467

COMER. 11. TABLER et ale

(CIrcuit Oourt, E. D. Tenne88ee, So D. November 29, 1890.)
1.

ASSIGNMENT POR BENEFIT Oli' CREDITOR8-VALIDITY.

"

A deed of assignJDentWbicb is voidable because the accoJDpauying scbedules are defective is good as W the assignor until attacked by creditors, and a second deed froJD him before the first one has been attacked passes no title, even though the assignee has not taken possession of the property. '

2.

BAME--,>I'REFERENCES.

Under the Tennessee declares that "preferences of creditors In general assignments of all a debtor's property shall be illegal and VOid, » an assignment containing preferences is only voidable.

8.

4.

SAME-RIGHTS OF CREDITORS,

The preferred creditors are entitled to their ratable share of the assigned property, in spite of the illegal preference.

BAME--,>POWER .01" ASSIGNEE.

Where an assignee does not accept the trust, a conveyance by him of the property, contrary to the term' of the assignment, passes no title.

In Equity. F. S. Yager and Young &:- Bogle, for complainant. Robt. P. U'oodard, for defendants. KEY, J. The determination of this case depends upon the em'ct to be p;ivento certain deeds: which have heen given in evidence. D. U. Crudup and J. H.Tabler Were the members of a firm styled" D. G. Crudup & Co." and of another firm styled "Tahler,Orudup & Co." They were also the owners of the capital stock of a corporation known as the "Tabler-Crudup Coal & Coke Company." On the 30th of July, 1887, all these concerns executed a deed to W. E. Baskette and T. H.' , Ewing, as trustees, conveying-"All the property we own, ot :everykind, character. and description,' bnth firm and individual prppetty·. excel,t· that exempt !'tum .execution undtlr the exemption and )lomesteild laws of Tennessee,illduding Oljr personalty. stocks, bonds, choses in llction,.reait)', and interest in realty."

The Tabler-Crud,up Companyconv'eyed to said trustees all of its propertyofevl:\ry<;haracter and description. The"Conveylll)l'e is made for t,liefollllwing uses and tru8ts, andnQne other: that is to the said bargaiuO,l's, 1)'.9. CrudUp &, Co., TaUlp.f, CrUdup & CP., and the Tal,ler-Crudup Coal & Coke Compan,v, aI'" largely inqpbtpd. to secure to their creditors an equal di'3lriblllion of their asst'ts. and to enable all the creditors to be pafd thefllH amount, they. the said bargainor", desire to make /lnd do hereby make to said! trllstt't'S 01' the 8urvh'orof Iht'm.or thA one qualifying as such, all-their propeJttyas a geneml a !ligament for the beneUt of their. 'lreditors, to be equallY$ha\'I'd betwoon thern in pl'oportion to the of their ·. The ptopt'rty tp the TablerCruuup Coal &, Coke Company will be applied to the paYIll:.p,nt of of said l'OUlpany, and the i\ssets and property ofD. G. crudup & Co. ariu.TalJler. of. the cretlitol'sof t1lt'se Crudup & Co. wilf ftrstbea,ipliedto the twoftrmB 8I1dtbeintrivilhm!ind..btetlness of J. H. TahleHmd D. G. CJ'udup, and wbere Tablpr-Crudup Coal&, Coke Co.; ·and, if the . prt)per,ty of .the .,sai4: faUs to pay linel satisfy the sa!d prope,rtY,l>f said Crudup&; {;;o. and

FEDERAL REPORTER,

vol. 44.

ler-Crudup Company shall be sold to satisfy the creditors of said Coal & Coke Company."

