the purpose of being manufactured, 
 the assignee can conduct the business in his own name, for 
 the purpose of working up the material thus ready for man- 
 ufacture, 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 necessarily incident to the principal 
 powers granted to the assignee. " Where the estates of in- 
 solvent men," it was said, " are liable to be transferred, and 
 that too, generally, without much discretion in the selection 
 
 ' See ante, p. 263. 
 
 ^ Patten's Estate, 2 Pars. (Penn.) Select Eq. Cas. 108, ' 22 Pick. 468. 
 
548 ASSIGNEE CONTINUING BUSINESS. [cHAP. XXXIII^ 
 
 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 exercise the power of preparing it for market, it will 
 often perish or be sacrificed. Of the propriety and expedi- 
 ency 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 action." ' 
 
 § 397. 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 assign- 
 ment 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, that was not necessary for working that off on 
 hand. But this was done with the assent and by the advice 
 of the creditors, who had been called together for the pur- 
 pose. ^ 
 
 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.'' 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 inter- 
 ested 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 de- 
 
 ' Id. 475. ' 26 Vt. (3 Deane), 462. ' Id. 464. 
 
 * Patten's Estate, 2 Pars. (Penn.) Select Eq. Cas. 108; see Doyle v. Smith, i 
 Cold. (Tenn.) 15. 
 
 ' Patten's Estate, 2 Pars. (Penn.) Select Eq. Cas. 108. 
 
§ 397-] ASSIGNEE CONTINUING BUSINESS. 549 
 
 fended suits brought against her, and ran her on joint ac- 
 count, and she was finally lost by fire," it was held to be in- 
 consistent with his duty for the assignee to run the steam- 
 boat 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 obtained, 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 run- 
 ning the vessel." Thus, where a stock of goods in a retail 
 business is assigned, the assignee cannot continue the busi- 
 ness and retail the goods, as before, with the view of ob- 
 taining higher prices, but must sell off at once.'' And even 
 where he is allowed to retail the goods for a limited time, 
 as a more beneficial course to creditors than an immediate 
 ■sale at auction, the sales must be uniformly for cash,^ and 
 there must be no new purchases with the proceeds,* nor any 
 act done or permitted which can prevent the business from 
 being at any time brought to an immediate close. 
 
 And in Connecticut, the trustee may be authorized by 
 the Court of Probate, before which the estate is in settle- 
 ment, to work up and complete any stock and materials in 
 an unfinished state, which belong to such estate, if it shall 
 find that it will be for the interest of creditors.^ 
 
 ' Duffy V. Duncan, 35 N. Y. 187 ; s. C. 32 Barb. 587; see Dunham v. Water- 
 man, 17 N. Y. 9; rev'g 3 Duer, 166. 
 
 ' Hart V. Crane, 7 Paige, 37, 38 ; and see Whallon v. Scott, 10 Watts, 237 ; 
 American Exchange Bank v. Inloes, 7 Md. 380. 
 
 ' See Meacham v. Stemes, 9 Paige, 398. 
 
 ' See Connah v. Sedgwick, i Barb. S, C. 210. 
 
 • Gen. Stat. (rev. of 1875), p. 384, § 28. 
 
CHAPTER XXXIV. 
 
 COLLECTION OF DEBTS AND RECOVERY OF PROPERTY.— ACTIONS 
 
 BY THE ASSIGNEE. 
 
 § 398. 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.'' He should pro- 
 ceed with promptness, 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 exe- 
 cution and sold, and the purchasers remained in peaceable 
 possession for five years before suit brought by the trustee 
 or cestui que trust to recover it, it was held in Virginia that 
 the statute of limitations was a bar to the recovery.* 
 
 In New Jersey, the assignee is expressly empowered by 
 statute to sue for and recover, in his proper name, every- 
 thing belonging to the estate, real or personal, of the debtor, 
 with full power and authority to refer to arbitration, settle 
 and compound, and agree with any person concerning the 
 same.5 
 
 In Connecticut, the proceedings where parties having 
 property of the assignor in their hands refuse to deliver it to 
 
 ' Ogden V. Prentice, 33 Barb. 161. 
 
 ' Irwin V. Keen, 3 Whart. (Pa.) 347. 
 
 ' It is the duty of the trustee to use all necessary means, by action or other- 
 wise, to realize the debts ; if a 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 ; see Winn v. Crosby, Sup. Ct. Gen. Term, Daily Register, Dec. 14, 1876- 
 
 * Sheppards v. Turpin, 3 Gratt. 373. 
 
 ' Rev. Stat. (ed. 1874), p. 10, §13. 
 
§ 398-J COLLECTION OF DEBTS. 55 1 
 
 the assignee, are regulated by statute, the particulars of which 
 have already been given." 
 
 It is also provided that trustees in insolvency of the estate 
 of corporations shall have the same power to call for and 
 collect unpaid capital as its .directors would have had, and 
 may proceed in the same manner to such an amount as the 
 Court of Probate may direct.^ 
 
 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, although they had never taken actual possession 
 of them. 3 And an assignee may make a contract with coun- 
 sel for the recovery of assets assigned.'' 
 
 So in the same State, it has been held that the assignee of 
 a corporation may enforce the power of the corporation to 
 make the calls upon stockholders necessary to enable him 
 to settle with creditors. = 
 
 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 interfered with the estate, property or effects 
 of any insolvent corporation, association, partnership or 
 individual, to recover such property or its value, and dam- 
 ages.^ 
 
 " Ante, p. 524. ' Gen. Stat. (rev. of 1875), p. 383, tit. 18, c. n, § 22. 
 
 " Hower v. Geesaman, 17 S. & R. 251. 
 
 ■■ McLellan's Appeal, 26 Penn. St. 463. 
 
 ° Germantown Pass. R. R. Co. v. Filler, 60 Penn. St. 155. But see Ohio Life 
 Ing. & Trust Co. v. Merchants' Ins. & Trust Co. 11 Humph. (Tenn.) i ; Vi^right 
 V. McCormick, 17 Ohio St. 86. 
 
 » Act of April 17, 1858, § 2 ; Laws of 1858, c. 314, p. 506 ; 3 Rev. Stat. (6th 
 ed.) p. 146. 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 com- 
 mon of the goods with the other member, and, of course, with the trustee or as- 
 signee 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 attachment against the assignor, and that as against 
 creditors the assignment was void for fraud, and that the defendant acted as attor- 
 ney for the creditor who caused the attachment to issue. Fallon v. McCunn, 7 
 
552 COLLECTION OF DEBTS. [cHAP. XXXlV. 
 
 § 399. Actions and Defenses against Creditors. — An 
 important class of actions by assignees are those which are 
 instituted for the recovery of property assigned, which has 
 been taken under attachments or executions issued in behalf 
 of creditors of the assignor, and it is in actions of this class 
 that questions involving the validity of assignments are con- 
 stantly raised and determined. The defense of actions by 
 creditors against assignors, where the assignees are sum- 
 moned as trustees or garnishees, belongs to the same general 
 head.' 
 
 § 400. 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." 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 he will also be entitled to an 
 injunction against the assignor, restraining him from wasting 
 the property.3 
 
 In Indiana, property fraudulently withheld by the as- 
 signor or transferred, may be recovered by summary pro- 
 ceedings on a warrant 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 application of the assignee or any creditor ; and the court 
 may, upon or after such examination, make and enforce any 
 
 Bosw. (N. Y.) 141. But an assignment cannot be attacked collaterally in an action 
 brought by the assignee. Ogden v. Prentice, 33 Barb. 160 ; Waterbury v. West- 
 ervelt, 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. 
 
 ' In Missouri, on the trial of an issue between the plaintiffs in an attachment 
 and the assignees summoned as garnishees, the assignment is prima facie evi- 
 dence that the persons therein named as creditors are, in fact, such. Gates v. La- 
 baume, 19 Mo. 17 ; see also Hutchinson v. Lord, i Wis. 286. 
 
 ' Pike V. Bacon, 21 Me. (8 Shep.) 280. 
 
 ' Keyes v. Brush, 2 Paige, 311. 
 
 ' I Stat, of Ind. (G. & H.) p. 117, § 15. 
 
40I-J ACTIONS AGAINST ASSIGNOR. 
 
 553 
 
 order, upon proper partie swhich 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.' 
 
 § 401. Where property obtained by the debtor as a fraud- 
 ulent vendee, comes into the hands of his assignee for the 
 benefit of creditors, the assignee stands in the place of his as- 
 signor, 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 deipand, 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, instead of disafiSrming the contract of sale, affirms 
 it by bringing suit thereon and prosecuting it to judgment, 
 neither he nor a receiver appointed in supplemental proceed- 
 ings instituted upon such judgment, can set up the fraud in 
 the sale for the purpose of defeating an assignment of the 
 property made by the vendee for the benefit of creditors, al- 
 though the assignment was made in furtherance of the fraud, 
 with full notice thereof on the part of the assignee. 
 
 The vendor had the option either to disaffirm the con- 
 tract and retake the goods, or sue for their wrongful conver- 
 sion, 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, 
 
 ' Act of April 27, 1872; Sayler's Stat. vol. 3, p. 2759, c. 2232. 
 
 ' Bliss V. Cottle, 32 Barb. 322 ; Kraft v. Dalles, 7 Ohio St. 116 ; Kennedy v. 
 Thorp, 51 N. Y. 174. But see the rule in Virginia to the contrary. Wickham v. 
 Martin, 13 Gratt. 427. 
 
 ' Bliss V. Cottle, supra. 
 
154 COLLECTION OF DEBTS. [cHAP. XXXIV. 
 
 md the choice between them once being made, the right to 
 oUow the other is forever gone.' 
 
 Assignees have the authority — although not expressly 
 riven them in the assignment — to compromise or compound 
 ;uch debts as cannot be wholly collected, provided they act 
 n good faith and do what is best for the creditors under the 
 nrcumstances.' 
 
 This power is frequently conferred in the assignment, 
 md in general is unobjectionable. ^ It is expressly given by 
 statute in some of the States. Thus, in Indiana,* the trustee 
 nay compound or compromise any debt or claim belonging 
 ;o the assignor which cannot otherwise be recovered with- 
 3Ut endangering the loss of the entire claim or debt. So in 
 Dhio, it is provided that the assignee shall have power, by 
 the direction of the probate judge, to compound and com- 
 promise any debt, claim or demand on behalf of his assignor 
 that, in his opinion, cannot be otherwise recovered or col- 
 lected.= 
 
 § 402. Costs. — In New York, it has been held that se- 
 curity for costs cannot be demanded of assignees under a 
 voluntary assignment for the benefit of creditors, who prose- 
 cute a suit in the name of the assignors ; and that such suit 
 is not within the statute ' entitling 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 conventional as- 
 signments, but rather for a class of trustees created by opera- 
 tion of law, under the various statutes concerning insolv- 
 ent debtors.' By statute, any assignee may recover from 
 his cestui que trust all necessary and reasonable costs and 
 
 ' Kennedy v. Thorp, 51 N. Y. 174 ; rev'g 2 Daly, 258 ; Morris v. Rexford, 18 
 N. Y. 552 ; Bank of Beloit v. Beale, 34 N. Y. 473. 
 ' Anon. V. Gelpcke, 13 Sup. Ct. (5 Hun), 245. 
 
 = See ante, p. 310. * i Stat, of Ind. (G. & H.) p. 117, § 17. 
 
 ' Rev. Stat. (S & C), p. 716, § 18. "2 Rev. Stat. [620] 515, § i. 
 
 ' Ferris v. The American Insurance Company, 22 Wend. 586. 
 
§403.] SET-OFF. 555 
 
 expenses paid or incurred by him in good faith, in the prose- 
 cution or defense in good faith, of any action by or against 
 him.' 
 
 ■ § 403. Set-off. — It has already been said that an assignee 
 for the benefit of creditors takes the property of the assign- 
 or 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 assignment,^ 
 even if it becomes due before the suit was commenced.* 
 And it has been held that a defendant cannot offset to the 
 claim of the assignee a note due when assigned, by show- 
 ing that the assignor was indebted to the defendant at the 
 time of the assignment, unless such counter-claim had at- 
 
 ' Act of April 17, 1858, § 3 ; Laws of 1858, p. 506 ; 3 Rev. Stat. (6th ed.) 
 p. 146. 
 
 '^ See ante, p. 538. ' Waterman on Set-off, p. 118. 
 
 ' Meyer v. Davis, 22 N. Y. 489 ; Johnson v. Bloodgood, i Johns. 5 1 ; Hege- 
 man 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 ; see 
 Duncan v. Stanton, 30 Barb. 533. 
 
 ' 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 the 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 as- 
 signment were the holders of the assignor's note, which had not yet matured, it was 
 held that the defendant could not set off the note. Bosworth, J., in delivering 
 the opinion of the court, reviewed the cases extensively, and stated the conclusions 
 of the court in the following language : " The principle 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 becomes insolvent, the moment 
 the demand against the insolvent becomes due, and not before. That when in- 
 solvency is the only equity for enforcing a set-off contrary to the provisions of the 
 statute, such equity gives no right to compel the insolvent to pay before the de- 
 mand 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 Maas v. Goodman, 2 Hilt. (N. Y.J 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. 
 
 ' Hicks V. McGrorty, 2 Duer, 295. 
 
556 COLLECTION OF DEBTS. [CHAP. XXXIV. 
 
 tached before the assignment — e.g., by an agreement that it 
 should be applied thereto or otherwise.' A judgment ob- 
 ;ained against the assignor subsequent to the assignment, 
 :annot be set off against a claim of the assignee, although 
 :he assignment was made without notice to the judgment 
 ;reditor.'' 
 
 Nor can a creditor set off his demand against the value 
 Df articles purchased by him at the assignee's sale.^ Equity 
 ivill not permit a preferred creditor to diminish the fund 
 ivailable to unpreferred creditors, by offsetting to a debt 
 lue from him, and which is part of the assigned estate, lia- 
 ailities to him not secured by the deed.'* The principles 
 ipplicable under the bankrupt act are referred to in the 
 iote.5 
 
 In action brought by a creditor to compel an account- 
 ng, the assignee cannot set up expenditures made by him 
 Dy way of counter-claims, and insist upon their allowance 
 jecause no reply was interposed.^ 
 
 § 404. When the Declarations of the Assignor can be 
 Used as Evidence against the Assignee. — It is laid down as 
 m established rule of evidence, that declarations made by a 
 
 ' Neal V. Lea, 64 N. C. 678 ; McConnaughey v. Chambers, Id. 284. The 
 ■forth Carolina Code as to set-off is similar to that of New York. See Kendall v. 
 iider, 35 Barb. 100. 
 
 " Ogden V. Prentice, 33 Barb. 1 60. 
 
 ' Bateman v. Conner, i Halst. 104. 
 
 ' Miller v. Cherry, 3 Jones Eq. (N. C.) 24. And in another case in the same 
 state, a trustee who had purchased the trust property at his own sale, but with- 
 lut fraud, was permitted to set off debts due him out of the increased price on a re- 
 ;ale of the property, before the unsecured creditors could come in. Elliott v. 
 ^ool, 6 Jones Eq. (N. C.) 42. 
 
 " Under the bankrupt act of 1867 (R. S; U. S. § 5073), it is provided that in 
 ill cases of mutual debts or mutual credits between the parties, the account be- 
 ;ween them shall be stated, and one debt set off against the other, and the bal- 
 ince only shall be allowed and paid, but no set-off shall be allowed in favor of 
 my debtor to the bankrupt of a claim in its nature not provable against the es- 
 ate, or of a claim purchased by or transferred to him after the filing of the peti- 
 ion, or in case of compulsory bankruptcy after the act of bankruptcy, upon or in 
 espect of which the adjudication shall be made and with a view of making such 
 et-off. Bump on Bankruptcy, p. 580; Sawyer v. Hoag, 9 N. B. R. 145; S. C. 
 7 Wall. 610 ; Gray v. RoUo, 9 N. B. R. 337; s. C. i8 Wall. 629; Drake v. RoUo, 
 . N. B. R. 689; s. C. 3 Biss. 273; Hovey v. Home Ins. Co. 10 N. B. R. 224. 
 
 ■ Duffy v. Duncan, 35 N. Y. 187, 189. 
 
§ 405-] PARTIES. 557 
 
 person under whom the party claims after the declarant has 
 parted with his right, are utterly inadmissible to affect any 
 one claiming under him.^ The acts and declarations of the 
 assignor, however, have in some instances been admitted as 
 binding upon the assignee. Declarations made at the time 
 of executing the assignment are thus admissible as part of 
 the res gestcej" and it has been held that the declarations of 
 the assignor, while he was in possession of the assigned 
 property, were competent evidence.^ It has also been 
 thought that the admissions of the assignor, after the as- 
 signment was completed, were admissible, on the theory 
 that the assignee is the representative and agent of the as- 
 signor. This doctrine, however, is not sustained by prin- 
 ciple or authority. There is no identity of interest between 
 an insolvent assignor in trust for creditors and his assignee. 
 The latter holds primarily for the creditors and for those in 
 hostility to the assignor. He does not represent merely or 
 primarily the assignor, nor hold chiefly for his interest and 
 benefit, but rather for the creditors of the assignor, and is 
 accountable in the first place to them."* In order to make 
 the declarations of the assignor, after the assignment, com- 
 petent evidence, it must be shown that the assignor and as- 
 signee are combined in a common conspiracy to defraud the 
 the assignor's creditors,' and this common purpose must be 
 established by evidence other than the declarations them- 
 selves.* 
 
 § 405. Parties. — Where the action is brought by the 
 assignee, to recover trust property or to reduce it to posses- 
 
 ' I Philips on Ev. (4th ed.) 314-322; Paige v. Cagwin, 7 Hill, 361; Davis, J., 
 in Foster v. Beals, 21 N. Y. 247, 249 ; see McBride v. Dorman, 6 Am. Law Reg. 
 736 and note. 
 
 " See ante, p. 488. 
 
 ' Adams v. Davidson, 10 N. Y. 309, 313; citing Willis v. Farley, 6 C. & P. 
 375 ; but see this case criticised in Cuyler v. McCartney, 40 N. Y. 221, 235. 
 
 * Folger, J., in BuUis v. Montgomery, 50 N. Y. 352, 358, 359 ; Cuyler v. Mc- 
 Cartney, 40 N. Y. 221, 235 ; Caldwell V. Williams, 1 Ind. 405, and see reporter's, 
 note; Wynne v. Glidewell, 17 Ind. 446 ; Savery v. Spaulding, 8 Iowa, 239. 
 
 '• Cuyler v. McCartney, 40 N. Y. 221 ; Caldwell v. Williams, i Ind. 405. 
 
 ' Cuyler v. McCartney, supra. 
 
558 COLLECTION OF DEBTS. [cHAP. XXXIV. 
 
 ;ion, the assignee may sue in his own name,' and the cestuis 
 me trust are not necessary or proper parties. "^ 
 
 § 406. Appeals and Writs of Error. — In Pennsylvania, 
 t is provided by statute that when the defendant or defen- 
 lants in any suit now pending, or hereafter to be brought, 
 lave assigned, for the benefit of creditors, before or after 
 such suit brought, or hereafter may assign for the benefit of 
 :reditors, the land or other property which is the subject of 
 3r affected by such suit, the assignee or assignees may ap- 
 Dcal from any award made in such suit against the defendant 
 or defendants, under a rule of reference entered under the 
 3th section of the act of the i6th of June, 1836, entitled " An 
 ict relative to reference and arbitration ; " and also bring a 
 ivrit of error upon any judgment which may be rendered in 
 my such suit.^ By the same act, the provisions of the 31st 
 section of the said act of June i6th, 1836, relating to refer- 
 3nce and arbitratioUj-^ and the first proviso of the 8th section 
 3f the act of June i6th, 1836, entitled "An act relating to 
 
 ' Ogden V. Prentice, 33 Barb. 160; and see Walker v. Miller, 11 Ala. 1067; 
 fohnson v. Candage, 31 Me. 28. 
 
 ' In Carey v. Brown, U. S. Sup. Ct. Cent. Law Jour. Oct. 27, 1876, the gen- 
 eral rule is said to be that in suits respecting the trust property, brought either by 
 jr against the trustees, the cestuis que trust as well as the trustees are necessary 
 jarties. Story's Eq. PI. § 207. " But to this rule there are several exceptions. 
 Dne of them is, that where the suit is brought by the trustee to recover the trust 
 jroperty, or to reduce it to possession, and in no wise affects his relation with his 
 :estuzs que trust, it is unnecessary to make the latter parties. Horsely v. Fawcett 
 ^11 Beav. 569) was a case of this kind — the objection taken in this case was 
 ;aken there. The master of the rolls said : ' If the object of the bill were to 
 ■ecover the fund, with a view to its administration by the court, the parties inter- 
 ested must be represented. But it merely seeks to recover the trust moneys, so 
 IS to enable the trustees hereafter to distribute them agreeably to the trusts de- 
 ;lared. It is therefore unnecessary to bring before the court the parties beneficially 
 nterested.' Such is now the settled rule of equity pleading and practice. Adams 
 /. Brad'ey et al. 6 Mich. 346; Ashton v. The Atlantic Bank, 3 Allen, 217 ; Boyden 
 r. Partridge et al. 2 Gray, 191 ; Swift et al. v. Stebbins, 14 Stew. & P. 447 ; The 
 Association, etc. v. Beekman Adm'r et al. 21 Barb. 555 ; Alexander v. Cana, i 
 Pe Gex & Sm. Ch. 415 ; Potts v. The Thames Haven & Dock Co. 7 Eng. Law & 
 Eq. 262 ; Story V. Livingston's Exr. 13 Pet. 359." 
 
 ' Act of June 13, 1840, § 9 ; Laws of 1840, p. 691 ; Purdon's Dig. (loth ed.) 
 D. 92, pi. 15. 
 
 * This provides that they may appeal without payment of costs or entering se- 
 ;urity, if the assignee shall not have taken out the rule of reference. Purdon's 
 Dig. p. 93, note {g). 
 
§406.] APPEALS AND WRITS OF ERROR. 559 
 
 executions," ' are extended to the assignee of voluntary as- 
 signments for the benefit of creditors, whenever such as- 
 signee shall enter an appeal, or sue out a writ of error under 
 the provisions of the ninth section of the act.'' 
 
 ' This provides that they shall not be required to g^ve bail in error. Id. note (/i). 
 
 ' Act of June 13, 1840, § 10; Pardon's Dig. p. 93, pi. 16. But in Mellon's 
 Appeal (32 Penn. St. I2i), it was held that an assignee could not appeal from a 
 distribution of a trust fund in his hands. Strong, J,, remarked, he is not " a party 
 aggrieved, within the meaning of the act of 1836, because he does not represent 
 the creditors generally." Where, however, he is a creditor, or has some personal 
 interest in the estate, it seems that he may appeal. 
 
CHAPTER XXXV. 
 
 SALE OF THE ASSIGNED PROPERTY. 
 
 One of the principal objects of a voluntary 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 cred- 
 itors. The property must, in all cases, be disposed of by 
 sale. The assignee is not allowed to barter or exchange it 
 for other property,' nor can he appropriate it for his ovsrn 
 use, although he charge himself with the cost price." 
 
 § 407. Power of Sale. — The power to sell is usually ex- 
 pressly 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 as- 
 signment. ■• In Connecticut, the courts of probate have 
 power, at all times, to order the sale of all or any part of the 
 assigned property. = 
 
 In Iowa, it is provided that the 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 as- 
 
 ' Bennett, J., in Page v. Olcott, 28 Vt. (2 Wms.) 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, sttpost. Chap. XL. 
 
 " Geisse v. Beall, ubi supra. 
 
 = Williams v. Otey, 8 Humph. 563; Wood v. White, 4 M. & C. 481 ; Good- 
 rich V. Proctor, i Gray, 567 ; Purdie v. Whitney, 20 Pick. 25 ; Gould v. Lamb, 1 1 
 Mete. 842; Perry on Trusts, pp. 147, 398. 
 
 ' Rev. Stat. (ed. 1874), p. 13, § 13. 
 [ " Gen. Stat. (rev. of 1875), p. 383, § 23. 
 
§ 4o8.] DUTY IN REGARD TO SALE. 56 1 
 
 signment, but no sale of real estate belonging to the trust 
 shall be made without notice published, as in case of sales of 
 real estate on execution, unless the court shall order and 
 direct otherwise.' 
 
 § 408. Duty in regard to Sale. — Every trustee to sell ia 
 bound by his office to bring the estate to a sale under every 
 possible advantage to the cestui que trusty and where there 
 are several persons interested, with a fair and impartial atten- 
 tion to the interest of all concerned.^ He is bound to use 
 not only good faith, but also every requisite degree of dili- 
 gence and prudence in conducting the sale. If he is want- 
 ing in reasonable diligence in the management of the sale, 
 or so manage it as to advance the interest of one of the 
 parties 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 con- 
 ducted as to prevent fair competition, whether cognizant of 
 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 property sold and interest upon it 
 just as if the money had been received.^ 
 
 A trustee who sells at an improper time, or without con- 
 forming 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.^ 
 
 ' Iowa Code (1873), p. 385, § 2127. 
 
 ° Lord Eldon in Downes v. Grazebrook, 3 Mer. 208; Matthie v. Edwards, 2 
 Coll. 480 ; Chesley v. Chesley, 49 Mo. 540. 
 
 ' Sir J. Leach in Ord v. Noel, 5 Mad. 440; Hunt v. Bass, 2 Dev. Eq. 292. 
 
 ' 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, i H. & G. 11 ; Osgood v. Franklin, 2 Johns. Ch. 27; 
 Chesley v. Chesley, 49 Mo. 540. 
 
 ' Harvey's Adm'r v. Steptoe's Adm'r, 17 Gratt. 289. 
 
 ' Melick V. Voorhies, 24 N. J. Eq. 305. 
 36 
 
562 SALE OF ASSIGNED PROPERTY. [CHAP. XXXV. 
 
 § 409. Time of Sale. — An assignee is bound to bring 
 the property to a sale, and to pay over the proceeds to those 
 who are entitled, without delay.' If he delay unreasonably 
 to sell, 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 de- 
 lays 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 ih 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 highest price. = 
 
 § 410. Mode of Sale. — An assignee, in general, has a dis- 
 cretion (apart from the authority usually given by the assign- 
 ment) 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 
 
 ' Hart V. Crane, 7 Paige, 37. In Clark v. Craig (29 Mich. 398), where it ap- 
 peared 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 pro- 
 ceeds of the fund. 
 
 ^ Parker, C. J., in Gore v. Clisby, 8 Pick. 555, 559. For any mere delay in 
 payment, interest is in law regarded as a sufficient compensation. Clark v. Craig, 
 29 Mich. 398. 
 
 ' 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 dis- 
 cretion of the trustee. Inloes v. Am. Ex. Bank, 11 Md. 173. 
 
 ' Burgin v. Burgin, i Ired. L. 453 ; Dewey v. Littlejohn, 2 Ired. Eq. 495. 
 
 ' Hawkins v. Alston, 4 Ired. Eq. 137. And see further as to sales under 
 deeds of trust, Haynes v. Crutchfield, 7 Ala. 189 ; Dubose v. Dubose, Id. 235. 
 
 'Perry on Trusts, pp. 412, 415,422; Ex parte Dunman, 2 Rose, 66; Ex 
 parte Hurley, i D. & C. 631 ; Ex parte Ladbroke, I M. & A. 384; Ex parte Cod- 
 ing, I D. & C. 323; Huger v. Huger, 9 Rich. Eq. 217. 
 
'§4II'] TERMS OF SALE. 563 
 
 ■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 any other, although by doing so he may in reality 
 promote the interests of those for whom he acts.^ And in 
 general, a trustee for sale must follow the provisions of the 
 trust deed.3 
 
 § 41 1. Terms of Sale. — In some of the States, an assignee 
 is allowed to sell the property for cash or credit, in his dis- 
 cretion,'* and the assignment itself frequently gives him 
 this power in terms.^ But in New York, an assignee 
 is not allowed to sell on credit without 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 Missouri, sales by assignees are made under the super- 
 vision of the Circuit Court or a judge in vacation, who is 
 required to direct the sale to be for cash or on credit, as shall 
 appear to be for the interest of all concerned, and to direct 
 the nature of the security to be taken at the sales.* 
 
 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, payable not more than nine months from 
 date with interest.' 
 
 ' Walworth, C, in Hart v. Crane, 7 Paige, 37, 38. 
 
 ' Greenleaf V. Queen, i Pet. 138. 
 
 ' Bebee v. De Baun, 8 Ark. 510. And as to the mode of sale, see Brock v. 
 Headen, 13 Ala. 370. 
 
 ■* Neally V. Ambrose, 21 Pick. 185; Petrikin v. Davis, i Morris, 296; Conk- 
 ling V. Conrad, 6 Ohio St. (Critch.) 611, 620, 621 f Hopkins v. Ray, i Mete. 79 ; 
 and as to what provisions are construed as conferring a power to sell on credit, 
 see ante, § 224. ' See ante, p. 296. 
 
 ' Barculo, J., in Burdick v. Post, 12 Barb. 184. As to obtaining the consent 
 of creditors, see Mussey v. Noyes, cited infra, p. 564, note 6. 
 
 ' Barney v. Griffin, 2 N. Y. 365; Nicholson v. Leavitt, 6 Id. 510. 
 
 ' I Gen. Stat. (Wag.) p. 156, § 34. 
 
 • Rev. Stat. (ed. 1870), vol. I, p. 114, § 10. But the neglect of the assignee to 
 require security will not avoid the sale. Yargan v. Shriner, 26 Ind. 369. 
 
564 SALE OF ASSIGNED PROPERTY. [cHAP. XXXV.. 
 
 In Connecticut, the trustee may be authorized by the 
 court to sell on credit on the payment of at least one-quarter 
 of the price in cash and the remainder secured in such man- 
 ner as the court may approve.' 
 
 In Ohio, the assignee is authorized to sell the real and 
 personal property assigned, either for cash or upon such 
 terms as the probate judge may direct, at public auction, on 
 notice of four weeks, but sales are not to be made at less 
 than two-thirds of the appraised value except upon special 
 order of the court. The property may be sold at private sale 
 upon the order of the court.^ 
 
 Where sales on credit are allowed, if the assignee sell at 
 private sale except for cash, he may expose himself to lia- 
 bility in the event of the failure of the purchaser. Thus, in 
 Pennsylvania, where assignees 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 as- 
 signed property on a credit without taking security, he sells 
 at his own risk, and is chargeable with any loss that may 
 thereby accrue, although the sale is advised by some of the 
 creditors and the debtor.* 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 interest 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 
 
 ' Gen. Stat. (rev. of 1875), p. 383, § 23. 
 
 ' Act of April 18, 1861 ; Sayler's Stat. vol. I, p. 128, c. 114, § I ; see Conkling; 
 V. Conrad, 6 Ohio St. 611. 
 
 ' Estate of Davis & Desauque, 5 Whart. 530. 
 
 * Swoyer's Appeal, 5 Barr, 377. 
 
 ° Pag-e V. Olcott, 28 Vt. (2 Wras.) 465 ; Bennett, J., Id. 468. 
 
 " Mussey v. Noyes, 26 Vt. (3 Deane), 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. Id. ibid. But it ap- 
 peared that the assignee had not lost or failed to collect the avails of any sale, 
 thus made on credit. Id. ibid. 
 
^412.] NOTICE OF SALE. 565 
 
 of a deed of trust, it has been held that the maker and bene- 
 ficiaries may change the terms of the sale/ 
 
 § 412. 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 New Jersey, the assignee is required 
 to advertise and sell in the same manner as is prescribed in 
 the case of an executor or administrator directed to sell lands 
 by an order of the Orphans' Court for the payment of the 
 debts of a testator or intestate.* If no time is fixed, a 
 reasonable notice should be given.^ In Minuse v. Cox,* it 
 was held that where a trustee is directed to sell the trust 
 property, " by pubhc auction or otherwise, and together or 
 by parcels, at his discretion, iipon giving three weeks' notice 
 thereof," the direction as to notice applies to a sale at auc- 
 tion, 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 
 
 " Bebee v. De Baun, 8 Ark. 510. 
 
 ^ Hart V. Crane, 7 Paige, 37, 38 ; Johnston v. Eason, 3 Ired. Eq. 330. 
 
 ^ 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 
 published but once. The obvious intent is to have the publication continued up 
 to the sale. Stine v. Wilkson, 10 Mo. 75. Where a notice was published once 
 in a newspaper called the " Evening Gazette," and then transferred to a news- 
 paper 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 
 entirely confined in its circulation to the city. Id. ibid. 
 
 ' Rev. Stat. (ed. 1874), p. 13, § 12. 
 
 ' Walworth, C, in Hart v. Crane, ubi supra. And a sale 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, 1 1 
 N. J. Eq. 84. 
 
 ^ 5 Johns. Ch. 441. 
 
 ' " To give three weeks' notice of a private sale would bs absurd." Kent, C, 
 Id. 447. 
 
566 SALE OF ASSIGNED PROPERTY. [cHAP. XXXV. 
 
 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 creditors 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 articles sold.^ 
 
 § 413. 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 or in the name of a trustee,* by pri- 
 vate contract or public auction,' from himself as the single 
 trustee, or with the sanction of his co-trustees ; ^ for he who 
 
 ' 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 exe- 
 cutes 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. 
 
 ' Haynes v. Critchfield, 7 Ala. 1S9. And see Lamb v. Goodwin, 10 Ired. L.320. 
 
 ' What follows in the text, to p. 568. is chiefly taken from the late valuable 
 treatise of Mr. Lewin on Trusts and Trustees, republished in the Philadelphia Law 
 Library, 1839. See Perry on Trusts, §§ 195, 199. 
 
 ■* Fox V. Mackreth, 2 Bro. C. C. 400 ; S. C. 2 Cox, 320; affi'd in Dom. Proc. 4 
 Bro. 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, i Macy, 461, in 
 the House of Lords. 
 
 ' Crowe V. Ballard, 2 Cox, 253 ; s. C. 3 Bro. C. C. 117 ; Killick v. Flexney, 4 
 Bro. C. C. 161 ; Hall v. Hallet, i Cox, 134; 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 position 
 as trustee enables the purchaser to acquire. Hamilton v. Wright, i Bell (Scotch) 
 Appeal Cas. 574. 
 
 •Campbell v. Walker, 5 Yes. Jr. 678; s. C. 13 Id. 601; Randall v. Erring- 
 ton, 10 Id. 423 ; Crowe v. Ballard, 2 Cox, 253; Hall v. Hallet, i Cox, 134. 
 
 ' 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. 
 Cookson, I Ves. Sr. 9 ; Ex parte Hughes, 6 Ves. Jr. 617; Ex parte Lacy, Id. 625; 
 Lister v. Lister, Id. 631 ; Whichcote v. Lawrence, 3 Id. 740 ; Attorney General v.. 
 Lord Dudley, Coop. 146; Downes v. Grazebrook, 3 Mer. 200. 
 
 ° Whichcote v. Lawrence, 3 Ves. Jr. 740 ; Hall v. Noyes, cited Id. 748. And 
 see Morse v. Royal, 12 Id. 374. 
 
§ 413-} DISABILITY OF ASSIGNEE TO PURCHASE. 567 
 
 undertakes to act for another in any matter cannot, in the 
 same matter, 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 cestui que trtist, he is bound to apply it for the cestui que 
 trust's benefit.^ 
 
 Where a tiustee 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. 3 
 
 Lord Rosslyn is said to have considered that to invali- 
 date a purchase 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 cestui 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 per- 
 son : the court can, with as little effect, examine how far 
 
 ' Lord Rosslyn, in Whichcote v. Lawrence, 3 Ves. Jr. 750 ; Lord Eldon, in Ex 
 parte Lacey, 6 Id. 623. 
 
 " See Ex parte James, 8 Ves. Jr. 348. The rule that a trustee is not to be 
 allowed 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. 
 
 ° Blauvelt v. Ackerman, 20 N. J. Eq. 141 ; citing Green v. Winter, i Johns. 
 Ch. 27; Parkist v.. Alexander, lb. 394; Schieffelin v. Stewart, Id. 620; Brown v. 
 Rickets, 4 Johns. Ch. 303 ; Evertson v. Tappen, 4 Id. 597 ; Hawley v. Mancius, 
 7 lb. 174 ; Holridge v. Gillespie, 2 lb. 30 ; Mathews v. Dragand, 3 Des. 25 ; Tren- 
 ton Bank v. Woodruff, Green Ch. (N. J.) 117. 
 
 ■■ See Whichcote v. Lawrence, 3 Ves. Jr. 750. 
 
 ' See Ex parte Vacey, 6 Ves. Jr. 626 ; Lister v. Lister, Id. 632. 
 
 ° Ex parte Bennett, 10 Ves. Jr. 385 ; Ex parte Lacey, 6 Id. 627 ; Attorney 
 General v. Lord Dudley, Coop. 148 ; Ex parte James, 8 Ves. Jr. 348. 
 
 ' Ex parte Lacey, 6 Ves. Jr. 625, 627 ; Owen v. Foulkes, cited Id. 630, 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. 
 
568 SALE OF ASSIGNED PROPERTY. [cHAP. XXXV. 
 
 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 ap- 
 pHes 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 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 purchas- 
 ing the trust estate, either directly or indirectly, has been 
 generally adopted in the United States."* In New York, it 
 
 ' Ex parte Bennett, lo Ves, Jr. 381, 400 ; Lord Eldon, in Coles v. Trecothick, 
 9 Id. 148 ; and see Gregory v. Gregory, Coop. 204. 
 
 ' Whitcomb v. Minchin, 5 Mad. 91 ; Lewin on Trusts, 376-378. The inter- 
 vention of a third person as a means or channel through whom the title is trans- 
 ferred 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; But- 
 ler's Appeal, 26 Penn. St. 63. 
 
 ^ Ex parte Burnell, 12 Law J. N. S. 23 ; 7 Jur. 1 16. 
 
 ■■ " It 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 reexposed 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 public auc- 
 tion, bona fide, and for a fair price. A person cannot act as agent for another, 
 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. It is incompatible with the fiduciary relation. Emptor emit quam min- 
 imo potest ; venditor vendit quam maxima potest. The i"ule is founded on the 
 danger of imposition, and the presumption of the existence of fraud inaccessible 
 to the eye of the court. The policy of the rule is to shut the door against tempta- 
 tion, 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. [438] 475. " It may be laid down as a general 
 proposition," observes Chancellor Tucker, " that trustees, executors, agents, com- 
 missioners for sales, sheriffs and auctioneers, are incapable of purchasing 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 conflicting characters. 
 ■ * * * xhe purchase is not to be permitted in any case, however honest be 
 the circumstances ; the general interests of justice requiring the practice to be 
 
§ 41 3- J DISABILITY OF ASSIGNEE TO I'URCMASE. 569 
 
 was held by the chancellor, 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 ceshtis que 
 trust are entitled, as of course, to have the purchase set 
 aside, and the property reexposed to sale, under the direc- 
 tion of the court. And it makes no difference in the appli- 
 cation 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, and in some very recent 
 cases.^' 
 
 The same rule has been adopted in Maine,^ Massachu- 
 setts,* Gonnecticut,s New Jersey,* Pennsylvania,' Ohio,* 
 
 -wholly discountenanced, as no court is equal to the examination and ascertain- 
 ment of the real character of the transaction in every instance." 2 Tucker's Com. 
 [459] 447, 448. " It may be laid down as a general rule," observes Mr.' Justice 
 Story, " that a trustee is bound not to do anything vi^hich can place him in a posi- 
 tion inconsistent with the interests 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 of a bankrupt or insolvent estate, who are never per- 
 mitted to become purchasers at the sale of the bankrupt or insolvent estate." i 
 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. 503, 554-558. 
 
 ' 2 Johns. Ch. 252. In this, which is a leading case on the point, the author- 
 ities 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 licet ex officio qtiod administrat guis emere 
 quid, vel per se, vel-per 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. 
 
 ^ Van Home v. Fonda, 5 Johns. Ch. 388 ; Hawley v. Cramer, 4 Cow. 717, 718 ; 
 Giddings v. Eastman, 5 Paige, 561 ; Campbell v. Johnson, i Sandf. Ch. 148 ; Slade 
 V. Van Vechten, II Paige, 21; Iddings v. Bruen, 4 Sandf Ch. 223; Ames v. 
 Downing, i Bradf 321 ; Colburn v. Morton, 3 Keyes, 296 ; Abbott v. Am. Hard 
 Rub. Co. 33 Barb. 570. 
 
 ' Pratt v. Thornton, 28 Me. (15 Shep.) 355. 
 
 ■■ Copeland v. Mercantile Ins. Co. 6 Pick. 198 ; Litchfield v. Cudworth, 15 Id. 
 21, 23; Arnold v. Brown, 24 Id. 89; Morton, J., Id. 96. 
 
 " Mills V. Goodsell, 5 Conn. 475. 
 
 " Den V. Wright, 2 Halst. 175 ; Den v. McKnight, 6 Id. 385 ; Blauvelt v. Ack- 
 erman, 20 N. J. Eq. 141 ; Melick v. Voorhies, 24 N. J. Eq. 305. 
 
 ' Lessee of Lazarus v. Bryson, 3 Binn. 54 ; Campbell v. Penn. 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. 333. 
 
 * Wade v. Pettibone, 11 Ohio, 57 ; Bohart.v. Atkinson, 14 Id. 228. 
 
570 SALE OF ASSIGNED PROPERTY. [CHAP. XXXV. 
 
 Indiana,' Illinois," Maryland,^ North Carolina,* South Car- 
 olina,s Alabama,* Mississippi,' Florida,^ Tennessee,' Ken- 
 tucky," Missouri," Michigan," and Wisconsin. '^ In Ken- 
 tucky, indeed, it is held that the sale itself, when the prop- 
 erty is purchased by or for the trustee, is void.'-* And the 
 rule was formerly laid down to the same extent in New Jer- 
 sey ,'5 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 cestuis qtie trust and their heirs, from whose 
 acquiesence or ratification they may become valid ; but that 
 strangers or third persons cannot impeach or question them.'* 
 This qualification of the rule is now generally admitted, 
 and has been expressly asserted in some cases.'' In the 
 
 ' Brackenridge v. Holland, 2 Blackf. 377. 
 
 " Thorp V. McCuUum, i Gilm. 614. 
 
 ' Davis V. Simpson, 5 Harr. & Johns. 147; Richardson v. Jones, 3 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 
 sheriff's sale, at the instance of others, and he will be entitled to reimburse- 
 ment 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 matter 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. 
 Id. ibid. 
 
 * Boyd v. Hawkins, 2 Ired. Eq. 304 ; Hunt v. Bass, 2 Dev. Eq. 292 ; Pitt v. 
 Petway, 12 Ired. L. 69 ; Patton v. Thompson, 2 Jones Eq. 285. 
 
 ' Perry v. Dixon, Dessau. 504, note; Butler v. Haskell, Id. 654; Zimmermaa 
 V. Harman, 4 Rich. Eq. 165. 
 
 ' Saltmarsh v. Beene, 4 Port. 283 ; Andrews v. Hobson's Adm'r, 23 Ala. 219. 
 
 ' Scott V. Freeland, 7 Sm. & M. 409. 
 
 " Bellamy v. Bellamy's Adm'r, 6 Fla. 62. 
 
 ° Armstrong v. Campbell, 3 Yerg. 201. 
 
 " Grider v. Payne, 9 Dana, 188, igo. 
 
 " Wasson 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 Id. 106; 
 Ownby v. Ely, 58 Mo. 475. 
 
 ^'^ A sale made by a trustee or agent to himself is void in law. Clute v. Barron,, 
 2 Mich. (Gibbs), 192. See the opinion of Whipple, C. J. in this case. 
 
 " Geisse v. Beall, 3 Wis. 367. " Grider v. Payne, ubi supra. 
 
 " Den v. Wright, 2 Halst. 175. 
 
 "■ Den V. McKnight, 6 Halst. 385 ; see Blauvelt v. Ackerman, 20 N. J. Eq. 141. 
 
 " Prevost V. Gratz, i Pet. C. C. 368 ; Harrington v. Brown, 5 Pick. 519, 521 ; 
 Painter v. Henderson, 7 Barr, 48; McKinley v. Irvin, 13 Ala. 681; but see 
 Michoud v. Girod, 4 How. 557. 
 
§§ 414. 41 5-] DISABILITY, HOW REMOVED. 571 
 
 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 sales, was examined at much 
 length, and the doctrine laid down in Davoue v. Fanning 
 was fully recognized. 
 
 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." 
 
 § 414. 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 to the court- 
 having jurisdiction.3 But in order to accomplish this object 
 he must be divested of the character of trustee, either tem- 
 porarily or wholly.-* In Connecticut, 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.* 
 
 § 415. Conveyance by Assignee. — It seems that an as- 
 signee for the benefit of creditors may convey land by attor- 
 ney, though there be no special authority given in the as- 
 signment, to delegate his power. This opinion was held by 
 Gibson, C. J., in the case of Blight v. Schenck.' But in 
 
 ' 4 How. 503, 556. = McClure v. Miller, i Bailey Ch. 107. 
 
 " Campbell v. Walker, 5 Yes. Jr. 678, 681 ; Wayne, J., in Michoud v. 
 Girod, 4 How. 557. 
 
 * Lord Eldon, in Ex parte Bennett, 10 Ves. Jr. 381, 394; Lewin on Trusts^ 
 379- 
 
 ' Gen. Stat. (rev. of 1875), p. 395, § 40. 
 
 ' Ex parte Perkes, 3 Mon. D. & De G. 385. 
 
 ' 10 Barr, 285. By the Pennsylvania act of March 14, 1850, § i, any trustee,, 
 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 
 and 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 con- 
 veyances so heretofore bona fide made by such trustees are confirmed. Laws of 
 
572 SALE OF ASSIGNED PROPERTY. [CHAP. XXXV. 
 
 Hawley v. James,' it was held by Chancellor Walworth, that 
 a trustee who has only a delegated discretionary power, can- 
 not give a general authority to another to execute 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 contract 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 ratification of such trustees, or any 
 two of them. And they may also 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 convey- 
 ance by him, except the ordinary covenant against his own 
 -encumbrances.3 
 
 § 416. Title of Purchaser. — A bona fide 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, un- 
 der a deed voidable for a defect apparent on its face, cannot 
 be avoided by the insolvent trustee of the assignors, where 
 
 T850, p. 195. Purdon's Dig. (Brightley, loth ed.) p. 1425, § 69. A trustee of the 
 legal title may convey by agent. Olney, J., in Telford v. Barney, i Iowa (Greene), 
 575. See Perry on Trusts, p. 411. 
 
 ' 5 Paige, 318, 323, 487. This was a case of trusts created by will. 
 
 " Cranston v. Crane, 97 Mass. 459 ; Gillespie \'. Smith, 29 111. 473. 
 
 ^ Ennis V. Leach, I Ired. Eq. 416; Perry on Trusts, p. 421; White v. Fol- 
 gambe, II Ves. 345 ; Onslow v. Londesborough, 10 Hare, 74 ; Worley v. Framp- 
 ton, 5 Hare, 560; Stephens v. Hotham, i Kay & J. 571 ; Page v. Broom, 3 Beav. 
 36; Copper Mining Co. v. Beach, 13 Beav. 478; Hodges v. Blagrave, 18 Beav. 
 405 ; Phillips v. Evarard, 5 Sim. 102 ; Barnard v. Duncan, 38 Mo. 170. As to 
 (Conveyances by surviving assignees, see Benedict v. Morse, 10 Mete. 223. 
 
 * Ewing V. Cargill, 13 Sm. & M. 79 ; Sheldon v. Striker, 42 Barb. 284. 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. 
 
§ 41 6.] TITLE OF PURCHASER. 573 
 
 the sale was made before an election by the trustee to dis- 
 afifirm the assignment.' A bona fide purchaser of trust prop- 
 erty from the trustee, without notice of the trust, will'be 
 protected in his purchase.^ And notwithstanding the in- 
 validity of an assignment, as it respects the creditors of the 
 assignor, a sale of goods assigned, made by the assignee be- 
 fore the creditors have obtained a specific lien upon them,. 
 to an innocent purchaser for a valuable consideration, is 
 valid. But where the assignee, after executions 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 as- 
 certained ; not, however, 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 inno- 
 cent purchasers for a valuable consideration.' 
 
 A purchaser has constructive notice of the trust from the 
 registry 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. And where 
 an assignee, under a voluntary assignment for the benefit of 
 creditors, sold at public sale a tract of land which had been 
 purchased by the assignor under articles of agreement duly 
 recorded, and in the advertisement it was described generally 
 as a tract of land belonging to the assignor — it was held that 
 the purchaser at the assignee's sale was entitled to a deduc- 
 
 ' Okie V. Kelley, 12 Penn. St. (2 Jones), 323. 
 
 ^ Henderson v. Dodd, i Bailey's Ch. 138 ; Christmas v. Mitchell, 3 Ired. Eq. 
 535- 
 
 ^ Pine V. Rickert, 21 Barb. 469. 
 
 •* Briggs V. Davis, 20 N. Y. 15 ; S. C. 21 N. Y. 574. 
 
574 SALE OF ASSIGNED PROPERTY. [cHAP. XXXV. 
 
 tion from the purchase money of the amount remaining due 
 to the original owner.' 
 
 Where the creditors have neither released the debtor nor 
 assented to the deed, he has such an interest in the sale of 
 the property 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 cestui gue trust, under an assignment for the benefit 
 of creditors, buys a right of property which the assignees 
 were empowered to sell, in the execution of their trust, he 
 must claim as a purchaser under them, not as a cestui que 
 trust? 
 
 ' Adams v. Humes, 9 Watts, 305. 
 
 = Case V. Edney, 4 Ired. L. (N. C.) 93. 
 
 ' Wilkinson v. Wilkinson, 2 Curt. 582. 
 
CHAPTER XXXVI. 
 
 EXPENSES OF THE TRUST, AND COMPENSATION TO THE ASSIGNEE 
 
 § 41 7. The payment of the expenses of the trust is usually- 
 provided for by the assignment ; 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 prop- 
 erty. And even where they are not provided for in the 
 assignment itself, all the necessary expenses of the assignee 
 are to be reimbursed to him out of the estate.' In every 
 instrument conveying an estate in trust, there is an implied 
 direction that all such expenses as the preservation or pro- 
 tection of the estate may require, shall be incurred, and an 
 implied stipulation or promise 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 advertising, insurance,'* interest,' taxes and assessments, 
 commissions on sales, salaries and wages of persons em- 
 ployed as agents, clerks, &c.,* office and store rent, costs of 
 suits to recover debts and property, costs of defending suits, 
 
 ' Noyes v. Blakeman, 3 Sandf. S. C. 531 ; Miles v. Bacon, 4 |. J. Marsh. 457; 
 Lowe V. Morris, 13 Ga. 165; Clark v. Hoyt, 8 Ired. Eq. 222 ; Egbert v. Brooks, 
 3 Harr. (Del.) no ; Hill on Trusts (3d Am. ed.) [570] 851 ; Blow v. Gage, 44 111. 
 208. 
 
 ' Duer, J., in Noyes v. Blakeman, 3 Sandf. S. C. 544 ; Lewin on Trusts, 450, 
 
 455- 
 
 ° Perry on Trusts, 537 ; Ex parte James, I D. & C. 272 ; Hill v. Mogan, 2 
 Moll. 460 ; Ex parte Norwich Yarn Co. 22 Beav. 143 ; Ex parte Chippendale, 4 De 
 G. M. & G. 19; Trott v. Dawson, I P. Wms. 78; Morrison v. Morrison, 7 De G. 
 M. & G. 226. 
 
 * See ante, p. 309. ' See ante, p. 309. 
 
 ° See ante, p. 310. 
 
576 EXPENSES OF THE TRUST. [cHAP. XXXVI. 
 
 and fees of counsel for services in suits, or for advice in the 
 general management of the trust.' But if an assignee allows 
 the debtor to act as his agent, and receive large compensa- 
 tion therefor, he will have to account for the amount to 
 creditors, on a bill filed on behalf of all of them." In Penn- 
 sylvania, it has been held that an assignee may make a con- 
 tract 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 bene- 
 fited by such payment, before the payment becomes a proper 
 credit to the assignee.* 
 
 A trustee ought to keep a regular account of his ex- 
 penses, 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 unreasonably defended it, 
 were cognizant of all the transactions out of which its in- 
 validity arose, they were decreed to bear their own costs. ^ 
 
 ' Noyes v. Blakeman, 3 Sandf. S. C. 531 ; Jewett v. Woodward, i Edw. Ch. 195, 
 200; see Hill on Trusts (3d Am. ed.) [551] 825 ; Id. [565] 845, note i ; Perry 011 
 Trusts, c. 30; Duffy v. Duncan, 35 N. Y. 187. 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 
 cestui que trust, to surrender the trdst, and has refused. Towle v. Mack, 2 Vt. 
 19. 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 
 & Eq. 197. 
 
 - Redmond v. Wemple, 4 Edw. Ch. 221. 
 
 ° McLellan's Appeal, 26 Perm. St. (2 Casey), 463. 
 
 ' Duffy v. Duncan, 35 N. Y. 187. 
 
 ' Perry on Trusts, p. 541 ; Ex parte Caswell, 5 Watts, 442 ; Green v. Winter, 
 I Johns. Ch. 27. 
 
 ' McDowell V. Caldwell, 2 McCord Ch. 42. 
 
 ' Hawley v. James, 16 Wend. 61 ; In re Wilson, 4 Barr, 430 ; Stewart v. Mc- 
 Minn, 5 W. & S. 100; See Bishop v. Hart's Trustees, 28 Vt. (2 Wms.) 71. 
 
 " Leavitt v. Yates, 4 Edw. Ch. 134. But see as to the validity of the trust, the 
 case of Curtis v. Leavitt, 15 N. Y. (i Smith), 9. 
 
§ 41 8.] COMPENSATION TO ASSIGNEE. 577 
 
 § 418. Compensation to Assignee. — In addition to the 
 allowance of his expenses and disbursements, the assignment 
 sometimes contains a provision allowing the assignee a com- 
 pensation 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 
 of a quantum meruit ; and sometimes a compensation is 
 stipulated for by agreement, independently of the assign- 
 ment. 
 
 Where there is no express stipulation or agreement for 
 compensation 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 compensa- 
 tion, whether there be any provision or agreement to that 
 effect or not. The general rule of equity, as held in En- 
 gland, is that trustees are not entitled to commissions or 
 compensation for their services, in the execution of their 
 trusts, where no provision was made therefor in the instru- 
 ment creating the trust.'* This rule was formerly adopted 
 to its full extent 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,' and the provisions of the Revised Stat- 
 utes,* allowing commissions to executors, administrators and 
 guardians, it was considered to be settled that in all cases 
 of express trusts, where nothing is said in the deed or in- 
 
 ' Vemon v. Morton, 8 Dana, 247. 
 
 ' Andrews v. Ludlow, 5 Pick. 28 ; see Winn v. Crosby, Daily Reg. Dec. 14, 
 1876 ; Lewin on Trusts, 443. 
 
 ' Barney v. GrifRn, 2 N. Y. 365 ; Donelson's Adm'rs v. Posey, 13 Ala. 752. 
 
 * Lewin on Trusts, 438, 443. For the reason of this rule, see Id. ibid. ; and see 
 Manning v. Manning, I Johns. Ch. 527 ; Hill on Trustees [574] 857; Perry on 
 Trusts, p. 535, § 904. For a statement of the rules in various States governing 
 the compensation of trustees, see Perry on Trusts, § 918. 
 
 ' Manning v. Manning, i Johns. Ch. 527 ; see the opinion of Walworth, C, in 
 Meacham v. Stemes, 9 Paige, 399-403 ; and see Jewett v. Woodward, I Edw, Ch. 
 195- 
 
 ' 9 Paige, 398. ' Laws of 1817, p. 292. 
 
 ' 3 Rev. Stat. (6th ed.) p. loi ; Id. [153, § 22] 86, § 21, 
 37 
 
578 EXPENSES OF THE TRUST. [CHAP. XXXVI. 
 
 strument creating the trust, on the subject of compensation 
 to the trustee for his personal services in the execution of 
 the trust, and where there is no agreement on the subject 
 for a different allowance, the trustee, upon the settlement 
 of his accounts, will be allowed the same fixed compensa- 
 tion 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 un- 
 derstanding on the subject of compensation.' Where the 
 instrument creating the trust, however, fixes a different com- 
 pensation,° or declares that none is to be allowed, or where 
 the trustee, previous to the acceptance of the trust, makes a 
 valid and binding agreement with the cestui que trust, as to 
 the rate of compensation to be allowed for his services 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 guantutn 
 meruit, the amount of compensation must necessarily de- 
 pend, to a certain extent, upon the peculiar circumstances 
 of each case, and must be adjusted with reference to what 
 is usually paid by the agreements of parties for similar serv- 
 ices.3 
 
 ' In Duffy V. Duncan (35 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 absconding 
 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. 
 See 3 Rev. Stat. 16th ed.) p. 210, § 31. 
 
 " In 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 executors 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 assignment for the pay- 
 ment of the expenses and commissions of the trustee are illegal, see ante, p. 315. 
 
 ' Walworth, C, in Meacham v. Sternes, 9 Paige, 403, 404. 
 
§§419.420.] COMPENSATION TO ASSIGNEE. 579 
 
 § 419. In Connecticut, also, it has been held that 
 although it is a general 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 him- 
 self for his responsibilities for such 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 trustep ; and it appeared that he con- 
 ducted the business with good faith, and without unneces- 
 sary delay ; that his services were highly important to the 
 company and all concerned, and without them the conse- 
 quences would have been ruinous — it was held that certain 
 sums charged in his account, as commissions on his respon- 
 sibilities, which were found to be, all things considered, only 
 a reasonable compensation, ought to be allowed.' In the 
 same State, by the statute regulating assignments, "the 
 expenses of executing the trust and settling the estate," are 
 to be paid first in the order of distribution, as made under 
 the direction of the Court of Probate.'' 
 
 In California, it is provided that in the absence of 
 any provision in the assignment to the contrary, an as- 
 signee for the benefit of creditors is entitled to the same 
 commissions as are allowed by law to executors and guard- 
 ians ; but the assignment cannot grant more, and may 
 restrict the commissions to a less amount, or deny them al- 
 together. ^ 
 
 § 420. In Delaware, the general equity rule appears to 
 prevail without qualification, that a voluntary trustee, not 
 stipulating for compensation, is not entitled to any compen- 
 sation for his time and trouble ; that he is entitled to have 
 
 ' Kendall v. New England Carpet Company, 1 3 Conn. 383. 
 ' Gen. Stat. (rev. of 1875), p. 386, § 34. 
 » Civil Code, § 3471 ; Hitt. § 8471. 
 
580 EXPENSES OF THE TRUST. [cHAP. XXXVL 
 
 his expenses and charges paid, and to be indemnified against 
 expenses and loss ; but not to be remunerated.' 
 
 In Pennsylvania/ and Maiyland,^ on the other hand, by 
 an equitable construction of the statutes allowing commis- 
 sions to executors, guardians and trustees (similar to that 
 adopted in New York), commissions may be allowed to 
 conventional trustees, although there was no agreement to 
 that effect.'' And in Pennsylvania, the rule is now estab- 
 lished that all trustees are entitled to a reasonable compen- 
 sation for their services as they are rendered, and unless a 
 contrary intention appear, the compensation must come out 
 of the fund with which they are intrusted.^ The same rule 
 seems to preyail in Vermont,^ Kentucky,' and Michigan.^ 
 
 In Ohio,' the assignee may be allowed as commissions on 
 the amount of the personal estate collected and accounted 
 for, and of the proceeds of real estate, for the first $1,00 3 at 
 the rate of six per cent. ; for all above that sum not exceed- 
 ing $5,000 at the rate of four per cent, and in all cas ;s such 
 further allowance shall be made as by the court shall be con- 
 sidered just and reasonable for the actual and necessary 
 expenses and for any extraordinary expenses, or for any 
 extraordinary services not required of an assignee under the 
 act in the common course of his duty ; also, such reasonable 
 counsel fees as may be necessary for the proper administra-. 
 tion of said assignment, whether performed by the assignee 
 
 ' Egbert V. Brooks, 3 Harr. 1 10 ; The State v. Piatt, 4 Id. 1 54 ; The State v. 
 Rogers, Id. ibid. 
 
 '' Prevost V. Gratz, 3 Wash. C, C. 434. 
 
 ^ Ringgold V. Ringgold, I H. & G. II. 
 
 ' Id. ibid ; see Winder v. Diffenderffer, i Bland, 166 ; Bentley v. Shreve, 2 Md. 
 Ch. Dec. 215. 
 
 ' Spangler's Estate, 21 Penn. St. (9 Har.) 335 ; Heckert's Appeal, 24 Penn. St. 
 (12 Har.) 482. The general rule is to allow compensation by commissions, and 
 five per cent, is the ordinar}' rule. Pusey v. Clemson, 9 S. & R. 209 ; Perry on 
 Trusts, § 908, note. 
 
 " Hubbard v. Fisher, 25 Vt. (2 Deane), 539. 
 
 ' Phillips V. Bustard, i B. Mon. 348 ; but see McMillen v. Scott, i Mon. 1 50 ; 
 Miles V. Bacon, 4 J. J. Marsh. 457; Lane v. Coleman, 8 B. Mon. 571. 
 
 ' Schwartz v. Wendell, Walk. Ch. 267. 
 
 ° Act of March 16, 1874 ; Sayler's Stat. vol. 4, p. 3202, c. 2739 ; see Gilbert v. 
 Sutliff, 3 Ohio, N. S. 129, for the rule before the statute. 
 
§ 421.] COMPENSATION TO ASSIGNEE. 581 
 
 as attorney, or such other as may be employed by him, but 
 that no such further allowance, extraordinary expenses or 
 services, or attorney's fees, shall be allowed by the court 
 unless a bill of items be filed showing such actual and neces- 
 sary or extraordinaiy expenses or services, or attorney's fees, 
 together with the affidavit of the person incurring' such ex- 
 penses or performing such services, showing that the same 
 were performed for and were necessary to the assignment, 
 and that the amount charged therefor is reasonable, and not 
 more than is usually paid for such services ; and when such 
 services shall have been performed by persons other than 
 the assignee, the assignee shall also file an affidavit stating 
 that such services were necessary for the proper administra- 
 tion of the assignment, and that they were performed under 
 his direction, and that the charges for the same are fair and 
 reasonable, and that the full amount thereof has been paid to 
 the party performing such services. 
 
 § 42 1. In Maine, assignees are allowed by statute a reason- 
 able compensation for their services, to be paid out of the 
 estate.' And in New Jersey, they are entitled by statute to 
 such commissions and allowances as the court before whom 
 their accounts are settled rnay consider just and right.° 
 
 In North Carolina, it seems to have been formerly held 
 that a trustee was entitled to no compensation for his serv- 
 ices unless there was some understanding to that effect 
 when the trust was created. ^ But this opinion was after- 
 wards modified,* and the rule is now settled that a trustee is 
 entitled to commissions as compensation 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 
 
 ' Rev. Stat. (ed. 1871), p. 545, c. ^o, § 11. 
 " Rev. Stat. (ed. 1874), p. 14, § l8. 
 ° Boyd V. Hawkins, 2 Dev. Eq. 195. 
 
 * See Boyd v. Hawkins, 2 Dev. Eq, 329. 
 
 • Sherrill v. Shuford, 6 Ired. Eq. 228 Ingram v. Kirkpatrick, 8 Id. 62. 
 
582 EXPENSES OF THE TRUST. [cHAP. XXXVI. 
 
 under an assignment are entitled to commissions by statute.' 
 And in Georgia, all trustees are by statute entitled to com- 
 pensation for their services, and commissions are allowed 
 them.'' A similar rule has been judicially established in Ala- 
 bama.3 
 
 In the case of Jenkins v. Eldridge,* in the Circuit Court 
 of the United States for Massachusetts, Mr. Justice Story 
 considered it to be "the general practice in America," and 
 especially in Massachusetts, to allow commissions to trustees 
 in cases of open and admitted express trusts, where the trus- 
 tees have not forfeited them by gross misconduct. And in 
 the case of Barney v. Saunders,^ in the Supreme Court 
 of the United States, it was held that trustees in this coun- 
 try are entitled to claim from courts of equity a fair com- 
 pensation for their services. 
 
 In New York, a trustee is entitled to commissions upon 
 sums with which he is charged, in consequence of losses 
 arising from his negligence, and on debts due to himself as 
 one of the ceshds que trust, and also on the balance in his 
 hands which he is directed by decree to pay over to the 
 cestuis que trust. ^ And in a case where a trustee died, with- 
 out having collected certain claims assigned to him, and they 
 were collected by his administratrix, it was held that she was 
 entitled to the commissions.' 
 
 § 422. Allowance of Compensation. — ^The compensation 
 of the assignee is to be ascertained and awarded by the 
 proper court upon the rendering of his account* He is not 
 allowed to become a judge of the value of his own services, 
 
 " Burckmyer v. Beach, 7 Rich. Eq. 487, referring to the statute of 1828; 
 Loller V. Croft, 9 Rich. Eq. 474. 
 
 ' Lowe V. Morris, 13 Ga. 165 ; WiHiamson v. Wilkins, 14 Id. 416; Bumey v. 
 Spear, 17 Id. 223, referring to the statute of 1764. 
 
 ' Gould V. Hays, 19 Ala. 438 ; Gould v. Hays, 25 Id. 426. 
 
 ' 3 Story, 325, 332. " 16 How. 535. 
 
 • Meacham v. Sternes, 9 Paige, 398, 399. 
 
 ' De Peyster v. Ferrers, 11 Paige, 13. 
 
 ° Geisse v. Beall, 3 Wis. 367 ; Gilbert v. Sutliff, 3 Ohio, N. S. 129; Heckert's 
 Appeal, 24 Penn. St. (12 Har.; 482. 
 
§ 423-] AMOUNT OF COMPENSATION. 583 
 
 and offset money or goods appropriated from the estate 
 against the same in gross, without specification and detail, 
 even where a compensation is provided.' In Maine, the 
 allowance is determined by the judge of probate, subject to 
 the right of appeal to the Supreme Court of Probate.' In 
 New Jersey, the commissions and charges of assignees are 
 adjusted in the final settlement of their accounts before the 
 Orphans' Court of the county. ^ 
 
 § 423. Amount of Compensation.— T\i& amount of com- 
 pensation allowed to assignees in the shape of commissions, 
 is in New York, as already mentioned, fixed at the same 
 rates as those allowed executors and administrators. These 
 are, on all sums of money received and paid out, not exceed- 
 ing one thousand dollars, five per cent. ; on all sums exceed- 
 ing one thousand dollars, and not amounting to five thou- 
 sand dollars, two and a half per cent. ; and on all sums 
 "above five thousand dollars, o?ie per cent."* And these rates 
 are so far settled, that the debtor cannot, by the assignment, 
 provide for paying the assignee a higher one.' And in a 
 case where a commission of six per cent, was allowed on the 
 gross amount of moneys received and paid out by the as- 
 signees, it was considered to be void to the extent atf the ex- 
 cess.* In North Carolina, a commission of two and a half 
 per cent, for making the sale and disbursing the proceeds, 
 has been considered as not too large.' In a case in the same 
 StatCj where a master, in his report, allowed a trustee noth- 
 ing for his expenses, but a greater amount of commission 
 than had been stipulated by the parties, and, upon the whole, 
 the trustee appeared to have received no more than a fair 
 
 ' Geisse v. Beall, ubi supra. " Rev. Stat. (ed. 1874), p. 14, § iS. 
 
 ' Rev. Stat. ^d. 1871), p. 545, c. 70, § 11. 
 
 ■• 3 Rev. Stat. (6th ed.) p. 101 ; 2 Id. p. 931. But see Duffy v. Duncan, 35 N. Y. 
 187, cited ante, p. 578. 
 
 ° Barney v. Griffin, 2 N. Y. 365, 372. But see Wynkoop v. Shardlow, 44 
 Barb. 84. 
 
 ° Bronson, J., Barney v. Griffin, 2 N. Y. 365, 372. 
 
 ' Ingram v. Kirkpatrick, 8 Ired. Ecj. 62. 
 
584 EXPENSES OF THE TRUST. [cHAP. XXXVI. 
 
 compensation, the court refused to disturb the report.' In 
 Alabama, it has been held, that where the trustee in a deed 
 of trust was to receive twelve and a half per cent, by the 
 terms of the deed, this was not sufficient to avoid it in the 
 absence of proof that such compensation was unconscion- 
 able." 
 
 In a case in Kentucky, where an assignment was made 
 to two trustees, and a salary of three hundred dollars was 
 stipulated to be paid to each of them annually, it was held 
 to be unobjectionable.^ And a provision for the payment 
 of large salaries has been held not to make the deed fraudu- 
 lent on its face."* But where each of the trustees was to re- 
 ceive eight thousand dollars per annum, the assignment was, 
 for this and other reasons, held void as against creditors not 
 parties. = 
 
 Compensation by the allowance of a gross sum to the 
 assignee, is the least frequent form in which it is provided 
 by the debtor. In a case in Massachusetts, where there 
 were two assignees, the allowance of one thousand dollars 
 as a compensation for the services of both, was not objected 
 to.^ 
 
 § 424. In regard to fees claimed by the assignee for 
 services rendered as counsel, it has been held in South Caro- 
 lina that a trustee cannot charge the estate with a counsel 
 fee paid to himself' And in New York it has been re- 
 cently held that a provision in an assignment authorizing 
 the payment of "a reasonable counsel fee" to the assignee, 
 in addition to the expenses, costs, and commissions of exe- 
 cuting the trust, was an appropriation of .the assigned prop- 
 erty to an illegal purpose, and rendered the assignment void 
 as to creditors ; and that, so far as the validity of such a pro- 
 
 * Clark V. Ho)ft, 8 Ired. Eq. 222. 
 
 ° Donelson's Adm'rs v. 'Posey, 13 Ala. 752. As to the general rule in this 
 State, see Gould v. Hays, 25 Ala. 426. 
 
 ^ Vernon v. Morton, 8 Dana, 247. * Ingraham v. Grigg, 13 Sm. & M. 22. 
 
 " Bodley v. Goodrich, 7 How. 276. • Andrews v. Ludlow, 5 Pick. 28. 
 
 ' Mayer v. Galluchat, 6 Rich. Eq. i. 
 
§ 425-] COMPENSATION WHEN FORFEITED. 585 
 
 vision was concerned, it was immaterial whether the assignee 
 was or was not an attorney and counselor at law." The 
 court regarded the rule as well settled, that an insolvent as- 
 signor cannot give to his assignee any portion of the estate 
 for his services, beyond the fixed legal rate of compensation." 
 In Mississippi, the sound and just rule on this subject is now 
 held to be, that although compensation may be allowed to a 
 trustee who peforms such service for the estate in his hands, 
 as an attorney or solicitor, yet it shall never be allowed un- 
 less it be clearly shown, beyond a doubt, that the legal pro- 
 ceedings were undertaken and conducted in good faith, and 
 with an eye single to the best interests of the estate, and 
 were necessary to protect its rights.' 
 
 § 425. Compensation when Forfeited. — Compensation 
 to an assignee, in any form, is always on the supposition and 
 condition that he performs the duties incumbent on him un- 
 der the assignment. Hence, if he is guilty of gross careless- 
 ness,* or misconduct,^ or violates the trust,^ no compensation 
 will be allowed him. And if he maladminister and refuse to 
 account, both compensation and expenses may be refused 
 him.' 
 
 ' Nichols V. McEwen, 21 Barb. 65; S. c. 17 N. Y. 22; and see Heacock v. 
 Durand, 42 111. 230; see ante, p. 315, n. 4. 
 
 '^ Nichols V. McEwen, 17 N. Y. 22 ; and see Winn v. Crosby, Daily Reg. Dec. 
 14, 1876, Sup. Ct. of N. Y. Oct. Term, 1876. 
 
 " Shirley v. Shattuck, 28 Miss. (6 Cush.) 13. 
 
 * Stehman's Appeal, 5 Barr, 413, 
 
 ' Jenkins v, Eldredge, 3 Story, 325, 332. 
 
 ' Flagg V. Mann, 3 Sumn. 84. 
 
 ' Gilbert v. Sutliff, 3 Ohio, N. S. 129. And see Barney v. Saunders, 16 How. 
 535. In a case in the Circuit Court of the United States for the District of 
 Rhode Island, where an assignment made by an insolvent debtor was held void- 
 able, as actually fraudulent as against creditors, and the assignee either had knowl- 
 edge of the extraneous facts which rendered the assignment voidable by creditors, 
 or the means of knowing them, and was put upon inquiry — it was held that he 
 had no lien, as against an attaching creditor, upon proceeds of the property as- 
 signed, for his services in partially executing the trusts, or for retainers paid to 
 counsel Hastings v. Spencer, i Curt. 504. 
 
CHAPTER XXXVII. 
 
 DISTRIBUTION AMONG CREDITORS. 
 
 After deducting out of the proceeds of the sales and col- 
 lections, the expenses incident to the trust, and the amount 
 of compensation provided for himself by law, or by the 
 terms of the assignment, it is the duty of the assignee to 
 distribute without delay the surplus moneys in his hands, 
 among such of the creditors as may be entitled, either ac- 
 cording to the provisions of the assignment, or according 
 to the general provisions of law, where they control those 
 of the assignment. This rnay be considered the most im- 
 portant proceeding in the whole course of executing the 
 trust ; to which the principal processes of collection and 
 sale, with their attendant proceedings, are only preliminary 
 and instrumental. Distribution to creditors comprises the 
 whole object and end of the assignment. 
 
 § 426. Distribution, how Made. — The distribution is 
 made either in one payment, or (which is more usual) in 
 successive payments or dividends, as moneys come to the 
 hands of the assignee, of which notice is given to the cred- 
 itors. But before it can take place, an essential preliminary 
 on the part of the assignee is to ascertain what creditors are 
 entitled to payment or dividend, the amount of the debts, 
 and the order, if any, in which they are payable. 
 
 § 427. What Creditors are Entitled. — Care should be 
 taken by the assignee, that payment is made to such 'cred- 
 itors only as are entitled to it under the assignment ; and it 
 will be no defense to an action brought against him by a 
 preferred creditor, that he had, through a misapprehension 
 
§ 42 7- J WHAT CREDITORS ARE ENTITLED, 587 
 
 of his duties, or a mistaken construction of the instrument, 
 paid over all the money to other creditors.' 
 
 Where the assignment is upon certain express terms, 
 as where it is made for the benefit of such creditors as 
 shall become parties to it or release the debtor, these 
 terms must be complied with by creditors who claim the 
 benefit of it.= 
 
 Where the assignment is explicit as to the debts to be 
 paid, and the amount of each, and (in cases of preference) 
 the order of payment, it will, in general, be a sufficient guide 
 to the assignee. In Missouri, it has recently been held that 
 the assignn;ent is prima facie evidence that the persons 
 named therein as creditors are really such.^ And in the 
 absence of any proof to the contrary, the assignee will, in 
 some cases, be justified in paying according to the descrip- 
 tion of the debt in thg deed, even if it be a mistaken one.* 
 Thus, in North Carolina, it has been held that where a debt 
 intended to be secured by a deed of trust, is not correctly 
 described in the deed, though the creditor, by identifying it, 
 may recover it out of the trust fund, while that remains, yet, 
 if the trustee has, bona fide, paid out the trust fund to dis- 
 charge other debts, without any notice of the mistake by the 
 creditor to the trustee, the creditor cannot make the trustee 
 personally responsible.^ But where evidences of the debts 
 directed to be paid are held by the creditors, the assignee 
 should always require the production of such evidences, 
 before payment ; otherwise he may render himself person- 
 ally liable. Thus, in Pennsylvania, in a case where an as- 
 
 ' Ward V. Lewis, 4 Pick. 518. 
 
 ' Lea's Appeal, 9 Barr, 504; Jewett v. Woodward, i Edw. Ch. 195. 
 
 ' Gates V. Labeaume, 19 Mo. (4 Ben.) 17. 
 
 ' So in a case in Wisconsin, where a preferred creditor gave to tlie plaintiff an 
 order on the defendant (assignee) for the amount of his claim as stated in the 
 assignment, and the defendant accepted the order, it was held that the assignee 
 was estopped by the representations made in the assignment from denying the 
 indebtedness to the creditor and setting up a defense to the order. Gundiy v. 
 Vivian, 17 Wis. 437. 
 
 ^ AUemand v. Russell, 5 Ired. Eq. 183 ; and see further, on this head, ante, 
 § 146. 
 
588 DISTRIBUTION TO CREDITORS. [CHAP. XXXVII. 
 
 signment provided, among other things, for the payment 
 " of all the creditors of the assignor, to whom J. S. may- 
 have become liable by acceptance, &c., viz.," and then fol- 
 lowed a Hst of those liabilities, including eight drafts partic- 
 ularly described, and the assignees paid the whole of the 
 alleged eight drafts, without requiring their production, and 
 it afterwards appeared that there were only six drafts, and 
 that two were inserted by mistake, it was held that the as- 
 signees were not entitled to credit, in their account, for the 
 mispayment.' 
 
 Where the trust is for the payment of the grantor's debts 
 generally, it will extend only to debts which existed at the 
 time when the deed was made. A debt subsequently orig- 
 inating is not entitled to payment out of the trust estate.' 
 If contingent liabilities are provided for, they must be such 
 as existed when the conveyance was executed, and should 
 be at least such as would entitle a party under the provisions 
 of the English bankrupt act or our insolvent laws, to a share 
 in the insolvent or bankrupt estate.^ 
 
 And where a note was made the day after the assign- 
 ment was executed and delivered, it was held that it could 
 not be included in the assignment, nor could the assignor 
 by antedating the note, vary the eflFect of the instrument.* 
 
 A judgment recovered against an assignor after his as- 
 signment on a previous cause of action, is prima facie evi- 
 dence of the facts which it adjudicates, as against the cred- 
 itors who take under the assignment ; such a judgment is 
 prima facie entitled to a dividend ' 
 
 Where there is difficulty in ascertaining from the assign- 
 ment the amount of debts payable, and the mode and order 
 of payment, or where there are conflicting claims which it is 
 difficult to adjust, the assignee may apply to the proper 
 
 ' Case of Stevenson's Assignees, 7 Watts, 480. 
 
 ° Rome Ex. Bank v. Eames, 4 Abb. Ct. App. Dec. 83. = Id. 92. 
 
 ■■ Sheldon v. Smith, 28 Barb 594, 600; see Power v. Alger, 13 Abb. Pr. 284-475. 
 ' Pitts. & Steubenville R. Co. Appeal, 3 Grant (Pa.) 68. The distributees 
 might have attacked the claim by showing fraud or collusion. Id. p. 69. 
 
§ 42 7-] WHAT CREDITORS ARE ENTITLED. 589 
 
 court for directions. This was done in New York, in the 
 important case of Pratt v. Adams,' in which the assignees 
 filed their bill against the assignor (Benjamin Rathbun), 
 and against several hundreds of other persons and banking 
 corporations who were supposed to be his creditors, for the 
 purpose of having the debts due to the creditors ascertained, 
 and their several priorities established, so that the proceeds 
 of the assigned property might be distributed among the 
 several persons interested therein, under the assignment, 
 according to their respective rights. The case was referred 
 to one of the masters of the court, to take and state an ac- 
 count, and report the order of priority in which the claims 
 against the assignor were payable ; and on the coming in of 
 his report, the necessary decree was made by the court.^ 
 
 The application on the part of the assignee to the court 
 for instructions and authority to settle disputed claims may 
 be either by motion or by bill in equity,^ but in either case 
 
 ' 7 Paige, 615. The creditors in this case were arranged by the assignment 
 in two classes, the first constituting the preferred class. Independently of specific 
 liens upon the assignor's real estate, amounting to more than half a million of 
 dollars, claims were presented to and allowed by the master, to an amount ex- 
 ceeding a million of dollars, of which amount, $380,939 was allowed by him as 
 belonging to the class of preferred debts under the assignment. And claims to 
 the amount of $225,000, which were attempted to be established, were rejected 
 by him as usurious and void. Id. 624, 625. 
 
 ' It may not be unimportant to state more particularly the course of proceed- 
 ' ing in this case, after the filing of the complainants' bill. Many of the defendants 
 were proceeded against as absentees, and the bill was taken as confessed against 
 them and many others, for want of appearance. And an arrangement was made 
 between the complainants, and those defendants who had caused their appearance 
 to be entered, by which the bill was to be taken as confessed as to them also ; 
 reserving to each creditor all his rights on the reference to be made to a master, 
 in the same manner as if he had come in and claimed such rights by his answer. 
 A decree was then entered referring it to one of the masters of the court : i. To 
 take and state an account of all property, money and effects which had come to 
 the hands of the complainants, as assignees, &c. ; 2. To take and state an ac- 
 count of all payments and disbursements made by them, &c. ; 3. To take and 
 state an account of all expenses incurred by them, &c., and of all just allowances 
 to be made to them for their services in the execution of the trust ; 4. To take 
 and state an account of all the claims and demands against the debtor, &c. ; 5. 
 To inquire into, and report the order of priority in which the said claims and de- 
 mands were entitled to be paid, and the facts and circumstances necessary to 
 determine the said order — ^besides many other special directions as to the proceed- 
 ings. See 7 Paige, 619-621. 
 
 ' In the case of Codwise v. Gelston (10 Johns. 521), Chancellor Kent remarked : 
 '' It may be difficult to draw a precise line between cases in which a party may be 
 relieved upon petition and in which he must apply more formally by bill. Peti- 
 
590 DISTRIBUTION TO CREDITORS. [CHAP. XXXVII. 
 
 the application must be on notice to all parties interested in 
 the estate, or the order or decree will be ineffectual to pro- 
 tect the assignee.' 
 
 In inquiring for the debts made payable out of the fund 
 in his hands, the assignee or trustee (as already stated) looks 
 in the first instance, to the description of them in the assign- 
 ment, or its accompanying schedules.'' But such description, 
 as we have seen, is not always to be implicitly relied on, 
 and when given by way of recital in a trust deed, has been 
 held not conclusive, even as against the grantor and his 
 administrator, of the amoiint of the respective t ebts.^ And 
 under the circumstances, the books of the grantor in the 
 deed of trust were held to be proper evidence of the amount 
 of the debts due to the creditors secured by the deed."* And 
 the creditors have sometimes been allowed to introduce 
 proof explanatory of the deed. Thus, in a case in Virginia, 
 a creditor was allowed to show by proofs that his debt was 
 intended to be secured under the provision for another cred- 
 itor.^ And in a case in Alabama, parol evidence was held 
 admissible to show that a particular bill of exchange was 
 
 tions are generally for things which are matters of course, or on some collateral 
 matter which has reference to a suit in court. The mode of application depends 
 very much upon the discretion of the court." 
 
 ' In the case of Anon. v. Gelpcke (12 Sup. Ct. [5 Hun], 245), Mr. Justice 
 Daniels observes : " To render them controlling and obligatory in that class of 
 cases, not only notice, but an opportunity to oppose the application to be 
 made are both matters of vital necessity (Stone v. Miller, 62 Barb. 431 ; People v. 
 Soper, 7 N. Y. 428, 431), and trustees have been required to observe this principle 
 in the applications which they have found it necessary to make for their guidance 
 in doubtful cases. In the Matter of Christ's Church in Londonderry (5 N. H. 
 434), the petition was presented on notice. Wheeler v. Perry (18 N. H. 307), and 
 Dimmock v. Bixby (20 Pick. 368), were by bill. See Freeman v. Cook, Burrill on 
 Assign. (2d ed.) 557." So where one of two assignees, without notice to his co- 
 assignee or to any of the creditors, applied to the court on petition for leave to 
 cornpromise a claim which appeared to be valid and good, and did not disclose all 
 the circumstances, nor the fact that his co-assignee was opposed to the settlement, 
 and obtained an order authorizing him to settle for 25 cents on the dollar — in the 
 final accounting by the assignees, it was held that this order was no protection, 
 and the assignee must sustain the loss. 
 
 '' See the observations of Ruffin, C. J., in Allemand v. Russell, 5 Ired. Eq. 183 
 186. 
 
 ' Griffin's Ex'r v. Macaulay's Adm'r, 7 Graft. 746. ' Id. ibid. 
 
 ' Id. Ibid. 
 
§ 428.] DOUBTFUL AND DISPUTED CLAIMS. 59 1 
 
 intended to be secured by a deed of trust, though generally 
 or improperly described in the deed.' 
 
 § 428. Doubtful and Disputed Claims. — Doubtful claims 
 are sometimes paid by assignees, after taking an indemnity 
 for their own security. In a case where an assignee paid in 
 this way a judgment preferred by the assignment, it was 
 held that such payment did not preclude the other creditors 
 from contesting the validity of the judgment. =" 
 
 How far the holders of usurious claims against the as- 
 signor are entitled to payment out of the proceeds of the 
 assigned property has been a subject of considerable dis- 
 cussion in the courts of New York. In the case of Beach 
 V. The Fulton Bank,^ in the Court of Errors, it was held that 
 trustees (some of whom were also creditors) under a deed 
 of assignment for the benefit of creditors, might set up the 
 defen e of usury against claims presented to them, though 
 the court inclined to think they were not bound to do so.* 
 In the case of Pratt v. Adams,^ in the Court of Chancery, 
 where a master of the court had, on a reference to him, re- 
 jected a large amount of claims under an ; ssignment as 
 usurious and void, the question, on exceptions to his report, 
 was fully considered by the chancellor, from whose opinion the 
 
 '.Posey V. Decatur Bank, 12 Ala. 802. And see further on this subject ante, 
 pp. 426, et seg., and post, Chap. XLIl. ' 
 
 ° Johns V. Erb, 5 Barr, 232. And see Meacham v. Sternes, 9 Paige, 398. " A 
 trustee cannot be expected to incur the least risk in the distribution of trust funds, 
 therefore when there is a mere shadow of doubt as to the rights of the parties, he 
 raay require a bond of indemnity. Such a bond, however, is not very satisfactory, 
 as the obligors may decease and their property be divided long betore there is a 
 call upon them to indemnify the trustee, and if it appears that the trustees have 
 committed a breach of trust under cover of such a defense, the court shows no 
 mercy. Therefore, if a third person makes a claim, or if he refuses to state 
 whether he has a claim when the trustee has a right to know, the trustee may 
 bring such person before the court by bill." Perry on Trusts, § 928. 
 
 ' 3 Wend. 573, 574. 
 
 * "As trustees," it was said, "they ought not to pay any illegal demands; 
 perhaps they would not be bound to set up this defense, but there can be nodoubt 
 they are not bound by their obligation as trustees to pay notes which, have no 
 legal efficacy, and are as perfectly justified in availing themselves of such a defense, 
 as if they were individually interested." Savage, C. J., 3 Wend. 584. *; 
 
 • 7 Paige, 639. !| 
 
592 DISTRIBUTION TO CREDITORS. [cHAP. XXXVII. 
 
 following rule may be deduced : ' that where the assignment 
 specifically directs a usurious claim to be paid, or placed in 
 a preferred class of creditors, it cannot be excluded or re- 
 jected by the assignee on the ground of its usurious character, 
 nor can other creditors who come in under the assignment 
 object to its allowance," although the usurious excess must 
 always be deducted by the assignee in the payment of it. 
 But that a general provision for the payment of debts, in an 
 assignment for the benefit of creditors, will not include debts 
 founded upon a usurious consideration.^ The doctrine of 
 this case was fully sustained by the Supreme Court in Green 
 V. Morse,'' in which it was held that the assignees of a debtor 
 who have accepted the trust created by an assignment for 
 the benefit of creditors, have no right to refuse the payment 
 of a debt specifically directed to be paid in the assignment, 
 on the ground of its being usurious, in the absence of any 
 request or authority to them from the assignor, or from any 
 creditor provided for in the assignment, to refuse such pay- 
 ment, and where the assignees are not themselves creditors 
 
 ' The chancellor held that even if the general principle, that a court of justice 
 will not lend its aid to enforce a contract which is made contrary to the provisions 
 of a statute, is applicable to usurious discounts by banks in another State, the 
 amount of money actually lent upon these notes, with the legal interest thereon, 
 formed a good consideration for a direction to the trustees in the case before him 
 to pay that money to the bank o'lt of the assigned property, and that those who 
 came in as cestuis que trust could not object to the legality of the assignment, and 
 the validity of the trusts therein contained.' Pratt v. Adams, 7 Paige, 639. 
 
 " The chancellor dwelt on the distinction existing in this respect between vol- 
 untary assignments and those made under the provisions of a bar>krupt or insolvent 
 law. " An assignment made under the provisions of a bankrupt or insolvent law 
 only provides for the payment of such debts as could be recovered against the 
 bankrupt or insolvent himself, either at law or in equity. It therefore follows as a 
 necessary consequence, that every creditor who comes in to prove a debt under 
 such an assignment, must be prepared to show a claim which was valid and re- 
 coverable against the person whose property has been thus assigned. But in the 
 case of a voluntary assignment, where the assignor creates his own trusts, a cred- 
 itor who comes in to claim a share of the fund under it must be content 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 assignment on the grounu that they are illegal and a fraud upon 
 the honest creditors of the assignor, must, apply to set aside the assignment as fraud- 
 ulent and void against him as a creditor, instead of coming in under the assign- 
 ment itself as a preferred creditor or otherwise." Pratt v. Adams, 7 Paige, 639. 
 
 " Walworth, C, 7 Paige, 639, 641, 642. ■* 4 Barb. S. C. 332. 
 
§ 428.] DOUBTFUL AND DISPUTED CLAIMS. 593 
 
 of the assignor ; that in such a case the assignees are mere 
 naked trustees, bound to execute the trust according to its 
 prescribed conditions, with no power to substitute their own 
 discretion in the place of the will of the assignor. It was 
 further held that even where assignees are also creditors, if 
 they have accepted the assignment and are acting under it, 
 and as agents and trustees for the creditors are seeking the 
 shares provided for them by it, they have elected to enforce 
 it instead .of assailing it by a hostile proceeding, and are 
 therefore estopped from questioning its provisions in favor 
 of others while they are claiming the benefit of them for 
 themselves.' The distinction taken in Pratt v. Adams, be- 
 tween a case where the assignor directs a specific debt to be 
 paid, and where he assigns generally for the benefit of cred- 
 itors, was also fully recognized. In the latter case, it was 
 said, the assignees are not bound to pay usurious debts, while 
 in the former they are.'' In regard to the usurious excess 
 claimed, the court inclined to think that it should be al- 
 lowed, but, notwithstanding their doubts, concluded to follow 
 the decision of the chancellor in Pratt v. Adams, and accord- 
 ingly ordered it to be stricken out of the decree. ^ 
 
 ' 4 Barb. S. C. 332. In the case of Union Bank v. Bell (14 Ohio St. 200), it 
 was held that the assignee of land mortgaged, as distinguished from the assignee 
 of the mere equity of redemption eo nomine, may set up the defense of usury 
 (citing Beach v. Fulton Bank, 3 Wend. 573 ; Pearsall v. Kingsland, 3 Edw. Ch. 
 195) ; and not only may the trustee set up this defense, but the creditor's benefi- 
 ciaries under the deed will be permitted to contest the validity of the mortgage. 
 