The deed gives a description of the p.roperty conveyed, and has attached to it lists of said property and of the debts secured; and on the date of the execution of the deed, T. H. Ewing, one of the trustees named, agreed to accept the trust created. On the 22d of October, 1887, J. H. Tabler a.nd D. G. CrudUp executed another deed, which purports to convey to R. P. Woodard a part of the property embraced in the other deed. The new deed assumes "that neither of the assignees has taken charge of the property assigned to them, nor assumed to execute the trusts; and it is the intention of Tabler & Crudup to arrange with their creditors to save expense, and avoid the execution of said assignment." This deed provides that the proceeds of the property shall be, to a extent, diffel'butlyapplied than under the terms of the iirst deed. It is admitted that the benefits of the new deed extended almost exclusively to the mercantile creditors of the bargainors therein. The first deed, admitting that lis schedules of property and lists of debts, and the affidavits thereto, are defective to the extent insisted upon by complainants, is not absolutely void, so as to allow the bargainors therein, or any of them, to disregard its provisions. It is voidable only, at the mo!!t,l1nd,ifnocreditorplaces hiIhself in a position of positive and dirElctantagonism to the terms of assignment, its provisions m'ay be carried out. The debtors, having parted with the title to their pl'operty for the· benefit of their creditors, cannot resume that title at their' pleasure' vvith(')ut the assent of those lor whose benefit thecol1veyance was made, since they are presumed to have accepted the assignment. Thedeath _'of the trustee, or his refusal to accept the trust, does not change or defeat the deed. The trust remains, whether there be a trustee or not; and a court of equity may execute the trust,. or appoint a trustee who can and will. It is clear that the second deed and the deed supplemental thereto were executed without power in the bargainors to execute them, and that both are void to all intents and for all purposes. The deed of assignment, however, is not void, but voidable,. at most. The statute of the state declares "that preferencp.s of creditors in general assignments of all a debtor's property shall be illegal and void;" but this does not necessarily make the assignment invalid. Any mortgage, deed in trust; or other conveyance of a portion of a debtor's property for the benefit of any particular' creditor or creditors, made within three months preceding a. general assignment, and in contemplation thereof, shall be void should a general assignment be made within three months; yet in both cases the conveyanees would be operative against the bargainor unless some creditors, or trustee or assignee for the creditors, institute appropriate proceedings to have them declared void. The question arises, then, in this case, have wea proceeding which authorizes the CQ.urt to declare the general assignment void? The com-. plainant has not put himself in a position of antagonism to the deed. He seeks no relief other than he can have under the deed l or other than' other ereditorsmay have under it. If the assignment be declared void,

COMER II. TABLER.

469

he would have only the relief he will have should. it be sustained. He is an objector, not an antagonist. He has no attachment or other lien, position dissimilar to the other creditors in the assignment. The assignment provides that the assets and property of D. G. Crudup & Co. and Tabler, Crudup & Co., and the individual property of Tabler and Crudup, shall be applied to their individual and firm debts, and to the debts of the coal and coke company which the firms of Tabler and Crudup have indorsed, and thus became liable for; and not until all such debts are satisfied, do any of the proceeds of their property go to the payment of the coal and coke company. It is insisted that complainant can have no relief because he seeks to set aside the deed. It is true that, when one beneficiary interestEid under an assignment, mortgage, or deed of trust attempts to set aside the <lonveyance, he is not entitled to take anything under it, because he has qec1ined to accept its provisions. But, as already staled, complainant has not instituted proceedings to invalidate the deed. If it were to be held that he could not take under the assignment, the same argument would exclude the creditors embraced in the conveyance to Woodard. They do not claim under the deed. of assignment. They do nol accept its provisions, but they claim under the deed to Woodard, which they ipsist supersedes and abrogates, so far, at least, as they are concerned, the deed of assignment. However, under the decision of the supreme (lourt in the case of White v. Cotzhau8en, 129 U. S. 34.5, 9 Sup. Ct. Rep. 309, the creditors provided for in the deed of trust, whose debts are induded in the general assignment, are entitled to their ratable share. in· the distribution of the funds under the assignment. In the decision reto it is said: that the conveyances, bill of "The circuit court proceeded upon the tlale, confessions of jUdgment. and transfers by Alexander White, Jr., were made without adequate consideration, and with- intent to hinder, delay, and defraud the appellee. Upon these grounds it gave hiw a prior right in the distribution of the property. We are not able to assent to this determination of the rights of the parties, for the mother, sisters,andhrc;>ther of White. Jr., were his creditors, and. so far as the record disc!osps, they only sought to obtain a preference over other creditors. But their attempt to obtain such illegal preference ought not to have the effect of depriving them of their interest, under the statute, in the proceeds of the- property in question, or justify a decree giving a prior right to tile appellee. It was not intended by the statute to give priority of right to ·the creditors who were not prefen·ed." _This adjudication was made in a suit which arose under the voluntary assignment act of the state of Illinois, which is, in its provisions generally, similar to the Tennessee statute. The complainant and the creditors in the trust-deed, who are provided for by the deed of assignment, are alike entitled to their ratable share of the proceeds of thepl'opedy included in the assignment. The execution of the deed by Baskette did not change or have any effect upon the title to the property. He had never accepted the trust. On the contrary, he repudiates any acceptance of it in his deed. Hence he had no authority to execute the paper.