 '^ Pratt V. Adams, 7 Paige, 615. 
 
 ' The question how far a creditor who comes in under an assignment Is barred 
 from impeaching the claims of other creditors provided for in the same instrument, 
 is one which on the authorities is not free from doubt. In a recent case in the Su- 
 preme Court of Arkansas, Mr. Chief Justice English delivered an elaborate opinion, 
 in which he examined a large number of authorities. In the case before him, 
 where the executrix of a deceased assignee, who was also creditor, sought to im- 
 peach the claims of certain of the other creditors named in the deed, as being 
 without consideration and inserted in fraud of the creditors, a conclusion adverse 
 to the executrix was reached. This rule rests upon the doctrine of election, under 
 which a party is compelled to accept or reject an instrument from which he draws 
 a benefit, but cannot affirm it in part and disaffirm it in part. The authorities in 
 support of this position are numerous and weighty. See Streatfield v. Streatfield, 
 I Lead. Cas. in Eq. (H. & W. notes), 273 (where the English and American 
 cases are collected and reviewed) ; Adlum v. Yard, i Rawle, 163 ; Gutzweiler v. 
 Lackman, 23 Mo. 168; Pratt v. Adams, i Paige, 615 ; Burrows v. Alter, 7 Mo. 
 424; Jewett v. Woodward, i Edw. Ch. 195; Lanahan v. Latrobe, 7 Md. 268 ; 
 
 83 
 
594 DISTRIBUTION TO CREDITORS. [cHAP. XXXVII. 
 
 § 429. Distribution in Particular Cases. — In some 
 States, the processes of ascertaining the debts against the 
 estate, settling disputed claims, and declaring and paying 
 dividends, are regulated, with more or less minuteness, by- 
 statute. 
 
 In Connecticut, the power of receiving and passing upon 
 the claims of creditors is vested in commissioners appointed 
 by the Court of Probate (after notice given by the trustees), 
 who, after being sworn, give public notice of the times 
 and places of their meetings.' The court limit a time (not 
 less than three months nor more than six months), for cred- 
 itors to exhibit their claims ; and the commissioners are re- 
 quired to act upon the claims exhibited to them, and allow 
 such of them, exhibited within the said time, as shall be 
 proved to be justly and lawfully due.'' Any claim against 
 an insolvent estate, whether founded in contract or tort, 
 may be proved before the commissioners and allowed by 
 them.3 The commissioners, as soon after the expiration of 
 the time limited as it can reasonably be done, are required 
 to make their report to the court, containing a list of all the 
 claims exhibited to them, and specifying those which they 
 have allowed and those which they have disallowed.'' The 
 court then direct the payment of the debts against the estate 
 to be made in the following order, to wit : first, the expenses 
 of executing the trust and settling the estate ; secondly, all 
 lawful taxes and all debts due to the State ; and lastly, the 
 
 Lerry v. Bibeau, 2 Minn. 293 ; Scott v. Edes, 3 Minn. 387 ; Geisse v. Beall, 3 Wis. 
 391 ; Moule v. Buchanan, 11 G. & J. 314; Swanson v. Turkington, 7 Heisk. 
 (Tenn.) 612; Irwin v. Tabb, 17 S. & R. 422 ; Green v. Morse, 4 Barb. 332; May- 
 nard v. Maynard, 4Edw. Ch. 711 ; Busby v. Finn, i Ohio St. 409. On the other 
 hand, it has been said that the assignee is not to be supposed to accept the trust 
 except for real and bona fide creditors, and that no particular creditor is precluded 
 by taking under an assignment from impeaching any of the debts attempted to be 
 secured by it. Macintosh v. Corner, 33 Md. 598 ; Starr v. Dugan, 22 Md. 58; Sixth 
 Ward Bank v. Wilson, 41 Md. 506 ; and see Pinneo v. Hart, 30 Mo. 561 ; and see 
 ante, p. 143, notes. In Pennsylvania, it seems that the distributees may attack the 
 claim of a creditor by showing frand or collusion. Pitts v. Steubenville R. R. Co. 
 3 Grant (Pa.) 68. 
 
 ' Gen. Stat, (rev, 1875), p. 388, § 7. ' Id. § 8. 
 
 Md. §3. Md. §11. 
 
§ 43°-] DISTRIBUTION IN PARTICULAR CASES. 595 
 
 debts of the several creditors as allowed, in proportion to 
 their respective amounts.' 
 
 A creditor who does not exhibit his claim is bound un- 
 less he can show some estate not in the inventory.^ 
 
 In Maine, under the statute regulating assignments, cred- 
 itors becoming parties to the assignment, and presenting 
 their claims to the assignee for allowance, are required to 
 offer the same proof thereof, and if dissatisfied with his 
 decision, have the same right of appeal and the same remedy 
 that is provided in relation to claims presented to commis- 
 sioners on insolvent estates, and also have the same remedy 
 on the assignee's bond that is provided in relation to an ad- 
 ministrator's bond.3 
 
 § 430. In New Jersey, under the statute regulating as- 
 signments, before the assignee can proceed to make a divi- 
 dend, he must, at the expiration of three months from the 
 date of the assignment, file with the clerk of the Court of 
 Common Pleas of the county wherein the debtor resided at 
 the time of making the assignment, a true list, under oath 
 or affirmation, of all such creditors of the debtor as shall 
 claim to be such, with a true statement of their respective 
 claims, having first advertised, as prescribed by the statute, 
 for six weeks next preceding the end of said term, making 
 known thereby that all claims against the debtor's estate 
 must be made as prescribed by the statute, or be forever 
 barred from coming in for a dividend otherwise than as pro- 
 vided/ The statute then declares that it shall be lawful for 
 the assignee, or any creditor or other person interested, to 
 appear at the next term of the said Court of Common Pleas, 
 
 ■ Id. p. 386, § 34. 
 
 " Id. p. 389, § 9. '' Rev. Stat. (ed. 1871), p. 544, c. 7°. § 6. 
 
 ■" Rev. Stat. (ed. 1874'), p. 10, § 5. In the case of Van Keuren v. McLaughlin 
 (21 N. J. Eq. 163), where a creditor who had not proved his claim or shared in the 
 final distribution of the e^ate, discovered that a certain conveyance by the debtor, 
 though absolu e upon its face, was in fact a mortgage, and the equity of redemp- 
 tion of the mortgaged premises passed to the assignee, it was held that the creditor 
 making the discovery was entitled to be paid out of the proceeds of the discovered 
 property an amount equal to the ratable share of the other creditors ; and afterpay- 
 ment of this amount the balance should be distributed ratably among all the 
 creditors. 
 
596 DISTRIBUTION TO CREDITORS. [CHAP, XXXVII. 
 
 and file exceptio?is to the claim or demand of any creditor 
 exhibited as aforesaid ; and said court shall cause a notice to 
 be served on said creditor, at least four weeks preceding the 
 next term ; and shall then proceed to hear the proofs and al- 
 legations in the premises, allowing the parties a right to have 
 the controversy settled by jury.' At the first term of the 
 court succeeding the expiration of the three months limited 
 by the statute, should there be no exceptions made to the 
 claim of any creditor, or if exceptions have been made and 
 adjudicated or settled by the court, the assignee is required 
 to proceed to make, from time to time, fair and equal divi- 
 dends among the creditors, of the assets which shall come to 
 hand, in proportion to their claims." It is further provided 
 that any creditor may not only exhibit any debt due, but 
 those to grow due, making, in such case a reasonable rebate, 
 when interest is not accruing on the same.^ 
 
 § 431. In Missouri, the assignee is required by statute, 
 to appoint a day, within six months after the date of the as- 
 signment, and a place, which shall be the county sea" of the 
 county where the inventory is filed, when and where he will 
 proceed publicly to adjust and allow demands against the 
 estate and effects of the assignor.'* He is required to give 
 notice of such time and place, by advertisement published in 
 some newspaper printed in the county, or if there be none, 
 in the one nearest the place where the inventory is filed, for 
 three months, 1 he last insertion to be at least four weeks be- 
 fore the appointed day ; and also, whenever the residence of 
 any of the creditors is known to him, by letter addressed to 
 such creditors, at their known or usual place of abode, at 
 least three months before the appointed day.= He is em- 
 powered to administer all necessary oaths to debtors, credit- 
 ors, and witnesses, and may examine them on oath, touch- 
 ing anv claim exhibited to him for allowance.* He shall re- 
 
 Rev. Stat. (e«l. 1874), p. 10, § 6. ' Rev. Stat. (ed. 1874), p. n, § 8. 
 
 Id. § 10, * Gen. Stat. (Wag.) p. 153, § 20. 
 
 ■Ibid. §20, 'Ibid. §22. 
 
§ 43I-] DISTRIBUTION IN PARTICULAR CASES. 597 
 
 quire such evidence, and no other, of the justice of such de- 
 mands, as is required to establish demands of a similar char- 
 acter in the Circuit Court, in suits between the original 
 parties to the contract.' His decision in relation to such 
 claims is declared to be final, unless a creditor, or some other 
 person interested, shall, before a decision is made on any 
 such claim, ask an appeal.'' All appeals so asked shall be al- 
 lowed to the Circuit Court of the county having jurisdiction 
 thereof 3 All creditors, who, after being notified as afore- 
 said, shall no" attend at the time and place of adjusting and 
 allowing demands against such estate, and lay before the as-' 
 signee the nature and amount of their demands, shall be 
 precluded from any benefit of such estate ; but the hearing 
 on any demand presented at the time may be continued for 
 good cause by the assignee, to such time as deemed right.'' 
 As soon as practicable, and not exceeding one month after 
 the time for an allowance of demands under the act, the as- 
 signee is required to pay upon the demands allowed, accord- 
 ing to their right, as much as the means in hand will permit, 
 after reserving enough for proper fees, costs, expenses, and 
 demands, whose trial is legally continued or removed, and as 
 often thereafter as a dividend of five per cent, can be paid 
 upon the demands allowed as aforesaid ; the assignee is also 
 required to give notice of such payment, by publication 
 thereof for one week, in the same newspaper in which was 
 published the notice of allowance of demands ; and if the as- 
 signee neglect or refuse to make payment out of such trust 
 fund as required, for more than three days after the same 
 have become due, and have been demanded by the person 
 entitled thereto, his agent or attorney ; or if he shall, in any 
 wise, neglect or refuse to comply with the provisions of the 
 section, he shall, for every such neglect or refusal, forfeit and 
 pay to the person aggrieved five per cent, per month inter- 
 est on such sum as such person was entitled to at the time of 
 
 ' Ibid. § 23. ' Ibid. § 24. 
 
 'Ibid. §25. • Ibid. §21. 
 
598 DISTRIBUTION TO CREDITORS. [CHAP. XXXVII. 
 
 such demand, to be recovered by motion in the court having 
 jurisdiction of said assignment ; and any judgment of said 
 court, on the hearing of such motion, shall be against said 
 assignee and his securities ; and such assignee shall, in addi- 
 tion to such forfeiture, be subject to be dismissed from his 
 trust by said court for such neglect and refusal, on motion 
 and citation for that purpose.' 
 
 § 432. In Indiana the assignee, within six months after 
 entering upon the duties of his trust, is required to report to 
 the judge of the Court of Common Pleas, under oath, the 
 amount of money in his hands from sales and collections, to- 
 gether with a list of the claims which have been presented 
 to him, noting those which he allows and those which are 
 disallowed.^ Claims which are disallowed are to be tried at 
 the succeeding term of the court.^ 
 
 So in Iowa, at the expiration of three months from the 
 time of first publishing the notice, the assignee is required to 
 report and file with the clerk of the court, a true andfullHst, 
 under oath, of all creditors who have claimed to be such, 
 with a statement of their claims, and also an affidavit of pub- 
 lication and list of the creditors, with their places of resi- 
 dence, to whom ijotice has been sent by mail, and the date 
 of mailing duly verified.'' Objections to the claims may be 
 filed, and the court, at the next term, hears and determines 
 upon them. 5 
 
 Creditors who shall not exhibit their claims within the 
 term of three months from the publication of notice, shall 
 not participate in the dividends until after the payment in 
 full of all claims presented within said term, and allowed by 
 the court.* 
 
 In New Hampshire, every creditor is required to file in 
 the probate office, within six months after the assignment, a 
 
 ' Ibid. § 35. See January v. Powell, 29 Mo. 241. 
 
 ' I Stat, of Ind. (G. & H.) 1870, p. 116, § 11. ' Id. § i2. 
 
 • Iowa Code (1873), p. 384, § 2120. ° Id. § 2121. 
 
 ' Id. p. 385, § 2126. 
 
§ 433'] NOTICE OF DIVIDEND. 599 
 
 distinct statement of the particulars of his claim against the 
 debtor, and of the offsets thereto, verified by the oath or 
 affirmation of himself, his agent, or attorney.' The form of 
 the verification is given in the statute." 
 
 Objections to the claims so presented may be filed within 
 seven months after the assignment, specifying the particular 
 items objected to, under the oath of the debtor, assignee, or 
 creditor objecting. The judge of probate, on notice to the 
 parties, allows or disallows the claims. ^ Appeals may be 
 taken from the judge of probate to the Supreme Court* 
 
 In Massachusetts, under the statute of 1836, c. 238, § 6, 
 the assignees were directed to declare and pay dividends 
 from time to time, as soon as might be after converting the 
 effects into money ; provided, that where it should appear 
 that there were creditors who, from their distant residence 
 or other sufficient reason, could not become parties to the 
 assignment before the making of the first dividend, or where 
 it should appear that there were any of the classes of cred- 
 itors named in the second section of the statute, whose debts 
 should not have, but might afterwards, become absolute, the 
 assignees might retain from the funds a sum sufficient to pay 
 to every such supposed creditor, an equal proportion with 
 the other creditors. 
 
 § 433. Notice of Dividend. — Independently of any stat- 
 utory provision, the assignee should always give notice to 
 the creditors, of the payment of any dividends under the 
 assignment, otherwise he will become liable to the payment 
 of interest. In some cases, this is provided for by the as- 
 signment itself In an important case in Louisiana, where 
 the assignment directed thirty days' notice to be given of 
 the assignees' intention to make a dividend, and also required 
 creditors to prove their debts, in order to entitle them to 
 a dividend, it was in both respects approved by the court.' 
 
 ' Gen. Stat. (ed. 1867), p. 264, § 11. = Ibid. 
 
 'Id. §13. - Id. §§ 23, 24, 25, 26. 
 
 • United States v. Bank of the United States, 8 Rob. (La.) 262 ; Garland, J., 
 Id. 412. 
 
6oO DISTRIBUTION TO CREDITORS. [cHAP. XXXVII. 
 
 § 434. Order of Payment. — In distributing the proceeds 
 of the assigned property, a certain order is to be observed 
 by the assignee, even where the general creditors are to be 
 paid ratably. Priorities in payment have been given by law 
 to the following descriptions of creditors : first, the United 
 States ; secondly, the State ; thirdly, claims for taxes ; 
 fourthly, rent due. 
 
 § 435. Priority of the United States. — The United 
 States have the exclusive privilege of being entitled to pri- 
 ority of payment over other creditors, in all cases of the in- 
 solvency or bankruptcy of their debtor.' This priority was 
 given by the acts of March 3, 1797, and March 2, 1799. 
 By the former it was declared (§ 5) that "where any per- 
 son becoming indebted to the United States, by bond or 
 otherwise, shall become insolvent, the debt due to the 
 United States shall be first satisfied ; " and the priority 
 given by the act was expressly extended to include cases 
 " in which a debtor, not having sufficient property to pay all 
 his debts, shall make a voluntary assignment thereof."" By 
 the act of 1 799, it was declared that in all cases of insolv- 
 ency, or where any estate in the hands of executors, admin- 
 istrators, or assignees, shall be insufficient to pay all the 
 debts, the debt or debts due the United States, on any bond 
 or bonds for the payment of duties, shall be first satisfied ; 
 and any executor, administrator, or assignee, who shall pay 
 any debt due by the person or estate for whom or for which 
 they are acting, previous to the debt or debts due to the 
 United States from such person or estate being first duly 
 satisfied, shall become answerable in their own person and 
 estate for the debt or debts so due to the United States, or 
 so much thereof as may remain due and unpaid, and actions 
 may be commenced against them for the recovery of such 
 
 ' United States v. Fisher, 2 Cranch, 358. A sketch of the origin of this claim 
 of priority, and of the various enactments on the subject in the United States, may 
 be found in the opinion of Mr. Justice Story, in the case of the United States v. 
 The State Bank of North Carolina, 6 Pet. 35, 36. 
 
 ' 1 U. S. Stat, at Large, 515 ; U. S. Rev. Stat. § 3466. 
 
§§436,437-1 PRIORITY OF the united states. 6oi 
 
 debts. The cases of insolvency, mentioned in the act, are 
 expressly declared to embrace (as in the preceding act) 
 cases where a debtor not having sufficient property to pay 
 all his debts, shall have made a voluntary assignment for the 
 benefit of his creditors.' 
 
 § 436. Under these acts, it has been held that insolvency 
 or inability to pay his debts, by any one who is a debtor to 
 the United States, does not give the United States a pref- 
 erence, unless the same be accompanied by a voluntary as- 
 signment of all the property of the debtor, for the benefit 
 of his creditors. . Aliter, if there be a legal insolvency." It 
 has been further held that the priority of the United States 
 extends as well to debts by bonds for duties which are pay- 
 able after the insolvency of the obligor, or after the date of 
 an assignment made by him, as to those actually payable or 
 due at the time of such insolvency or assignment.^ 
 
 § 437. But to entitle the United States to priority of 
 payment out of funds in the hands of assignees, the assign- 
 ment must have been a general one of all the debtor's 
 property,-* as distinguished from a partial one.^ An as- 
 signment of a portion, however large, without fraud, is not 
 sufficient* Insolvency, in the sense of the statute, relates to 
 such a general divestment of property as would in fact be 
 equivalent to insolvency in its technical sense. It supposes 
 that all the debtor's property had passed from him.' But if 
 only a trifling portion of the assignor's estate be omitted or 
 
 ' I U. S. Stat, at Large, 676 ; U. S. Rev. Stat. § 3467. 
 
 "^ Thelluson v. Smith, Pet. C. C. 195. As to the meaning of the term "volun- 
 tary assignment," see ante, % 2, and notes. 
 
 ' United States v. The State Bank of North Carolina, 6 Pet. 29. 
 
 * United States v. Monroe, 5 Mason, 572 ; United States v. Rowland, 4 
 Wheat. 108; United States v. Mott, i Paine, i88 ; United States -i. Clark, Id. 
 629 ; United States v. Hunter, 5 Mason, 229 ; United States v. Hooe, 3 Cranch, 
 73 ; Conard v. Atlantic Ins. Co. i Pet. 386; Story, J., Id. 439; United States v. 
 McLellan, 3 Sumn. 345 ; United States v. Bank of the United States, 8 Rob. (La.) 
 262 ; see Dias v. Bouchaud, 10 Paige, 445. 
 
 ' See ante, p. 190. 
 
 ' United States v. Munroe, 5 Mason, 572. 
 
 ' Conard v. Atlantic Ins. Co. I Pet. 386, 439. 
 
602 DISTRIBUTION TO CREDITORS. [cHAP, XXXVII,' 
 
 reserved, whether by mistake or for the purpose of evading 
 the statute, such omission or reservation will not make the 
 assignment a partial one, so as to defeat the priority.' 
 Where there is an omission of an article of property in an 
 assignment which purports to be general, but which does 
 not show that the intention was that the assignment should 
 be a partial, as opposed to a general one, it does not take 
 the case out of the act."" And if the assignment does not on 
 its face appear to be general, the onus probandi is on the 
 United States.^ Thus, where the deed of assignment con- 
 veys only the property mentioned in the schedule annexed, 
 and the schedule does not purport to convey all the prop- 
 erty of the party who made it, the onus probandi is thrown 
 on the United States to show that the assignment embraced 
 all the property of the debtor. ■* But a debtor cannot, by 
 assigning all his property by different acts, defeat the pri- 
 ority of the United States, under the pretext of the assign- 
 ments being partial.^ It has been further held recently in 
 New York, that an assignment by a debtor, who is in- 
 solvent, of his property in trust for the benefit of a single 
 creditor or surety, containing no provisions for the benefit 
 of creditors generally, is not within the act of March 2, 
 
 1 799-' 
 
 § 438. In regard to the nature of the priority established 
 in favor of the United States, it was held in Conard v. The 
 Atlantic Insurance Company,' that it is not a right which 
 supersedes and overrules the assignment of the debtor, as 
 to any property which the United States may afterwards 
 elect to take in execution, so as to prevent its passing by 
 
 ' United States v. Hooe, 3 Cranch, 73 ; United States v. Langton, 5 Mason, 
 280, 289 ; United States v. McLellan, 3 Sumn. 345. 
 
 ' United States v. Clark, i Paine, 629 ; Mott v. Maris's Assignees, 2 Wash. C. 
 C. 196. 
 
 ° United States v. Clark, i Paine, 629 ; United States v. Langton, S Mason. 
 280, 289 ; United States v. Howland, 4 Wheat. 108. 
 
 ' United States v. Howland, iM supra. 
 
 • United States v. Bank of the United States, 8 Rob. (La.) 262. 
 
 " Bouchaud v. Dias, I N. Y. 201. ' i Pet. 386 ; Story, J., Id. 439. 
 
§ 438-J PRIORITY OF THK UNITED STATES. 603 
 
 virtue of such assignment to the assignees ; but it is a mere 
 right of prior payment out of the general funds of the debtor 
 in the hands of the assignees ; and the assignees are ren- 
 dered personally liable, if they omit to discharge the debt 
 due to the United States, In Brent v. The Bank of Wash- 
 ington,' it was held to have been the uniform construction 
 of the fifth section of the act of 1797, and of the similar pro- 
 vision in the sixty-fifth section of the collection act of 1 799, 
 that whether in a case of insolvency, death, or assignment^ 
 the property of the debtor passes to the assignee, executor, 
 or administrator, the priority of the United States oper- 
 ates not to prevent the transmission of the property, but 
 gives them a preference in payment out of the proceeds. 
 It was further held that this preference is in the appropria- 
 tion of the debtor's estate ; so that if, before it has attached, 
 the debtor has conveyed or mortgaged his property, or it 
 has been transferred in the ordinary course of business, 
 neither are overreached by the statutes ; and it has never 
 been decided that it affects any lien, general or specific, 
 existing when the event took place which gave the United 
 States a claim of priority.'' In Beaston v. The Farmers' 
 Bank of Delaware,' the rule was held to be clearly estab- 
 lished, under the act of March, 3d, 1797, that whenever a 
 debtor has been divested of his property in any of the 
 modes stated in the act, the person who becomes invested 
 with the title, is thereby made a trustee for the United 
 States, and is bound to pay the debt first, out of the pro- 
 ceeds of the debtor's property. The moment the transfer 
 of property takes place, the person taking it, whether by 
 voluntary assignment or by operation of law, becomes, 
 under the statute, bound to the United States for the faith- 
 ful performance of the trust. 
 
 It was further held in this case in regard to the descrip- 
 tion of debtors contemplated by the act, that all debtors to 
 
 ' 10 Pet. 596. 
 
 ' See United States v. Fisher, 2 Cranch, 358; United States v. Hooe, 3 Id, 73. 
 
 ' 12 Pet. 102. 
 
604 DISTRIBUTION TO CREDITORS. [CHAP. XXXVII. 
 
 the United States, whatever their character, and by v/hat- 
 ever mode bound, may be fairly included within the lan- 
 guage used in the fifth section of the act ; that it was mani- 
 fest that Congress intended to give priority of payment to 
 the United States, over all other creditors, in the cases 
 stated therein ; and that it therefore lies upon those who 
 claim exemption from the operation of the statute, to show 
 that they are not within its provisions. It was accordingly 
 held that corporations were to be deemed and considered 
 persons within the provisions of the fifth section of the act, 
 and that the priority of the United States existed as to debts 
 due by them to the United States. 
 
 § 439. The priority of payment thus given, is one which 
 cannot be divested by the act of the debtor. Accordingly, 
 an assignment made by a debtor of the United States, when 
 his property was about being levied upon under judgments 
 obtained against him by one of his creditors, in trust, first 
 for the debt of such creditor, and then for the debt of the 
 United States, was held to be a voluntary assignment, and 
 fraudulent and void against the United States, notwith- 
 standing the creditor gave up his intention of levying in 
 consideration of such assignment, and that the property 
 might be sold under it, to the best advantage, for the benefit 
 of the sureties to the United States.' 
 
 This right of priority, however, attaches only on the 
 residue of the fund in the assignee's hands after payment of 
 the expenses incurred in its collection.^ And the same 
 right of priority which belongs to the government, attaches 
 to the claim of an individual who, as surety, has paid money 
 to the government.^ A surety on a custom house bond, 
 who has paid it, has the same priority as the United States, 
 against the estate of his principal, in the hands of his as- 
 signee.'' But where a debtor made an assignment of his 
 
 ' United States v. Mott, i Paine, 188. 
 ' United States v. Hunter, 5 Mason, 229. 
 " Hunter v. Tlie United States, 5 Pet. 173. 
 ■■ United States v. Hunter, 5 Mason, 229. 
 
§ 44°-] ■ SECURED CREDITORS. 605 
 
 property in trust for the benefit of a single creditor, and his 
 surety in certain custom house bonds filed a bill, claiming 
 that the United States had acquired a right to be first paid, 
 and to be subrogated to that right, on the ground that, as 
 such surety, he had been compelled to pay the bonds, it was 
 held that the bill could not be sustained.' 
 
 § 440. Secured Creditors. — As to the manner in which 
 creditors holding collateral or other securities shall share in 
 the trust estate, it is held in some of the States that the 
 secured creditor having first exhausted his security, can re- 
 ceive a dividend only upon the balance then remaining un- 
 paid ; while in other States he is permitted to receive his 
 dividend upon the whole amount of the indebtedness exist- 
 ing at the time of the assignment. In Pennsylvania, the 
 latter rule prevails. Thus, it has been decided that a cred- 
 itor who has a lien upon a particular portion of the assigned 
 estate (as by mortgage upon land for unpaid purchase 
 money), and out of the sale of a part of which he realizes a 
 portion of his claim, is entitled to \)Ss, pro rata dividend on 
 the whole claim, out of the general assets in the hands of 
 the assignee, to an amount sufficient to pay the balance of 
 his demand in full, although a portion of the estate upon 
 which he holds the lien remains unsold.'' It was further 
 held that an assignee in such case, who has paid claims in 
 full, which, upon a distribution are only entitled to a pro 
 rata payment, cannot claim to be subrogated to the rights 
 of the lien creditor, for the purpose of indemnifying himself 
 for such payments beyond the assets in his hands.^ " He 
 cannot," said toe court (Black, J.), "make reprisals upon 
 one creditor, to indemnify himself for paying too much to 
 another."* In another case in the same State, where one of 
 several creditors, for whose benefit a debtor had made an 
 assignment without preference, had a bond for a large 
 
 ' Bouchaud v. Dias, i N. Y. 201. 
 
 ° Keim's Appeal, 27 Penn. St. (3 Cas.) 42. 
 
 = Id. ibid. * Id. 45- 
 
6o6 DISTRIBUTION TO CREDITORS. [CHAP. XXXVII. 
 
 amount, secured by a mortgage, and the dividend allowed 
 to creditors from the avails of the personal property was 
 8.26 per cent, of which the creditor's portion ($1,650) on 
 the whole debt ($20,000) was set apart for future disposi- 
 tion, and he afterwards received $17,938 from his mortgage, 
 it was held that he was entitled to receive the dividend on 
 the whole debt, in addition to what he received on the mort- 
 gage.' 
 
 Where a vendor having delivered a portion of the goods 
 sold under a contract with the insolvent assignor, retained 
 and sold the balance, and applied the proceeds in payment 
 of the amount due under the contract, he was held to be 
 entitled to a dividend upon the whole of the contract in- 
 debtedness, and not merely upon the unpaid balance.'' 
 
 The general rule is that if a creditor have two funds out 
 of which he may make his debt, he will be required to 
 resort to that fund upon which another creditor has no 
 lien' — and although the secured creditor is entitled to en- 
 force the collaterals and if they be insufficient, to claim a 
 dividend also under the assignment, until the whole debt is 
 paid, yet, in computing the amount of the dividend, the 
 claim of each creditor must be taken as reduced by the 
 amount which he has received under the collaterals.* 
 
 In New Flampshire, it is provided that if any creditor 
 holds collateral security for his debt, of less value than such 
 
 ' Morris V. Olwine, 22 Penn. St. 21. 
 
 ''Patten's Appeal, 45 Penn. St. 151; see Miller's Appeal, 35 Penn. St. 481. 
 A creditor who has bought land from the assignor, subject to incumbrances 
 which he discharges, cannot maintain a claim against the estate on the original 
 indebtedness, either by taking assignments of the incumbrances or otherwise. 
 Cooley's Appeal, i Grant (Pa.) loi ; Hansell v. Lutz, 20 Penn. 284. 
 
 ' Story's Eq. Jur. § 559. 
 
 ' Midgeley v. Slocomb, 2 Abb. Pr. N. S. 275 ; s. C. 32 How. Pr. 423 ; Wurtz v. 
 Hart, 13 Iowa, 515; Dickson v. Chorm, 6 Iowa, 19. In Bell v. Fleming's Ex'rs 
 (12 N. J. Eq. 490), the question is left in doubt. In Indiana, it is provided that 
 before the holder of any lien or incumbrance shall be entitled to receive any por- 
 tion of his debt out of the general fund, he shall proceed to enforce the payment 
 of his debt, by sale or otherwise, from the property on which such lien or incum- 
 brance exists ; and for the residue of such claim, such holder of such lien or in- 
 cumbrance shall share pro rata with the other creditors, if entitled so to do by 
 the laws of the State, i Stat, of Ind. (G. & H. 1870), p. 1 13, § 13. 
 
§§44^.442-] CLAIM OF LANDLORD FOR RENT. 607 
 
 debt, the judge of probate shall estimate the value of such 
 security, and allow only the difference between such sum and 
 his debt.' 
 
 If the creditor is dissatisfied with the estimate, he may 
 surrender the security to the assignee, who shall apply the 
 proceeds to the payment of the creditor's claim, and allow 
 the difference between the sum so paid and the amount of 
 the claim. ° 
 
 § 441. Taxes, and Debts Due the State.— Taxes assessed 
 upon the property assigned, and debts due to the State, 
 usually occupy the next place in the order of priority, after 
 payment of debts due to the United States. In Connecti- 
 cut these are, by statute, directed to be paid next after the 
 expenses of executing the trust and settling the estate.' 
 Priority of payment is frequently given to taxes and assess- 
 ments, by the express terms of the assignment And a 
 similar priority is given (next after debts due to the United 
 States), by the statutes regulating the order of the payment 
 of debts by executors and administrators. ' 
 
 § 442. Claim of Landlord for Rent. — In many cases 
 the landlord of the assignor's premises is entitled to a prefer- 
 ence over other creditors, arising from his right to distrain 
 the goods assigned. But where that right does not exist, 
 
 ' Gen. Stat, of N. H. (1867), p. 264, § 15. ■" Ibid. § 16. 
 
 ' Rev. Stat. (ed. 1875), p. 386, § 34. 
 
 * A direction to pay rents and taxes on real estate does not invalidate an as- 
 signment. It is a necessary power to preserve the property, and the assignee 
 should have been authorized to do it, if the authority was not included in the in- 
 strument. Van Dine v. Willett, 24 How. Pr. 306 ; see Murray v. De Rottenham, 
 6 Johns. Ch. 52 ; Gardner v. Diedrichs, 41 111. 58. An assignment is not such a 
 transfer as will divest personal property of a lien of the State for taxes, however 
 it might be in the case of a transfer to an absolute purchaser in good faith for a 
 valuable consideration. Cones v. Wilson, 14 Ind. 465. And in New Jersey it has 
 been held that the assignee must pay taxes under the act of 1 866, on the whole 
 estate, though claims to more than double the assets had been presented, and 
 many of the claimants were non-residents. State v. Grover, 37 N. J. L. 175. If 
 the trustee neglect to pay taxes, any beneficiary in the deed can advance the taxes 
 and ask contribution from the other beneficiaries, or claim reimbursement out of 
 the trust fund, but he cannot permit the lands to be sold for taxes and acquire a 
 valid legal title by purchasing in the certificate of sale. Peters v. Glen, cited in 
 I Frierson v. Branch, Cent. L. J. May 26, 1876. 
 
 ' See 3 N. Y. Rev. Stat. (6th ed.) p. 95, § 38. 
 
6oS DISTRIBUTION TO CREDITORS. [CHAP. XXXVII. 
 
 the rent being due and in arrear, or where, if the right to 
 distrain does exist, he omits to exercise it, and suffers a bona 
 fide sale and removal by the assignees, he stands in the same 
 position with respect to the proceeds of the sale, as any other 
 creditor.' In a case in Pennsylvania, where the landlord 
 of the assignor gave notice to the assignee of the amount of 
 rent due, before the sale or removal of the goods, and told 
 him that he wished to have it secured to him, which the as- 
 signee promised to do as far as the law allowed, it was held 
 that the assignee was justified in paying the amount of rent 
 to the landlord.'' 
 
 In New Jersey, it has been expressly provided by the 
 statute of assignments, that in all cases where any debtor, 
 being a tenant, shall make an assignment under that act, all 
 the goods and chattels of such tenant, on the premises in the 
 possession of such tenant, shall be first bound for the pay- 
 ment of rent c ue to his landlord ; and the said claim for 
 rent, in favor of the landlord, not exceeding one year's rent, 
 shall be first paid and satisfied by the assignee out of the 
 goods and chattels of the said tenant which were on the de- 
 mised premises at the time of the assignment.^ It is further 
 provided by the same statute, that if the tenant, his assignee, 
 or any other person, shall remove any goods or chattels from 
 the demised premises, after the assignment, it may be lawful 
 for the landlord, at any time within forty days after the re- 
 moval, to seize such goods and chattels, in whose hands so- 
 ever the same may be found, as a distress for his said rent, 
 and proceed with the same in the manner directed by the 
 act concerning distresses, whether the rent, by the terms of 
 the lease, be due or not, making a rebate on the sum not due.* 
 
 Assignees are bound to pay rent to the landlord for the 
 period during which they occupy the premises for the pur- 
 pose of discharging the duties of the trust.^ But to make 
 
 ' Morris V. Parker, i Ashm. 187. ' Osborne's Estate, 5 Whart. 267. 
 
 ' Rev. Stat. (ed. 1874), p. 12, §§ 10, n. * Id. p. 12, § 11. 
 
 ' Morris v. Parker, i Ashm. 187; and see Gould v. Kerr, 52 Ga. 154. 
 
§ 443-] OTHER PRIORITIES. 609 
 
 them responsible for the rent of premises leased to the as- 
 signor for a term of years, it must appear that they have ex- 
 pressly or impliedly elected to accept the lease;' 
 
 § 443. Other Priorities. — In Pennsylvania, it is pro- 
 vided by statute, that in all assignments of property, 
 whether real or personal, which shall hereafter be made 
 by any person or persons, or chartered company, to trustees 
 or assignees, on account of inability at the time of the as- 
 signment to pay his or their debts, the wages of miners, 
 mechanics, and laborers, employed by such person or per- 
 sons, or chartered company, shall be first preferred and paid 
 by such trustees or assignees, before any other creditor or 
 creditors of the assignor, provided that any one claim thus 
 preferred shall not exceed one hundred dollars." And in 
 New Jersey it is provided that the wages of clerks, miners, 
 mechanics, and laborers, due at the time of making the as- 
 signment from the person or persons making the same, 
 shall be preferred debts, and shall be first paid by the as- 
 signee, before any other claim or debt shall be paid, provided 
 that no payment shall be made as a preferred debt to any 
 one person to an amount exceeding three hundred dollars.^ 
 
 In Connecticut, debts due from any insolvent debtor 
 whose estate is in settlement, for any labor performed for 
 him within six months before the assignment, shall be al- 
 lowed and paid in full, to the amount of fifty dollars, before 
 the general liabilities of such debtor are paid.'' 
 
 So in Ohio, operatives are preferred to the extent of one 
 
 ' Pratt V. Levan, i Miles, 358. 
 
 ' Act April 22d, 1854, § I; Laws of 1854, p. 480; Purd. Dig. (Brightley, loth 
 ed.) p. 91, § 4. By the previous act of April 2d, 1849, a similar priority was 
 allowed to claims of this character ; but it was limited to assignments made by 
 persons engaged in certain descriptions of business (coal mines, forges, furnaces, 
 rolling mills, nail factories, machine shops and foundries), and it was further 
 limited to certain counties (Schuylkill, Berks, Washington, Centre, Somerset, 
 Westmoreland and Carbon.) The claims of each miner, &c., thus preferred, were 
 also limited to fifty dollars. Purd. Dig. p. 835, tit. Wages, pi. i, 2, 3. By the 
 act of April 14th, 1851, § 10, this limit was extended to one hundred dollars, as 
 far as referred to the county of Schuylkill . Purd. Dig. ubi supra, pi. 4. 
 
 » Rev. Stat. (ed. 1874), p. 11, §8. 
 
 * Gen. Stat. (rev. 1875), p. 382, § 17. 
 89 
 
6lO DISTRIBUTION TO CREDITORS. [CHAP. XXXVII. 
 
 hundred dollars for services performed within six months 
 preceding the assignment." 
 
 § 444. Course of Distrihition among Creditors. — After 
 the payment of any claims which may exist on the part of 
 the United States against the assignor, and such other claims 
 as may be entitled to a priority by any law of the State, the 
 assignee should proceed to distribute the residue of moneys 
 in his hands among the creditors, either ratably and without 
 distinction, or according to the order of priority and pref- 
 erence established by the assignment, unless the latter mode 
 of distribution shall have been overruled or prohibited by 
 statute. = 
 
 As a general principle of equity, where the deed creates 
 no preferences among creditors, a court of chancery will 
 make a pro rata distribution of the proceeds among all the 
 creditors who are provided for in the instrument.^ There 
 are cases, however, in which certain creditors may be post- 
 poned to others, independently of any direction in the as- 
 signment. Thus, it has been held that a judgment given by 
 one of two joint assignors for the benefit of creditors to the 
 other, before the assignment, must be postponed to the debts 
 provided for by the assignment, though the judgment has 
 teen transferred to one who, with notice of the assignment, 
 paid value for it.'' 
 
 § 445. Computation of Dividends. — The rule in respect 
 to the calculation of dividends, where the estates of two or 
 
 ' Act of March 6, 1861 ; Sayler Stat. vol. I, p. 27, c. 35. 
 
 ' See ante, § 165. Where three debtors conveyed lands to the same 
 trustees to be sold, and the proceeds appropriated to the debts of the grant- 
 ors according to legal priorities, and at the time of the conveyance judg- 
 ments existed to a large amount against them, both jointly and severally, it was 
 held that the proceeds of this fund should be appropriated according to the 
 several sources whence it was derived, and to the priorities of the several liens. 
 Dodge V. Doub, 8 Gill, 16. 
 
 " Branch Bank v. Robertson, 19 Ala. 798. 
 
 * Mifflin V. Rasey, 3 Rawle, 483. As to the payment of preferred creditors hav- 
 ing other security, see Besley v. Lawrence, 11 Paige, 581 ; Strong v. Skinner, 4 
 Barb. S. C. 546, ^59. As to the payment of debts due the assignee himself, see 
 Gibbs V. Cunningham, 4 Md. Ch. Dec. 322 ; French v. Townes, 10 Gratt. 513. 
 As to the payment of partnership debts, see ante, pp. 274, et seq. 
 
§446-] THE PAYMENT OF A DIVIDEND. 6l I 
 
 more persons assigned for the benefit of creditors are liable 
 for the payment of the same note or bill, is to take the 
 amount actually due upon the note or bill, at the times re- 
 spectively at which the first dividend was declared of each 
 fund so assigned.' In other words, where several persons 
 liable for the payment of a debt have made several assign- 
 ments for the payment of their creditors, the amount actu- 
 ally due on the debt, at the times respectively when dividends 
 are declared, is to be taken as the sum on which the percent- 
 age is so be estimated.'' 
 
 § 446. The Payment of a Dividend does not take the 
 Debt out of the Statute of Limitations. — The payment of 
 a dividend by the assignee of an insolvent debtor is not 
 such a part payment as will take the residue of the debt out 
 of the statutory limitation as against such debtor.^ Such a 
 payment is not a personal or voluntary act of the assignor. 
 The assignee is not the agent of the debtor ; he can neither 
 compel him to admit or reject a claim presented to him for 
 allowance.'' Chancellor Kent presents the reason of this rule 
 in the following words : = "It is going unreasonably far to 
 construe payments by assignees or trustees, who are not 
 parties to the contract, or under any personal obligation to 
 pay or contribute, as meaning more than they plainly import, 
 or as carrying with them sufficient evidence of a renewed 
 personal promise of the original debtor to pay. Such special 
 trusts were not created for any such purpose, and it is per- 
 verting the intention of the parties, and it is plainly repug- 
 nant to the reason and equity of the trust to make the ordinary 
 execution of the trust the ground "of a constructive new as- 
 sumption of the debt by the debtor. The language of the 
 transaction would seem to be directly otherwise." 
 
 ' Bank of Pennsylvania V. McCalmont, 4 Rawle, 307. 
 
 = Perit V. Pittfield, 5 Rawle, 166 ; and see McLeod v. Latimer, i Whart. fPa.) 
 532. 
 
 ' Pickett V. Leonard, 34 N. Y. 175 ; Pickett v. King, 34 Barb. 193 ; Marenthal 
 V. Moster, (6 Ohio St. 566 ; Stoddard v. Doane, 7 Gray, 387. 
 
 * Day, J., in Marenthal v. Moster, 16 Ohio St, 566. 
 
 ' Roosevelt v. Mark, 6 Johns, Ch. 266, 292. 
 
iI2 DISTRIBUTION TO CREDITORS, [CHAP. XXXVII. 
 
 § 447. Interest. — Where the assignment directs that cer- 
 ain creditors shall be paid " the amount of their respective 
 iemands in full," the creditors are entitled to interest on 
 heir debts if the fund prove sufficient.' And assignees for 
 he benefit of scheduled creditors have been ordered by the 
 ourt to allow interest on the debts from the time they be- 
 ame due.^ But it has been held that a debtor may stipu- 
 ite in the assignment that no interest shall be paid out of 
 he effects conveyed until the principal of all the debts is 
 iaid.3 
 
 The subject of dividends will be further considered in 
 subsequent chapter.'' 
 
 ' Scott V. Morris, 9 S. & R. 123. 
 '' Bryant v. Russell, 23 Pick. 508. 
 ' Ingraham v. Grigg, 13 Sm. & M. 22. 
 'St^post, Chap. XXXIX. 
 
CHAPTER XXXVIII. 
 
 DISPOSITION OF THE SURPLUS REMAINING AFTER DISTRIBUTION. 
 
 § 448. If, after payment of all the assignor's debts which 
 are legally payable under the assignment, and all liens on the 
 trust effects, there is a surplus of the proceeds of sales and 
 collections remaining in the hands of the assignee, such sur- 
 plus belongs to the assignor, and the assignee is bound to 
 pay it over to him/ In most assignments there is a clause 
 expressly directing him to do so ; but whether there be or 
 not, there necessarily arises in such cases a resulting trust, by 
 mere operation of law, in favor of the debtor, which will 
 entitle him to claim it of the assignee." The surplus in no 
 case belongs to creditors whose demands have been paid. 
 Therefore, where an assignee agreed to collect the assets 
 and pay them over to the creditors, it was held that he was 
 not also to pay to them any surplus after discharging their 
 debts in fuU.^ 
 
 So if, after payment of all the debts, there should remain 
 in the hands of the assignee any property unconverted into 
 money, it belongs to the assignor, and the assignee should re- 
 convey it to him.* But if the assignee reconvey the prop- 
 erty to the assignor before the debts for the payment of 
 which the estate was created have been paid, the reconvey- 
 ance is void as to all creditors whose debts were provided 
 
 ' Marshall, C. J., in Brashear v. West, 7 Pet. 608. 
 
 ' Halsey v. Whitney, 4 Mason, 206, 222, 223 ; Matter of Potter, 54 Penn. St. 
 465 ; Merrick's Estate, i Phil. (Pa.) 373. 
 
 ' Lazarus v. Commonwealth Ins. Co. 19 Pick. 81. 
 
 * In Harvey V. Steptoe's Adm'r, 17 Gratt. 289, it is said that where a grantor 
 in a deed of trust to secure debts, which conveys real and personal estate, dies in- 
 testate before a sale of the trust subject, the quasi equity of redemption descends 
 to his heirs, and the surplus proceeds of the real estate, after the trust is satisfied, 
 is applicable ratably to the debts of the grantor by specialty binding the heirs. If 
 he by will directs the sale of his real estate for payment of debts, such surplus 
 proceeds are equitable assets to be distributed among all the creditors. 
 
6l4 DISPOSITION OF SURPLUS. [CHAP. XXXVIII. 
 
 for hy the assignment, and which remained unpaid at the 
 date of the reconveyance.' 
 
 Where the assignment imposes certain terms upon cred- 
 itors, as the condition upon which they are to receive its 
 benefits, and all the creditors do not choose to accede to 
 such terms, and do not comply with them, it has been held 
 that if a surplus remain after satisfying the claims of the 
 acceding creditors, it belongs to the assignor, and may be 
 legally reserved to him by the assignment itself.'' This was 
 so held where the condition imposed was the execution of a 
 release without receiving the full amount of the debts.^ But 
 the better opinion now is,'' that the surplus in such a case 
 belongs to those creditors who have not acceded to the terms 
 of the assignment ; and in Brashear v. West,^ it was said that 
 a court of equity will award it to them. And even where 
 the terms imposed were that the creditors should agree to a 
 ratable division, and certain creditors refused to accede to 
 such terms, it has been held that if there should be any sur- 
 plus after the payment of the claims of those who assent, 
 and all other liens upon the trust effects, they, as general 
 creditors, would have a right to subject the surplus to the 
 payment of their demands.^ 
 
 § 449. The same principle has been applied to cases 
 where certain creditors have lost the benefit of an assign- 
 ment by failing to comply with some .statutory requisition, 
 as to exhibit their claims within a specified period. Thus, 
 in New Jersey, if any creditor shall not exhibit his claims 
 within the term of three months limited by the statute, such 
 claim will be barred of a dividend unless the estate shall 
 prove sufficient after the debts exhibited and allowed are 
 
 ' Briggs V. Palmer, 20 Barb. 392; Briggs v. Davis, 21 N. Y. 574 ; s. C. 20 N. 
 Y. 1 5 ; see ante, p 1 2. 
 
 ° Halsey v. Whitney, 4 Mason, 206, 222. 
 
 = Id. ibid. 
 
 * The validity of stipulations for a release of the assignor have already been 
 considered. See ante, pp. 232, et seq. 
 
 " 7 Pet. 608. 
 
 " Vernon v. Morton, 8 Dana, 247, 254, Ewing, J. 
 
§ 449-] DISPOSITION OF SURPLUS. 615 
 
 fully satisfied, in which case such barred creditor will be 
 entitled to a ratable proportion therefrom.' 
 
 In Maine, where distribution is required to be made 
 among all the creditors becoming parties to the assignment, 
 it is provided by statute that, after the lapse of eighteen 
 months from the assignment, or two years, to which the court 
 may for satisfactory reasons extend the time, any creditor not 
 a party to the assignment may trustee the assignee for any 
 excess of the estate, after the payment of the debts of the 
 parties thereto and lawful expenses ; and if such suit is in- 
 stituted before the expiration of said terms, it may be con- 
 tinued till after their expiration on such conditions as the 
 court directs.'' 
 
 ■ Rev. Stat. (ed. 1874), p. 12, § 11. And where a creditor who had not proved 
 his claim, or shared in the final distribution of the estate, discovered certain prop- 
 erty of the debtor which had been conveyed in fraud of the creditors, it was held 
 that he was entitled to be paid out of the proceeds of the discovered property an 
 amount equal to the ratable share of the other creditors, and after payment of this 
 amount the balance should be distributed ratably among all the creditors. Van 
 Keuren v. McLaughlin, 21 N. J. Eq. 163. 
 ° Rev. Stat, (ed. 1871), p. 545, § 7. 
 
CHAPTER XXXIX. 
 
 FINAL ACCOUNTING AND CLOSE OF THE TRUST BY THE ASSIGNEE. 
 
 § 450. An essential part of the duty of an assignee in 
 trust for the benefit of creditors is the keeping of a strict 
 and full account of all his receipts and payments during the 
 course of the execution of the trust ; and after all the 
 moneys in his hands arising from collections and sales, have 
 been finally appropriated and paid over to those entitled to 
 them, he should always be prepared to exhibit his accounts 
 to the assignor and the creditors. 
 
 If an assignee neglects to keep a full and fair account of 
 the sales of the trust property, and the amount of sales can- 
 not be ascertained by him, he will be charged with the 
 value of the property sold by him, and the interest on it' 
 So, if he neglects to keep proper accounts of his expendi- 
 tures, the lowest estimate will be put on them, in remuner- 
 ating him therefor.'' Every intendment of fact, indeed, is 
 to be made against a trustee who keeps none, or very im- 
 perfect accounts.3 
 
 § 451. Accounting without Action. — In some States, 
 the assignee is expressly required by statute (without any 
 application for that purpose) to present his account to some 
 court designated, for examination and -approval, before he 
 can finally discharge himself from the trust. Thus, in New 
 Jersey, the assignee is required, as soon as may be after 
 completing the payment of dividends, and not exceeding 
 one year thereafter, to render, on oath or affirmation, a final 
 
 ' Page V. Olcott, 28 Vt. (2 Wms.) 465. 
 ° McDowell V. Caldwell, 2 McCord's Ch. 43. 
 
 ' Ex parte Cassel, 3 Watts, 442 ; and see Green v. Winter, I Johns. Ch. 27 ; 
 Miller v. Whittier, 36 Me. 577. 
 
§ 45 1 -1 ACCOUNTING WITHOUT ACTION. 617 
 
 account to the Orphan's Court of the county, in like manner, 
 and upon the same notice to creditors and. others interested, 
 as directed in regard to executors and administrators ; and 
 exceptions may in like manner be filed to such accounts, 
 and proceeded in as prescribed in regard to executors and 
 administrators ; and the settlement and decree of the said 
 court are declared to be conclusive on all parties, except for 
 assets which may afterwards come to hand, or for frauds, 
 or apparent error.' 
 
 In Vermont, it is made the duty of the assignee, on the 
 completion of the discharge of his trust, to file in the office 
 of the clerk of the county where the assignment is made 
 arid the property assigned is situated, a full copy of the 
 settlement of his trust account, showing in detail how he 
 has administered the trust, which account shall be verified 
 by the oath of the assignee, and shall remain on file in the 
 clerk's office for the inspection of all the creditors of the 
 assignor.'' 
 
 In Maine, the assignee is bound by his official bond, to 
 render a true account of his doings on oath, to the judge of 
 probate, within six months, and at any other time when 
 cited by the judge.^ 
 
 In Maryland, the assignee is required within six months 
 from the period of giving the bond, to file a report of the 
 whole amount of the trust estate and the disposition made 
 of the same.'' If he fail to report, he may be compelled to 
 appear and make report by summons and attachment. ■'' 
 
 In Indiana, the assignee, after the expiration of one year 
 after entering upon the duties of his trust, or the next term 
 of the court thereafter, is required to make a final report, 
 and upon the hearing and determination thereof, if the judge 
 
 •Rev. Stat. (ed. 1874), p. 11, § 8. 
 
 ' Act of Nov. 19, 1852, § 5; Lawrs of 1852, p. 15; Gen. Stat. (ed. 1870), p. 
 454. § 7. 
 
 ' Rev. Stat. (ed. 1871), p. 544, c. 70, § 3. 
 ' Laws of 1874, c. 483, § III. 
 'Ibid. § 112. 
 
6l8 FINAL ACCOUNTING. [cHAP. XXXIX. 
 
 is satisfied with and approves the same, he shall order the 
 trustee to be discharged from his trust' 
 
 In New Hampshire, within one year from the time of 
 his appointment, and at such other times as the judge may 
 direct, the assignee, upon due notice, shall settle with the 
 judge of probate an account of his doings, and of the prop- 
 erty in his hands, and the amount of his charges for services 
 and disbursements, which with the decree of the judge 
 thereon, shall be filed in the office of the register of pro- 
 bate.= And on the settlement of the account, the judge 
 may order a distribution in like manner as is provided for 
 the settlement of estates of deceased insolvents.^ 
 
 § 452. Accounting Under Statutory Provisions. — ^In 
 Pennsylvania, an accounting upon the part of any assignee 
 may be compelled, on the application of any person inter- 
 ested, or cotrustee, or co-assignee, to exhibit his accounts 
 before the Court of Common Pleas of the proper county ■• 
 (such courts being clothed with the same powers as the 
 several Orphans' Courts of the commonwealth).^ The gen- 
 eral course of proceeding, as indicated by the statute, is as 
 follows : On the application being made, a citation is issued 
 by the court, to the assignee, requiring him to appear and 
 exhibit, under oath or affirmation, the accounts of the trust 
 in the said court, within a certain time, to be named in the 
 citation.^ The accounts being exhibited and filed, the court 
 direct their prothonotary to give public notice of such ex- 
 hibition and filing, setting forth in such notice that the 
 accounts will be allowed by the court at a certain time 
 stated, unless cause be shown to the contrary.' The courts 
 are authorized to refer all accounts exhibited to them, to an 
 auditor or auditors appointed for the purpose, who are 
 
 ' Stat, of Ind. (G. & H.) p. 117, § 18. 
 
 ■' Gen. Stat. (ed. 1867), p. 264, § 21. ^ Ibid. § 22. 
 
 * Act of June 14, 1836, §7; Dunlop, 688; Purd, Dig. (Brightley, i oth ed. 
 p. 1416, pi. 7. 
 
 ' Id. § 33; Dunlop, 692 ; Purdon, p. 1419, pi. 33. 
 ° Id. § 7; Dunlop, 688; Purdon, p. 1416, pL 7. 
 ' Id. § 9 ; Dunlop, 689 ; Purdon, p. 1417, pi. 10. 
 
§ 452-] STATUTORY PROVISIONS. 619 
 
 sworn well and truly to audit and adjust the same, and 
 make a true report thereof according to the evidence.' And 
 the courts and their auditors are empowered to examine 
 assignees upon oath or affirmation, touching the execution 
 of the trust, and to compel the production of any books, 
 papers, or other documents necessary to a just decision of 
 any question before them.^ Exceptions may be filed to the 
 auditor's report. If the court confirm the report, distribu- 
 tion is decreed in accordance with it. The decree confirm- 
 ing the report may be appealed from to the Supreme Court.^ 
 An assignee after having accepted the trust and received 
 moneys under it, is not relieved from the exhibition of a 
 trust account by his having failed to give bond or to file an 
 inventory as required by statute. Nor is he relieved from 
 such exhibition by the reason that the assignments to him 
 were but partial assignments, and that since their execution 
 the debtors had made a general assignment of all their 
 estate to another person in trust, to whom the first assignee 
 had assigned all the property covered by the partial assign- 
 ments.'' 
 
 It is, however, provided by the same statute of Pennsyl- 
 vania already cited, that an assignee may with the leave of 
 the court having jurisdiction, make a voluntary settlement of 
 his accounts, so far as he may have executed the trust ; and 
 the same being filed in the office of the prothonotary of the 
 court, the like proceedings shall be had thereon as in the 
 case of a settlement of such accounts after citation.^ And it 
 
 ' Id. § 31 ; Dunlop, 692 ; Purdon, 1419, pi. 31. 
 
 " Id. § 32 ; Purdon, 141 9, pi. 32. An assignee, when before theauditor, may 
 elect to pay to an adverse claimant, and if such claimant have the right, there can 
 be no objection to the jurisdiction. In re Wilson, 4 Barr, 430. 
 
 " Keim's Appeal, 27 Penn. St. (3 Cas.) 42. One who has no interest in the 
 effects in the hands of the assignee will not be permitted to except to his account. 
 McCabe's Account, Sup. Ct. Pittsburgh Leg. J. February 25, 1854. For the con- 
 struction of the act of June 14, 1836, see Whitney's Appeal, 22 Penn. St. (10 
 Har.) 500. The jurisdiction of the Court of Common Pleas is given by the 13th 
 section of the Act of June 16, 1836. Id. ibid. 
 
 * Whitney's Appeal, 22 Penn. St. (10 Har.) 500. 
 
 ° Act of June 14, 1836, § 14 ; Dunlop, 689 ; Purd. 1419, pi. 9. As to an ac- 
 counting by one of two assignees, see Stell's Appeal, 10 Barr, 149 ; Matter of 
 
620 FINAL ACCOUNTING. [CHAP. XXXIX, 
 
 has been held in the same State, that a settlement and divis- 
 ion by an assignee of the estate assigned to him, with the 
 knowledge, assent and approbation of all the parties in in- 
 terest, is just as effective as if made by a formal decree of a 
 court possessing competent jurisdiction.' 
 
 § 453. In Missouri, it is provided by statute that on ap- 
 plication of any person interested in the estate, at any time 
 after the expiration of one year from the date of the assign- 
 ment, the court in whose office the inventory is filed may 
 issue a citation to any assignee, requiring him to appear in 
 court, and exhibit on oath or affirmation the accounts of 
 the trust, within a given time, to be named in the citation." 
 The court shall direct the clerk to give notice of the exhibi- 
 tion and filing of the accounts, for such time and in such 
 public newspapers as it shall appoint, and that the accounts 
 will be allowed by the court at a time to be stated in the 
 notice, unless good cause to the contrary be shown. ^ 
 
 § 454. In Vermont, it is provided by statute, that if, in 
 the opinion of any one of the creditors of the assignor 
 named in the assignment, the assignee shall neglect to close 
 up a settlement of his trust, and file a copy of his account 
 with the county clerk * for an unreasonable length of time, 
 such creditor may apply to the chancellor of the circuit for 
 an order upon the assignee to close a settlement of his trust, 
 and file with the clerk a copy of his trust account, verified 
 by the oath of the assignee, by such time as the chancellor 
 shall deem meet and proper. = And the chancellor is em- 
 powered to hear such application upon notice given to the 
 assignee, and to make all necessary orders in the premises, 
 
 Gray's estate, 10 Barr, 149. In the late case of McLellan's Appeal (26 Penn. St. 
 [2 Cas.] 463), the assignee filed his first account, embracing the proceeds of the 
 personal estate, and the balance remaining in his hands was distributed among 
 the creditors. He afterwards filed a second and final account, embracing the 
 proceeds of the real estate, which was confirmed, and an auditor appointed to 
 distribute the balance. 
 
 ' Estate of Latimer, 2 Ashm. 520. 
 
 ■■' Gen. Stat. (Wag. 1872), p. 153, § 16. = Id. 
 
 * See ante, p. 617. " Gen. Stat. (ed. 1870), p. 454, § 8. 
 
§ 455-] STATUTORY PROVISIONS, 62 1 
 
 and to allow or refuse costs, &c., and to enforce orders made 
 by him, and to proceed against the assignee for disobedience 
 to his order as for a contempt' 
 
 § 455- Under the New York statute of i860, as amended, 
 it is provided,^' that after the lapse of one year from the date 
 of such assignment, the county judge ^ of the county where 
 such inventory is filed shall, upon the petition of any cred ■ 
 itor of such debtor or debtors, have power to issue a citation 
 or summons compelling such assignee or assignees to appear 
 before him and show cause why an account of the trust fund 
 created by any such assignment shall not be made, and to 
 decree payment of such creditor's just proportional part of 
 such fund ; and such county judge shall also have the same 
 power and jurisdiction to compel such accounting as is now 
 possessed by surrogates in relation to the estates of deceased 
 persons; and also power to examine the parties to such 
 assignment, and other persons, on oath, in relation to such 
 assignment and accounting, and all matters connected there- 
 with, and to compel their attendance for that purpose ; and 
 the parties interested in such accounting shall have the same 
 rights to appeal from any order or decree of such judge in 
 the premises as is now given from the decrees of surrogates 
 in relation to the accounts of executors and administrators. 
 And such judge shall have the power to refer the said ac- 
 counting to a referee or auditor, to be appointed by him for 
 that purpose, to take and state such account ; and such 
 referee shall have the same power to take the examination 
 of any witnesses produced before him, and to compel their 
 
 ' Ibid, § 9. 
 
 " Laws of i860, c. 348, § 4; 3 Rev. Stat. (6th ed.) p. 32 ; Fay's Dig-, vol. i, p. 
 394. This section has been four times amended. See Laws of 1867, c. 860; 
 Laws of 1870, c. 92 ; Laws of 1872, c. 838 ; Laws of 1875, c. 56. In its present 
 form the section is verbatim as in the act of i860, with the addition of tlie last 
 clause relating to references. 
 
 ' The term county judge, as employed in the act of 1 860 and amendments, in- 
 cludes the judges of the Court of Common Pleas for the city and county of New 
 York, and the jurisdiction conferred upon the county judge is rightfully exercised 
 by the judges of that court when the debtor resides in tlie city of New York. In 
 the Matter of Morgan, 56 N. Y. 629. 
 
62 2 FINAL ACCOUNTING. [cHAP. XXXIX. 
 
 attendance and examination as a referee appointed by the 
 Supreme Court to try and determine an. action therein. 
 
 No judgment is necessary to warrant the proceedings of 
 the creditor under this section. All that is necessary is, that 
 the creditor shall be entitled to a proportional part of the 
 trust fund provided by the assignment for his benefit.' 
 
 The court has no power to compel the assignee to ac- 
 count and pay over to the creditors until the lapse of one 
 year from the date of the assignment,"" and it seems that the 
 assignee will not be compelled to pay over any part of the 
 fund until a final accounting has been had between the as- 
 signee and all the creditors in any way, no matter how 
 remotely, interested in the trust fund.^ 
 
 But there seems to be no power conferred by the stat- 
 ute to compel the assignee to render a final account and 
 distribution of the fund among all the creditors, or to bring 
 the parties interested before the court unless the assignee 
 shall himself voluntarily petition for such accounting.* 
 
 In California, it is provided that after six months from 
 the date of the assignment, the assignee may be required, on 
 petition of any creditor, to account before the county judge 
 of the county where the inventory was filed, in the manner 
 prescribed by the insolvent laws of the State.^ 
 
 And in Iowa, the assignee is at all times subject to the 
 
 ' People V. Chalmers, 8 Sup. Ct. (i Hun), 683. 
 
 ' Matter of Nelson, 1 1 Abb. Pr. 352. " Ibid. 
 
 ' And even in that case, there seems to be reason to doubt whether the juris- 
 diction of the county court is so complete as to protect the assignee against claims 
 which have not been presented in compliance with the published notice, when 
 creditors who have failed to present their claims are not parties to the proceeding, 
 Section two of the act cited ante, p. 514, provides for the protection of the as- 
 signee against claims of creditors, when notice has been published as provided, 
 by the order or decree of the county judge, made on the final accounting of such 
 assignee. The only authority of a county judge to take or require an accounting 
 on the part of the assignee, is obtained under the section cited in the text, by which, 
 on petition of any creditor, he has the same power and jurisdiction to cornpel such 
 accounting as is now possessed by surrogates. But a surrogate has no power to 
 compel a final accounting and distribution of the estate among all the parties in- 
 terested, merely on the application of a creditor. 3 Rev. Stat. (6th ed.) p. loi, 
 § 73. See Matter of Uglow, 51 How. 342; Campbell v. Bruen, i Bradf. 224; 
 an d see Tucker v. Tucker, 4 Keyes, 1 36. 
 
 ' Code, § 3469; Hitt. § 8469; see Insolvents, Hitt. §§ 15, 505, 
 
§ 45^-] STATUTORY PROVISIONS. 623 
 
 order and supervision of the court or judge, and may be 
 compelled by citation and attachment to file reports of his 
 proceedings, and to proceed in the faithful execution of the 
 duties required.' 
 
 In Ohio, at the expiration of eight months from the 
 appointment and qualification of the assignee, and sooner 
 if it can be done with regard to the rights and interests of 
 all parties, and as often afterwards as may be deemed proper 
 by the probate judge, a dividend shall be declared payable 
 out of the assets of the assignors applicable to the payment 
 of non-preferred claims and balances of claims, equally 
 among all the creditors entitled in proportion to the 
 amounts of their respective claims therein including those 
 disallowed, as to which the claimant has begun proceedings 
 to establish the same. Notice of the payment is to be 
 given. The dividends reserved for disallowed claims are 
 retained until the termination of the proceedings.^ 
 
 . § 456. In some instances, very informal statements have 
 been allowed as an accounting. Thus, in Vermont, where, 
 after an assignment for the benefit of creditors, some of the 
 creditors agreed in writing (which agreement was appended 
 to the assignment), to receive the dividends which might 
 accrue to them, " after a faithful accou7tting by the assign- 
 ees, and await the same ; " and the surviving assignee noti- 
 fied the creditors that he was ready to pay a dividend of 
 twenty-five per cent, upon their claims, and that was all he 
 could pay, and more than they would be entitled to receive 
 upon a strict accounting ; and it did riot appear upon what 
 basis the dividend was thus declared, nor that there was any 
 fraud, nor that any more was retained by the assignee than 
 a reasonable compensation for his services and expenses, it 
 was held that this was substantially an " accounting," within 
 the meaning of the agreement.^ 
 
 ' Iowa Code (1873), p. 384, § 2123. ' Rev. Stat, of Ohio (S. & C.)p. 711, § 10. 
 ' Foster v. Deming, 19 Vt. (4 Washb.) 313. But see the late statute provis- 
 ions, ante, pp. 617, 620. 
 
624 FINAL ACCOUNTING. [cHAP, XXXIX. 
 
 § 457. Accountinor in Fquity. — But though no formal 
 accounting is required bv statute, the creditors are always 
 entitled to an account, and if this be refused or insufficiently 
 granted, they may proceed to compel an account by bill in 
 equity or other equivalent proceedings. The method of 
 procedure upon such accounting is regulated by the practice 
 and rules of Courts of Chancery in the several States,' and 
 proceeds under the general jurisdiction of courts of equity 
 over trusts and trustees. The action may be brought in 
 the name of any creditor, in behalf of himself and all other 
 creditors.^ The action is properly referable to a referee, or 
 master in chancery, and he may be directed to determine 
 primarily whether the assignee should account, and if so, to 
 take the account upon due notice to all creditors to come 
 in and present their claims, before a day fixed for that pur- 
 pose. ' Creditors who fail to so present their claims, and 
 appear before the referee, are barred from any claim against 
 the assignee, although they had no actual notice of the pro- 
 ceedings, and that even though the assignee from other 
 sources had knowledge of the claim of the creditor.'' 
 
 § 458. Close of the Trust. — The time for closing the 
 trust is sometimes fixed by the assignment itself.^ If no 
 time be limited, the assignee will be all:. wed what may be 
 considered, under all the circumstances, a reasonable time 
 for the purpose.^ 
 
 ' Barb. Chan. Pr. 505, et seq. " Duffy v. Duncan, 35 N. Y. 187. 
 
 ' Kerr v. Blodgett, 48 N. Y. 62 ; Duffy v. Duncan, 35 N. Y. 187. 
 
 ' Kerr v. Blodgett, 48 N. Y. 62. " Dana v. Bank of U. S. 5 W. & S. 223. 
 
 ° Cunningham v. Freeborn, 11 Wend. 241 ; Stevens v. Bell, 6 Mass. 339; 
 Farmers' Bank v. Douglas, 1 1 Sm. & M. 469, 539 ; Gibson v. Rees, 50 111. 383 ; 
 In re Estate of Potter &. Paige, 54 Penn. St. 465; Mellish's Estate, I Pars. (Penn.) 
 Sel. Cases, 482 ; and see Morrison v. Brand, 5 Daly, 40 ; see 2 Perry on Trusts, 
 pp. 555, et seq. And by a recent statute in New York, it is provided that " where 
 the purposes for which an express trust shall have been created, shall have 
 ceased, the estate of the trustee shall also cease, and where an estate has been 
 conveyed to trustees for the benefit of creditors, and no different limitation is 
 contained in the instrument creating the trust, such trust shall be deemed dis- 
 charged at the end of twenty-five years from the creation of the same ; and the 
 estate conveyed to trustee or trustees, and not granted or conveyed by him or 
 them, shall revert to the grantor or grantors, his or their heirs or devisees, or 
 persons claiming under them, to the same effect as though such trust had not 
 been created." Laws of 1875, c. 545 ; 2 Rev. Stat. (6th ed.) p. mo, § 80. 
 
§ 458-] CLOSE OF THE TRUST. 625 
 
 Sometimes the trust will be considered "as closed by 
 lapse of time. As a general rule of equity, an assignee in 
 trust cannot set up the statute of limitations against his 
 cestui que trust, such direct trusts not being within the 
 statute. The possession of the trust fund in the hands of 
 the trustee or assignee, is the possession of the cestui que 
 trust, for creditors, and is not held adversely to them. But 
 after twenty years, the law presumes the debts paid and the 
 trust executed, so far as respects creditors.' It has been 
 held, however, in Pennsylvania, that the lapse of seventeen 
 years without corroborating circumstances was too short a 
 time to raise a legal presumption that the objects of an as- 
 signment have either been accomplished or abandoned.^ 
 
 The. trust may also be determined by the acts of the 
 parties. A trust to sell real estate for the payment of debts 
 ceases when the debts are, in any mode, paid or discharged. 
 Thus, in a case in New York, where a debtor conveyed 
 lands to trustees, upon trust to sell the same for the benefit 
 of certain specified creditors, and to reconvey to himself 
 such parts of the property as should remain unsold after 
 satisfying the trusts ; and afterwards conveyed his residuary 
 interest in the property to the same trustees, for the benefit 
 of the same creditors, and in satisfaction of their demands ; 
 the creditors, on their part, accepting the trust fund as a 
 satisfaction of their claims, it was held that the original trust 
 was determined, and -that the whole legal and equitable title 
 to the property became vested, under tne statute,^ in the 
 creditors.'' 
 
 ' Coates' Estate, 2 Pars. (Penn.) Sel. Cases, 258 ; Gibson v. Rees, 50 111. 382; 
 Hunter v. Hubbard, 26 Tex. 537. In the last case it is said : The statute does 
 not begin to run in favor of the trustee, so long as the trust continues and is 
 acknowledged to be a continuing subsisting trust, for the reason that the pos- 
 session of the trustee is the possession of the cestui que trust. But if he claim 
 to hold the trust fund as his own, and adversely to the cestui que trust, and the 
 latter has knowledge of the fact, then from the time of such adverse holding, the 
 statute will run in favor of the trustee. And so in general when the relation is 
 terminated by a breach of trust. Wicldiffe v. The City of Lexington, 1 1 B. Mon. 
 161. '^ Adlum V. Yard, I Rawle, .163. 
 
 ' I Rev. Stat. 728, §§ 47, 49 ; 6th ed. vol. 2, p. 1 105. 
 
 < Selden v. Vermilya, 3 N. Y. 525. 
 40 
 
CHAPTER XL. 
 
 LIABILITY OF ASSIGNEES. 
 
 § 459. The liability of an assignee in trust for creditors, 
 though sometimes expressly assumed in terriis, as where he 
 becomes a formal covenanting party to the assignment, fol- 
 lows, independently of any such express undertaking, as a 
 legal consequence of his acceptance of the trust. It is a 
 liability which attaches to his office as a trustee ; and it 
 operates as a security for the faithful performance of that 
 office, for the benefit of those whose interests are so exten- 
 sively confided to him. 
 
 An action at law cannot be maintained against the as- 
 signee to recover the amount of a debt due a creditor, on 
 the ground that the assignee has neglected to collect an 
 amount due upon the sale of assigned property, and apply 
 it to the payment of the creditor in discharge of the trust." 
 But it seems that a count against trustees as such may be 
 joined with a count against them personally." In order to 
 maintain his action, the creditor must show not only that 
 the estate, but that he, personally, has • been injured by the 
 wrong complained" of. Thus, a creditor of an inferior class, 
 under an assignment containing preferences, cannot sustain 
 his action against the trustee for wasting the assets, without 
 showing that the assets were sufficient to pay the creditors 
 preferred to him in full.' 
 
 How far the assignor will be protected from the claims 
 of creditors where the assigned property was sufficient to 
 pay the indebtedness, but has been wasted or misapplied 
 
 ' Bishop V. Houghton, i E. D. Smith, 566. 
 
 ' Rush V. Good, 14 S. & R. 226 ; but see Mitchell v. Kendall, 45 Me. 234. 
 
 ' Davenport v. McCole, 28 Ind. 495. 
 
§ 460.] EXTENT OF LIABILITY. 627 
 
 by the assignees, is a question not free from doubt. It has 
 been said that where the assignee is selected by the debtor, 
 the waste of the assets by the assignee is no defense, but 
 that the rule is otherwise where the assignee is selected by 
 the creditors.' 
 
 § 460. Extent of Liability. — The liability of an assignee 
 is, for the most part, commensurate with the duty which the 
 assignment imposes on him.^ This duty may, in its most 
 general terms, be stated to be — to observe good faith in all 
 his transactions, and to exercise all reasonable diligence and 
 carefulness in the management of the trust. Hence, a want 
 of good faith or of proper diligence will subject him to any 
 loss which may be consequent upon it.^ 
 
 For gross misconduct, or a violation or abuse of the 
 trust, such as a willful misapplication of the trust funds in 
 his hands, an assignee is not only personally responsible,'* 
 but may be dismissed from office. ^ But negligence, either 
 in the collection and recovery of the property assigned, or 
 in the custody and management of it, or in the final dispo- 
 sition of it by sale and payment to creditors, is the ground 
 upon which assignees are, in practice, most frequently held 
 liable. Thus, a trustee is answerable for property or money 
 lost by his gross negligence.^ But an assignee's liability is 
 not confined to gross negligence, nor can it be so limited 
 by any stipulation on ' his part, in the deed of assignment. 
 This was so decided in a case in the Superior Court of the 
 city of New York,' in which the subject was well consid- 
 ered, and the general rule stated to be that a trustee is 
 
 ' Hargrooves v. Chambers, 30 Ga. 580 ; see Bailey v. Bergen, N. Y. Ct. of 
 Ap. Nov. 28, 1876. 
 
 ' It has, however, been said that the liability of trustees is not measured by 
 the abstract rule of their duty. Hext v. Porcher, i Strobh. Eq. 170. 
 
 " Freeman v. Cook, 6 Ired. Eq. 373. 
 
 ' Williams v. Otey, 8 Humph. 563 ; see Winn v. Crosby, N. Y. Sup. Ct. Daily 
 Reg. Dec. 15th, 1876. 
 
 " S&Qpost, Chap. XLI. 
 
 " Hurtt v. Fisher, I Harr. & Gill, 88 ; Meacham v. Sternes, 9 Paige, 398, 405. 
 
 ' Litchfield v. White, 3 Sandf. S. C. 545 ; affirmed by the Court of Appeals, 7 
 N. Y. 438. 
 
628 LIABILITY OF ASSIGNEES. [CHAP. XL, 
 
 bound to manage and employ the trust property for the 
 benefit of the cestui que trust, with the care and diligence 
 of a provident owner.' Consequently he is liable for every 
 loss sustained by reason of his negligence, want of caution, 
 or mistake, as well as for positive misconduct.' On this 
 ground of orduiary negligence, assignees have been held 
 liable for neglecting to recover debts assigned ; ^ for omitting 
 to recover assigned property from the debtor ; '^ and for 
 permitting the debtor to retain possession of assigned prop- 
 erty and receive the proceeds.^ So, where a trustee, after 
 accepting and acting under the trust, neglected to record 
 the trust deed, he was charged with a loss resulting there- 
 from.* On the same principle, assignees who delay the col- 
 lection 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 prop- 
 erty to three partners, all men of wealth, without taking 
 security for the purchase money, suffered them to retain it 
 for a number of years, until they all became insolvent, they 
 were held personally responsible for the amount of the pur- 
 chase money.' In a case in Vermont, it was held that if an 
 
 'Willis on Trustees, 135, 169; Qoodwin v. Mix, 38 111. 115; Davis v. Har- 
 man, 21 Gratt. 200; Olmsted v. Herrick, i E. D. Smith, 310. 
 
 '^ Willis on Trustees, 172, 173; 2 Kent's Com.. 230; cited by Sandford, J., 3 
 Sandf. S. C. 551 ; and see the obsenfations of Ruggles, C. J., in Litchfield v. White, 
 7 N. Y. 443, 444. 
 
 " Royall's Adm'r v. McKenzie, 25 Ala. 363 ; Winn v. Crosby, cited ante, p. 585. 
 
 * Pingree v. Comstock, 1 8 Pick. 46. And where the assignee had paid a 
 dividend 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 limitation, 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 Penn. St. 160. 
 
 ' Harrison v. Mock, 16 Ala. 616. As to the measure of the trustee's liability 
 in such case, see Id. ibid. 
 
 " Cooper V. Day, i Rich. Eq. 26 ; see Hext v. Porcher, i Strobh. Eq. 170, 
 
 ' Royall's Adm'r v. McKenzie, 25 Ala. 363. 
 
 ' For 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 divi- 
 dead for a period of three years. Tomlinson v. Smallwood, 15 N. J. Eq. 286. 
 
 ° Miller v. Holcombe'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 
 
§ 4^0.] EXTENT OF LIABILITY. 629 
 
 assignee barter away the trust property 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, with- 
 out the sanction of the cestuis 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 cestuis que trust so elect, treat the lands as his own 
 individual property.'' But the rule recognized in Maryland 
 is that when a trustee has acted with good faith, in the exer- 
 cise of a fair discretion, and in the same manner as he would 
 ordinarily do in regard to his own property, he ought not 
 to be held responsible for any losses accruing in the manage- 
 ment 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.* Thus in a case in South Carolina, where a trus- 
 tee, 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 uni- 
 versal test of their liability or exemption from liability is 
 this : Is there, or is there not, in this case evidence of faith- 
 ful endeavors to perform his duty ? " It is clear, however, 
 
 fund applicable to pay a creditor who was ready to receive payment, and invested 
 the fund in confederate bonds, under the order of the court, made in a suit 
 brought by the ti-ustee 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. Carter, 21 
 Gratt. 200. 
 
 ' Page v. Olcott, 28 Vt. 465, 469. 
 
 " Royall's Adm'r v. McKenzie, 25 Ala. 364; Blauvelt v. Ackerman, 20 N. J. 
 Eq. 141. 
 
 ^ Gray v. Lynch, 8 Gill, 403 ; and see Higgins v. Whitson, 20 Barb. 141 ; Mel- 
 ick V. Voorhis, 24 N. J. Eq. 305. 
 
 ■* In re Durfee, 4 R. I. 401 ; Perry on Trusts, 562. 
 
 ° Hext V. Porcher, i Strobh. Eq. 170. 
 
630 LIABILITY OF ASSIGNEES. [CHAP. XL. 
 
 that mere mistake or misapprehension of duty, however 
 honest, will not always protect an assignee from consequent 
 liability. Thus, in a case in Massachusetts, 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 assignment, paid 
 all the money which he had received in trust to other cred- 
 itors, 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.' In a case in Alabama, it has been held that 
 a trustee who applies the trust fund in his hands to the pay- 
 ment 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 creditors — 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 mistake 
 it, he is responsible if he have such intelligence. He cannot 
 shield himself from responsibility by doubts that he takes 
 no measures to either verify or dispel.^ 
 
 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 duty properly, but 
 in a case of doubt he should apply to a court of equity .= 
 
 ' Ward V. Lewis, 4 Pick. 518. In a case in England, where trustees, 
 witliout sufficient cause, doubted tlie identity of tlieir 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. 
 
 '' 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. 
 
 ' Gilbert v. Sutliff, 3 Ohio (N. S.), 129. ' Jones v. Stockett, 2 Bland, 409. 
 
 ° Freeman v. Cook, 6 Ired. Eq. 373. 
 
§ 461.] ASSIGNEES, WHEN PROTECTED. 63 1 
 
 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,^ 
 in 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 bona fide by the trus- 
 tees, the costs will be decreed to be paid out of the trust 
 estate.5 
 
 § 461. Assignees, when Protected. — It is a further and 
 important generaj 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 accountable 
 for proceeds of the assigned property which they have actu- 
 ally paid over to bona fide creditors of the assignor, in pursu- 
 ance of the assignment, before any other creditors have 
 obtained a lien (general or specific, legal 04- equitable) upon 
 the assigned property.' So in New Hampshire and Massa- 
 
 ' Dimmock v. Bixby, 20 Pick. 368 ; Wilde, J., Id. 374, 375 ; Lockwood v. 
 Slevin, 26 Ind. 124; Anon. v. Gelpcke, 12 Sup. Ct. (5 Hun), 245. And creditors 
 may also apply for directions to the assignee. Wilson v. Brown, 12 N. J. Eq. 246. 
 
 '^ 7 Paige, 615. '' See a«/^, p. 589. 
 
 * Trotter v. Blocker, 6 Port. 269. 
 
 " Trotter v. Blocker, ubi supra ; Harvey's Adm'r v. Steptoe, 17 Gratt. 289. 
 
 " See Hawley v. James, 16 Wend. 61, 182; Barney v. Griffin, 4 Sandf. Ch. 552; 
 affi'd 2 N. Y. 365. 
 
 ' Wakeman v. Grover, 4 Paige, 23, 24 ; Ames v. Blunt, 5 Id. 13 ; Averill v. 
 Loucks, 6 Barb. 470, 471 ; Bostwick v. Berger, 10 Abb. Pr. 197 ; and see 
 Grimsley v Hooker, 3 Jones Eq. (N. C.) 4 ; Therasson v. Hickok, 37 Vt. 454 ; 
 Fahnestock v.Bailey, 3 Mete. (Ky.) 48. 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. 
 
632 LIABILITY OF ASSIGNEES. [cHAP. XL. 
 
 chusetts, where trustees under fraudulent conveyances have 
 paid the proceeds of the property assigned to them to bona 
 fide creditors before the service of process upon them, they 
 have been discharged from liabiHty, on the ground that there 
 remained nothing in their hands that could be subjected to 
 a judgment' So in Pennsylvania, assignees under an assign- 
 ment which was void on the ground of not having been re- 
 corded within the time prescribed by 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 assign- 
 ment.'' And a voluntary assignee was protected in pay- 
 ments made by him to his cestuis que trust, under a fraudu- 
 lent assignment, before an adverse claim by an insolvent 
 trustee and bankrupt assignee.^ And more recently, it has 
 been held in the same State, that a sale to a bo7ia fide pur- 
 chaser 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 as- 
 signment* And in a case in New York, the court on 
 setting aside a conveyance of all the debtor's real estate in 
 trust, made provision for the ratification of sales in good 
 faith by the trustees.^ 
 
 § 462. 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 
 
 ' Thomas v. Goodwin, 12 Mass. 140 ; Hutchins v. Sprague, 4 N. H. 469. 
 Approved in Crowninshield v. Kittredge, 7 Mete. 520. 
 ' Stewart v. McMinn, 5 Vv^. & S. loo. 
 ^ In re Wilson, 4 Barr, 430. 
 
 ' Okie V. Kelly, 12 Penn. St. (2 Jones), 323. And see Butler v. Jaffray, 12 Ind. 
 504. 
 
 ' Barney v. Griffin, 4 Sandf. Ch. 652 ; affi'd 2 N. Y. 365. As to the extent of 
 the liability of assignees in Vermont, where the assignment is declared void, see 
 Bishop V. Hart's Trustees, 28 Vt. (2 Wras.) 71. 
 
§ 463-] LIABILITY OF CO-ASSIGNEES. 633 
 
 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 in- 
 spected 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 faith- 
 fully executed his trust, unless the contrary is fully and satis- 
 factorily evinced.'' 
 
 § 463. Liability of Co-assignees. — Where there are several 
 assignees or trustees, the general rule is that they are respon- 
 sible only for their own acts, and not for the acts of each 
 other, unless they have made some agreement by which they 
 have expressly agreed to be bound for each other, or have, 
 by their own voluntary co-operation or connivance, enabled 
 one or more to accomplish some known object in violation 
 of the trust.3 An express clause, indeed, is frequently in- 
 serted in assignments, as in other trust deeds, that an as- 
 signee shall not be answerable for the receipts, acts or defaults 
 of his co-assignees.* But it has been said of such a proviso, 
 that while it informs the trustee of the general doctrine of 
 the court, it adds nothing to his security against the liabilities 
 of the office.' 
 
 In regard to receipts of money, the rule in England 
 formerly was that cotrustees were considered responsible 
 for money if they joined in signing the receipt for it, but in 
 
 ' DiffenderfFer v. Winder, 3 Gill & Johns. 311. See to the same effect, the ob- 
 servations of Bennett, J., in Paige v. Olcott, 28 Vt. (2 Wms.) 469, 467, who adds : 
 " It is necessary, in such cases, that rules somewhat of a stringent character 
 should be established, to prevent speculation in trust funds, and to induce fidelity 
 of conduct." And see the observations of Lee, J , in Miller v. Holcombe's Ex'r, 
 9 Gratt. 665, 674; referring to Elliott v. Carter, Id. 541. 
 
 ^ Maccubbin v. Cromwell, 7 Gill & Johns. 157 ; Goodwin v. Mix, 38 111. 115. 
 
 ' 2 Story's Eq. Jur. § 1280; Lewin on Trusts, 269; Perry on Trusts, §415. 
 The rule in these words is said to have been adopted and acted on in Taylor v. 
 Roberts, ^ Ala. 86; State v. Guilford, 18 Ohio, 509 ; Latrobe v. Tiernan, 2 Md. 
 Ch. 480 ; Hill on Trustees, (3d Am. ed.) 450, American editor's note ; where 
 reference is also made to Taylor v. Bonham, 5 How. (U. S.) 233 ; Worth v. McAden, 
 I D. & B. Eq. 199; Boyd v. Boyd, 3 Gratt. 114; Miller v. Sligh, 10 Rich. Eq. 
 (S. C.) 247 ; Glenn v. McKim, 3 Gill, 366 ; Stell's Appeal, 10 Barr, 149 ; Banks 
 V. Wilkes, 3 Sandf Ch. 99. 
 
 * See attte, p. 313. ' Lewin on Trusts, 288 ; Perry on Trusts, § 415. 
 
634 LIABILITY OF ASSIGNEES. [CHAP. XL. 
 
 later times the rule has been established, that a trustee who 
 joins in a receipt for mere conformity's sake, shall not be 
 answerable for a misapplication by the trustee who receives.' 
 A trustee, however, will not be exempt from liability if he 
 sign a receipt for money which the purposes of the trust do 
 not require.^ In New York, the liability of a trustee for 
 moneys received by his cotmstee was fully considered by 
 Chancellor Kent in the case of Monell v. Monell,^ and the 
 following rule deduced from the authorities cited, viz., that 
 if two trustees join a receipt for moneys it is prima facie, 
 though not absolutely conclusive, evidence that the money 
 came to the hands of both ; that one trustee may show by 
 satisfactory proof that the joining in the receipt was neces- 
 sary or merely formal, and that the moneys in fact were paid 
 to his companion ; that, without such satisfactory proof, he 
 must be liable to the cestui que trust, and that if the moneys 
 were in fact paid to his companion, yet if they were so paid 
 by his act, direction or agreement, and when he had it in his 
 power to have controlled or secured the money, he is and 
 ought to be responsible.* In Wallis v. Thornton, ^ it was 
 held by Chief Justice Marshall, that a trustee is not liable 
 for money received by his cotrustee in the regular discharge 
 of the trust, though he join in the receipt therefor ; but 
 where he joins in a receipt for money received by his co- 
 trustee when he had no right to receive it, he will be con- 
 sidered as co-operating in the breach of trust, and will be 
 liable. In Massachusetts, the rule has been adopted, that 
 trustees are liable only for the money which they have actu- 
 ally received, and in a case where it appeared that one of the 
 trustees under a voluntary assignment had received no prop- 
 erty under the assignment, it was held that he could not be 
 charged.*^ 
 
 ' Lewin on Trusts, 271, 272, citing Brice v. Stokes, 11 Ves. Jr. 319, 324, and 
 other cases. 
 
 " Lewin on Trusts, 273 ; Hanbury v. Kirkland, 3 Sim. 265, cited ibid. 
 
 " 5 Johns. Ch. 283. ' Kent, C, Id. 296 ; see 2 Stoiy's Eq. Jur. § 1283. 
 
 ° 2 Brock. 423. ° Ward v. Lewis, 4 Pick. 518, 524. 
 
§ 463-] LIABILITY OF CO-ASSIGNEES. 635 
 
 Another rule established by the English cases is, that 
 though a trustee joining in a receipt may be safe in merely 
 permitting his cotrustee to be the receiver in the first in- 
 stance, yet he will not be justified in allowing the money to 
 remain in his hands for a longer period than the circum- 
 stances of the case may reasonably require.' In Brice v. 
 Stokes,'' where one of two trustees received certain purchase 
 money, both signing the receipt, and the trustee who 
 received the money died insolvent, without having ac- 
 counted for it, and it was proved that the other was con- 
 nusant of the misemployment of the fund, though he took no 
 active measures for recovering it out of his cotrustee's 
 hands, he was made answerable. The same principle has 
 received the sanction of the American courts. In New 
 York, it was held by the chancellor, in Monell v. Monell,^ 
 that where, by the act or agreement of one trustee, a por- 
 tion of the trust fund gets into the hands of his cotrustee, 
 they are both responsible for it. And the same principle 
 has been adopted in North Carolina.* A trustee who suf- 
 fers funds to pass improperly into the hands of his cotrus- 
 tee, is chargeable for any loss arising from such negligence 
 or abuse of trust.= 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 cotrustee, it was held that he was 
 responsible for the property so misapplied, to a person who 
 was cestui que trust in both funds, though such cestui que 
 trust had discharged the cotrustee in ignorance of the 
 mingling of the funds by the several 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 acted in good faith, and exercised that vigilance over 
 
 ' Lewin on Trusts, 274. " 11 Yes. Jr. 319. 
 