470

J'EDERAJ, REPORTER,VOl.

44.

If,hom!et-;hisofficeoHrust had any vitality as to him,it 'such only aB"the 'deed of assigntntmt gave him, and that was to 'exem1te'the trust and effectuate its terms. No authority ,express or implied!(was gi'Ve'n"hifuitontdlify or destroy the instrument that created him. ' To do sowort1a be 'a species bflegalsuicide.' , The Mticlilsion is that the deed of general assignment is not void or avoided; but that it is in force; that under it the creditors of Crudup, Tabler, aDd ,their two firm.s,including those who hold debts upon which they, or either of them,are sureties or indorsers, are entitled to a pro rata distribution of the proceeds of the property sold, after deducting the money paid in the of prior liens and incumbrances upon the property, ineludingtaxes thereon, and a compensation of $350 to Woodard 8sreceiver,-'"dne-half of this compensation to be paid out of may first come to his hands, and the of the funds which may last come to his hands. The other half costs of the case will he ;paid out of the funds. The clerk, as special master, wi,ll hea:rproof, and report what debts are provided for, as indicated herein; to whom they are due, and the respective amounts He will whether there is 'any other property or assets emassignment available, the proceeds of which may be applied to the aloresaid debts. , If so, give a description thereof. He may bring' before him as witriesserfCrudup,Tabler, and any other perSo'llS 'he de'em proper. He may also report as to the amount due complainant,' 'iid the credjts thereon. The receiver, Woodard, will be required 16' maKe 'but two payments in the ditltribution of the proceeds' oflh'e property sold byhim,--onewhenthe anl0unt o(the debts are ascertained, and to whom due, the other, when all the funds have been'
, n "

collected.

CINdINNATI So'tf.tH.' R. Co. et al.11.

",'

. WESTERN

WAy(JO.

CIfATTANOOGA

.

STREE'r-R.w.-'

,

&A.

Co.

fl. SAME.

(etreult Courl"E;D. Tennessee, B. D. December 24, 1890.)
RAILROAD

, .·Wbere aeouoty court d...<J1ares a road to be open as'sooo as certain fences are set anll, cO,nditions with, a,nd the propolled road ,'is. left with mllroad tracks, aod embaokments crossing it for II years theree.fter. and there.is no 'proof' that any of the said 'conditions were e\'er fulfilled, the' cdunty authorities have,no: ,tp;grant ,1,1. cpmpallY pe,'missiOIi to hLy its track along' Suoh' , roadwithouttbe consent of the railroad company, l1oJI,d t.he layiDg of 8uch t.1"aok ""maybeienjbl.neli at 8uit of the railroad company.

.

.

.... '

In' Equity:' , Bill fotinjUnction · .Lewis SMphtrd;·· fdr'complainants., .··Clark .&0 BrOWn; for: defendant.