 ' 5 Johns. Ch. 283. * Graham v. Davidson, 2 Dev. & Batt. Eq. 155. 
 
 ' Mumford v. Murray, 6 Johns. Ch. i. 
 
 • Id. ibid. ; see Hart v. Bulkley, 2 Edw. Ch. 70. 
 
636 LIABILITY OF ASSIGNEES. [cHAP. XL. 
 
 the fund which a man of ordinary prudence will exercise 
 over his own property.' And in Virginia, where a person 
 named trustee in a. deed to secure debts, united in sales nec- 
 essary in the execution of the trust, and other formal acts, 
 but received none of the trust funds, they being received by 
 his cotrustee, and was guilty of no fraud in relation thereto, 
 it was held that he was not responsible for the misapplica- 
 tion or waste of the funds by his cotrustee." 
 
 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 cestui que trust's 
 interest,* he will himself become responsible for the mis- 
 chievous consequences of the act. A trustee is called upon, 
 if a breach of trust be threatened, to prevent it by obtaining 
 an injunction ; = and if a breach of trust has been already 
 committed, 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 cotrustees, to whom 
 he left the management 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 pei^formance of the 
 duties of the trust to one, all are equally responsible for the 
 
 ' The State of Ohio v. Guilford, 18 Ohio (Giisw.) 500. 
 
 "^ Griffin's Ex'or v. Macaulay's Adm'r, 7 Graft. 476. And for a fuller view of 
 the American cases as to the liability of cotrustees generally, see the American 
 editor's note to Hill on Trustees, (3d Am. ed. Phil. 1857) 450. 
 
 ^ Boardman v. Mosman, i Bro. C. C. 68. 
 
 ■* Brice v. Stokes, 11 Ves. Jr. 319; and see Walker v. Symonds, 3 Swanst. 64; 
 Oliver v. Court, 8 Price, 166 ; In re Chertsey Market, 6 Price, 279. 
 
 ' See In re Chertsey Market, 6 Price, 279. 
 
 ' Franco v. Franco, 3 Ves. Jr. 75. 
 
 ' See Walker v. Symonds, 3 Swanst. 64, 71 ; Lewin on Trusts, 287. 
 
 ' 8 Price, 127 ; see 2 Story's Eq. Jur. § 1275. 
 
§ 464-J LIABILITY OF SURETIES ON BOND. 637 
 
 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-as- 
 signees ; the court holding that if an assignee once accepts 
 an assignment, he undertakes the duties of the office, and is 
 responsible, although he takes no active part, but leaves the 
 control to his co-assignee ; and that in such case he is liable 
 for the misapplication of the trust funds by his associate.' 
 In Maiyland, also, it 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 exclusively performed by the 
 cotrustee, with the concurrence and consent of the former ; 
 on the contrary, he is accountable for the conduct and man- 
 agement of the cotrustee to whom he has thought proper 
 to delegate his power, in the same manner and to the same 
 extent as if they had been executed by himself'' In Ala- 
 bama, a trustee who, after accepting the trust, voluntarily 
 permits his cotrustee to take the entire management of it, 
 and the possession and control of the trust property, is equally 
 with him liable to account.^ 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, notwith- 
 standing any agreement between themselves as to which 
 shall take charge of and be accountable for particular por- 
 tions, they are all jointly responsible to the creditors for the 
 proper application of the whole property.'' 
 
 § 464. 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 sureties on the bond stand in no better posi- 
 tion than their principal. The measure of his responsibility 
 
 ' Bowman V. Raineteaux, Hoff. Ch. 150; see also Monell v. Monell, 5 Johns. 
 Ch. 283. 
 
 ' Maccubbin v. Cromwell, 7 Gill & Johns. 1 57. 
 ' Royall's Adm'r v. McKenzie, 25 Ala. 364. 
 * Miller v. Holcombe's Ex'r, 9 Gratt. 665. 
 
638 LIABILITY OF ASSIGNEES, [cHAP. XL. 
 
 is the measure of theirs,' and where, by a final decree upon 
 the account of an assignee, he is directed 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 accounting for all moneys received by the as- 
 signee, it was held in a case in New York that the ac- 
 counting referred to was an accounting to creditors under 
 the assignment, and that where the assignment 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.^ Where the assignee 
 attempts to defend an action on the bond, on the ground 
 that he has faithfully discharged his duties under the assign- 
 ment, 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.* 
 
 ' Patterson's Appeal, 48 Penn. 342. But where the statute provided that 
 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, in a 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. 
 
 ' Little V. Commonwealth, 48 Penn. 337. 
 
 ' People V. Chalmers, 8 Sup. Ct. (i Hun), 683. 
 
 ' Morrill v. Richardson, 9' Pick. 84. 
 
CHAPTER XLI. 
 
 PROCEEDINGS IN CASE OF THE DEATH, REMOVAL, NON-ACCEPT- 
 ANCE, RESIGNATION, MISCONDUCT, INSOLVENCY, OR INCAPACITY 
 OF AN ASSIGNEE. 
 
 § 465. In case of Death. — Where there are several as- 
 signees, and one dies, the execution of the trust devolves 
 (in the absence of any special provision to the contrary) 
 upon the survivors.' In Connecticut, it is provided by stat- 
 ute, that if any trustee of an estate assigned for the benefit 
 of creditors, not being a sole trustee, die, the Court of Pro- 
 bate, may, in its discretion, unless the assignment shall 
 othei-wise provide, appoint another trustee in his stead, who 
 shall be associated with the other trustee or trustees, in 
 the same manner as was the trustee so dying ; and if the 
 court shall not so appoint, the other trustees shall complete 
 the execution of the trust.^ In Pennsylvania, it is provided 
 by statute, that in case of the death of one or more of 
 several trustees, the survivors or survivor and remainine 
 trustees shall have and exercise all the title and authority 
 which the whole might have done, unless the ti-ust or power 
 conferred shall require the whole number to act ; ^ in which 
 case the vacancies shall be filled by the courts having juris- 
 diction.* In a case in Mississippi, where a corporation as- 
 signed all their property to two trustees, to be held by them, 
 
 ' Stewart v. Pettus, 10 Mo. 755 ; Shook v. Shook, 19 Barb. 653; Hannah v. 
 Carrington, 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. Rev. Stat. 
 (6th ed.) 1 104, § 44; see Belmont v. O'Brien, 12 N. Y. 394. As to the rights of 
 a surviving trustee against the estate of a deceased cotrustee, see Hart v. Bulkley, 
 2 Edw. Ch. 70. 
 
 = Gen. Stat. (rev. 1875), p. 381, § 14. 
 
 ' Act of May 3, 1855, § 2 ; Laws of 1855, p. 415 ; Purdon's Dig. (Brightley, 
 loth ed.) p. 1426, pi. 72. 
 
 ' Id. ibid. ; and see the act of June 14, 1836, § 23 ; Purdon's Dig. (Brightley, 
 loth ed.) p. 1418, pi. 23. 
 
640 DISABILITY OF ASSIGNEE. [cHAP. XLI. 
 
 " and the survivors of them, and the heirs, executors, ad- 
 ministrators and assigns of such survivor," 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.) executed 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. The administrator of a deceased as- 
 signee is not bound to assume the supervision of the trust 
 property, or to be legally responsible for its administration.^ 
 In Connecticut, under the statute regulating assignments, if 
 a sole assignee dies, the Court of Probate aj points another 
 assignee in his stead.* In Pennsylvania, the Court of Com- 
 mon Pleas appoints a new assignee, on application of any 
 person interested in the property, and after due notice to all 
 parties concerned.^ In New Jersey, it is provided by the 
 statute regulating assignments, that if the assignee or as- 
 signees who have been appointed and have given surety, 
 according to the provisions of the act, should die before the 
 
 ' Peck V. Ingraham, 28 Miss. (6 Cush.) 246. 
 
 ' 2 Tuck. Com. [458] 446, p. 44. 
 
 ' Bowman v. Raineteaux, Hoff. Ch. 1 50. In New York it is provided by statute, 
 that upon the death of the surviving trustee of an express trust, the trust estate 
 shall not descend to his heirs, nor pass to his personal representatives ; but the 
 trust, if then unexecuted, shall vest in the Court of Chancery [Supreme Court] 
 with all the powers and duties of the original trustee, and shall be executed by 
 some person appointed for that purpose under the direction of the court, i Rev. 
 Stat. [730] § 68. 
 
 ' Gen. Stat. (rev. 1875), p. 363, § 68. 
 
 ' Act of June 14, 1836, §§ 23, 24; Purdon's Dig. (Brightley, loth ed.) p. 1418, 
 pi. 23, 24. 
 
§§ 466, 467-] IN CASE OF NON-ACCEPTANCE. 641 
 
 final settlement of the estate, it shall be lawful for the 
 surety to proceed to final settlement, and perform every 
 duty which the assignee or assignees could rightfully have 
 performed, having first given additional security for the faith- 
 ful performance of the trust.' And that in case the surety 
 should die, or reasonable objections be made by the cred- 
 itors against his acting, or he should refuse to act, the 
 Orphans' Court shall proceed to appoint some suitable per- 
 son or persons to settle the estate." In Maine, if any as- 
 signee dies, resigns, becomes insane, or otherwise unsuitable 
 to perform the trust, refuses or neglects so to do, or mis- 
 manages the trust property, the judge of probate for the 
 county, after due notice, shall appoint another in his place, 
 who shall have the same powers and be subject to the same 
 liabilities as the original assignee. ^ 
 
 § 466. In case of Removal. — In Pennsylvania, if an as- 
 signee is about to remove out of the jurisdiction of the 
 court, he may be proceeded against by citation, as in case 
 of misconduct.'* And if he shall have removed from the 
 State, or cease to have a known place of residence therein, 
 during the period of a year or more, the court, on due proof 
 thereof, may at once dismiss him.= In Alabama, if a trustee 
 leaves the State without executing the trust confided in him, 
 the Court of Chancery has authority to execute it.^ 
 
 § 467. 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. ^ 
 
 ' Rev. Stat. (ed. 1874), p. 13, § 14. ' Id. § 17. 
 
 ' Rev. Stat. (ed. 1871), p. 545, c. 70, § 7. 
 
 * Act of June 14, 1836, § 11 ; Purdon's Dig. (Brightley, loth ed.) p. 1417, § 12. 
 
 ° Act of June 14, 1836, § 20; Purdon's Dig. (Brightley, loth ed.) p. 1418, §20, 
 but see act of May 17, 1871, Ibid. p. 1426, § 74. 
 
 " CuUum V. Branch Bank at Mobile, 23 Ala. 797. 
 
 ' Bancroft v. Snodgrass, i Cold. (Tenn.) 430 ; Furman v. Fisher, 4 Cold. 
 (Tenn.) 626. Where a deed of trust is made to several trustees, and a part dis- 
 claim, 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. 
 
 41 
 
642 DISABILITY OK ASSIGNEE. [CMAP. XLI. 
 
 In Pennsylvania, this power is expressly given by statute to 
 the courts of Common Pleas, not only in the case where a 
 single assignee renounces the trust, but where one of several 
 renounces, and the duties of the trust require the joint act 
 of all' It is exercised on the application, by bill or peti- 
 tion, of any person interested in the estate or property 
 which is the subject of the trust, and not otherwise, and 
 after due notice to all parties concerned.'' 
 
 In New York, 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 Connecticut, if the trustee or trustees of any estate 
 assigned for the benefit of creditors, shall neglect or refuse 
 to accept the trust, having been notified thereof, it is made 
 the duty of the Court of Probate to appoint one or more 
 trustees in his or their stead, as the court may think proper.'' 
 And if one of several trustees refuse to accept the trust, the 
 court may, in its discretion, appoint 'another in his stead; 
 and if the court shall not so appoint, the other trustees shall 
 complete the execution of the trust.^ 
 
 So in Iowa, where the assignee fails, within twenty days 
 after the making of the assignment, to file an inventory and 
 give bonds, the court will appoint another trustee to exe- 
 cute the trust* 
 
 § 468. In case of Resignation. — After a trustee has once 
 accepted 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 
 
 ' Act <)f June 14, 1836, §23; Purdon's Dig. (Brightley, loth ed.) p. 1418; John- 
 son V. Harney, 46 Penn. St. 415, 
 
 ' Act of June 14, 1836, % 24 ; Purdon's Dig. (Brightley, loth ed.) p. 1418, § 24. 
 ° King V. Donnelly, 5 Paige, 46. * Gen. Stat. (rev. 1875), p. 381, § 14. 
 
 ' Id. ibid. § 13. " Iowa Code (1873), p. 385, § 2128. 
 
 ' Bethune v. Dougherty, 30 Ga. 770 ; see Perry on Trusts, § 267. 
 
§ 468.J IN CASE OF RESIGNATION. 643 
 
 which created it, or by the direction of a court of compe- 
 tent jurisdiction,' or with the general consent of all the per- 
 sons interested in the execution of the trust." 
 
 In New York, it is generally provided by statute, that 
 upon the petition of any trustee, the Court of Chancery 
 (Supreme Court) may accept his resignation and discharge 
 him from the trust, under such regulations as shall be estab- 
 lished by the court for that purpose, and upon such terms 
 as the rights and interests of the persons interested in • the 
 execution of the trust may require.^ Full power is given to 
 the court to appoint a new trustee in place of a trustee 
 resigned ; and where, in consequence of such resignation, 
 there shall be no acting trustee, the court, in its discretion, 
 may appoint new trustees, or cause the trust to be executed 
 by one of its officers under its direction.'* But a trustee, on 
 being discharged for no cause oth'er than his own wish to be 
 relieved from the duties of the trust, must pay the costs 
 of the petition, and of the appointment of his successor, 
 and resign all claim to commissions on the capital of the 
 estate. 5 
 
 In Pennsylvania, an assignee may obtain his discharge 
 from the trust by application to the proper Court of Com- 
 mon Pleas ; but the discharge will not be allowed unless 
 the assignee's accounts shall have been duly settled or con- 
 firmed, 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 advertisement, nor 
 until such assignee shall have surrendered the trust estate 
 remaining in his hands to some other assignee or other per- 
 son appointed by the court to receive the same, and have 
 
 ' McCuUough V. Sommerville, 8 Leigh (Va.) 415. 
 
 ^ Shepherd v. McEvers, 4 Johns. Ch. 136 ; Cruger v. Halliday, 11 Paige, 314; 
 Jones V. Stockett, 2 Bland, 409; Mreedlove v. Stump, 3 Yerg. 257 ; see Read v. 
 Robinson, 6 W. & S. 329; Hill on Trustees (3d Am. ed.) [554] 830. 
 
 ' I Rev. Stat. 730, § 69 ; 6th ed. vol. 2, p. nil, § 82. 
 
 ' Id. ibid. § 71. 
 
 " Matter of Jones, 4 Sandf. Ch. 27. 
 
 " See Fournier v. Ingraham, 7 W. & S. 27. 
 
644 DISABILITY OF ASSIGNEE. [CHAP, XLI. 
 
 performed all such other matters as may be required in 
 equity.' 
 
 In the same State, if a sole assignee, after formally ac- 
 cepting the trust, refuses to execute it, it is competent to 
 any of the parties interested in it to call upon the proper 
 court to appoint another.'' 
 
 In Missouri, when any assignee becomes satisfied that it 
 is no longer advantageous to the creditors to keep the as- 
 signment open, he may apply to the Circuit Court in whose 
 clerk's office the inventory is filed, for a discharge from his 
 trust. 3 The application is by petition filed in the court, and 
 preceded by notice of his intention to make such applica- 
 tion, stating the time, which notice must be published for at 
 least six weeks next preceding.'* The petition must be ver- 
 ified by affidavit, and set forth the disposition made of the 
 assets of the assignment to him ; what portion of them re- 
 mains on hand, and their condition ; the amount realized 
 from the assets ; the particular disposition of such amount ; 
 the demands allowed, particularly, with their respective 
 amounts and owners' names, and the sums paid on each ; 
 with an offer to deliver into the charge of the court what 
 remains of the assets, and the evidences thereof, accom- 
 panied with all vouchers therewith connected.^ If no per- 
 son interested shall within one week after the filing of the 
 petition, file written objections to such discharge, accom- 
 panied by specified reasons, the court refers the application 
 to the commissioner of the court, or one appointed for the 
 case, to examine the merits of the application and report 
 thereon ; and upon the filing of such report in such court, 
 the court shall make such further order in the premises as it 
 shall adjudge right, and may discharge the assignee from all 
 further duty or obligation under the assignment.^ 
 
 'Act of June 14, 1836, § 22; Purdon's Dig. (Brightley, loth ed.) p. 1418, 
 § 22 ; see also Stat, of Kans. (ed. 1868), c. 6, § 39. 
 
 ' Seal V. Duffy, 4 Barr, 274 ; Bell, J., Id. 278. For the rule in Alabama, see 
 Drane v. Gunter, 19 Ala. 731. 
 
 ^ Stat, of Mo. (Wagnei", 1872), p. I57,§ 38. ' Id. ibi']. ' Id. ibid. 
 
 ' Id. § 39. And as to further proceedings, see Id. §§ 40, 41. 
 
§ 469-] IN CASE OF MISCONDUCT. 645 
 
 § 469. In case of Misconduct. — If an assignee miscon- 
 ducts himself in his office, by wasting, neglecting or misman- 
 aging the estate, or refusing or neglecting to comply with 
 some requirement of law, as to file an inventory, or give 
 bond, or to account, proceedings may be taken to dismiss 
 or remove him.' In Connecticut, it is provided by statute 
 that the Court of Probate may, in any case, on the com- 
 plaint of any person interested in the trust, remove any 
 trustee of an estate assigned for the benefit of creditors, due 
 notice of such complaint having been given him, and suffi- 
 cient cause having been shown for his removal.'' In New 
 York, it is provided generally, that upon the petition or bill 
 of any person interested in the execution of a trust, and 
 under such regulations as shall for that purpose be provided, 
 the Court of Chancery (Supreme Court) may remove any 
 trustee who shall have violated or threatened to violate his 
 trust,3 and the court is empowered to appoint a new trus- 
 tee in his place, as in cases of resignation."* 
 
 In New Jersey, it is provided by the statute of assign- 
 ments, that on its appearing upon examination that any 
 assignee has embezzled, wasted, or misapplied the estate 
 assigned to him, the Orphans' Court of the county in which 
 the assignor resided at the time of the assignment shall pro- 
 ceed to remove said assignee, and appoint some suitable 
 person or persons in his stead, to fulfill the trusts contained 
 
 ' See 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 ; Mandel v. Peay, 20 Ark. 
 325 ; Pinneo v. Hart, 30 Mo. 561 ; see Perry on Trusts, §§ 817, 818. 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 con- 
 verts the trust estate 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. 
 Geisse v. Beall, 3 Wis. 367. 
 
 = Gen. Stat. (rev. of 1875), p. 392, § 26. 
 
 » I Rev. Stat. 730, § 83 ; 6th ed. p. 11 11, § 83. 
 
 ■" Id. ibid. § 71; see Planck v. Schermerhorn, 3 Barb. Ch. 644, 646. In the 
 case of The People v. Norton (9 N. Y. 176), it was held by the Court of Appeals 
 (Ruggles, Ch. 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. 
 
646 DISABILITY OF ASSIGNEE. [cHAP. XLI. 
 
 in the deed of assignment. The assignee so appointed is 
 required to give bond with security, and is thereupon de- 
 clared to have all the power and authority of the former 
 assignee, and to be subject to the same duties and liabilities.' 
 
 In Pennsylvania, it is provided that whenever it shall 
 be made to appear in a Court of Common Pleas, having 
 jurisdiction, that an assignee or trustee has neglected or 
 refused, when required by law, to file a true and complete 
 inventory, or to give bond with surety, or to file the ac- 
 counts of his trust, or that an assignee or trustee is wast- 
 ing, neglecting, or mismanaging the trust estate, it shall 
 be lawful for such court to cite him to appear before it 
 at a time named, to show cause why he should not be dis- 
 missed from his trust ; and on the return of the citation, 
 the court may require security or further security from such 
 assignee, or may proceed at once to dismiss him from the 
 trust." 
 
 In Missouri, it is provided that where an assignee neg- 
 lects to file an inventory or give bond, as required by stat- 
 ute, he may be cited to show cause why he should not be 
 dismissed.3 And on the return of the citation, the court 
 may require him to file an inventory or give bond, in such 
 time as it may deem reasonable, or it may proceed at once 
 to dismiss him from his trust."* When an assignee is dis- 
 missed, the court may appoint a new one, who is required 
 to give like bond and security, and to whom the court is 
 required to order the books, papers, and property to be 
 forthwith delivered.^ 
 
 ' Rev. Stat. (ed. 1874), p. 13, § 16. 
 
 '' Act of June 14, 1836, §§ n, 12; Purdon's Dig. (Brightley, loth ed.) p. 1417, 
 pi. 12, 13. 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 Penn. St. (8 Har.) 67. An assignee who has 
 been discharg:ed for malfeasance, 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 equitable claim which he can enforce against the assigned 
 estate in the hands of the subsequently appointed assignee. Fournier v. Ingra- 
 ham, 7 W. & S. 27. 
 
 ' Stat, of Mo. (Wagner, 1872), p. 155, § 29; see Pinneo v. Hart, 30 Mo. 561. 
 
 ' Id. § 30. ' Stat, of Mo. (Wagner, 1872), p.' 155, §§ 31, 32. 
 
§ 469-] IN CASE OF MISCONDUCT. 647 
 
 In Ohio ' and Kansas,^ by recent statutes, the creditors 
 are empowered to select an assignee, who succeeds to the 
 rights and liabilities of the assignee named in the assignment. 
 In the former State, the probate judge may remove any as- 
 signee for good cause and appoint a successor, and enforce 
 the transfer of the trust, and may also discharge the sureties 
 upon the assignee's bond.^ 
 
 In Indiana, the act regulating assignments provides for 
 the removal of the assignee upon petition, and for the filling 
 of a vacancy occasioned by the death, resignation or removal 
 of the assignee. "* The act also provides for the discharge of 
 the trustee from his liability under the trust.^ In Iowa like- 
 wise, special provision is made by statute for the appoint- 
 ment of an assignee to supply the place of an assignee who 
 has died, or who has failed to comply with the require- 
 ments of the act relating to the filing of the inventory 
 and bond.* 
 
 In Rhode Island, the Supreme Court may, upon the 
 petition of a majority in interest of the creditors interested 
 in any such deed of assignment, upon due notice and for 
 cause shown, remove the assignee or assignees named 
 therein from their office and trust' The court is also em- 
 powered to name a new assignee or assignees who shall 
 be substituted in the place of the retiring assignee.^ 
 
 Provision is made for the settlement of the accounts of 
 the assignee removed,' and also for the discharge of the sub- 
 stituted assignee.'" 
 
 ■ Act of March 16, 1874; Sayler's Stat. vol. 4, p. 3202, c. 2739. For mal- 
 administration, the assignee , is subject to removal, and if he colludes with the 
 assignor against the creditors he certainly should be removed. Thomas v. Tal- 
 madge, 16 Ohio St. 433. 
 
 " Laws of 1876, c. loi. 
 
 ' Act of April 16, 1874; Sayler's Stat. vol. 4, p. 3250, c. 2784. 
 
 • Gen. Stat, of Ind. (G. & H.) p. 117, § 19. ' Id. ibid. 
 
 • Iowa Code (1873), p. 385, § 2128. ' Gen. Stats, of R. I. p. 405, § 13. 
 " Ibid. § 14. ' Ibid. § 16. 
 
 " Ibid. § 17. No action abates by the removal of the assignee. Ibid. § 15. 
 Under the statute, the application must be made by a majority in interest of the 
 creditors interested in the assignment; the remedy, in case such majority do not 
 apply, being by bill only. In the Matter of Durfee, 4 R. I. 401. 
 
648 DISABILITY OF ASSIGNEE. [CHAP. XLI. 
 
 § 470. In case of Insolvency. — In New York, if an assignee 
 becomes insolvent, or is insolvent at the time of the assign- 
 ment, a receiver will be appointed by the court having juris- 
 diction.' In Pennsylvania, the proceeding is by citation, as 
 cases of misconduct.^ And the like proceedings are had 
 where the surety of the assignee is in failing circumstances, 
 or has removed out of the State, or signified his intention to 
 do so.3 ■ A similar provision has been enacted in Missouri.* 
 In New Jersey, whenever the security given by any assignee 
 under the act regulating assignments shall be insufficient at 
 the time of giving it, or shall afterwards become insufficient, 
 it is made the duty of the Orphans' Court of the county in 
 which the assignor resided at the time of making the assign- 
 ment, to order and direct such assignee to give such further 
 or other security to the ordinary, by bond in the usual form, 
 as to the said court, after hearing the objections of creditors 
 or persons concerned, shall seem proper ; and if the assignee 
 neglect or refuse to give such additional security as may be 
 ordered, the court shall proceed to remove him and appoint 
 another in his stead.^ 
 
 And in Iowa, it is provided that where the security is 
 discovered to be insufficient, or it appears the assignee is 
 guilty of wasting or misapplying the trust estate, the court 
 may require additional security, and may remove such as- 
 signee, and may appoint others instead.^ 
 
 § 471. In case of Incapacity . — If an assignee becomes in- 
 competent to perform the duties of his office from lunacy,' 
 
 ' Keyes v. Brush, 2 Paige, 311 ; Reed v. Emery, 8 Id. 417 ; Connah v. Sedg- 
 wick, I Barb. S. C. 210. These decisions were previous to the act of i860, which 
 requires 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 bo nd or 
 the surrender of the property to an assignee in bankruptcy where such assignee 
 has been appointed. Van Hein v. Elkus, Weekly Dig. vol. 3, p. 429. 
 
 ' Act of June 14, 1836, §§ 11, 12 ; Purdon's Dig. (Brightley, loth ed.) p. 1417, 
 pi. 12, 13. 
 
 ' Penn. Act of 1836, § 20; Purdon's Dig. (Brightley, loth ed.) p. 1418, pi. 20. 
 
 * Stats, of Mo. (Wagner, 1872), p. 155, § 31. 
 
 ' Rev. Stat. (ed. 1874), p. 13, § 16. « Iowa Code (1873), p. 385, § 2128. 
 
 ' Penn. Act of 1836, § 20 ; Purdon's Dig. (Brightley, loth ed.) p. 1418, pi. 20. 
 
§ 472-J POWERS OF NEW ASSIGNEE. 649 
 
 habitual drunkenness,' or other cause, he may be removed 
 and a new assignee appointed, as in other cases. 
 
 In Massachusetts, it was provided by the statute of 1836, 
 c. 238, § 7, that the Supreme Court or Court of Common 
 Pleas might, upon the application of the debtor, or of the 
 assignees, or of any creditor or other person interested in the 
 case, remove any assignee for any sufficient cause, and upon 
 such removal, or upon the death or resignation of an as- 
 signee, appoint another in his place. In Rhode Island, it 
 is provided that an assignee may be removed by the Su- 
 preme Court on the application of a majority in interest 
 of the creditors, on cause shown, and a new assignee ap- 
 pointed.' 
 
 § 472. 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, powers and duties of his predecessor. In 
 Pennsylvania, it has been expressly provided by statute, that 
 every assignee and trustee appointed by the court shall be 
 liable to the same duties, shall have the same powers and 
 authorities in relation to the trust, or to the further execu- 
 tion of the same, as the case may be, and shall be subject to 
 the jurisdiction and control of the court in the same man- 
 ner, to all intents and purposes, as his predecessor or pre- 
 decessors in the trust.^ And that upon the appointment by 
 the court of such assignee or trustee, and upon his giving 
 security, if he shall be so required, all the trust estate and 
 eflFects whatsoever shall, forthwith and without any act or 
 deed, pass to and be vested in such succeeding assignee or 
 trustee.* And similar provisions are found in the statutes of 
 other States.' 
 
 ' Penn. Act of June 14, 1836, § 20; see Bayles v. Staats, i 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. = Rev. Stat. (ed. 1857), p. 389, §§ 14, 15. 
 
 = Act of June 14, 1836, § 25 ; Purdon's Dig. p. 805, pi. 25. 
 
 *■ Id. § 26. ; Purdon's Dig. pi. 26. 
 
 ' Ohio, Act of April 16, 1874; Sayler's Stats, vol. 4, p. 3250, c. 2784; Iowa, 
 Code (1873), p. 385, § 2128 ; Indiana, Stat, of Ind. (G. & H. 1870), p. 117, § 19 ; 
 Rhode Island, Gen. Stats, p. 405, § 13. 
 
650 DISABILITY OF ASSIGNEE. [CHAP. XLI. 
 
 § 473. Discharge of Assignee. — As we have already- 
 seen, provision 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 man- 
 ner as other trustees are relieved of their trusts.' "The dis- 
 charge 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 cestui que trust may still inquire into his adminis- 
 tration prior to his discharge, and may require him to ac- 
 count for all his transactions, therefore it is usual, upon the 
 final settlement and transfer of the trust property to the par- 
 ties entitled, to discharge the trustee by a formal release of 
 all claims, executed by all the cestuis que trtist who are sui 
 Juris!' "^ 
 
 ' Perry on Trusts,! 921- 
 " Ibid, § 922. 
 
CHAPTER XLII. 
 
 PROCEEDINGS OF CREDITORS.— COMING IN UNDER THE ASSIGN- 
 MENT. 
 
 § 474. A voluntary assignment being in its nature a 
 mode and instrument of provision for creditors, and deriv- 
 ing its validity from the sufficiency or legality of such pro- 
 vision, 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 prac- 
 tice established thereupon. These rights of creditors have 
 already been alluded to, in the progress 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 show- 
 ing, 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 pro- 
 ceedings it is competent for them to adopt for the enforce- 
 ment of such rights. 
 
 § 475. Coming in under the Assignment. — On receiving 
 notice of the execution of an assignment, or becoming other- 
 wise informed that such a transfer has been made, the cred- 
 itors either accept of the provision made by it, or reject it 
 as fraudulent or illegal, with the view of taking active meas- 
 ures 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 to take 
 such steps for obtaining its benefits as may be required of 
 
 ' It 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, 3 Wis. 367. 
 
652 PROCEEDINGS OF CREDITORS. [CHAP. XLII. 
 
 them either by the provisions of the instrument, or by the 
 general rules of law applicable to the case. 
 
 § 476. What Creditors may come in. — Creditors are 
 entitled to avail themselves of the benefit of an assignrnent, 
 although it has been made without their knowledge or 
 privity, and may compel the trustee to execute the trusts 
 created by it' And they may come in if they choose, even 
 under a fraudulent assignment.^ . 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 receiving a dividend, nor from calling the as- 
 signee 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 ratifies it at all, he must 
 stand by it." 
 
 § 477. When to come m.— Where a specific time is pre- 
 scribed by the assignment for creditors to come in and 
 assent to it, as parties 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 
 
 ' Ward V. Lewis, 4 Pick. 518 ; New England Bank v. Lewis, 8 Id. 113 ; Pin- 
 gree v. Comstock, 18 I'd. 46; Wilde, J., Id. 50, 51 ; Shepherti v. McEvers, 4 Johns. 
 Ch. 136; Ingram v. Kirkpatrick, i5 Ired. Eq. 452 ; Robertson v. Sublett, 6 Humph. 
 316. 
 
 ' Ames V. Blunt, 5 Paige, 13; Mills v. Argall, 6 Id. 577; Geisse v. Beall, 3 
 Wis. 367. 
 
 ° Jewett V. Woodward, i Edw. Ch. 195. 
 
 ' Geisse v. Beall, ubi supra ; Jefferie's Appeal, 33 Penn. St. 39. 
 
 ' Phcenix Bank v. Sullivan, 9 Pick. 410 ; Battles v. Fobes, 21 Id. 239 ; Ded- 
 ham Bank v. Richards, 2 Mete. 105. 
 
 " De Caters v. Le Ray de Chaumont, 2 Paige, 490, 493. 
 
§ 477-J WHEN TO COME IN. 653 
 
 Statute. 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 before distribution, in which 
 case he will be entitled to a ratable proportion therefrom.' 
 In Massachusetts, it was provided by the statute of 1836, c. 
 238, § 4, that all creditors should have a right to become 
 parties to the assignment, provided they applied therefor 
 before the final dividend was declared ; but no creditor 
 coming in after any dividend was declared should be 
 allowed to disturb it, but he should receive an equal por- 
 tion with the other creditors, so far as the funds then re- 
 maining unappropriated in the hands of the assignees should 
 be sufficient. And in Maine, creditors not becoming parties 
 to the assignment, may, after the lapse of eighteen, months 
 or two years, trustee the assignee for any excess of the es- 
 tate, after payment of the debts of the parties thereto and 
 lawful expenses." A release may also be inserted in the 
 assignment, which shall forever discharge the assignor from 
 the claims of such creditors as become parties thereto. 
 Three months are allowed for creditors to become parties.^ 
 In New Hampshire, creditors are presumed to assent to an 
 assignment unless their dissent is made known to the as- 
 signee within thirty days after notice of the assignment, and 
 the actions of assenting creditors are discontinued, and their 
 costs form part 01 their claim against the estate of the 
 debtor, while those dissenting take no benefit under the 
 assignment."* 
 
 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 no- 
 tice, mistake, or accident, it was held in New York that 
 
 ' Rev. Stat. (ed. 1874), p. 15, § 20; see Vanderveer v. Conover, 16 N. J. L. 487. 
 ' Rev. Stat. (ed. 1871), p. 543. c. 7°, § 2. ' Ibid. § 4. 
 
 ' Gen. Stat. (ed. 1867), p. 262, c. 126, § 3; see ante, p. 380, n. 2. 
 
654 PROCEEDINGS OF CREDITORS. [cHAP. XLII, 
 
 they might come in afterwards ; and some of the creditors 
 being in Europe, six months was allowed for that purpose.' 
 
 § 478. 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 no- 
 tice to the assignee of their acceptance of it ; and, less for- 
 mally, 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 provisions, they must signify their assent in 
 that mode, otherwise they cannot take under the instru- 
 ment.'' But where they are not required 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.'* 
 
 § 479. Consequence of coming in. — By coming in under 
 a voluntary 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 property. Thus, where some of the debts 
 directed by the assignor to be paid are usurious, other 
 
 ' De Caters v. Le Ray de Chaumont, 2 Paige, 490, 493 ; see Raworth v. Par- 
 ker, 2 K. & J. 163. 
 
 '^ Garrard v. Lord Lauderdale, 3 Sim. i. 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 instrument, although it was not actually executed by the creditors, the cred- 
 itors might maintain an action after the expiration of fifteen years, to have the 
 trusts enforced. Nicholson v. Tutin, 2 K. & J. 18; and see Broadbent v. Thorn- 
 ton, 4 De G. & S. 65 ; Lancaster v. Elce, 31 Beav. 325. 
 
 ' Halsey v. Whitney, 4 Mason, 206, 214, 225 ; Acton v. Woodgate, 2 Myl. & 
 K. 492 ; 2 Story's Eq. Jur. § 1036 a. 
 
 ' Jewett v. Woodward, i Edw. Ch. 195, 197 ; Sandford, J., in Litchfield v. 
 White, 3 Sandf. S. C. 545, 553- 
 
§479-] CONSEQUENCES OF COMING IN. 655 
 
 creditors claiming under t!:e assignment cannot, on that 
 ground, object to their allowance. " In the case of a vol- 
 untary 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 content 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 credior of the assignor, 
 whether provided for by the assignment or not, who wishes 
 to repudiate the trusts of the assignment on the ground 
 that they are illegal and a fraud upon the honest creditors 
 of the assignor, must apply to set aside the assignment as 
 fraudulent and void against him as a creditor, instead of 
 coming in under the assignrnent itself, as a preferred cred- 
 itor or otherwise." ' 
 
 Another consequence of coming in under an assignment, 
 in certain cases, is that the creditor elects to take the pro- 
 vision made for him by the debtor in full discharge of his 
 demands. This consequence, however, arises only in virtue 
 of some express stipulation contained in the assignment to 
 which the creditor has become, a party (such as the stipula- 
 tion for a release, which has been already considered), or 
 some positive statutory provision. Thus, in New Jersey, 
 
 ' Pratt V. Adams, 7 Paige, 615 ; see Green v. Morse, 4 Barb. S. C. 332, 342; 
 Jewett V. Woodward, i Edw. Ch. 195; Olmstead v. Herrick, i E. D. Smith, 310. 
 In the late case of Johnson v. Rogers, 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 consulta- 
 tion, and with the advice and concurrence of many of the creditors, it was con- 
 cluded that a general assignment, without preferences, should be made to three 
 assignees, two of whom were to be selected by the creditors, and one by the as- 
 signor, and subsequently various creditors became uissatisfied, and actions were 
 commenced and judgments recovered against the assignors — it was held that hav- 
 ing 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. Albany Law J. vol. 14, p. 427. And a transferee 
 of a claim from one of the creditors, where the transfer is colorable merely, will 
 stand in no better position than the transferrer. Ibid. p. 428. 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. Ibid. A creditor is not estopped from 
 assailing an assignment by merely treating with the assignee as such under the 
 assignment, nor where he has accepted the instrument in ignorance of the fraud. 
 Ibid. 
 
656 PROCEEDINGS OF CREDITORS. [CHAP. XLII. 
 
 creditors coming in under an assignment and exhibiting 
 their demands for a dividend are declared to be wholly 
 barred from having afterwards any action or suit at law or 
 equity against the debtor or his representatives, except in 
 cases of fraud or concealment of property by the debtor.' 
 In construing this section, it was held, that the legislature 
 plainly intended that if a debtor makes a fair surrender of 
 his property, every creditor who voluntarily presents his 
 claim and comes in for a dividend shall be precluded from 
 ever after suing for his debt or any part of it. As to such 
 creditor, the debtor is forever discharged from his debt.° 
 
 In Maryland, a creditor who claims a share in the pro- 
 ceeds of sale under a deed of trust, makes himself so far a 
 party to such deed as to lose his right to deny its validity. ^ 
 
 § 480. Proof of Debts. — Where proof of the debts is 
 positively required by the assignment, or by any judicial 
 order obtained under it, or by any statute regulating the 
 proceedings, the making of such proof in the form required 
 is, of course, a necessary preliminary to obtaining any pay- 
 ment or dividend from the assignee. In the absence of any 
 such express provision or direction, and where the debts to 
 be paid are designated in the assignment or schedule, less 
 strictness is required, though even in these cases assignees 
 are entitled to be satisfied of the identity and amount of the 
 claims presented to them, and to call for the production of 
 ^ny evidence of debt which the creditors may possess. "^ 
 
 § 481. Application of Dividend. — Where, under an as- 
 signment for the benefit of such creditors as become parties 
 to it, and thereby release their claims, a dividend is received 
 by one of such creditors, it must be applied ratably to all his 
 
 ' Rev. Stat. (ed. 1874), p. 15, § 21. 
 ' ' Vanderveer v. Conover, 16 N. J. L. 487, 490. 
 
 ' Lanahan v. Latrobe, 7 Md. 268. And see further, under the head of " Effect 
 of taking Dividend," infra in the text. 
 
 ■■ See Lancaster v. Elce, 31 Beav. 825. Under the Missouri statute, the 
 Circuit Court has no power to compel the assignee to prove his demand. It 
 seems that the proper remedy for the creditor is the writ of mandamus. January 
 V. Powell, 29 Mo. 241. 
 
§ 482. J EFFECT OF TAKING DIVIDEND. 657 
 
 claims against the debtor, as well to those upon which 
 other parties are liable, or which are otherwise secured, as to 
 those which are not so secured.' 
 
 § 482. Effect of taking Dividend. — An assignment which 
 is voidable, as tending to delay creditors, cannot be ques- 
 tioned by a creditor who has taken a dividend under if 
 But trustees appointed under insolvent laws, being cred- 
 itors of the insolvent, do not, by receiving dividends under a 
 prior voluntary assignment made by the debtor for the benefit 
 of creditors, thereby affirm the voluntary deed, but they may 
 afterwards avoid it if otherwise voidable.^ In Maine, it was 
 at one time held,"* that a creditor who had become a party 
 to an assignment containing a release, and received divi- 
 dends under it, could not be permitted to object to its 
 vaHdity. But this was afterwards overruled, = it having been 
 decided^ that an assignment containing such a release 
 was illegal. More recently, however, assignments with re- 
 leases have been declared legal by statute.'' In Vermont 
 the mere acceptance by a creditor of a payment from the 
 assignee, without becoming a party to the deed of assign- 
 ment, will not prevent him from sustaining an action at any 
 time upon his claim against the debtor.^ In Alabama, a 
 creditor who receives his pro rata share of the proceeds of 
 sale under a deed of trust, is not thereby estopped from 
 attacking the deed for fraud.' In South Carolina, an accept- 
 ance of a provision under a deed of assignment, and a release 
 
 ' Commercial Bank v. Cunningham, 24 Pick. 270. 
 
 ° Adlum V. Yard, I Rawle, 163 ; Daub v. Barnes, i Md. Ch. 127 ; Scott v. Edes, 
 3 Minn. 377 ; Moule v. Buchanan, 11 G. & J. 314 ; see ante, p. 593, note 3 ; and 
 see post, p. 673. But it seems where the creditor has accepted a dividend under 
 an assignment in ignorance of the fraudulent character of the assignment, he may- 
 disaffirm the act on the discovery of the fraud by tendering back what he has 
 received. Babcock v. Dill, 43 Barb. 583. 
 
 ' Weber v. Samuel, 7 Barr, 499. ' Fisk v. Carr, 20 Me. (7 Shep.) 301. 
 
 ' Vose V. Holcomb, 31 Me. (i Red.) 407. 
 
 " Pearson v. Crosby, 23 Me. (10 Shep.) 261. 
 
 ' Rev. Stat. (ed. 1857), p. 437, § 2 ; see act of March 21, 1844, c. II2. 
 
 ' Bank of Bellows Falls v. Deming, 17 Yt. (2 W^ash.) 366 ; and see Haskins v. 
 Olcott, 13 Ohio St. 211. 
 
 ' Crutchfield v. Hudson, 23 Ala. 29<3; 
 42 
 
658 PROCEEDINGS OF CREDITORS. [cHAP. XLII. 
 
 of the principal debtor, with the assent of the surety, is 
 equivalent to a discharge by operation of law/ 
 
 § 483. Rights of Preferred Creditors.. — Where a pre- 
 ferred creditor in an assignment has another fund to which 
 he may resort for satisfaction, as between him and the other 
 creditors, he is equitably bound to resort to that fund." But 
 a judgment creditor, filing his bill after the assignment, in 
 such a case has an inferior equity to the postponed creditors, 
 and cannot compel the preferred creditors to seek satisfac- 
 tion under the assignment to their injury.^ 
 
 § 484. Coming in under Decree. — Creditors may come 
 in not only under an assignment, but under a decree made 
 in a suit brought to enforce or avoid. it/ When allowed to 
 come in under such a decree, they must do so within the 
 time limited for that purpose. They will not, however, be 
 held strictly to the terms of the decree as to time where the 
 indulgence will not work injustice to other parties.^ 
 
 ' Haskins v. Olcott, 13 Ohio St. 211 (1862), 235 ; Varnum v. Evans, 2 Mc- 
 Mullan, 409 ; Bank of Newberry v. Walker, 12 Rich. (S. C.) 304. 
 
 '^ Besley v. Lawrence, 11 Paige, 581 ; Paige, J., in Strong v. Skinner, 4 Barb. 
 S. C. 546, 559- 
 
 ' Besley V. Lawrence, II Paige, 581. 
 
 * See Parmelee v. Egan, 7 Paige, 610. 
 
 ' Pratt y. Rathbua, 7 Paige, 269. And see further as to the course of pro- 
 ceeding in these cases. Wilder v. Keeler 3 Paige, 164; Wilder v. Keeler, Id. 167 ; 
 Morris v. Mowatt, 4 Paige, 142. A provision in a trust deed, that creditors coming 
 in after a distribution has been made shall not disturb the distribution already 
 made, but receive only the same percentage in the subsequent distribution which 
 others receive, does not invalidate the deed. Pearson v. Rockhill, 4 B. Mon. (Ky.) 
 296. 
 
CHAPTER XLIII. 
 
 RELEASES BY CREDITORS. 
 
 § 485. It has already been observed,' that creditors who 
 choose to come in under an assignment and claim the benefit 
 of its provisions, must comply with such conditions as it 
 prescribes. An important condition sometimes required of 
 creditors (the validity of which, and of the instrument con- 
 taining it, has already been sufficiently considered) ° is the 
 release or discharge of all their demands against the assignor. 
 Assuming such a provision to be legal and valid, if the as- 
 signment itself contain a release, or stipulate for the execu- 
 tion of such an instrument, it must appear that the creditor 
 coming in, and of whom it is required, has either executed 
 the assignment itself or a separate instrument of release suffi- 
 cient for the purpose. The execution of a release in one or 
 the other of these forms is a condition precedent to obtaining 
 a payment or dividend from the assignee, and the creditor 
 can maintain no action for such dividend until he has per- 
 formed such condition.3 
 
 Where a release is required by the assignment, it must 
 be actually executed by the creditor ; a mere offer to exe- 
 cute is not sufficient. Thus, where the trustee in an assign- 
 ment for the benefit of such creditors as should, within sixty 
 days, execute in favor of the assignor a release of all de- 
 mands, gave public notice that a release would be prepared 
 by him for the signature of the creditors, and one of the 
 creditors called upon the trustee before the expiration of the 
 sixty days and offered to execute the release, but was informed 
 by him that the instrument was not prepared — it was held 
 
 ' Ante, p. 651. ^ See ante, pp. 232, et seq. 
 
 " Mather v. Pratt, 4 Dall. 224. 
 
66o RELEASES BY CREDITORS. [cHAP. XLIII, 
 
 that the offer was not tantamount to a release, and that the 
 creditor was, nevertheless, bound to execute a release in due 
 form within the prescribed period.' 
 
 § 486. Time for Executing Release. — ^Where a time is 
 expressly limited by the assignment, within which the release 
 must be executed, it must be executed within such time in 
 order to secure to the creditor a share in the distribution by 
 the assignee, and if it be signed afterwards, the releasor can 
 take nothing under the assignment.^ But it has been held 
 in Pennsylvania, that he is nevertheless bound in such case 
 by the release if there be no fraud or mistake, though the 
 assignment be declared to be the consideration of the re- 
 lease.3 It had been previously held, however, in the same 
 State, that where a voluntary assignment had been made for 
 the benefit of such creditors as should execute a release, a 
 creditor who had notice of the assignment, but did not execute 
 the release until after a dividend, was entitled to a propor- 
 tion of that dividend.'' 
 
 Where an assignment was made in favor of such cred- 
 itors as should, " within sixty days from the date of the said 
 instrument," execute a release, it was held that the day of 
 the date was excluded. = But where the time given for exe- 
 cuting 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.^ 
 
 § 487. Form of Release. — The form of the release re- 
 quired from creditors is sometimes prescribed by the assign- 
 ment itself,^ and in such case should be closely followed. 
 Where this is not the case, the assignee may prepare a gen- 
 
 ' Pearpoint v. Graham, 4 Wash. C. C. 232. 
 
 " Coe V. Hutton, i S. & R. 398 ; Pearpoint v. Graham, ubi supra. 
 ' Coe V. Hutton, ubi supra. 
 
 ' Bank of Pennsylvania v. Gratz, i Browne, Appendix, 69. 
 ° Pearpoint v. Graham, ubi supra. ' Pearpoint v. Graham, ubi supra. 
 
 ' See ante, p. 255 ; and see Sheepshanks v. Cohen, 4 S. & R. 35, cited ante, p. 
 436, 
 
§ 488.] DELIVERY OF RELEASE. 66 1 
 
 eral form to be executed by the creditors, of which he should 
 give them notice.' 
 
 In any case, the release should be under seal," and free 
 from any condition. Thus, where, under an assignment re- 
 quiring a release from creditors, on or before a day named, 
 certain creditors on that day wrote to the assignees, agreeing 
 to become parties to the assignment and release left with the 
 assignees on condition that they should be paid twenty-five 
 per cent, dividend on their claim, and expressing such letter 
 to be a full and free discharge from all claims they might 
 have against the assignors, the same as if they had signed 
 the release in the hands of the assignees — it was held that 
 such writing or paper was inoperative as a release under 
 the assignment ; first, because it was not under seal ; and 
 secondly, on account of the condition contained in it.^ 
 
 Where an assignment stipulated for a full and complete 
 release within a certain time, and a mercantile firm, creditors 
 of the assignors, executed a general release under seal, and 
 added to the signature the following words : " On condition 
 that the assignment pays over 25-100 on our claim " — it was 
 held that the condition was void, and the release single and 
 absolute, and that it extinguished the debt.'* 
 
 § 488. Delivery of Release. — The terms of the stipula- 
 tion for a release, as expressed in the assignment, usually 
 are, that the creditors shall within the time specified, " make, 
 execute and deliver a full and complete release of all claims," 
 &c. The question of the sufficiency of a delivery occurred 
 in the following case in Pennsylvania. A., by indenture 
 dated the 28th of March, 1823, assigned all his estate to B., 
 C. and D., in trust for creditors ; but, in the first place, to 
 pay and satisfy B. for any debt due to him, &c., provided that 
 no creditor should have the benefit of the assignment, un- 
 less he did, within three months after' the execution of the 
 
 ^ Pearpoint v. Graham, ubi supra. 
 
 ' See Pond v. Williams, i Gray, 630; Shaw, C. J., Id. 636. 
 
 ' Agnew V. Dorr, 5 Whart, 131. * Tyson v. Dorr, 6 Whart. 256. 
 
662 RELEASES BY CREDITORS. [CHAP. XLIII. 
 
 assignment, make, execute and deliver to the said grantor, 
 a full and complete release of all claims, &c. At the time 
 of the execution of the assignment, three general releases 
 were prepared by the counsel of A., and delivered one to 
 each assignee for the signature of the creditors. On the 
 23d of June, 1823, B. went to the office of his counsel, and 
 there, in his presence and that of two students (one of 
 whom became a subscribing witness), executed one of the 
 releases, which, however, he put in his pocket, and with it 
 left the office. A., who had left Philadelphia on the 1 7th 
 of April, 1823, for New Orleans, returned there on the 30th 
 of June, when the release was tendered to him, which he 
 refused to receive, and it remained in the possession of B. 
 It was held that there was sufficient evidence for the jury 
 to find that the release was delivered within the three 
 months.' 
 
 § 489. Construction of Releases. — Several cases involv- 
 ing the construction of that clause of an assignment which 
 requires the execution of a release, have been already 
 given in a former chapter.^ The following cases are here 
 added. 
 
 S. owed M. eight hundred dollars, secured by mortgage. 
 After the mortgage was recorded, G. obtained judgment 
 against S. S. made an assignment in trust for his creditors, 
 preferring among others M. for a debt due to him, of three 
 hundred dollars, and after the preferences, then in trust for 
 such of his creditors as should release him within sixty days. 
 M. executed a release under the assignment, of all his de- 
 mands, within the time limited, and afterwards S. took the 
 benefit of the insolvent act, returning the mortgage as due. 
 It was held that the mortgage was released, and G. was en- 
 titled to be paid first from the money raised on sale of the 
 mortgaged premises, by execution. ^ 
 
 So a release, though expressed to be (as in the usual 
 
 ' Steel V. Tuttle, 15 S. & R. 210. 
 
 = See ante, Chap. XXIV. = Matlack's Appeal, 7 W. & S. 79. 
 
§ 490-J RELEASE, WHEN VOID. 663 
 
 form) in full of all demands, will not prevent the creditor 
 executing it from retaining certain securities deposited with 
 him by the debtor. This was decided in the following case. 
 
 A. deposited with certain creditors, for collection, certain 
 promissory notes payable to him. The creditors had previ- 
 ously discounted for A. an accommodation note drawn by 
 
 B. in his favor, and indorsed by him ; and this note falling 
 due, and the creditors requiring another indorser, A. agreed 
 that the creditors should hold the notes deposited, as collat- 
 eral security for the payment of the note on which he was 
 indorser. Shortly afterwards, A. made an assignment of all 
 his property for the paym'ent of such creditors as should 
 execute a release of all demands, &c. The creditors holding 
 the notes deposited, executed the release, and received cer- 
 tain dividends under the assignment. It was held that they 
 had a right, nevertheless, to retain the notes deposited with 
 them, until payment of the note discounted by them.' 
 
 § 490. Release, when Void. — Where a release is obtained 
 by fraud, it is void," and the concealment of material 
 facts from a creditor executing a release will sometimes 
 have the effect of avoiding it.^ Thus, where a debtor, being 
 a member of a firm in which two others were dormant part- 
 ners, executed an assignment to one of them, of all his es- 
 tate for the payment of creditors, and a creditor who had 
 sold goods to the debtor executed a release to him of all 
 demands, in compliance with a stipulation in the assign- 
 ment, it was held that the concealment of the fact of the 
 partnership, at the time of the execution of the release, was 
 a fraud upon the creditor which avoided the release.* 
 
 ' Lewis V. Bank of Penn Township, 3 Whart. 531. 
 ° Ludwig V. Highley, 5 Barr, 132. 
 " Doe V. Scribner, 41 Me. 277. 
 * Carter v. Connell, I Whart. 392. 
 
CHAPTER XLIV. 
 
 PROCEEDINGS BY CREDITORS TO ENFORCE THE TRUST.— SUITS 
 AGAINST ASSIGNEE. 
 
 If the assignee neglect to execute the trust, or to ac- 
 count, or make distribution, or distribute wrongfully, a cred- 
 itor claiming the benefit of the assignment may proceed 
 against him by suit to enforce the trust, or to compel an 
 account, or the payment of a distributive share of the pro- 
 ceeds ; and the usual and appropriate remedy in all these 
 cases, where no particular course of proceeding is prescribed 
 by statute, is by bill in equity.' The jurisdiction of a court 
 of equity for enforcing trusts is not taken away by the fact 
 that the party has a remedy at law, especially where the 
 party seeking relief is entitled to a discovery, or where the 
 trustee is bound to state an account of the trust fund and 
 its proceeds.^ 
 
 § 491. Suit to Enforce Trust. — If the assignee is remiss 
 in executing the trust, as, if he neglect to collect the assets 
 and render them available, or to settle the conflicting claims 
 of creditors and adjust the respective amounts to be paid to 
 each, the appropriate proceeding is by bill in equity to en- 
 force a settlement of the accounts of the assignee, and a dis- 
 tribution of the assets among creditors.^ And the suit may 
 
 '■ Ward V. Lewis, 4 Pick. 512, 522; First Congregational Society in Raynham 
 V. Trustees, &c. 23 Pick. 148 ; Fitcli v. Workman, 9 Mete. 517 ; Keyes v. Brush, 
 
 2 Paige, 311 ; Wright v. Henderson, 7 How. (Miss.) 539; Jones v. Dougherty, 10 
 Ga. 273 ; see Page v. Olcott, 28 Vt. (2 Wms.J 465 ; Geisse v. Beall, 3 Wis. 367. 
 In this last case, the bill was for the removal of the assignee, and for an account, 
 injunction, and other relief In Bellamy v. Bellamy's Adm'r (6 Fla. 62), the bill 
 was for an account and the removal of the assignee. 
 
 " First Cong. Society in Raynham v. Trustees, &c. ubi supra ; Hall v. Harris, 
 
 3 Ired. Eq. 389 ; McCrea v. Purmort, 16 Wend. 460 ; New York Ins. Co. v. Rou- 
 let, 24 Wend. 505. 
 
 ' Fitch v. Workman, 9 Mete. 517 ; Wright v. Henderson, 7 How. (Miss.) 539. 
 
§§ 492. 493-] PARTIES. 665 
 
 be maintained by a creditor at large.' No action at law can 
 be maintained by a creditor against the assignee until his 
 accounts have been settled and a decree made for a distribu- 
 tion,'' nor will a creditor be permitted to sustain such an 
 action on the ground that the assignee has neglected to col- 
 lect an amount due upon the sale of the assigned property, 
 and apply it to the payment of the creditor in discharge of 
 the trust. 3 
 
 Assignments for creditors do not give the creditors any 
 title to the property assigned, but only a right to enforce 
 the duty undertaken by the assignees. ■* 
 
 Those whose claims assume a hostile attitude to the 
 assignment cannot claim any interest under it, or insist on 
 standing as parties to it.^ Thus, where a creditor had at- 
 tached assigned property, claiming that the assignment was 
 invalid, he was not allowed to enforce payment of his dis- 
 tributive share.* 
 
 § 492. Time for Commencing Suit. — The assignee is 
 entitled to a reasonable time to wind up his trust, and if the 
 creditors speed him before he has had that time, it will be 
 at their own costs and charges.' On the other hand, too 
 long a delay, as we have seen,^ may have, the effect of bar- 
 ring them of their remedy. 
 
 § 493. Parties. — Where a bill is filed by a creditor to carry 
 an assignment into effect, and to obtain his share of the 
 trust fund, the other creditors provided for by the assign- 
 ment should be made parties, or it should be filed in behalf 
 
 ' Goncilier v. Forst, 4 Minn. 13; see Spicer v. Ayers, 2 Supm. Ct. (T. & C.) 
 626 ; McCartney v. Bostwick, 32 N. Y. 53 ; Sweeny v. Sheridan, 37 Supr. Ct. 
 (J. & S.) 587; and see also Ocean Nat. Bank v. Olcott, 46 N. Y. 12. 
 
 = Van Arsdale v. Richards, i Whart. (Pa.) 408 ; Gray v. Bell, 4 Watts (Pa.) 
 410. 
 
 • Bishop V. Houghton, i E. D. Smith, 566. 
 ' Jefferie's Appeal, 33 Penn. St. 40. 
 
 • Jefferie's Appeal, 33 Penn. St. 40 ; Valentine v. Decker, 43 Mo. 583. 
 ' Valentine v. Decker, supra. 
 
 ' Sandford, V. C, in Jackson v. Cornell, i Sandf. Ch. 348. 
 
 • See ante, p. 625 ; and see Martin v. Price, 2 Rich. Eq. 412. 
 
666 PROCEEDINGS TO ENFORCE TRUST. [CHAP. XLIV. 
 
 of the complainant and all others who may choose to come 
 in under the decree/ So, where the object of the bill is to 
 enforce a claim adversely to those of other creditors.^ But 
 where a bill for an account is filed against an assignee, by a 
 general creditor who claims only the benefit of such a bal- 
 ance as shall remain after paying the preferred creditors in 
 the assignment, such preferred creditors need not be made 
 parties.3 Creditors who are secured by a deed of trust, ac- 
 cepted by the trustee, may require the execution of the 
 trusts, though not privy to the execution of the deed.* 
 
 In certain cases, the assignee is considered as represent- 
 ing the interests of all the parties, so that a suit will lie 
 against him alone, without joining the others. Thus, in a 
 case in Virginia, where A. & B. assigned property to C. in 
 trust to pay debts of a former firm of A. & D., and certain 
 debts of A. & B., and to pay the surplus to the order of A. 
 & B. ; and A. & B. gave an order on C. payable out of the 
 surplus, to E. ; and C. accepted it ; and E. filed a bill 
 against C. alone, for an account of the fund, and to have the 
 surplus applied to satisfy his order, it was held that neither 
 A. & B. or A. & D. nor any other of the cestuis que trust 
 were necessary pafties, as the trustee represented all the in- 
 terests of all parties. = 
 
 § 494. Pleadings. — The grounds of the assignee's lia- 
 bility must be distinctly charged in the bill, as he will be 
 held to account only for such neglects or breaches of duty 
 
 ' Wakeman v. Grover, 4 Paige, 23 ; Bryant v. Russell, 23 Pick. 508 ; see 
 Houghton V. Davis, 23 Me. 28; McDougal v. Dougherty, ii Ga. 570 ; Brooks v. 
 Peck, 38 Barb. 519; Mandel v. Peay, 20 Ark. 325 ; Weir v. Tannehill, 2 Yerg. 
 (Tenn.) 57 ; see Perry on Trusts, § 885. Where there is more than one trustee, 
 all are necessary parties. Perry on Trusts, § 876. Where the assignee is required 
 to account under the interlocutory decree, provision is made in the decree for 
 proper notice to parties to come in and present their claims. See ante, % 457. 
 
 "^ Rogers v. Rogers, 3 Paige, 379 ; see Brooks v. Peck, 38 Barb. 519. 
 
 " Page v. Olcott, 28 Vt. (2 Wms.) 465 ; Patton v. Bencini, 6 Ired. Eq. (N. C.) 304. 
 And see as to parties, Geisse v. Beall, 3 Wis. 367; Armstrong v. Pratt, 2 Id. 299. 
 
 * Smith v. Turrentine, 8 Ired. Eq. 185. 
 
 ' Buck V. Pennybacker, 4 Leigh, 5. So in Maine, it has been held in case of 
 an assignment of real estate, that it is not requisite, where a bill is filed against 
 an assignee, to make the creditors parties. The assignee is supposed to repre- 
 sent and protect their interests. Johnson v. Candage, 31 Me. (I Red.) 28. 
 
§ 495-J DEFENSE. 667 
 
 as are charged/ A creditor's bill filed by the beneficiaries 
 for the settlement of a deed of trust executed by the debtor, 
 which required that the secured creditors should assent to 
 its provisions within six months, must allege that the com- 
 plainants assented to the deed/ 
 
 § 495. Defense. — ^Where a suit is brought by creditors to 
 enforce the trust against an assignee who has received the 
 property of the debtor, he cannot set up fraud in making 
 the assignment, as a defense to the suit, without showing 
 that the fund has been recovered from him by the parties 
 intended to be defrauded.' It is no excuse for not account- 
 ing, that the assignment is fraudulent and void as against 
 creditors.* The fact that one or more of the creditors men- 
 tioned in an assignment allege a fraudulent preference in 
 favor of other creditors, is no reason why a court of equity 
 should refuse to hold the assignee to accountability. ^ Nor 
 can the fact that the creditors or cestuis que trust named in 
 an assignment have made arrangements in regard to the 
 distribution of the estate different from that prescribed by 
 the assignment be made available to the trustee, in avoid- 
 ance of his liabilities as such.* Where a trustee in a deed 
 for the benefit of creditors without distinction or preference, 
 in answer to a bill filed to enforce the trust, set up demands 
 to a specific amount, as due to him by the grantor at the 
 time of the execution of the deed ; and after his death, the 
 bill was revived against his administrator, who adopted the 
 answer of his intestate, but subsequently filed a supplemental 
 answer, insisting upon an additional claim, to which he 
 alleged his intestate's estate was entitled, for money ad- 
 vanced and paid out by his intestate since the execution of 
 the deed and the filing of his answer, on execution against 
 the grantor, which created a lien superior to the deed of 
 trust, it was held, i, that payments on executions against 
 
 ' Pag-e V. Olcott, 28 Vt. 465. ■' Colgin v. Redman, 20 Ala. 650. 
 
 ° Seaman v. Stoughton, 3 Barb. Ch. 344. 
 
 ' Geisse v. Beall, 3 Wis. 367, 383. See this case for forms of bill and answer. 
 
 ' Geisse v. Beall, ubi supra. ' Id. ibid. 
 
668 PROCEEDINGS TO ENFORCE TRUST. [cHAP. XLIV. 
 
 the grantor, made by the trustee before the date of the deed, 
 were not put in issue by the pleadings, and were properly 
 disallowed ; 2, that the answer of the trustee was an admis- 
 sion of the extent of the debt claimed by him at that time, ' 
 and was conclusive until amended/ 
 
 § 496. Decree. — Where all the effects of a trust estate 
 have been converted into money, and the debt constituting 
 a charge upon it is ascertained, the decree against the trus- 
 tee who is himself a creditor, should be for the balance that 
 remains after deducting the dividend to which he is entitled, 
 and not for the entire sum found in his hands/ 
 
 § 497. Statutory Proceedings. — In New Jersey, it is pro- 
 vided by statute that the Orphans' Court of the proper county 
 may, from time to time, if necessary, by citation and attach- 
 ment, compel the assignee to proceed to the execution of 
 the duties required by the act, until a final settlement and 
 distribution. 3 
 
 In Pennsylvania, the Court of Common Pleas of the 
 proper county is the appropriate tribunal in which creditors 
 may proceed to have the accounts of the assignee settled. 
 The course is to cite the assignee, after the expiration of 
 one year from the date of the assignment, to appear and 
 exhibit, under oath or affirmation, the accounts of the trust, 
 in such court, within a time specified.'' 
 
 § 498. Action for Dividend.—Whtre the trust has been 
 so far executed that the distributive shares of the creditors 
 have been ascertained by the assignee, and a dividend de- 
 clared, an action will lie against him to recover such share 
 or dividend, in favor of a creditor from whom it is with- 
 
 ' Harrison v. Mock, i6 Ala. 6i6. An unreasonable delay in the execution of 
 the trust cannot be met by the fact that the assignee had a discretion as to the 
 time and mode of sale, nor that the delay was advised by counsel. Hammond v. 
 Stanton, 4 R. S. 65. 
 
 ^ Harrison v, Mock, tebz supra. 
 
 = Rev. Stat. (ed. 1847), p. 318, § 9. 
 
 * Act of June 14, 1836, §§ 7, 8, et seq. ; Purdon's Dig. p. 803 ; Whitney's Ap- 
 peal, 22 Penn. St. (10 Har.J 500. See further, as to the proceedings in this State 
 and in Vermont and Missouri, ante, Chap. XXXIX. 
 
§§ 499' 5^0.] INTEREST WHEN RECOVERABLE. 669 
 
 held ; ' and such action may be either in the form of a bill 
 in equity,' or action at law for money had and received.^ 
 But such an action will not lie in cases where a release is 
 required of creditors, until a release has been executed ; "• 
 nor, in Pennsylvania, until the assignee's accounts have been 
 settled in the proper court, and a decree made for distribu- 
 tion.= 
 
 § 499. Interest, when Recoverable. — Besides the amount 
 of his share or dividend, the creditor from whom it is with- 
 held will be entitled to recover interest from the assignee in 
 all cases where the latter has unreasonably delayed to pay it 
 over, or has neglected to inform the creditor of the divi- 
 dend.* The general rule is that trustees of every descrip- 
 tion, neglecting to apprise those interested in the trust fund 
 of the amount due to them, and to offer payment in a reason- 
 able time, are chargeable with interest, and a demand by 
 legatees, heirs, or creditors is not necessary.' In a case in 
 New York, where an assignee, after having converted the 
 assigned property into money, retained it in his hands for 
 several years without making distribution, and a creditor 
 filed a bill against him, he was decreed to pay the amount 
 of the debt, with interest from the time he received the 
 money, and with the costs of suit.^ 
 
 § =;oo. Actions in other cases. — If an assiefnee violates 
 his trust, to the injury of a particular cesttii que trust, the 
 
 ' Rush V. Good, 14 S. & R. 226 ; McLemore v. Nuckolls, i Ala. Sel. Cas. 591. 
 
 ° Ward V. Lewis, 4 Pick. 518 ; Keyes v. Brush, 2 Paige, 311. 
 
 ' McCrea v. Purmort, 16 Wend. 460; Cowen, J., Id. 465 ; New York Ins. Co. 
 V. Roulet, 24 Wend. 505 ; Fitch v. Workman, 9 Mete. 517. 
 
 " Mather v. Pratt, 4 Dall. 224; Bank of Penn. v. Gratz, i Browne (Pa.) Appx. 
 69. 
 
 ' Van Arsdale v. Richards, i Whart. 402 ; Gray v. Bell, 4 Watts, 410. 
 
 ° Gray v. Thompson, i Johns. Ch. 82; Minuse v. Cox, 5 Id. 441 ; Lomax v. 
 Pendleton, 3 Call, 538 ; Estate of Merrick, i Ashm. 305 ; Bedell v. Janney, 9 
 III. 193; and see Lindsey v. Platner, 23 Miss, (i Cush.) 576. 
 
 ' Estate of Merrick, i Ashm. 305 ; Clark v. Craig, 29 Mich. 398 ; Rosenberg 
 V. Moore, 1 1 Md. 376. 
 
 'Gray V. Thompson, i Johns. Ch. 82 ; as to the payment of interest in Mis- 
 souri, see I Rev. Stat. p. 208, § 32. 
 
670 PROCEEDINGS TO ENFORCE TRUST. [cHAP. XLIV. 
 
 latter has his separate remedy in equity.' So, if there be a 
 breach of the assignee's covenants to the injury of any one 
 covenantee, he may maintain an action at law, without join- 
 ing the other covenantees.'' 
 
 In those States where bonds are required of assignees, 
 they are sometimes declared to inure to the use and benefit 
 of all the creditors, or persons interested in the assignment. ^ 
 In Missouri, any person injured by breach of the condition 
 of an assignee's bond, may sue thereon in the name of the 
 State, for his use.* So, in New York, it is provided by the 
 5th section of the Act of 1860,5 that whenever an assignee 
 shall omit, or refuse to perform, any decree or order made 
 against him by a competent tribunal, the county judge, or 
 court, may order the assignee's bond to be prosecuted in the 
 name of the people, by the district attorney of the county 
 where the bond is filed, and the money collected on the bond 
 is applied in the same manner as it ought to have been ap- 
 plied by the assignee. And by an amendment ^ to this sec- 
 tion, in case of the removal of an assignee, his bond may be 
 prosecuted on the relation of the substituted assignee. 
 
 ' Dimmock v. Bixby, 20 Pick. 368. = Id. ibid. 
 
 " Pennsylvania act of June 14, 1836, § 6 ; Purdon's Dig. (Brightley, loth ed.) 
 p. 141 6, pi. 6. 
 
 ' I Stats, of Mo. (Wagner, 1870), p. 152, § 10. 
 
 = 3 Rev. Stat. (6th ed.) p. 34, § 36 ; see People v. Chalmers, 8 N. Y. Sup. (i 
 Hun), 683. 
 
 ° Laws of 1873, c. 363 ; 3 Rev. Stat. (6th ed.) p. 34, § 36. 
 
CHAPTER XLV. 
 
 PROCEEDINGS OF CREDITORS IN OPPOSITION TO THE ASSIGN- 
 MENT AND IN AVOIDANCE OF IT. 
 
 Having considered the proceedings on the part of the 
 creditors of the assignor, in cases where they accept of the 
 provisions of the assignment, and elect to enforce the trust 
 against the assignee, it remains to consider the nature and 
 course of their proceedings where they repudiate the assign- 
 ment, and refuse to come in under it. 
 
 In cases of apparent fraud or obvious illegality, the 
 course is sometimes adopted of treating the assignment as a 
 nullity, and proceeding as though it had not been made. 
 But the usual course taken by creditors, where an assign- 
 ment has been made which is regarded as fraudulent and 
 void as against them, is to assail it by hostile proceedings 
 in courts of competent jurisdiction, for the express purpose 
 of having it judicially declared to be void, and set aside for 
 their benefit. 
 
 § 501. Treating the Assignment as a Nullity. — The 
 right to treat an assignment as a nullity, in certain cases, is, 
 in some States, expressly given to creditors by statute. 
 Thus, in Delaware, if an assignment is made with prefer- 
 ences, contrary to the statute, it is absolutely void, and the 
 estate, goods, chattels, or effects contained in such assign- 
 ment are declared to be liable to be taken in execution or 
 attached for the payment of the debts of the assignor, in the 
 same manner and to as full an effect, as if no such assign- 
 ment had been made.' In other States, the same right is 
 recognized by decisions of the courts. In Illinois, if an as- 
 
 ' Laws of Delaware (ed. 1829), pp. 140, 141 ; Rev. Code of Del. (ed. 1874), p. 
 785, c. 132, § 4. 
 
672 AVOIDANCE OF ASSIGNMENT.. [cHAP. XLV, 
 
 signment contain a condition of release, without provision 
 for full payment of the creditors, it is void as to creditors not 
 parties, and they may proceed to judgment and levy execu- 
 tion upon the property assigned, as long as it remains in 
 the possession of the assignor or assignees, as though the 
 assignment had not been made.' In Pennsylvania, it has 
 been expressly held that where an assignment is tainted 
 with either moral or legal fraud, the property does not pass, 
 but remains in the debtor, liable to the execution of cred- 
 itors who have not assented to the assignment And the 
 course of treating the assignment as a nullity, and seizing 
 and selling the property under execution or attachment, 
 in opposition to it, has been frequently approved by the 
 courts. 3 
 
 Where the assigned property has been thus seized by a 
 creditor, the assignee may bring an action of trespass, and 
 this will raise the question as to the validity of the assign- 
 ment.'* In some States, the validity of an assignment alleged 
 to be fraudulent, may be tried in a court of law, upon an 
 issue made between an attaching creditor and the assignee 
 summoned as garnishee, under the provisions of the law re- 
 lating to attachments. 5 
 
 A creditor cannot avoid an assignment merely on the 
 ground that it contains a provision which is illegal, unless 
 such provision tends to his injury.^ So a partnership cred- 
 itor cannot attack an assignment of partnership and indi- 
 vidual property, on the ground that by its provisions, cred- 
 itors of the partners, individually, are hindered and delayed.' 
 
 ' Ramsdell v. Sigerson, 2 Gilm. 78. 
 
 ' McClurg V. Lecky, 3 Penn. R. 83, 94; Irwin v. Keen, 3 Whart. 347, 355. 
 
 ' In re Wilson, 4 Barr, 430 ; Seal v. Duffy, Id. 274 ; Coulter, J., in Mitchell v. 
 Stiles, 13 Penn. St. (i Har.) 306, 309, 310 ; Isham, J., in Bishop v. Hart's Trus- 
 tees, 28 Vt. (2 Wms.) 71, 74; Aspinall v. Jones, 17 Mo. (2 Benn.) 209; but see 
 Antignance v. Central Bank of Georgia, 26 Miss. (4 Cush.) 1 10. 
 
 * Mussey v. Noyes, 26 Vt. (3 Deane), 462 ; Hutchinson v. Lord, I Wis. 286. 
 
 ' Lee V. Tabor, 8 Mo. 322 ; Hardcastle v. Fisher, 24 Id. 70 ; Keep v. Sander- 
 son, 2 Wis. 42. As to the course of proceedings in Vermont, see Bishop v. Hart's 
 Trustees, 28 Vt. (2 Wms.) 71 ; Isham, J., Id. 72, 74. 
 
 • Fox V. Heath, 16 Abb. Pr. 163. 
 
 ' Morrison v. Atwell, 9 Bosw. 503 ; see ante, p. 281. 
 
§§ 502, 503-] WHO MAY ASSAIL. 673 
 
 § 502. Proceedings to Set Aside the Assignment. — If, 
 instead of treating the assignment as a nullity, the creditor 
 elects to have it declared void and set aside judicially, the 
 proceeding is by bill in equity, or equivalent proceeding, 
 praying for a decree to that effect. And the prayer of the 
 bill is also, usually, for an injunction, to prevent further pro- 
 ceedings under the assignment, and for a receiver to take 
 possession of the property, or its proceeds. 
 
 § 503. Who may Assail the Assignment. — This course, 
 however, cannot be taken by all descriptions of creditors, 
 nor under all circumstances. Thus, none but judgment 
 creditors can attack an assignment as fraudulent or invalid.' 
 A distress warrant, though levied, is not equivalent for this 
 
 ' Hastings v. Belknap, i Den. 190; Henriques v. Hone, 2 Edw. Ch. 120 ; Law- 
 ton V. Levy. Id. 197; Neustadt v. Joel, 2 Duer, 530; Reubens v. Joel, 13 N. Y. 
 488; Pennington v. Woodall, 17 Ala. 685 ; Berryman v. Sullivan, 13 Sm. & M. 
 65 ; Caswell v. Caswell, 28 Me. (i 5 Shep.) 232 ; Spear v. Wardell, 2 Barb. Ch. 
 291 ; Cropsey v. McKenney, 30 Barb. 47 ; Heacock v. Durand, 42 111. 230; Ober- 
 holser v. Keefer, 47 Ga. 530. But a judgment for costs, recovered after the as- 
 signment, does not make the owner a creditor entitled to dispute the assignment. 
 Ogden V. Prentice, 33 Barb. 160. The action may be commenced forthwith upon 
 the return of the execution, although the sixty days within which the sheriff may 
 make the return have not expired. Knauth v. Bassett, 34 Barb. 31. In Loring 
 V. Pairo (10 Iowa, 282), it was held that the action could be maintained before the 
 return of the execution. A deed fraudulent as to creditors can be avoided only 
 by a judgment creditor, or one claiming under him, who has taken out execution 
 and levied upon the property fraudulently conveyed. Fox v. Willis, i Mich. 
 (Mann.) 321 ; and see Meux v. Anthony, 11 Ark. (6 Eng.) 411. A creditor has a 
 right to file a bill to set aside the debtor's conveyance, as soon as he has obtained 
 a judgment which is a lien on the property. The Mohawk Bank v. Atwater, 2 
 Paige, 54. The levying of an attachment upon the assigned property, and the 
 perfecting of judgment and issuing an execution thereon, does not give the attach- 
 ing creditor the right to maintain an equitable action in his own name, to enforce 
 his lien by setting aside a fraudulent transfer. Thurber v. Blanck (Ct. of App.), 
 51 N. Y. 80; Wilson v. Forsyth, 24 Barb. 105; contra. Mechanics' & Traders' 
 Bank v. Dakin (Com. of App.), 51 N. Y. 519; Heye v. Bolles, 33 How. Pr. 266 ; s. 
 C. 2 Daly, 231 ; Greenleaf v. Mumford, 19 Abb. Pr. 469; S. C. 30 How. Pr. 30. 
 In Maryland, prior to the act of 1835, c. 380, the general rule was that a creditor, 
 before he could in equity pursue property fraudulently conveyed, must have first 
 obtained a judgment with respect to realty, and a judgment and fieri facias 
 where personal property was to be reached. But the act of 1835, c. 380, § 2, ex- 
 pressly exempted creditors from the obligation to obtain judgments before they 
 can proceed in equity to vacate fraudulent conveyances. Swan v. Dent, 2 Md. 
 Ch. Dec. Ill ; Sanderson v. Stockdale, 11 Md. 573. So in Missouri, a judgment 
 lien is not necessary to sustain a creditor's bill. Alnutt v. Leper, 48 Mo. 319. A 
 deed fraudulent and void as against the grantor's antecedent creditors, is valid if 
 recorded as against subsequent creditors, when there is nothing in the deed itself, 
 and no evidence to show any intent or design to defraud such creditors. Kane v. 
 Roberts, 40 Md. 590 ; see Shafer v. Alden, 2 Ind. 42. 
 
 43 
 
674 AVOIDANCE OF ASSIGNMENT. [cHAP. XLV. 
 
 purpose to judgment and execution.' So creditors who 
 have confirmed a fraudulent assignment, by receiving a ben- 
 efit under it, or have become parties to it voluntarily and 
 with a full knowledge of all the circumstances, are estopped 
 from afterwards impeaching it." But where the partner of a 
 creditor had received a payment on account of his debt, 
 from the assignee, but he had been informed that the cred- 
 itors were all to share alike under the assignment, and he 
 was ignorant of the fraudulent' circumstances connected 
 with it, it was held that he was not by such receipt pre- 
 cluded from setting aside the assignment for fraud.^ And, 
 in general, creditors cannot claim the benefit of an assign- 
 ment, and at the same time attack it as invalid. Thus, if a 
 complainant claim a beneficial interest in an assignment, he 
 is not entitled to any relief on the ground that it is fraud- 
 ulent, or was intended to defraud creditors.'* 
 
 By statute in New York, an executor or administrator 
 represents creditors, and has power to assail an assignment 
 made by the decedent in his lifetime in fraud of his cred- 
 itors,^ and if he refuses to do so the creditors may by action 
 against the personal representatives and the assignee, have 
 the assignment set aside,* and the same rule prevails in other 
 States.' By virtue of the same statute, an assignee for the 
 benefit of creditors may avoid a previous fraudulent assign- 
 ment of the grantor ; but the fact that this power is conferred 
 upon the assignee will not be a defense to the assignor 
 against an action brought by a creditor, where the assignee 
 
 ' Hastings v. Belknap, i Den. 190. 
 
 " Adlum V. Yard, i Rawle, 163; Burrows v. Alter, 7 Mo. 424; Rapalee v. 
 Stewart, 27 N. Y. 311 ; Lanahan v. Latrobe, 7 Md. 268; Richards v. White, 7 
 Minn. 345 ; Scott v. Edes, 3 Minn. 377 ; Valentine v. Decker, 43 Md. 583 ; Doub 
 V. Barnes, i Md. Ch. 127; Therasson v. Hickok, 37 Vt. 454. 
 
 ° Van Nest v.. Yoe, i Sandf. Ch. 4. 
 
 ■* The Ontario Bank v. Root, 3 Paige, 478 ; and see Pratt v. Adams, 7 Paige, 
 615; Greene v. Morse, 4 Barb. S. C. 332 ; Lanahan v. Latrobe, 7 Md. 268 ; Geisse 
 v.. Beall, 3 Wis. 367 ; but see Crutchfield v. Hudson, 23 Ala. 393. 
 
 " Act of 1858, c. 314 ; 3 Rev. Stat. (6th ed.) p. 146, § i. 
 
 ' Bate V. Graham, n N. Y. 237. See Bryant v. Bryant, 2 Robt. 612. 
 
 ' Holland v. Cruft, 20 Pick. 321. See Caswell v. Caswell, 28 Me. (15 Shep.) 232. 
 
§ 503-] WHO MAY ASSAIL. 675 
 
 is not made a party, and no objection is made on the ground 
 of a defect of parties.' But a trustee who has executed 
 a trust deed and accepted the trust, cannot assail it as 
 fraudulent, and subject the property to the payment of a 
 debt due to himself from the grantor. =" 
 
 In the case of Hooper v. Tuckerman,^ in the Superior 
 Court of the city of New York, it was held that the assign- 
 ees of an insolvent debtor under the insolvent laws of Mas- 
 sachusetts, might file a bill in the courts of New York, to 
 set aside an assignment of personal property made in New 
 York, which was void as against creditors by the law of this 
 State. But in the case of Betton v. Valentine,'* in the Cir- 
 cuit Court of the United States for the district of Rhode 
 Island, the contrary doctrine was maintained, the court 
 holding that the assignee of an insolvent debtor, appointed 
 under the laws of the State of Massachusetts, does not so 
 far represent creditors in the State of Rhode Island, as to be 
 able to avoid a conveyance of personal property in the latter 
 State, good as against the insolvent, but invalid as against 
 creditors by the law of Rhode Island. 
 
 In New York, a receiver appointed by a judge in pro- 
 ceedings supplementary to execution, represents the cred- 
 itors, and may therefore maintain an action to set aside an 
 assignment of real and personal property made by the debt- 
 or in fraud of his creditors.^ By the act of April ij, 1858,^ 
 receivers, as well as assignees and other trustees of an insolv- 
 ent estate, corporation, partnership, or individual, may, for 
 the benefit of creditors or others interested, disaffirm, treat 
 as void, and resist all acts done and transfers made in fraud 
 of the rights of any creditor interested in the property held 
 by them. 
 
 ' Fort Stanwix Bank v. Leggett, 51 N. Y. 552. 
 ' Strong V. Willis, 3 Fla. (Hogue), 124. 
 
 = 3 Sandf. S. C. 311. * i Curt. 168. 
 
 ^ Porter V. Williams, 9N. Y. 142; but see Seymour v. Wilson, 16 Barb. 294; 
 Hayner v. Fowler, Id. 300. 
 
 * Laws of 1858, p. 506, c. 314. See ante, p. 136. 
 
676 AVOIDANCE OF ASSIGNMENT. [cHAP. XLV. 
 
 § 504. Parties to Bill. — ^Where a creditor proceeds in 
 this way to set aside an ordinary assignment on the ground 
 of fraud, he need make only the assignor and assignee de- 
 fendants, without joining other creditors as parties, and may 
 file the bill in his own name and behalf.' But it has been 
 held that several judgment creditors may join as complain- 
 ants in filing one bill." And in cases of deeds of trust to 
 secure creditors, all the persons secured by the deed either 
 directly or indirectly, if named in it, are necessary parties to 
 a bill assailing the deed as fraudulent as to some of the 
 cestuis que trust, and seeking a distribution of the trust 
 fund.3 
 
 § 505. Form of Bill. — The bill may be framed either 
 with the single view of setting aside the assignment as fraud- 
 ulent, and applying the property to the payment of the com- 
 plainant's judgment, or it may be framed with a double 
 aspect — first, of setting aside the assignment, and in failure 
 of that object, then of obtaining a decree against the assignee 
 for an account, in behalf of the complainant and other cred- 
 itors, with a prayer accordingly. A creditor is not entitled 
 to a decree for an account against a trustee, when his bill is 
 framed with a single view of setting aside the deed of as- 
 signment under which the trustee holds, and of obtaining 
 satisfaction of his judgment.* 
 
 § 506. Proof. — The fraud charged in the bill, if denied 
 in the defendant's answer, must as already mentioned, be 
 established by proofs A court of equity, however, is held 
 
 ' Wakeman v. Grover, 4 Paige, 23 ; Rogers v. Rogers, 3 Id. 379 ; Russell v. 
 Lasher, 4 Barb. S. C. 232. 
 
 = Lentilhon v. Moffatt, i Edw. Ch. 451. 
 
 ' Billups V. Sears, 5 Gratt. 31 ; Stout v. Higbee's Executors, 4 J. J. Marsh. 632. 
 
 ' Cunningham ■^. Freeborn, 1 1 Wend. 240, 257. Where the complaint failed 
 to allege the delivery and acceptance of the assignment by the assignee, and his 
 acceptance of the trust, it was held that the action might be maintained to. com- 
 pel the assignee to disclaim title under it. Gasper v. Bennett, 12 How. Pr. 307. 
 
 ' Dunham v. Gates, 3 Barb. Ch. 196; Bogert v. Haight, 9 Paige, 297, 302 ; 
 ■Vernon v. Morton, 8 Dana, 247 ; Stout v. Higbee's Executor.?, 4 J. J. Marsh. 632. 
 As to evidence in regard to the consideration of a deed of trust, see Pennington v. 
 Woodall, 17 Ala. 685. 
 
§ 507-] DECREE AND SUBSEQUENT PROCEEDINGS. 677 
 
 to be competent to pronounce upon the question of fraud- 
 ulent intent in a case submitted on bill and answer, notwith- 
 standing the denial of such intent in the answer, if the facts 
 of the case be such as to produce a conviction of the fraud- 
 ulent intent. But where the facts stated are not conclusive 
 evidence of fraud, but ratrelj -indicia or badges of fraud, 
 they are countervailed by the denial of the fraudulent in- 
 tent. And if a party relies upon such facts and circum- 
 stances, he must put in a replication, and give his opponent 
 an opportunity to produce proof in explanation of the facts 
 casting suspicion on the transaction." 
 
 § 507. Decree and Sztbsequent Proceedings. — If the cred- 
 itor who assails the assignment succeeds in establishing a 
 case of fraud, a decree is made by the court, declaring the 
 instrument void, and appointing a receiver, through whom, 
 as its officer, the court takes possession of the property and 
 appropriates it' The effect of the decree is to declare the 
 assignment void in toto, as respects those who impeach it, 
 and it gives to them the benefit of their legal diligence. ^ 
 But the court does not declare it void as to other persons, 
 nor will it set it aside as a nullity between the parties to 
 the instrument* 
 
 Where the assignment is set aside for fraud, the assignees 
 will not be answerable for payments made under it to bona 
 fide creditors before the filing of the bill,' or money retained 
 under it by him as a bona fide creditor.^ 
 
 ' Cunningham v. Freeborn, 1 1 Wend. 240 ; Redmond v. Wemple, 4 Edw. Ch. 
 321, ace. 
 
 ' Henriques v. Hone, 2 Edw. Ch. 120, 124; see Terrjrv. Butler, 43 Barb. 395. 
 
 ° Atkinson v. Jordan, Wright (Ohio), 247 ; Barrett v. Reid, Id. 700 ; Dicl<son 
 V. Rawson, 5 Ohio St. 218. In Ohio, all fraudulent conveyances inure as assign- 
 ments for creditors, to the equal benefit of all creditors. See ante, p. 205 ; and 
 see Jamison v. McNally, 21 Ohio St. 295. 
 
 ' Smith V. Howard, 20 How. Pr. 121 ; and see Edwards on Receivers (2d ed.) 
 408, 474. 475- 
 
 ' Wakeman v. Grover, 4 Paige, 24 ; Ames v. Blunt, 5 Id. 13 ; see ante, pp. 631, 
 632. He is not bound to account for rents received and applied according to the 
 terms of the trust, before the commencement of the suit. Collumb v. Read, 24 
 N. Y. 505. 
 
 ' Peacock v. Tompkins, Meigs, 317. 
 
678 AVOIDANCE OF ASSIGNMENT. [CHAP. XLV, 
 
 If the assignor and assignee collude with a complainant, 
 and permit a decree setting aside the assignment, the cred- 
 itors provided for by it will be relieved against the decree. 
 But if the decree could not have been prevented, its being 
 by default or consent will not prejudice the assignee.' 
 
 Where an assignment by an intestate is set aside in a 
 court of equity on the application of his administratrix, on 
 the ground that it was made to defraud his creditors, and 
 the whole of the property assigned is required for the pay- 
 ment of the creditors, the fraudulent assignee will not be 
 allowed to deduct and retain the amount of the considera- 
 tion paid by him for the assignment.'' 
 
 Creditors who have filed bills to set aside a deed of 
 trust, and subject the effects conveyed to their debts, and 
 have failed in that object, the deed being valid, may have 
 the benefit of the surplus after the claims provided for in 
 the deed are satisfied. But where it is obvious that there is 
 no surplus, their bills may be dismissed at once.^ 
 
 ' Russell V. Lasher, 4 Barb. S. C. 232. 
 ' Holland v. Cruft, 20 Pick. 321. 
 ° Vernon v. Morton, 8 Dana, 247. 
 
APPENDIX. 
 
APPENDIX OF FORMS AND PRECEDENTS. 
 
 I. ASSIGNMENTS BY INDENTURE BIPARTITE. 
 
 1. A Oeneral Assignment of Real and Personal Property for tbe 
 benefit 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 per- 
 sons in sundry sums of money, which he is unable to pay in 
 full, and is desirous of providing for the payment of the 
 same so far as in his power by an assignment of all his prop- 
 erty 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 re- 
 ceipt whereof is hereby acknowledged, has granted, bar- 
 gained, 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, heredita- 
 ments, appurtenances, goods, chattels, stock, promissory 
 notes, debts, claims, demands, property and eflFects of every 
 description belonging to the party of the first part, where- 
 ever 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 dispatch, and to convert the same into money, 
 and also to collect all such debts and demands hereby as- 
 signed as may be collectible, and with and out of the pro- 
 ceeds of such sales and collections — 
 
 I. To pay and discharge all the just and reasonable ex- 
 penses, costs and charges of executing this assignment and 
 
682 APPENDIX OF FORMS AND PRECEDENTS. 
 
 of carrying into effect the trust hereby created, together with 
 a lawful commission to the party of the second part for his 
 services 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 lia- 
 bilities 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 residue 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 proceeds to the payment of 
 said debts and liabilities ratably and in proportion. 
 
 3. And if, after the payment of all the said debts and lia- 
 bilities 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 lawful attorney, irrevo- 
 cable, with full power and authority to do all acts and things 
 which may be necessary in the premises to the full execu- 
 tion 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 belonging to 
 the said party of the first part, and to give acquittances and 
 discharges for the same, to sue, prosecute, defend and im- 
 plead for the same, and to execute, acknowledge and deliver 
 all necessary deeds, instruments and conveyances. And the 
 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 sign the 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 reposed 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. 
 
APPENDIX OF FORMS AND PRECEDENTS. 683 
 
 In witness whereof, the parties to these presents have 
 hereunto set their hands and seals the day and year first 
 above written. 
 
 Sealed and delivered ] [seal. 
 
 in presence of J [seal. 
 
 State of New York, ) 
 
 City and Cotmty of New York, j ^^* ' 
 
 On this day of , in the year of our Lord one 
 thousand eight hundred and seventy- , before me 
 came , to me personally known, and known to 
 
 me to be the persons described in and who executed the 
 above instrument, and each for himself severally acknowl- 
 edged that he executed the same. 
 
 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 Ma- 
 rengo, 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 in- 
 debted 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 assignment 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 consideration 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, sold, assigned, transferred and set over, 
 and by these presents doth grant, bargain, sell, assign, transfer 
 and set over to the said party of the second part, his heirs, exe- 
 cutors, administrators and assigns, all and singular, the lands, 
 tenements, h'ereditaments and appurtenances, goods, chattels, 
 
 ' This deed is taken from Sackett v. Mansfield, 26 111. 22, 23, 24. See remarks 
 of Breese, J., in reference to its provisions. Ibid. 27. 
 
684 APPENDIX OF FORMS AND PRECEDENTS. 
 
 accounts, promissory notes, debts, choses in action, claims, 
 demands, property and effects of every description belong- 
 ing 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 ex- 
 empt to him by the law of the State of Illinois, the same 
 being fully and particularly enumerated and described in a 
 schedule thereof hereto 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, executors, 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 posses- 
 sion 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 
 beneficial to the interest ' of the creditors of the said party 
 of the first part, and convert 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 com- 
 missions 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 
 services, 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 collec- 
 tions, shall pay and discharge the debts due and owing by 
 the said party of the first part to and in the order and man- 
 ner following, that is to say — 
 
 ' The controversy in the case of Sackett v. Mansfield, 26 111. 21, from which 
 this form is taken, turned upon the propriety of this provision, and it was there held 
 not to indicate a fraudulent intent on the part of the grantor. 
 
APPENDIX OF FORMS AND PRECEDENTS. 685 
 
 First. The said party of the second part shall 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 propor- 
 tion to the respective amounts thereof. 
 
 Secondly. After the payment in full of all the debts desig- 
 nated in Schedule B, as number one, in manner above di- 
 rected, 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 whomso- 
 ever, 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 proportion to the re- 
 spective 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 pro- 
 ceeds of said sales and collections shall remain in the hands 
 or control of the said party of the second part, his executors, 
 administrators and assigns, he or they shall return the same 
 to the said party of the first part, his executors, administra- 
 tors 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, administrators, 
 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, reassign 
 and redeliver the same to the said party of the first part, his 
 heirs, executors, administrators or assigns. And for the bet- 
 ter and more effectual execution of these presents, and of 
 the trusts hereby created and reposed, 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, irrevo- 
 cable, with full power and authority to do, transact and per- 
 
686 APPENDIX OF FORMS AND PRECEDENTS. 
 
 form all acts, deeds, matters and things which may be neces- 
 sary in the premises, and to the full execution of the said 
 trust, and for the purposes of said trust to ask, demand, re- 
 cover and receive of and from all and every person or per- 
 sons all the property, debts, demands, belonging and owing 
 to the said party of the first part, and to give acquittances 
 and discharges for the same, and to sue, prosecute and de- 
 fend for the same, and to execute, acknowledge and deliver 
 all necessary deeds and instruments of conveyance, 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 revoke the same, hereby ratifying and con- 
 firming 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. 
 
 [L. S.J 
 
 Schedule A. 
 
 Referred to in the foregoing assignment. 
 Real Estate. 
 
 All that certain messuage or dwelling-house and lot, piece 
 or parcel of land, situate, lying and being on the south- 
 erly side of street, between and streets, in the 
 ward of the city of , and known and distinguished 
 as Number street, &c. [describing it.^ 
 
 All that certain lot, piece or parcel of land, situate, &c., in 
 the town of in the county of and State of , 
 and known and described as follows, to wit : \descrip- 
 tion?\ 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 the 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. 
 
APPENDIX OF FORMS AND PRECEDENTS. 
 
 Stocks. 
 
 Ten shares of the 
 Ten shares of the 
 Four shares of the 
 
 Insurance Company, 
 Land Company, 
 Banking'Association, 
 
 Bonds and Notes. 
 
 687 
 
 $1,000 
 
 ~A bond executed by E. J. to the said J. D., dated 
 , conditioned for the payment of two thou- 
 sand dollars, on which is now due $1,500 
 
 W. & M.'s note in favor of B. M., at six months 
 
 from Aug. 20th, 1850, 1,000 
 
 N. T.'s note in favor of L. E., at four months from 
 
 \_date.'\ 1,000 
 
 Judgments. 
 
 A judgment recovered by the said J. D. against 
 T. F., in the Superior Court of the city of New 
 .York, _ _ $550 75 
 
 A judgment recovered against S. R., in the \court?[ 427 00 
 
 Claims. 
 
 A claim for insurance on one-half interest in Brig 
 
 at the Insurance Office, $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, &c. 2,000 00 
 
 Book Debts and Balances. 
 
 Due from the following persons : \_giving the 
 
 items. ^ 
 Dated, &c. ID. 
 
 Witness, &c. 
 
688 appendix of forms and precedents. 
 
 Schedule B. 
 Referred to in the foregoing assignment. 
 
 Class Number One. 
 
 W. A. B., money deposited by him, as per receipt 
 
 given, $i,ooo 
 
 S. J., dividends on stock collected for her, 500 
 
 F. N., minor ward of J. D., legacy collected for her, 2,000 
 
 Class Number Two. 
 
 J. G., money borrowed of him, as per note dated, &c. $1,500 
 
 M. E., money received for him, as per receipt, 850 
 A. N., surety on J. D.'s bond to , dated, &c., 
 
 conditioned for 2,000 
 E. P.'s indorsement of J. D.'s note, dated, &c., held 
 
 by W. P. 1,000 
 
 Dated, &c. J. D. 
 
 Witness, &c. 
 
 3. A General Assignment of Real and Personal Property, giving 
 Preferences, wltbont 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, &c. [recital, as in preceding forms.'] 
 Now, this indenture witnesseth that the said party of 
 the first part, in consideration of the premises, and of the 
 sum of one dollar to him in hand paid by the said party of 
 the second part, the receipt whereof is hereby acknowl- 
 edged, hath granted, bargained, 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 
 
APPENDIX OF FORMS AND PRECEDENTS. 689 
 
 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, &c. [describing it.'\ 
 
 One pair of horses and one carriage, now in the posses- 
 sion of G. H., of 
 
 A bond executed by W. B., dated , and conditioned 
 for the payment of one thousand dollars. 
 
 A promissory note for eight hundred dollars, dated , 
 made by S. 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, administrators 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 promissory note, and out of 
 the moneys arising therefrom, after deducting the costs, 
 charges and expenses of the said sales and collections, and 
 other expenses attending the execution of this trust, and 
 the lawful commissions of the said party of the second part, 
 as a 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 [one 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 remain- 
 ing, 
 
 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-men- 
 44 
 
690 APPENDIX OF FORMS AND PRECEDENTS. 
 
 tioned 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 execution of the trust hereby created, and 
 after fully paying and discharging all the lawful debts due 
 and owing by the said party of the first part, of any and 
 every kind and description, if any part, &c. \_surplus to 
 debtor,, as in No. i.] 
 
 And, &c. [power of attorney, as in No. i.] 
 
 And the said party of the second part, [covenant by 
 assignee, if necessary, as in No. i.] 
 
 In witness whereof, the parties to these presents have 
 hereunto set their hands and seals, the day and year first 
 above written. 
 
 Sealed and delivered ) A. B. [seal. 
 
 in presence of j C. D. [seal. 
 
 E. F. 
 
 4. A General A§§ignmeiit, with Stipulation for a Release.' 
 
 This deed, made this day of , A. D., 187 , by 
 and between C. D., of , in the State of Maryland, of the 
 first part, and H. C. of , in said State, trustee as herein- 
 after mentioned of the second part. 
 
 Whereas the said C. D. is indebted to sundry parties, 
 in several and various sums of money, and is unable to pay 
 the same in full, and has proposed and agreed to convey all 
 of his property of every kind and description, unto the said 
 H. C, for the benefit of his creditors as hereinafter men- 
 tioned : 
 
 Now this deed witnesseth, that for and in consideration 
 of the premises, and of the sum of one dollar in hand paid 
 to the said Q D., the said C. D. doth grant and convey 
 unto the said H. C. his heirs, executors, administrators and 
 
 ' This is the form in ijse in Maryland. For a more extended form, see Moen- 
 mcl V, Murdock, 13 Md. 164. 
 
APPENDIX OF FORMS AND PRECEDENTS. 69 1 
 
 assigns, all his property and estate, of every kind and de- 
 scription, real, personal, and mixed, and wheresoever situated 
 or being, including herein all his stock in trade in the store 
 known as No. on street, in said , and all his 
 book accounts, bills, notes, choses in action, claims and de- 
 mands of every kind, of him, the said C. D. 
 
 To have and to hold the same unto the said H. C, his 
 heirs, personal representatives and assigns, in trust and 
 special confidence, nevertheless, that is to say : 
 
 In trust that he shall, as soon as conveniently may be, 
 make sale of so much of the said property as may be sal- 
 able, for the best price that can be reasonably obtained for 
 the same, and either at public or private sale, as he may 
 deem most advantageous, and upon such notice, at such 
 place or places, and upon such terms as the said trustee may 
 think best for said trust, and to collect so much of the said 
 property as is outstanding and collectible, and to take into 
 his possession and custody all the property hereby conveyed 
 to him ; and upon the further trust, to dispose of the pro- 
 ceeds of said property, when the same shall have been sold, 
 collected and reduced to his possession, in manner follow- 
 ing, viz.: 
 
 First. To pay and reimburse himself all such reason- 
 able costs, charges and expenses as may be incurred by him 
 in the execution of this trust, together with such commis- 
 sions to himself as shall be allowed to him by the Circuit 
 Court of for the discharge of his duties as trustee here- 
 under. 
 
 Secondly. To apply the residue to the payment of all 
 rents which may be due and unsatisfied at this date for the 
 store aforesaid, and of all parts of said rent hereafter to be- 
 come due, for which said trustee can be held liable ; and. 
 
 Thirdly. To apply the residue of such proceeds to the 
 payment of the claims of all the creditors of the said C. D., 
 pari passu, and without any preference, who shall on or 
 before the day of ,187 , agree to accept such divi- 
 dend or dividends as they may severally be entitled to under 
 this deed, in full satisfaction and discharge of their respect- 
 ive claims against the said C. D., and execute and deliver 
 to the said C. D. a legal release thereof. 
 
 Fourthly. 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 
 
692 APPENDIX OF FORMS AND PRECEDENTS. 
 
 of the said C. Vi., pari passu, and without any preference or 
 priority ; and after the payment of all the creditors of the 
 said C. D. in full, to pay' over the residue, if any, to the 
 said C. D., his legal representatives or assigns. And the 
 said C. D. doth hereby appoint the said H. C. trustee as 
 aforesaid, and his successors in said trust, his true and lawful 
 attorneys, to liquidate all accounts, and to collect all debts and 
 sums of money due and owing to the said C. D., and acquit- 
 tances and discharges to give therefor, and generally to do all 
 acts requisite to be done in the premises, as fully as the said 
 C. D. could do. 
 
 In witness, &c. -C. D. [seal.] 
 
 5. Copartnersbip Assignment. Assignment by Copartners \ritb- 
 
 out Preference. 
 
 This indenture, made this day of , in the year of 
 our Lord one thousand 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 cred- 
 itors. Now, therefore, 
 
 First. The parties of the first part, in consideration of 
 the premises and the sum of one dollar to them in hand re- 
 spectively 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 successor 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 assigns. 
 
APPENDIX OF FORMS AND PRECEDENTS. 693 
 
 In trust, nevertheless, for the following uses and pur- 
 poses : 
 
 Second. The said party of the second part shall forthwith 
 take possession of all and singular the estate, property and 
 effects hereby above assigned, transferred and conveyed, and 
 set over or intended so to be, and shall with all reasonable 
 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, 
 as such copartnership, so far as the same shall prove collect- 
 ible. 
 
 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 com- 
 pensation 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, without any priority or preference 
 whatsoever; and if the proceeds of such sales and collec- 
 tions, 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, provided the respective 
 amounts of the individual debts of each of said parties does 
 not exceed his portion of the surplus that may remain after 
 paying all the said partnership debts ; and if it should, then 
 
694 APPENDIX OF FORMS AND PRECEDENTS. 
 
 his interest in said surplus is to be divided pro rata among 
 his individual creditors in proportion to their respective de- 
 mands, it being understood no part of the said surplus which 
 v/ill belong to each of said individual parties of the first 
 part respectively, after the payment of the copartnership 
 debts, is to be made Hable 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 respectively 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 where- 
 soever the same may be, of the said parties of the first part, 
 which is held and owned by them respectively as their sep- 
 arate 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 following uses and pur- 
 poses : 
 
 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 conveyed, or in- 
 tended so to be, and shall with all reasonable diligence sell 
 and dispose 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 fii'st part respectively, so far as the same shall prove col- 
 lectible. 
 
 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 reason- 
 able costs, charges and expenses of carrying into effect this 
 assignment in this behalf, including all reasonable compensa- 
 
APPENDIX OF FORMS AND PRECEDENTS, 695 
 
 tion to the party of the second part for his services in exe- 
 cuting and carrying out the trust in this behalf by this in- 
 strument. 
 
 Tenth, The party of the second part is directed out of 
 the residue and remainder of said estate, property and pro- 
 ceeds 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, as follows : To apply and de- 
 vote 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, prop- 
 erty 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 individual debts 
 and liabilities, then any surplus that may remain is to be ap- 
 plied 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 part- 
 nership property and effects, said surplus to be applied to 
 the payment and liquidation of said partnership debts rata- 
 bly, 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 
 otherwise, exempt to them, or any or either of them, from 
 levy and sale under execution or otherwise for payment of 
 debts. 
 
 Fourteenth. 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, or either of them, 
 the party of the second part shall return the same to the 
 
696 APPENDIX OF FORMS AND PRECEDENTS. 
 
 parties of the first part, their executors, administrators or as- 
 signs, 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 per- 
 sons 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 acquittances and discharges for the same, 
 to sue, prosecute, defend and implead for the same, and to 
 execute, acknowledge and deliver all necessary deeds, instru- 
 ments and conveyances. 
 
 And the said parties of the first part do hereby authorize 
 the party of the second part to sign the copartnership name 
 of the parties of the first part to any check, draft, promis- 
 sory 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 ; 
 and the said parties of the first part respectively, in their in- 
 dividual 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 the 
 name of each or any of the parties of the first part to any in- 
 strument 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 reposed 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 
 
APPENDIX OF FORMS AND PRECEDENTS. 697 
 
 hereunto set their hands and seals the day and year first 
 
 above written. 
 
 [seal 
 [seal.' 
 
 Sealed and delivered ) [seal.~ 
 
 in presence of j 
 
 [Here insert acknowledgment, as in Form No. i.J 
 
 6. Assignment by Copartnership (shorter Form.) 
 
 This indenture, made and entered into this day 
 
 of , in the year one thousand eight hundred and seventy- 
 , by and between , of , and , of , co- 
 
 partners 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, as- 
 signed, 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 co- 
 partnership 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 
 aad 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 posses- 
 sion of the same, and to sell the same with all reasonable 
 dispatch, and convert the same into money, and also to col- 
 lect all such debts and demands hereby assigned as may be 
 collectible, and with and out of the proceeds of such sales 
 and collections — 
 
 I. To pay and discharge all the just and reasonable ex- 
 penses, costs and charges of executing this assignment, and 
 
698 APPENDIX OF FORMS AND PRECEDENTS. 
 
 of carrying into effect the trust hereby created, together 
 with a lawful commission to the party of the second part for 
 his services 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 lia- 
 bilities. If the 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 separate and individual debts and 
 liabilities in full, then the proceeds of the individual prop- 
 erty 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 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 sep- 
 arate and individual debts and liabilities in full, the said sur- 
 plus shall be applied towards the payment of the copartner- 
 ship debts and liabilities of the said parties of the first part. 
 
 3. The net proceeds of the copartnership property, to- 
 gethe with the surplus, if any, of the proceeds of the indi- 
 vidual 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 
 copartnership 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 executors, administrators or assigns, according to their 
 respective rights thereto. 
 
 [Here insert power of attorney as in Form No. i.] 
 
 [Here insert acceptance by assignee as in Form No. i.] 
 
 In witness whereof, the said parties to these presents 
 have hereunto set their hands and seals the day and year 
 first above written. 
 
 Sealed and delivered 
 in presence of 
 
 SEAL. 
 SEAL.' 
 SEAL. 
 
 \Here insert acknowledgment as in Form No. i.] 
 
APPENDIX OF FORMS AND PRECEDENTS. 699 
 
 7. An Assignment with Special Provisions as to tlie Employment 
 of Agents, Hiring of Store, Insurance of Property, and Cor- 
 rection of Schedules. 
 
 This indenture, made the day of , in the year 
 , [«j in the preceding 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 exe- 
 cution of the trusts hereby created, and to allow them a just 
 and reasonable compensation for their services ; and also to 
 hire such places or storerooms 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 hereto 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, &c. \^power of attorney, as in the preceding forms?^ 
 
 In witness whereof, &c. 
 
 S. An Assignment by a Bank, for the Payment of its Depositors 
 and the Holders of its Notes, with Special Provisions as to 
 Dividends.' 
 
 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, depositors in the said bank, and the branches 
 
 ' This assignment was held vahd in Louisiana, in the case of The United 
 States V. The Banlf 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 Penn. St. (10 Har.) 479. 
 
yOO APPENDIX OF FORMS AND PRECEDENTS. 
 
 or offices 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 circulation ; 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, enfeoflfed and deliv- 
 ered, assigned, transferred, and set over, and by these pres- 
 ents, 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 heredita- 
 ments, 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 follow- 
 ing or relating 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 survivors and sur- 
 vivor of them, and the heirs, executors, administrators and 
 
 ' See the case of Hogg's Appeal (22 Penn. St. [10 Har.] 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 ;£l,ooo ster- 
 ling, with interest, which were issued for a loan of money to the said bank, a,nd 
 which were not designed to be a part of the circulation of the bank. 
 
APPENDIX OF FORMS AND PRECEDE,NTS. 70I 
 
 assigns of the survivor, to and for their and his own use and 
 benefit forever, as joint tenants, and not as tenants in com- 
 mon : In trust, nevertheless, to and for the following uses, 
 purposes and trusts, and to and for no other use or purpose 
 whatsoever, that is to say : in trust, in the first place, to 
 enter upon the said real estate 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, 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 mean time, and until a sale shall be made, to re^ 
 ceive the rents, issues, and income of the said real estate, 
 and to pay the charges thereon ; and, in the next place, in 
 trust to collect, 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 declared, that is to say : 
 
 Firstly. To pay and discharge all reasonable and neces- 
 sary 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 two thousand dollars 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 par- 
 ticipate 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 retransfer, convey and pay over to the 
 said party of the first part, their successors and assigns, what- 
 
 ' As to the effect of this clause in New York and other States, see ante, pp. 
 296-309. 
 
\ 
 
 702 APPENDIX OF FORMS AND PRECEDENTS. 
 
 ever 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 ^applied 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 pro- 
 ceed 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 
 defaulting creditor or creditors bringing forward and prov- 
 ing his or their claim or claims in time therefor, as afore- 
 said, shall be entitled to receive in addition to such divi- 
 dend, 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 shall, 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 interest 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 suc- 
 cessors 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 
 
APPENDIX OF FORMS AND PRECEDENTS. 703 
 
 and be determined and at an 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 deposits, notes and 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, trans- 
 ferred and delivered to the said party of the first part, their 
 successors or assigns. And it is hereby expressly agreed by 
 and betvi^een the parties to these presents, as a condition or 
 part thereof, that the said trustees, their successors or as- 
 signs, shall not be answerable for the acts, omissions or de- 
 faults of each other, but only each for his own acts, omis- 
 sions or defaults ; and that they shall not be answerable for 
 the misconduct, emissions 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 in the 
 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 exec- 
 utors 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 attor- 
 neys and attorney irrevocable, 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 to be, to 
 give receipts and acquittances for the same, and generally to 
 act and do as fully and eflFectually 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 the premises. 
 
 It is understood that the foregoing indenture, or any- 
 thing therein contained, is not in any manner to impair or 
 affect the liabilities of the Bank of the United States, nor 
 
704 
 
 APPENDIX OF FORMS AND PRECEDENTS. 
 
 the rights of depositors, or of the holders of the said notes 
 and post-notes. 
 
 In witness whereof, the said parties have hereunto inter- 
 changeably 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, 
 at Philadelphia, the day and year first above written. 
 
 Signed, sealed and delivered, 
 in the presence of us. 
 T. S. Taylor. 
 G. W. Fairman. 
 
 Attest, 
 
 W. Drayton, President. 
 
 j SEAL OF j 
 j THE BANK, j 
 
 T. S. Taylor, Cashier. 
 
 We accept the trust created by the above indenture of 
 
 assignment. 
 
 John Bacon. 
 A. Symington. 
 Thomas Robins. 
 
 L. s. 
 L. s. 
 L. s. 
 
 [Schedule^ 
 
 II. ASSIGNMENT BY DEED POLL. 
 
 0. A General Assig^nment 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 acknowledge, 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, as- 
 sign, 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 belonging 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." 
 
APPENDIX OF FORMS AND PRECEDENTS. 705 
 
 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 pos- 
 sible, collect the debts, accounts and demands aforesaid : 
 and with and out of the proceeds of such sales and col- 
 lections, after deducting and paying all reasonable costs, 
 charges and expenses attending the execution of the trust 
 hereby created, together with a reasonable and lawful com- 
 pensation 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 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 ta 
 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, constitute 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 purposes 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 
 mc, and to give acquittances and discharges for the same ,' 
 and in default of delivery or payment in the premises, to 
 sue, prosecute and implead for the same, and to execute, 
 acknowledge and deliver all necessary deeds and instru- 
 ments of conveyance, and also for the purposes aforesaid, or 
 any part thereof, to make, constitute and appoint one or 
 more attorneys under him, and at his pleasure to revoke the 
 same — hereby ratifying and confirming whatever my said 
 
 45 
 
7o6 APPENDIX OF FORMS AND PRECEDENTS. 
 
 attorney or his substitutes shall lawfully do in the prem- 
 ises. 
 
 In witness whereof, I have hereunto set my hand and 
 seal, the day of , in the year 
 Sealed and delivered ) A. B. [seal.] 
 
 in presence of j 
 E. F. 
 
 [Schedules, as in preceding forms ?\^ 
 
 III. ASSIGNMENTS BY INDENTURE 
 TRIPARTITE. 
 
 10. A Oeneral Assignment for the Benefit of Creditors, with 
 Preferences to such as become Parties, and 'vrith 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 consideration 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 second part, his heirs, exec- 
 utors, administrators and assigns, all, &c. [describing the 
 jproperty, with reference to a schedule annexed, as in the pre- 
 4£eding forms^ 
 
 To have and to hold the same, and every part and parcel 
 
APPENDIX OF FORMS AND PRECEDENTS. 707 
 
 thereof, with the appurtenances, unto the said party of the 
 second part, his heirs, executors, administrators and assigns : 
 
 In trust, nevertheless, that he, the said party of the 
 second part shall forthwith 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 col- 
 lect 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 executing the trusts hereby created (includ- 
 ing a reasonable compensation to the said party of the sec- 
 ond 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 collecr 
 tions 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 mentioned 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 shall 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, admin- 
 istrators 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 administrators, 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 dis- 
 charge 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 part, his [&c.] 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 [&c.] may or shall do 
 
7o8 APPENDIX OF FORMS AND PRECEDENTS. 
 
 in the premises by virtue hereof; 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 aforesaid, as by the said party of the 
 second part, or his counsel learned in the law, shall be rea-^ 
 sonably advised and required ; and further, that he, the said 
 party of the first part, his [&c.] 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 [&c.] 
 given, assist him and them in making up his accounts, and 
 in getting in the said debts, &c., according to the best of his 
 ability. 
 
 And the said party of the second part for himself, his 
 heirs, executors and administrators, 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 en- 
 deavors to sell and dispose of the property, estate and effects 
 hereby assigned, for the best prices and on the best terms 
 that can be obtained 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 here- 
 by 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 their respective executors, adminis- 
 trators, 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 pay- 
 ments and dividends that they may respectively receive 
 under and by force of the same, in full satisfaction and dis- 
 charge 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 
 
APPENDIX OF FORMS AND PRECEDENTS. 709 
 
 demands which they, as aforesaid, may hereafter have on the 
 said party of the first part, in consequence of any present 
 existing acceptance, indorsement, suretyship, or liability, by 
 them respectively made or assumed for his account. And 
 in consideration of the premises, they do severally, as afore- 
 said, release and discharge the said party of the first part, his 
 heirs, executors and administrators, 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. 
 
 Sealed and delivered ) C. D. seal. 
 
 in presence of j N. C. seal. 
 
 E. P. J. T. [seal. 
 
 R. L. H. S. [seal. 
 
 and other creditors. 
 
 [Add schedules, as in preceding forms^ 
 
 IV. INVENTORY, BOND AND NOTICE TO 
 CREDITORS.' 
 
 11. Title to Inventory. 
 
 The following is a full and true inventory of all the es- 
 tate, both real and personal, of the copartnership firm of 
 C. B. & Co., in law and equity, and the incumbrances ex- 
 isting 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 
 statute of i860. See Hawes on Assignments, 104 ei seq. ; Kieley on Insolvent 
 Assignments, 193 et seq. 
 
7IO 
 
 APPENDIX OF FORMS AND PRECEDENTS. 
 
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 APPENDIX OF FORMS AND PRECEDENTS. 
 
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APPENDIX OF FORMS AND PRECEDENTS. 713 
 
 IS. Affidavit to Inventory and Schedules. 
 
 State of New York, 
 
 City and County of New York, ^ 
 
 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 inventory and schedules, and that the same are in 
 all respects just and true according to the best of his knowl-- 
 edge and belief 
 
 Sworn to before me this 
 day of , 187 . 
 
 16. Indorsement by Judge. 
 
 State of New York, 
 
 City and County of New York, '' 
 
 The foregoing inventory and schedule of and con- 
 cerning the assigned estate of Messrs. A. B. & Co., duly 
 verified, was this day duly delivered to me the undersigned, 
 one of the judges of the Court of Common Pleas, of the 
 city and county of New York, sitting at Chambers, in pur- 
 suance of the statute in such case made and provided. 
 
 Dated this day of 
 , A. D. 187 
 
 17. Affidavit to obtain Order flxingr the Penalty o the Bond 
 where Schedules have not been tiled. 
 
 COURT OF COMMON PLEAS, 
 
 for the city AND COUNTY OF NEW YORK. 
 
 In the matter of the general as- j 
 signment of A. B. to C. D. >- 
 for the benefit of creditors. 
 
 __^ . ^J 
 
 City and Cctmty of New York, s?. : 
 
 , being duly sworn, says, that on 
 the day of , 187 , A. B., of the city of Nelv York, 
 
714 APPENDIX OF FORMS AND PRECEDENTS. 
 
 did make an assignment of all his property for the benefit 
 of his creditors to C. D., in due form of law, which said as- 
 signment was on the day of , duly recorded in the 
 office of the clerk of the city and county of New York ; 
 that more than twenty days have elapsed since the recording 
 of said assignment, and that the said A. B. has neglected and 
 omitted to file an inventory and schedule of his estate and 
 liabilities, as required by law, and that no such inventory 
 and schedules have been filed herein, for the reason [s^a^e the 
 reasons which delay the preparation of schedules^ ; that the 
 said C. D., the assignee as aforesaid, is desirous of giving 
 the bond required by statute before the filing of said in- 
 ventory and schedules, for the reasons [^state the reasons, the 
 property being perishable or other reason, why the' prop- 
 erty should be sold^ ; that deponent has examined the 
 books of account of the said A. B., and from such examina- 
 tion it appears that the debts and liabilities of the said A. B. 
 amount to the sum of dollars ; that the property con- 
 
 veyed to deponent by said assignment consists of \_here state 
 the character of the property assigned^ ; and that the value 
 of the same is dollars, and that the demands due to the 
 
 said A. B., "as appears from said bopks of account, amount to 
 the sum of dollars ; that many of said demands are 
 
 uncollectible, and that the actual value of said demands doe? 
 not exceed the sum of dollars. 
 
 Sworn to before me this 
 day of , 187 . 
 
 1§. Order fixing Penalty of Bond before Schedules are filed. 
 
 COURT OF COMMON PLEAS, 
 
 FOR THE CITY AND COUNTY OF NEW YORK. 
 
 In the matter of the general as- 
 signment of A. B. to C. D. 
 for the benefit of creditors. 
 
 Upon the annexed affidavit of , and on application 
 
 of C. D., assignee of the above named A. B., let C. D., the 
 assignee above named, give a bond in the penalty of 
 
APPENDIX OF FORMS AND PRECEDENTS. 715 
 
 dollars, with sufficient sureties, to be approved by a judge 
 of this court, to the people of the State of New York, or 
 their assigns, for the faithful performance and discharge of 
 the duties of the said C. D. as assignee as aforesaid. 
 Dated New York, , 187 . 
 
 19. A§signee's Bond on Assignment. 
 
 Know all men by these presents, that we, re- 
 
 siding at No. , in the , 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 
 
 Whereas ha made an assignment of prop- 
 
 erty, in trust to the above bounden for the benefit of 
 
 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 assignee, and duly account for 
 all moneys received by him as such assignee, then this obli- 
 gation to be void, else to remain in full force and virtue. 
 
 SEAL. 
 ^SEAL. 
 
 Sealed and delivered ) [seal. 
 
 in the presence of j 
 
 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 
 
7l6 APPENDIX OF FORMS AND PRECEDENTS. 
 
 all his debts and liabilities, and exclusive of property ex- 
 empt by law from execution. 
 
 Sworn to before me this 
 day of , i8 . 
 
 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 , i8 . 
 
 I certify, that on this , day of , i8 , before 
 
 me personally appeared the within named , known 
 
 to me to be the individuals described in and who executed 
 the within bond, and severally acknowledged that they exe- 
 cuted the same. 
 
 I hereby approve of the within bond and of the sufficiency 
 of the sureties therein. 
 
 [Signature of county judge, or judge of Court of Com- 
 mon Pleas, with title of office.^ 
 
 20. Affidavit to obtain Order autliorizing Assignee to Adver- 
 tise for Claims. 
 
 COURT OF COMMON PLEAS, 
 
 FOR THE CITY AND COUNTY OF NEW YORK. 
 
 1 
 
 In the matter of the general as- ( 
 signment of A. B. to C. D., 
 for the benefit of creditors. 
 
 City and County of New York, ss. : 
 
 C. D., being duly sworn, says, that on the day of 
 
 ,187 , A. B., above named, made and executed, in due 
 
 form of law, a general assignment of all his property to de- 
 
APPENDIX OF FORMS AND PRECEDENTS. ']\'J 
 
 ponent, 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 
 on 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 upoa 
 the discharge of hjs duties as such assignee. 
 
 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 ] C. D.- 
 
 day of , i8 . 
 
 21. Order of Publication of Notice to Creditors. 
 
 COURT OF COMMON PLEAS, 
 
 FOR THE CITY AND COUNTY OF NEW YORK. 
 
 \Title as above^ 
 
 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 satis- 
 faction [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 cred- 
 itors 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 es- 
 tate, be and he hereby is authorized and empowered to ad- 
 vertise 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 advertisement or no- 
 tice shall be published once in each week for four succes- 
 sive weeks, in the newspaper, published in the county of 
 , where said assignment was made [and where credit- 
 
7l8 APPENDIX OF FORMS AND PRECEDENTS. 
 
 ors 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.] 
 
 22. 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 
 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 \assignor\ for the 
 benefit of their creditors, at his office, No. , in the city 
 of New Ybrk, on or before the day of , 187 . 
 
 Dated New York, the day of , 187 . 
 
 Assignee. 
 
 [The day named in the notice must be not less than 
 three months from the date of the first publication.] 
 
ADDENDA 
 
 CORRECTIONS AND ADDITIONS. 
 
 Page 37, line 17, for " are " read " were." 
 
 Page 37, line 18, for "create " read "created." 
 
 Page 38, line i. — The act of 1859 repealed and supplied the act of 1853. 
 
 Page 38, line 6, for " that " read " those." 
 
 Page 41, line 4, after "witness ' insert "and." 
 
 Page 43, line i, strike out " the " before " creditors." 
 
 Page 67, line 3, for " discussion " read " decision." 
 
 §48. Rights of Creditors. Assignments set aside in Bankruptcy. — 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 by 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 conamencement of the proceedings in equity. Where an assignment, fraudu- 
 lent 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 as- 
 signee in bankruptcy took the assigned property subject to the liens of judgment 
 creditors which had attached subsequent to the assignment. Johnson v. Rogers 
 (U. S. Dist. Ct. S. Dist. of N. Y.), Alb. Law J. vol. 14, p. 427. If, however, a 
 creditor, by reason of exceptional circumstances, is precluded from assailing the 
 assignment, 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, i 
 Taunt. 381 ; Philips v. Wooster, 36 N. Y. 412; Johnson v. Rogers, supra. 
 
 § 48. Assignee in Bankruptcy takes subject to lien of Judgment Creditors. — 
 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 creaitor, under a judgment obtained after the assignment 
 took effect and before the fiUng of the petition in bankruptcy, secured a prefer- 
 ence over the title of the assignee in bankruptcy. Macdonald v. Moore, i Abb. 
 N. Cas. 53. 
 
 § 49. Assignment void in Bankruptcy. — A general assignment, though under 
 a State law and without preferences, 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.) I Abb. N. Cas. 53. 
 
 § 49. Assignment without Preferences not void by reason of the exist- 
 ence if the Bankrupt Act. — 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 i8th day of May, 1872, was adjudged 
 bankrupt, in an action brought by the assignee in bankruptcy to obtain possession 
 
720 CORRECTIONS AND ADDITIONS. 
 
 of the assigned property — held that the assignment did not contravene any of the 
 provisions of the bankrupt act. 
 
 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 characterize the case at 
 bar. The admission and proof establish 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 
 (N. Y. 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 
 creditors is not an instrument void per se in hostility to the bankrupt act." Haas 
 V. O'Brien, i Abb. N. Cas. 173. 
 
 § 56. Suit by Assignee in Bankruptcy in State Court. — Under the Revised 
 Statutes of the United States, the Supreme Court of New' York has no jurisdic- 
 tion of an action by an assignee or trustee in bankruptcy to recover property al- 
 leged to have been conveyed by the bankrupt in fraud of his creditors. Frost v. 
 Hotchkiss, I Abb. N. Cas. 27. 
 
 § 58. Commissions and Expenses to Voluntary Assignee under Bankrupt 
 Law. — 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, i Abb. N. Cas. 53; and see cases cited in note. 
 
 § 160. Preference of Creditors not Fraudulent at Common Law. — An in- 
 solvent debtor turned out goods to one of his creditors to the amount of nearly 
 half of his indebtedness, and then made an assignment of the residue of his 
 property, under the Maine statute, for the benefit of his creditors — held that the 
 transfer was not fraudulent or void at common law. Hanscomb v. Buffum, 2 L. 
 & E. Rep. 626. 
 
 § 230. Power of Assignee to defend Suit brought against Assignor. — A pro- 
 vision in an assignment authorizing 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, i 
 Abb. N. Cas. 181, and cases cited. 
 
 § 230. Right of Assignee to employ and pay Counsel. — See remarks of Robin- 
 son, J., in Levy's Accounting, I Abb. N. Cas. 182. 
 
 § 382. Inventory. — Where it was claimed that the affidavit to the inventory 
 and schedules was made before a person not legally qualified to administer the 
 oath, and that the schedule and bond were not filed in the proper office — held 
 that, chap. 600, L. 1874 (N. Y.), which provides that the omission to make 
 or deliver the schedule shall not invalidate the assignment, was intended to ab- 
 rogate the rule that the making and delivery of the verified schedules required by 
 § 4 of the act of i860, was essential to the validity of the assignment, and the 
 provision allowing the assignee to file the schedules within six months was not 
 intended as a condition a breach of which would invalidate the assignment. Pro- 
 duce Bank v. Morton, i Abb. N. Cas. 174. 
 
 § 383. Inventory and Bond. — The opinions in the cases of Thrasher v. Bent- 
 ley and Syracuse R. R. Co., referred to in the text, are reported in full in Abb. N. 
 Cas. pp. 39, 47.. 
 
 § 397- Continuing Assignor' s Business by Assignee, — "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 assignment, 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 tend- 
 ing to any other result are (equally as if committed by the debtor) in fraud of the 
 
CORRECTIONS AND ADDITIONS. 72 1 
 
 creditor, in hindering and delaying him in the realization of what is justly due 
 him either from his debtor or from the assigned estate." Robinson, J., in Levy's 
 Accounting, i Abb. N. Cas. 186. 
 
 § 455. Accounting. Reference on Statutory Accottnting in New York. — Where 
 an order of reference was made, which directed the assignee " to hear and deter- 
 mine " as to the matter appertaining to the assignment, and account and report 
 thereon — held (that the order was improvident, so far as it authorized the referee to 
 hear and determine any matter in controversy arising upon objections or excep- 
 tions taken to any account rendered by the assignee, as any such judgment rested 
 wholly with the judge. L. 1875, c 56, § 2 ; Levy's Accounting, i Abb. N. Cas. 
 177. 
 
 § 455. Accounting under State Statute. — Where proceedings are pending to 
 test the validity of the assignment, and also to seek to obtain the trust property, 
 by an assignee in bankruptcy, and there is no collusion, the accounting under the 
 State statute should be postponed until a definite result is reached. Matter of 
 Petition of Bowery Nat. Bank for an Accounting by Assignee of Wm. B. Duncan, 
 N. Y. Com. PI. Jan. 10, 1877. 
 
 § 469. Removal of Assignee, — Where the assignee refused to allow the cred- 
 itors access to the assignor's books of account, this was regarded, among other 
 things, as a ground for the appointment of a receiver. 
 
 Van Vorst, J.: " It is of the first importance that the trustee of an insolvent, 
 under an assignment for the benefit of creditors, should be open and candid with 
 the creditors whose claims are provided for in the instrument, and afford them 
 every reasonable means and opportunity for examining into the affairs of the as- 
 signor." Manning v. Stern, Supr. C. Sp. T. Dec. 1876. 
 
 Where it appeared that the assignors had transferred large quantities of prop- 
 erty to the assignee in payment of debts, which had been retransferred to them 
 about the time of the assignment, and were not included in the schedules as first 
 filed, and not until after the examination of the assignors had disclosed the fact, 
 this was held to give rise to the suggestion that there might be other property 
 not mentioned by the assignors, and, taken in connection with the assignee's re- 
 fusal to permit an examination of the books, regarded as sufficient ground for the 
 appointment of a receiver. Manning v. Stern, supra. 
 
 4G 
 
GENEEAL INDEX 
 
GENEKAL INDEX. 
 
 (The references are to pages.) 
 
 ACCEPTANCE of assignment by assignee, 355. 
 when to be signified, 355. 
 how to be signified, 355. 
 by one of several assignees, 356. 
 effect of, 356. 
 presumed, 356. 
 proceedings where assignee refuses, 357. 
 
 where assignee renounces after acceptance, 358. 
 ACCOUNT, balances of, assignable, 131. 
 
 bill in equity for, against assignee, 624, 664. 
 ACCOUNTING final, by assignee, 616. 
 by statute in New Jersey, 616. 
 in Vermont, 617. 
 in Maine, 617. 
 in Pennsylvania, 618. 
 in Maryland, 617. 
 in Indiana, 617. 
 proceedings to compel, 618. 
 
 under statute of New Jersey, 616. 
 of Pennsylvania, 618, 668. 
 of Missouri, 620. 
 of Vermont, 620. 
 ofNew York, 621, 721. 
 of California, 622. 
 of Iowa, 622. 
 of Ohio, 623. 
 without action, 616. 
 in equity, 624. 
 ACCOUNTS, assignee must keep, 616. 
 ACKNOWLEDGMENT of execution of assignment, 335. 
 ACTIONS by assignee, 556. 
 
 against creditors, 552. 
 
 assignor, 552. 
 against assignee by creditors, to enforce the trust, 664. 
 time for commencing, 665. 
 parties to, 665. 
 
726 GENERAL INDEX. 
 
 ACTIO'MS— continued. 
 
 against assignee — pleadings, 666. 
 defense of, 665. 
 , decree, 668. 
 
 statutory proceedings, 668. 
 for dividend, 668. 
 in other cases, 669. 
 
 by creditors to set aside assignment, 673. 
 parties to, 676. 
 
 pending, interests in, assignable, 131, 132. 
 ADDITIONS to assignments, 350, 353. 
 AGENCY, deeds of, in England, 152. 
 
 of assfgnor, 521. 
 AGENT, provision for employment of assignor as, 260, 261. 
 
 employment of assignor by assignee as, 260, 521. 
 AGENTS, power to assignee to appoint and dismiss, 310. 
 
 powers of assignee to appoint, 544. 
 ALABAMA statute against preferences, 24, 206. 
 
 against fraudulent conveyances, 446, note 2. 
 ALLOWANCE of compensation to assignee, 582. See Compensation, 
 AMENDMENTS to assignments, 350. 
 by consent of parties, 350. 
 by the court, 351. 
 in other cases, 352. 
 AMOUNT of property assigned, 121-128. 
 APPEALS by assignees, 558. 
 APPRAISEMENT of property assigned, 526. 
 under the statute of Connecticut, 527. 
 Rhode Island, 528. 
 New Jersey, 533. 
 Pennsylvania, 533. 
 Missouri, 536. 
 Indiana, 536. 
 Ohio, 534. 
 ARKilNSAS, statute relating to assignments, 24. 
 ASSAILING an assignment as fraudulent or void, 671. 
 
 who may assail, 673. 
 ASSENT of creditors to assignment, 70, 379, 395. 
 the rule in various States, 382. 
 the English rule, 387. 
 in assignments directly to creditors, 389. 
 how and when given, 390. 
 of how many creditors, 392. 
 by attorney, 392. 
 
GENERAL INDEX. 727 
 
 ASSENT — continued. 
 
 """"by partners, 393. 
 
 limitation of time to assent, 393, 
 
 presumption of, 381. 
 
 from lapse of time, 393. 
 
 to avoid assignments, 394. 
 ASSIGNEE, qualifications of, 118. 
 
 creditor may be, 116. 
 
 relative may be, 118. 
 
 selection of, by creditors, 117. 
 
 of insolvent corporations, 117. 
 
 of religious corporations, 120. 
 
 appointment of, cannot be reserved to assignor, 120. 
 
 in bankruptcy, avoiding assignment by, 72. 
 
 right of action exclusive, 73. 
 
 protection of voluntary assignee in bankruptcy, 74. 
 
 allowance of expenses to voluntary assignee, 75. 
 
 covenant by, in assignment, 178. 
 
 execution of assignment by, 330. 
 
 power to mortgage and lease, 309. 
 
 power to pay interest, insurance and incumbrances, 309. 
 
 power to employ agents, 310. 
 
 to compound and compromise debts, 310, 554. 
 to defend suit against assignor, 312, 720. 
 
 acceptance of assignment by, 355. 
 
 proceedings of, general, outline of, 509. 
 
 rights, duties, and powers of, 538, 541, 544, 550. 
 
 how he takes, 538. 
 
 not a bona fide purchaser, 484, 540. 
 
 notice of assignment by, 512. 
 
 taking possession by, 517. 
 
 inventory and appraisement of property, 526. 
 
 bond by, 526. 
 
 custody of property by, 543. 
 
 continuing assignor's business, 281, 285, 547, 550, 720. 
 
 liability of, on taking possession, 523. 
 
 ■when protected, 631. 
 
 how dealt with by court, 632. 
 
 application of, to court for instructions, 589, 590. 
 
 collection of debts and recovery of property by, 550. 
 
 actions by, 550. 
 
 sale by, 560. 
 
 cannot purchase at sale, 566. 
 
 distribution by, among creditors, 586. 
 _^nal accounting and close of trust by, 616. 
 
728 GENERAL INDEX. 
 
 •ASSIGN EE— continued. 
 
 must keep accounts, (il6. 
 
 liability of, 626. 
 
 death of, 639. 
 
 removal of, 641. 
 
 non-acceptance of, 641. 
 
 resignation of, 642. 
 
 misconduct of, 645. 
 
 insolvency of, 648. 
 
 incapacity of, 648. 
 
 powers of new, 649. 
 
 discharge of, 650. 
 
 actions against, by creditor, 664. 
 ASSIGNEES, when parties to assignment, 157. 
 
 stipulations for benefit of, 313. 
 
 special powers and directions to, 309. 
 
 liability of, 626. 
 
 when protected from liability, 631. 
 
 how dealt with by the courts, 633. 
 ASSIGNMENT defined, 1, 2, 3, 4, 148, n. 4. 
 
 when an act of bankruptcy, 47-70. 
 
 who may make an, 78. 
 
 to whom, 116. 
 
 of what property, 121. 
 
 for whose benefit, 140. 
 
 pending what proceedings, 217. 
 
 how to be made, 145. 
 
 general, 148. 
 
 partial, 186. 
 
 form of, 145. 
 
 by several instruments, 159. 
 
 division and varieties of, 161. 
 
 form of, particularly considered, 156. 
 
 execution of, 329. 
 
 oath to, 334. 
 
 acknowledgnaent of, 335. 
 
 attestation of, 334. 
 
 record or registry of, 337. 
 
 delivery of, to assignee, 347. 
 
 amending and adding to, 350. 
 
 acceptance of, by assignee, 355. 
 
 assent to by creditors, 379. 
 
 takes effect when, 396. 
 
 operation of, 399. 
 
GENERAL INDEX. 729 
 
 ASSIGNM ElUT— continued. 
 what passes by, 132. 
 construction of, 421. See Assignmbnts. 
 revocation and canceling of, 505. 
 notice of, by assignee, 512. 
 creditors coming in under, 651 . 
 creditors treating an, as nullity, 671. 
 assailing as void, 673. 
 ASSIGNMENTS in general, 1. 
 in debt, 3. 
 
 for the benefit of creditors, 3. 
 voluntary, 4, 5, and notes. 
 history of, 17, 23. 
 classification of, 19. 
 when acts of bankruptcy, 47; 70. 
 regulated by statute in what States, 21>. 
 
 Alabama, 24. 
 
 Arkansas, 24. 
 
 California, 25. 
 
 Connecticut, 25. 
 
 Delaware, 26. 
 
 Florida, 26. 
 
 Georgia, 26. 
 
 Iowa, 27. 
 
 Illinois, 27. 
 
 Indiana, 27. 
 
 Kansas, 28. 
 
 Kentucky, 28. 
 
 Louisiana, 29. 
 
 Maine, 29. 
 
 Massachusetts, 30. 
 
 Maryland, 34. 
 
 Michigan, 34. 
 
 Minnesota, 34. 
 
 Mississippi, 84. 
 
 Missouri, 34. 
 
 North Carolina, 34. 
 
 New Hampshire, 34. 
 
 New Jersey, 34. 
 
 New York, 35. 
 
 Ohio, 36. 
 
 Pennsylvania, 38. 
 
 South Carolina, 39. 
 
 Tennessee, 39. 
 
 Texas, 39. 
 
730 y GENERAL INDEX. 
 
 ASSIGNMENTS— con i!m«ec?. 
 
 regulated by statute in Vermont, 39. 
 
 Virginia, 40. 
 
 Wisconsin, 40. 
 by insolvents, 78. 
 distinguished from sales, 8-10. 
 
 from deeds of trust in the nature of mortgages, 14. 
 
 from mortgages, 11-14. 
 
 from agencies, 11. 
 by one of several partners, 90. 
 by partners, how to be made, 109. 
 partial, 186. 
 
 with preferences, 183, 191, 229^418. 
 directly to creditors, 5. 
 with special provisions, 229. 
 parties to, 150. 
 consideration of, 319. 
 parts of, 323. 
 construction of, 421. 
 
 fraudulent and void, 441 . See Fraudulbkt. 
 void in part, 489. 
 in connection with inortgages, 495. 
 
 judgments, 499. 
 
 other transfers, 500. 
 
 subsequent instruments, 503. 
 
 other assignments, 502. 
 
 releases, 504. 
 by corporations, 84. 
 
 how executed, 85. 
 effect and operation of, 401. 
 ASSIGNOR, reservations of benefit to, 250. 
 
 stipulations for use of property by, 263-267. 
 for continuance of business by, 281. 
 actions against by assignee, 552. 
 of powers to, 315. 
 execution of assignments by, 329. 
 retention of possession by, 360, 519. 
 acting as agent, 521. See Agent. 
 ATTESTATION of execution of assignment, 334. 
 ATTORNEY, power of, in assignment, 178. 
 
 execution of assignment by, 329. 
 AVOIDANCE of assignment, proceedings in, 673. 
 
 of assignment, extent of, 469. 
 AVOIDING assignment by assignee in bankruptcy, 72. 
 AWARDS, interest in, assignable, 133. 
 
GENERAL INDEX. 73 1 
 
 BADGES of fraud, 479. 
 BAIL may be secured by assignment, 140. 
 BALANCES of account assignable, 130. 
 BANK may make an assignment, 88. 
 BANKRUPTCY, the system of, 42. 
 
 assignments, act of, the English doctrine, 47. 
 general grounds of English rule, 53. 
 fraudulent assignments, acts of, 59. 
 
 assignments with preferences, acts of, 47, 59, 193, note 1. 
 pro rata, acts of, under English system, 50-54. 
 when acts of, under Unnited States law, 60-70, 719. 
 assignments voidable in, 71 . 
 not a bar to discharge in, 76. 
 proceedings on avoiding, 74. 
 protection of voluntary assignee in, 75. 
 BANKRUPT LAW, assignments considered in connection with, 42. 
 right to assign, how affected by, 17. 
 of England, 43-55. 
 acts of United States, 55-59. 
 acts of 1800 and 1841, 55. 
 act of 1867, 56. 
 
 power to assign, not suspended by, 59. 
 
 exemption of assignments from operation of English act, 53. 
 transfers under foreign, 405. 
 BENEFICIARIES under assignment, who may be, 140. 
 BENEFIT of creditors, what, 3, note 1. 
 to debtor, reservations of, 256. 
 BILL in equity to enforce trust of assignment, 664. 
 to set aside assignment, 673. 
 parties to, 675. 
 form of, 676. 
 proof, 676. 
 
 decree and subsequent proceedings, 677, 078. 
 BILLS of exchange assignable, 130. 
 BIPARTITE assignment, 162. 
 BONA FIDE purchaser, assignee not, 538-540. 
 
 assignments must be, 442. 
 BONA FIDES of assignments, 442. 
 BOND by assignee, 526. * 
 
 under statute of Maine, 526. 
 Vermont, 527. 
 Connecticut, 527. 
 Rhode Island, 528. 
 New Jersey, 533. 
 Pennsylvania, 533. 
 
732 GENERAL INDEX. 
 
 BOND — continued. 
 
 under statute of Oliio, 531, 
 
 Missouri, 536. 
 
 New Hampshire, 520. 
 
 New York, 529. 
 
 Iowa, 535. 
 
 Indiana, 535. 
 
 Mar3']and, 537. 
 
 California, 537. 
 BONDS assignable, 130. 
 BOOK accounts assignable, 130. 
 BOOKS of account, delivery of, to assignee, 517. 
 BUSINESS of assignor, continuance of, by assignee, 547. 
 
 stipulations for, 281. 
 
 CALIFORNIA statute of assignments, 25. 
 
 against fraudulent conveyances, 446, note 2. 
 CANCELLATION of assignments, 505, 508. 
 CHARGES, assignee takes subject to, 538. 
 CHOSES in action assignable, 130. 
 " CLAIM" construed, 439. 
 
 of landlord for rent, priority of, 607. 
 CLAIMS of creditors doubtful and disputed, 591. 
 
 growing out of and adhering to property, assignable, 131. 
 on foreign governments, pass by assignment, 133. 
 for damages for toits, when assignable, 131, 133. 
 of creditors, how ascertained under statute of Connecticut, 594. 
 Indiana, 598. 
 Iowa, 598. 
 Maine, 595. 
 Missouri, 596. 
 New Hampshire, 598. 
 New Jersey, 595. 
 CLERKS, power of assignees to appoint, 544. 
 CLOSE of trust by assignee, 624. 
 CO-ASSIGNEES, liability of, 633. 
 COLLECTION of debts by assignee, 550. 
 COMING in under assignment, 651. 
 who may come in, 65%. 
 when to come in, 652. 
 how to come in, 654. 
 consequence of, 654. 
 under decree, 658. 
 COillTY, rule of, 404. 
 
GENERAL INDEX. 
 
 733 
 
 COMMISSIONS of assignee, 577, 583. 
 COMPENSATION of assignee, 174, 315, 575, 577. 
 
 in New York, 577. 
 
 in Connecticut, 579. 
 
 in Delaware, 579. 
 
 in Pennsylvania, 580. 
 
 in Maryland, 580. 
 
 in Vermont, 580. 
 
 in Kentucky, 580. 
 
 in Michigan, 580. 
 
 in Maine, 581. 
 
 in New Jersey, 581. 
 
 in North Cai-olina, 581. 
 
 in South Carolina, 581. 
 
 in Georgia, 582. 
 
 in Alabama, 583. 
 
 in California, 579. 
 
 in Ohio, 580. 
 
 when forfeited, 585. 
 COMPOSITION deeds, 227. 
 COMPOUNDING, power of, to assignee, 310. 
 COMPUTATION of dividends, 542,610. 
 CONDITIONAL assignments, 354, note 5. 
 preferences, 223, 232. 
 reservations of surplus, 268. 
 CONDITIONS of preference, 254. 
 CONNECTICUT statute of assignments, 25. 
 against preferences, 25, 203. 
 against fraudulent conveyances, 446. 
 CONSIDERATION of assignments, 319, 322. 
 
 statement of, 164. 
 CONSTRUCTION of assignments, 421. 
 
 general rule of, 874, 421. 
 
 description of property, what passes, 432, 426. 
 
 designation of debts to be paid, 426, 434. 
 
 stipulation for release, 434. 
 
 authority to assignee, 437. 
 
 liability of trustee, 438. ^ 
 
 effect of release, 438. 
 particular words, 439. 
 of releases, 663. 
 CONSTRUCTIVE fraud, 472. 
 CONTINGENT interests assignable, 131. 
 
734 GENERAL INDEX. 
 
 CONTINUANCE of assignor's business by assignee, 547. 
 
 stipulations fur, 281. 
 CONTRACTS, interests in, assignable, 130. 
 CONVEYANCE by assignee, 571. 
 CONVEYANCES, fraudulent, statutes of, 17, 443. 
 CORPORATION may make an assignment, 84. 
 
 moneyed, right to assign, 88. 
 
 preferences by, 218. 
 
 effect of assignment by, 401. 
 COSTS against assignee, 554. 
 COURSE of distribution among creditors, 586. 
 COVENANT by assignee, 178. 
 COVIN, 442. 
 CREDIT, power to assignee to sell on, 296, 309. 
 
 implied power to assignee to sell on, 302. 
 CREDITORS, benefit of, what, 3. 
 
 when parties to assignment, 181. 
 effect of becoming, 654. 
 
 assent of, to assignment, 379, 395. 
 
 coming in under assignment, 651. 
 
 releases by, 659. 
 
 enforcing the trust of the assignment, 664. 
 
 actions by, against assignee, in avoidance of assignment, 671. 
 
 actions against, by assignee, 552. 
 
 treating the assignment as a nullity, 671. 
 
 what, may assail assignment, 673. 
 
 assailing the assignment as fraudulent or void, 673. 
 CROPS, assignable, 129, note 6. 
 CUSTODY of property by assignee, 543. 
 
 DAMAGES, right of action for, assignable, 131. 
 DEATH of assignee, proceedings in case of, 639, 641. 
 DEBTOR, right to assign, 17. 
 DEBTS assignable, 129. 
 
 description of, in assignment, 175, 178. 
 
 proof of, 656. 
 
 collection of, by assignee, 550. 
 DECLARATION of trusts in assignment, 173. 
 DECLARATIONS of assignor, when evidence against assignee, 556. 
 DECREE, creditors coming in under, 658. 
 
 on bill to set aside assignment, 677. 
 DECREES in equity, assignable, 132. 
 DEEDS of agency, in England, 152, note 2. 
 
 of trust, in Southern States, 14. 
 
GENERAL INDEX. 735 
 
 DEFENSE of suits, provision for, 312. 
 DEFENSES by assignee against creditors, 552, 667. 
 DEFINITION of voluntary assignments, 3. 
 DELAWARE statute prohibiting preferences, 26. 
 DELAY of creditors, 404, 420. See Intent. 
 DELIVERY of assignment to assignee, 347. 
 
 what amounts to, 348. 
 
 evidence of, 348. 
 of possession of property assigned, 360. 
 
 rules on the subject, 361, 373. See Fraud. 
 
 when essential, 360, 
 
 exceptions to rules, 371. 
 
 time and mode of, 373. 
 
 of lands, 374. 
 
 of goods, 374. 
 
 of debts, 374. 
 
 constructive delivery, 374. 
 
 retention of possession, 327, 377. 
 of chattel not in schedule, 378. 
 DESCRIPTION of property in assignment, 164. 
 of amount assigned, 168,265. 
 of debts to be paid, 175. 
 DEVISEES, interests of, pass by assignment, 135, 856. 
 DIRECT assignments to creditors, 5. 
 DIRECTIONS, special, to assignees, 309. 
 DISABILITY of assignee to purchase at sale by him, 586. 
 
 how removed, 571. 
 DISCHARGE of assignee before executing tru§t, 642. 
 
 after executing trust, 643, 650. 
 DISMISSAL of assignee, 645. See Removal. 
 DISPOSITION of surplus by assignee, 613. 
 DISPUTED claims, payment of, by assignee, 591. 
 DISTINCTION of assignments, 19. 
 DISTRIBUTION by assignee among creditors, 586. 
 
 how made, 586. 
 
 what creditors are entitled, 586. 
 
 application to court for directions, 589, 590, note 1 , 
 
 in particular cases, by statute, 594. 
 
 order of, 600, 610. 
 
 course of, 610. 
 DIVIDENDS to creditors, 586. 
 
 under statute in Connecticut, 594. 
 
 in New Jersey, 595. 
 
 in Missouri, 596. 
 
736 GENERAL INDEX. 
 
 DIVIDENDS— contirmed. 
 
 under statute in Indiana, 598. 
 in Iowa, 598. 
 in New Hampshire, 598. 
 
 notice of, 599. 
 
 computation of, 610. 
 
 application of, 656. 
 
 effect of taking, 657. 
 
 action for, 668. 
 
 interest on, 669. 
 
 payment of, does not take debt out of statute of limitations, 61). 
 DIVISION and varieties of assignments, 147, 161. 
 DOMICILE of parties, affected by assignments, 415. 
 DUTIES of assignee, 539, 541. 
 
 in regard to sale, 561. 
 
 EFEECT, when assignment takes, 396. 
 ELIZABETH, statute of 13, c. 5th, 7, 8, 443, 446. 
 EMPLOYMENT of debtor by assignee, 521. See Agent. 
 
 stipulation for, 282, 283. 
 ENFORCEMENT of trust of assignment by creditors, 664. 
 under statute of New Jersey, 668. 
 of Pennsylvania, 668. 
 ENGLISH deeds of agency, 152, note 2. 
 EQUITIES, assignee takes subject to, 538, 555. 
 EVIDENCE of delivery of assignment, 348. 
 declarations of assignor when, 556. 
 EXCEPTION of property,. out of assignment, 124. 
 EXCLUSIVE possession of property delivered to assignee, 376, 377. 
 EXECUTION of trust, provisions respecting time for, 285. 
 of assignment, 329. 
 by assignor, 329. 
 by assignee, 330. 
 by creditors, 331. 
 by attorney, 329, note 1. 
 by wives of assignors, 150, 330. 
 of schedules, 330. 
 acknowledgment, 335. 
 attestation of, 331. 
 .EXEMPT property, 123. 
 EXPECTANCIES assignable, 131. 
 EXPENSES of executing the trust, 575. 
 items of, 574, . 
 
GENERAL INDEX. 737 
 
 FAMILY of debtor, reservations for benefit of, 257. 
 riCTITIOUS debt, preference of, 327. 
 
 trust for payment of, 143. 
 FINAL accounting by assignee, 616. 
 FLORIDA statute, 26. 
 
 .FOEEIGN assignments, 403. See Lex Loci. 
 repugnant to law of forum, 408. 
 assignment, choses in action pass by, 413. 
 preferences in, 418. 
 bankrupt assignment, 405. 
 property passes by assignment, 133. 
 debts pass by assignment, 133. 
 FORM of assignments, 147. 
 
 particularly considered, 156. 
 of assignment by single instrument, 161. 
 FORMAL parts of assignments, 162. 
 FRAUD in selecting an assignee, 118, 119. 
 
 ill providing for future indorsees or sureties, 141. 
 
 under the non-imprisonment act of New York, 217. 
 
 by assignments without writing, 155. 
 
 in giving preferences in general assignments, 203, 204. 
 
 in giving preferences by secret agreement, 227. 
 
 in stipulations for a release, 240, 244. 
 
 in partial assignments with stipulations for a release, 253. 
 
 in reserving a benefit to the debtor, 256. 
 
 in creating a trust for the debtor, 259, 480. 
 
 in stipulating for the use of the assigned property by the debtor, 
 
 263. 
 in reserving surplus moneys or property to the debtor, 268. 
 in stipulating for continuance of assignor's business, 281. 
 in fixing a time for the execution of the trust, 200, 203, 285. 
 in limiting a time for creditors to become parties or assent, 289. 
 in fixing the time of sale of the property, 291. 
 in prescribing the terms of sale, 296, 309. 
 in empowering assignees to compound with creditors, 310. 
 
 to defend suits by creditors, 312. 
 in postponing collection of bond assigned, 313. 
 in limiting assignee's liability, 313, 314. 
 
 in reserving to assignor power of revocation, and of declaring new 
 trusts, 315. 
 to mortgage, 316. 
 
 to change order of preferences, 316. 
 to appoint new trustees, 317. 
 
 47 
 
73'8 GENERAL INDEX. 
 
 FRAUD — continued. 
 
 in directing assignee to hold property subject to assignor's order, 
 
 317. 
 in not specifying property assigned, 164. 
 in providing for payment of large salaries to trustees, 175. 
 in omitting to annex schedules to assignment, 165, 173, 179. ' 
 
 in influencing creditors to become parties to assignment, 332. 
 in retaining possession of property assigned, 361, 364, 370. 
 the rule in Pennsylvania, 361. 
 
 in Vermont, 363. 
 
 in Illinois, 364. 
 
 in South Carolina, 364. 
 
 in New York, 366, 368. 
 
 in Massachusetts, 364. 
 
 in Connecticut, 364. 
 
 in North Carolina, 364, 365. 
 
 in Indiana, 365. 
 
 in Arkansas, 365. 
 
 in Maine, 365. 
 
 in New Hampshire, 365. 
 
 in New Jersey, 365. 
 
 in Ohio, 365. 
 
 in Missouri, 365. 
 
 in Kentucky, 365. 
 
 in Tennessee, 365. 
 
 in Virginia, 365. 
 
 in Georgia, 365. 
 
 in Texas, 365. 
 
 in Mississippi, 365. 
 
 in Alabama, 365. 
 
 in Louisiana, 835. 
 
 in Wisconsin, 365. 
 
 in Michigan, 865. 
 exceptions to the rule, 371. 
 in assignments, generally, 464. 
 in law and in fact, 469. 
 constructive, 472. 
 how established, 473. 
 on the face of the deed, 476. 
 from matter extrinsic, 478. 
 from both sources, 478. 
 indicia or badges of, 479. 
 effect of subsequent or previous, 487. 
 FRAUDULENT and void assignments, 441, 494. 
 
GENERAL INDEX. 739 
 
 YnKUDVLBNT— continued. 
 
 intent, 464, 467. See Intent. 
 
 how ascertained, 467. 
 assignment, not affected by subsequent events, 487. 
 
 how far it may be avoided, 489. 
 conveyenoes, statutes of, 17, 18, 443. 
 English statute of 13 Elizabeth, c. 5th, 443, 446. 
 statutes of United States, 446, note 1. 
 statutes of New York, 446, 448. 
 
 emphatic words of, 449. 
 hindrance and delay of creditors, 450, 466. 
 penal character of statute, 457. 
 how construed, 450, 466. 
 
 the stricter rule, 457, 462. ' 
 
 the more liberal rule, 458, 459. 
 preferences, 227, 228. 
 FUTURE advances and responsibilities, 141. 
 suretyships may be secured, 141. 
 
 GENERAL assignment, what, 21, 148. 
 GEORGIA statute relating to assignments, 26. 
 
 against fraudulent conveyances, 446, note 2. 
 GOOD FAITH, 441. 
 GOODS assignable, 129. 
 " GOODS " construed, 489. 
 " GOODS and chattels," construed, 439. 
 GRATUITIES not assignable, 131, note 3. 
 
 HABENDUM of assignment, 172. 
 
 HEIRS, interests of, pass by assignment, 135. 
 
 HENRY VII, statute of, 3, c. 4th, 480, 486. 
 
 HINDRANCE and delay of creditors, 448, 449, 450, 467. 
 
 HISTORY of practice of assignments, 17, 23. 
 
 HOW to make an assignment, 147. 
 
 the assignee takes, 538. 
 
 assignments are considered, 487. 
 
 far assignments may be avoided, 489. 
 
 ILLEGAL preferences, 227. 
 
 ILLINOIS statute against fraudulent conveyances, 446, note 2. 
 
 IMPLIED power to sell on credit, 302, 309. 
 
 trusts of assignment, 324. 
 IMPRISONMENT of parties to conveyances with intent to hinder, delay, 
 or defraud creditors, 451. 
 
74b GENERAL INDEX. 
 
 JNCOMPETENT assignee, 118, 121. 
 
 proceedings in case of incompetency, 648. 
 INDIANA, statute relating to assignments, 27. 
 
 statute against fraudulent conveyances, 446, note 2. 
 INDICIA or badges of fraud, 479. 
 INDOKSERS may be secured by assignment, 140, 141. 
 preferred by assignment, 222. 
 are creditors, 140, note 3. 
 INFANTS, assignments by, 78, note 1 . 
 INSOLVENCY on the part of an assignor, 78. 
 defined, 81, 84. 
 of assignor, when important, 78. 
 of a corporation, 86. 
 INSOLVENT assignee, 1 19. 
 
 proceedings in case of insolvency, 648. 
 INSOLVENT'S discharge, application for, when barred by assignment, 216, 
 
 217. 
 INSURANCE, policies of, assignable, 130. 
 power to assignees to effect, 309. 
 INTENT to hinder and delay creditors, in the statute of 13 Elizabeth, 443, 
 446. 
 in the New York statutes, 446. 
 quality of, under the statute of Elizabeth, 448, 467. 
 to defeat execution and prevent sacrifice of property, 466. 
 to defraud, fatal to assignment, 467. 
 
 in the statute of 13 Elizabeth, 443, 462. 
 in the New Yori< statutes, 446-448. 
 on the part of assignor, 467. 
 of assignee, 467. 
 INTEREST on claims of creditors, 603. 
 direction not to pay, 313. 
 power of assignee to pay, 309. 
 on dividends, when recoverable, 612, 669. 
 INTERESTS in personal contracts assignable, 130. 
 in actions pending, assignable, 132. 
 in wife's property pass by assignment, 134. 
 of devisees pass by assignment, 135. 
 of heirs pass by sssignment, 135. 
 INVENTORY of assigned property by assignee, 526. 
 under statute of Maine, 526. 
 Connecticut, 527. 
 Rhode Island, 52S. 
 New Jersey, 533. 
 Pennsylvania, 5S3. 
 
GENERAL INDEX. '/4I 
 
 INYENTORY— continued. 
 
 under statute of Missouri, 536. 
 
 Vermont, 527. 
 
 New Hampshire, 529. 
 
 New York, 529, 720. 
 
 Ohio, 534. 
 
 Iowa, 535. 
 
 Indiana, 535. 
 
 Maryland, 537. 
 
 California, 537. 
 IOWA statute relating to assignments, 27. 
 
 JUDGMENT not an assignment, 158, 196. 
 
 in aid of fraudulent assignment, void, 260, 499. 
 JUDGMENTS assignable, 132. 
 
 KANSAS statute relating to assignments, 28. 
 KENTUCKY statute prohibiting preferences, 28. 
 
 against fraudulent conveyances, 446, note 2. 
 
 relating to assignment' 28. 
 
 LANDLORD'S claim for rent of assigned premises, prioi'ity of, 607. See 
 
 Rent. 
 LANDS assignable, 129. 
 LAPSE of time, evidence of assent of creditors, 393. 
 
 when trust closed by, 624. 
 LEASE or mortgage, power to assignee to, 309. 
 LEASEHOLD interests when they pass, 134. 
 
 premises, assignee taking possession of, 524. 
 LESSEE, right of, assignable, 129. 
 LESSOR, right of, assignable, 129. 
 LETTER, an assignment by, 157. 
 
 not a release, 661. 
 LEX FORI governs remedy, 408. 
 LEX LOCI of assignment, 403. 
 the general rule, 403. 
 as to real property, 406. 
 as to choses in action, 413. 
 lule of comity, 403, 408. 
 LIABILITY of assignees, 626. 
 
 stipulations respecting, 313. 
 continuation of, 438. 
 extent of, 627, 631 . 
 in cases of negligence, 627. 
 
74^ GENERAL INDEX. 
 
 LIABILITY— continued. 
 
 of assignees — mistake, (529. 
 hov7 guarded against, 530. 
 
 by taking advice of counsel, G30. 
 by application to the court, .589, 631 . 
 of co-assignees, 633, 637. 
 of sureties on assignee's bond, 6S7. 
 LIENS, assignee takes subject to, 538. 
 
 LIMITATIONS, statute of, payment of dividend does not take debt out of, 
 611. 
 in application to trust, 625. 
 LIMITED partnership, assignment by, 115. 
 
 cannot give preferences, 217. 
 LOUISIANA, constitution of, against preferences, 29, 206. 
 
 MAINE statute of assignments, 29, 203. 
 
 prohibiting preferences, 203. 
 MALICE, in the intent to delay ot hinder creditors, 450, 407. 
 "MALICE, fraud, covin, collusion, or guile," in the statute of fraudulent 
 
 conveyances, 443, 450, 467. 
 MARYLAND statute relating to assignments, 34. 
 
 preferences under insolvent lav?^, 206. 
 MASSACHUSETTS statute of assignments, 30. 
 
 against preferences, 21 1, note 6. 
 MERCHANDISE, assignable, 129. 
 
 MICHIGAN statute against fraudulent conveyances, 446, note 2. 
 MISCONDUCT of assignee, proceedings in case of, 645-647. 
 MISSISSIPPI statute against fraudulent conveyances, 446, note 2. 
 MISSOURI statute against preferences, 34, 206. 
 
 of assignments, 34. 
 
 against fraudulent conveyances, 446, note 2. 
 MISTAKE, liability of assignee for, 555, 556, 629. 
 MONEY in bank passes by assignment, 136. 
 MORTGAGE, povi^er to assignee to, 309. 
 
 power to pay off, 310. 
 
 power to pay interest on, 310. 
 MORTGAGEE'S interest assignable, 129. 
 MORTGAGES distinguished from assignments, 11-14. 
 MORTGAGOR'S interest assignable, 129. 
 
 NEGLIGENCE, liability of assignee for, 627. 
 
 NEW HAMPSHIRE statute against preferences, 34, 203. 
 
 against fraudulent conveyances, 446, note 2. 
 NEW JERSEY statute of assignments, 34. 
 
 against preferences, 204. 
 
 against fraudulent conveyances, 446, note 2. 
 
GENERAL INDEX. 743 
 
 Iv"^EW YOEK statute regulating assignments, 35. 
 
 against fraudulent conveyances, 446-448. 
 
 against conveyances in trust for grantor, 481. 
 NON-ACCEPTANCE of trust by assignee, proceedings on, G4. 
 NON-DELIVERY of possession of assigned property, 300. 
 
 when conclusive evidence of fraud, 360, 361. 
 
 ■when only presumptive evidence of fraud, 360, 361. 
 
 ■when not presumptive evidence of fraud, 360, 370. 
 NOTES, assignable, 130. 
 NOTICE of assignment, 512. 
 
 in lieu of record, 345. 
 by statute, 512. 
 
 object and effect of, 515. 
 
 effect of omission of, 515. 
 
 of sale, 564. 
 
 of dividend, 599. 
 
 by assignee to creditors, to prove debt, 311. 
 NULLITY, treating assignment as, 671. 
 
 OATH to assignment, 334.- 
 OHIO statute of assignments, 36. 
 
 against preferences, 36, 205. 
 OPERATION of assignment, 399. 
 ORDER of payment by assignee, 600. 
 
 PARTIAL assignments, ■what, 186. 
 
 on condition of release, 187-189, 253. 
 
 not ■within priority' acts of Congress, 100. 
 
 ■with preferences, 189, 214. 
 PARTIES to assignments, 150. 
 
 assignors, 150. 
 
 assignors' wives, 150. 
 
 assignees, 150. 
 
 creditors, 151. 
 
 time to become, 289. 
 
 in action by assignee to collect debts, 558. 
 
 to bill to enforce trust, 665. 
 
 to set aside assignment, 676. 
 PARTNERS, assignments by, 90. 
 
 power of each of, to assign his interest, 113. 
 
 surviving, 114. 
 
 preferences by, 274. 
 
744 GENERAL INDEX. 
 
 PAETNEESHIP, limited, cannot give preferences, 217. 
 assignments by, 115. 
 
 appropriation of assets in assignments by, 274. 
 preference of individual creditors in assignments by, 274, 
 preference of firm creditors in assignments, 276, 281. 
 effect of assignment by, 402. 
 PAYMENT, preference by, 192-195. 
 
 by assignee, order of, 600. 
 PENAL character of the statute of fraudulent conveyances, 451. 
 PENNSYLVANIA statute of assignments. 38. 
 
 against preferences, 212. 
 PEESONAL contracts assignable, 130. 
 
 statute of uses, 482. 
 PLEADINGS in suit to enforce trust. (iCii-. 
 POLICIES of insurance assignable, 130. 
 POSSESSION of property assigned, delivery of, 3G0, 673. 
 want of, when evidence of fraud, 261. 
 taking by the assignee, 517. 
 actual and continued change of, 376. 
 by assignor, the rule and exceptions, 371. 
 by assignor when not evidence of fiaud; 370. 
 effect of change of under foreign assignment, 412, 
 how taken, 377. 
 
 how far assignor may be left in, 519. 
 how far assignor may act as agent, 521. 
 how taken when property is not in assignor's hands, 523, 
 of leasehold premises, 524. 
 POSSIBILITIES coupled with an interest assignable, 131. 
 POWEE of partners to assign, 91-113. 
 
 of attorney, not an assignment, 157. 
 
 in an assignment, 178. 
 to sell on credit, when it vitiates an assignment, 296-309, 
 
 implied power, 302. 
 of revocation, void, 315. 
 POWERS to assignee, special, in assignments!, 308. 
 to lease or mortgage, 309. 
 to sell or mortgage, 309. 
 to effect insurance, 309. 
 to pay interest, 309. 
 to appoint agents, 310. 
 to declare or change preferences, 310, 316. 
 to compound with creditors, 310- 
 to give notice to creditors to prove debts, 311, 
 to defend suits. 312. 
 
GENERAL INDEX. 745 
 
 FOWEl^S— continued. 
 
 to assignee to sell at public or private sale, 295. 
 
 to sell for cash or upon credit, 296, 302. 
 to assignors, reservations of, 315-318. 
 to lease or mortgage, void, 316. 
 to change order of preferences, void, 316. 
 to name successor of assignee, void, 317. 
 to order future disposition, void, 317. 
 to order sale of property, when valid, 817. 
 to appoint proceeds, void, 318. 
 of assignee under assignment, 509, 538. 
 of sale, 560, 
 PREFERENCE of creditors, right of, 192, 196, 199, 200, 201, 418. 
 by payment, 192. 
 
 by appropriation of property, 195, 196. 
 by direct transfer, 196. 
 in assignments to trustees, 198. 
 . restrictions in the right to prefer, 202, 215. 
 regarded with disfavor, 207. 
 in special instances, 210, 
 assignments with, 191. 
 statutes against, 165. 
 in what States allowed, 206. 
 
 by assignments not general, when allowed, 211, 212, 213, 
 in partial assignments, 214. 
 
 by partners to creditors of individual partners, 274. 
 by individual partners to creditors of rirm, 276. 
 subjects of, 222. 
 
 where there is other security, 223, 
 modes of giving, 195, 223. 
 absolutely, 223. 
 upon condition, 142, 223. 
 must be given by the assignment itself, 225. 
 by implication, 145, 227. 
 illegal, 146, 227. 
 fraudulent, 227. 
 secret, 228. 
 form of giving, 183. 
 by corporations, restrictions on, 218. 
 PREFERRED creditors, rights of, under assignment, 658. 
 PRESUMPTION of acceptance of assignment by assignee, 356. 
 of assent of creditors to assignment, 331-340, 380-389. 
 of fraud, 474. 
 PRIORITY of payment, who entitled to, 000, 010. 
 
746 GENERAL INDEX. 
 
 PHlORlTY—conlinued. 
 
 of United States, 190, 600. 
 
 of the State, 607. 
 
 of landlord of assignor's premises, 607. 
 
 in other eases, 609. 
 PEOFITS of lands assignable, 129. 
 PROMISSORY notes assignable, 130. 
 PROOF of debts under assignment, 656. 
 
 of fraud in assignment^ 474. 
 PROPERTY assigned, amount of, 148, 168. 
 
 description of, 161. 
 
 delivery of possession of, 360. 
 
 when all the debtor's, must be, 126. 
 
 proportion of, to debts, 127. 
 
 what may be, 128.. 
 
 what passes under general terms, 132. 
 
 taking possession of, by assignee, 517. 
 
 fraudulently transferred passes to assignee, 136. 
 
 after acquired does not pass, 138. 
 PURCHASER of land may assign his interest, 129, note 2. 
 PUTTING in use or ure, 448, 7ioie 3. 
 
 ■QUADRIPARTITE assignments, 161. 
 QUALIFICATIONS of assignees, 118. 
 
 REAL estate of partners, how assigned, 113. 
 
 subject of assignment, 129. 
 
 how conveyed, 150, 173. 
 
 how described in assignment, 164, 165. 
 
 how delivered to assignee, 360, 374. 
 
 does not pass by foreign assignment, 406. Sse Lex Looi. 
 
 conveyance of, by assignee, 571. 
 RE-A.SSIGNMENT to assignor, by assignee, 506. 
 RECITAL of assignment, 162. 
 RECORD of assignment, 337. 
 
 in what States necessary, 337, 345. 
 
 notice in lieu of, 345. 
 REFERENCE to schedule, 168, 179. 
 REGISTRY of assignment, 337. See Recokd. 
 RELATIONSHIP between assignor and assignee, 119. 
 RELEASE, stipulations for, in assignments, 232. 
 in Pennsylvania, 233. 
 in Virginia, 235. 
 in Maryland, 235. 
 
GENERAL INDEX. 747 
 
 RELEASE — continued. 
 
 stipulations for in Massachusetts, 237. 
 
 in Vermont, 238. 
 
 in New Hampshire, 238. 
 
 in Maine, 238. 
 , in Rhode Island, 239. 
 
 in New York, 240, 2«. 
 
 in Ohio, 245. 
 
 in North Carolina, 245. 
 
 in Mississippi, 245. 
 
 in Missouri, 245. , 
 
 in Connecticut, 245. 
 
 in Illinois, 245. 
 
 in Georgia, 245. 
 
 in Indiana, 245. 
 
 in Michigan, 245. 
 
 in Alabama, 236. 
 
 in Texas, 245. 
 
 in Tennessee, 245. 
 general rule as to, 246. 
 objections to, 250, 253. 
 in partial assignments, 253, 256. 
 in assignments to partners, 253. 
 excluding non-releasing creditors, 250. 
 manner of stipulating for, 255. 
 bj creditors, 659. 
 
 time for executing, 660. 
 
 form of, 660. 
 
 delivery of, 661. 
 
 construction of, 662. 
 
 when void, 663. 
 REMOVAL of assignee by the court, 645. See Dismissal. 
 
 proceedings in case of, 639. 
 RENT of premises, payable by assignee, 525, 607. 
 
 claim of landlord for, when preferred, 007. 
 RENTS pass by assignment, 135. 
 RESERVATIONS in assignments for the benefit of the assignor, 356. 
 
 general rule as to, 250, 259. 
 
 qualifications, 184, 261. 
 in mortgages and deeds of trust, 267. 
 with stipulations for releases, 271 . 
 what allowed, 261. 
 
 or exceptions of property, 257, 261, 263. 
 of surplus to assignor, 268. 
 of powers to assignor, 228. 
 
748 GENERAL INDEX. 
 
 RESIGNATION of assignee, proceedings in case of, 642. 
 RESTRICTIONS on the right to prefer, 202, 207, 215. 
 RESULTING trusts for debtor, 256, 259, 270, 327. 
 RETENTION of possession by assignor, fraudulent joe/- se, 361. 
 only evidence of fraud, 364. 
 not even evidence of fraud, 370. 
 REVOCATION, powers of, in assignments, void, 315. 
 
 of assignments, 505. 
 RHODE ISLAND statute of assignmeilts, 647. 
 
 against fraudulent conveyances, 446, note 2. 
 RIGHT to assign property, 17. 
 
 to prefer creditors, 193, 196, 198, 200. 
 
 restrictions on, 202, 215. 
 of corporation to assign, 84. 
 restrictions on, 86. 
 
 to prefer creditors, restrictions on, 218. 
 RIGHTS ad rem and in re, assignable, 130. 
 
 of action for damages, assignable, 131. 
 
 of assignee, 538. 
 
 how the assignee takes, 538. 
 
 SALE of assigned property by assignee, 560. 
 power of, 360. 
 duties in regard to, 561. 
 time of, 291, 562. 
 provision for, in assignment, 291. 
 mode of, 562. 
 
 provision for, in assignment, 295. 
 terms of, 563. 
 
 provision for, in assignment, 296. 
 on credit, 563. 
 of assigned property on credit, provision for, 296, 308. 
 
 prohibition of, 302. 
 notice of, 565. 
 disability of assignee to purchase at, 566. 
 
 how removed, 571. 
 conveyance by assignee, 571. 
 title of purchaser, 572. 
 
 provisions in assignment respecting, 291, 308. 
 SALES distinguished from assignments, 8. 
 SCHEDULE of property, reference to, in assignment, 168, 171, 179. 
 
 qu;ilifies general description, 168. 
 preparation of, 179. 
 "to be annexed," 171. 
 "annexed,". 172. 
 
GENERAL INDEX. 749 
 
 SCHEDULES, 179, 183. 
 form of, 152. 
 
 provision for correcting, 18.'2. 
 SECRET preferences, 227, 228. 
 
 trusts void, 327. 
 SECURED creditors, payment of, 605. 
 
 debts may be provided for by assignment, 142. 
 SET-OFFS, assignee takes subject to, 538, 555. 
 SETTING aside assignment as fraudulent or void, 673. See Bill. 
 SEVERAL instruments, assignments by, 159. 
 SIMPLEST form of assignment, 162. 
 SOUTH CAROLINA statute relating to assignments, 39. 
 SPECIAL assignments, 19, 147. 
 
 provisions, assignments with, 229. 
 clauses in assignments not advisable, 229. 
 powers and directions to assignees, 309, 313. 
 STATE, debts due, priority of, 607. 
 
 STATUTES of various States relating to assignments, 23. 
 of fraudulent conveyances, 17, 443. 
 13 Elizabeth, c. 5th, 443, 446. 
 former statute of New York, 440, note 2. 
 present statute of New York, 447. 
 of different States, 446, note 2. 
 of personal uses, 480. 
 STATUTORY assignments, 4. 
 STIPULATING for release, manner of, 187, 246. 
 
 STIPULATIONS in assignmsnts for release of debtor, 232. See Release. 
 for use of property, 268, 267. 
 for continuance of assignor's busine.ss, 281, 285. 
 for benefit of assignees, 313. 
 limiting assignee's responsibility, 313, 314. 
 STOCK assignable, 129. 
 
 SUIT to enforce trust, by creditors, 684. See Action; Bill. 
 SURETIES may be secured by assignment, 140. 
 official, 141. 
 may be preferred, 222. 
 liability of on assignee's bond, 637. 
 SURPLUS, reservations of, to assignor, 268. 
 
 disposition of, by assignee, 613. 
 SURVIVING partner's right to assign, 114. 
 SURVIVORSHIP among assignees, 639, 640. 
 SYMBOLICAL delivery of property assigned, 374. 
 
75C3 GENERAL INDEX. 
 
 TAKING possession of property assigned, 517. 
 TAXES, priority of payment of, 607., 
 TENNESSEE statute relating to assignments, 39. 
 TEEMS of sale lay assignee, 563. 
 
 provision for, in assignment, 290. 
 TEXAS statute against fraudulent conveyances, 446, note 2. 
 TIME for executing trust, provisions respecting, 285, 289. 
 
 for creditors to become parties, or assent, 289. 
 
 of assignment taking effect, 396. 
 
 of sale by assignee, 561. 
 
 provisions respecting, 291. 
 TITLE of purchaser at assignee's sale, 572. 
 TORTS, rights of action for, when assignable, 133. 
 TRANSFER, clause of, in assignments, 164. 
 TRIPARTITE assignments, 161. 
 TRUST, close of, by assignee, 624. 
 
 of assignment, what, 323. 
 
 when deemed closed by lapse. of time, 625. 
 
 when determined by acts of parties, 625. 
 TRUSTS of assignments, 323. 
 
 express, 325. 
 
 must be declared, 323. 
 
 passive, 326. 
 
 implied or resulting, 324. 
 
 resulting, for debtor, 270, 327. 
 
 for use of assignor, when void, 259, 327, 480, 486. 
 
 declaration of, 173. 
 
 to convert the assigned property into money, 173. 
 
 to apply and distribute, 174. 
 
 to pay expenses, 174. 
 
 to retain a compensation, 174. 
 
 to pay debts, 175. 
 
 to pay surplus to assignor, 178. 
 
 enforcement of, by ci-editors, 664. 
 
 UNITED STATES, priority of, 190, 600. 
 
 " URE," what, 448, note 3. 
 
 USE of property by debtor, stipulation for, 263. 
 
 of assignor, assignment in trust for, void, 256, 259, 327, 480. 
 USURIOUS claims, assignments for payment of, 144. 
 how payable, 591. 
 
 VALID assignments in part, 489. 
 VERMONT statute of general assignments, 39. 
 statute against preferences 204. 
 
 fraudulent conveyances, 446, note 2. 
 
GENERAL INDEX. 751 
 
 VIRGINIA statute against fraudulent conveyances, 446, note 2. 
 VOID assignments, 441. See Fraudulent. 
 
 in part, and valid in part, 489, 494. 
 
 as to certain property, 492. 
 debts, 446, 493. 
 parties, 447, 493. 
 
 assent of creditors to, 380. 
 " VOID" and " VOIDABLE," 441, 507, note 2. 
 " VOLUNTARY," signification of, 4, note 3. 
 VOLUNTARY assignment, what, 3. 
 
 deeds of agency in England, 152. 
 
 WHAT may be assigned, 128, 132. 
 
 passes by an assignment, 132. 
 
 under general terms, 133, 164. 
 
 does not pass, 137. 
 WHO may make an assignment, 78. 
 WIFE'S interests, when they pass, 134, 150. 
 
 property, interests in, assignable, 134. 
 WISCONSIN statute against fraudulent conveyances, 446, note 2, 
 WIVES of assignors, parties to assignments, 150, 234. 
 WRITING, when necessary to an assignment, 154, 156. 
 
KF 15^8 A7 B97 1877 
 
 Autho 
 
 Burrill, Alexander Mansfield. 
 
 Vol. 
 
 1 
 
 ''''"^a treatise on the law and pra'e?te^ 
 of voluntary assign, for the etc. 
 
 Borrower's Name 
 
 \