Case ID: tenn_19/html/0317-01.html
Source: Caselaw Access Project
Author: {"author": "Reese, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Peacock vs. Tompkins.
    ¿Chancery. Debtor and Creditor — Assignment, what stipulation in will vitiate. If an assigning debtor make his note, at the time of the assignment, to the creditor, not to secure a debt then due, or advance then made; but in consideration of the creditor’s verbal promise to allow him a further credit, to support his family, or carry oti his business, and such note purport to be secured by the assignment amongst the real debts mentioned in it, — the deed will be set aside, at the suit of a judgment creditor of the assgnor, as fraudulent and void in law.
    SAME. Same — Assignment annulled for constructive fraud, how assignee to account. If an assignment for the payment of debts embrace some effects which are liable to execution at law, and some that are not, and it be set aside for constructive fraud, at the suit of a judgment creditor of the assignor, the assignee will account—
    
      To the judgment creditor—
    1. For such effects, as existing in specie when the fi. fa. was issued, would, in the absence of the deed of trust, have been subject to its liep.
    2. For the proceeds of such effects.
    
      To all the creditors parties in the suit—
    3. For all effects in his hands not subject to execution, as choses inaction, &c
    And, having* converted the debtors effects into cash, he will be allowed a credit for so much thereof as he had applied to the satisfaction of his own debt, if himself a creditor; or of any other bona fide debt paid by him as assignor, before the complainant’s lien attached! as also for all reasonable charges and commissions for care, and sale of effects, and collections.
    
      Ames v. Blunt, 5 Paige, 540; Grover v. Waheman, 11 Wendell, 187, cited and approved, See post Ewing v. Cantrell.
    
    William Turner, a hatter of Gallatin, became indebted for-materials in bis business and other merchandise, to J. R. A. Tompkins in about the sum of $323 31 cents; to Patterson and Tompkins in the sum of 100 dollars; to Daniel McAuly in the sum of 146 dollars; to D. & A. McAuly in the sum of 629 dollars 14 cents; to B. & J. H. Peyton in the sum of 447 dollars; and to James Peacock of Nashville, for materials in his business exclusively, in the sum of 1072 dollars and 8 cents. On the 7th July, 1837, in order to secure the four first named debts, he conveyed in trust to Charles Lewis, by deed, his “frame shop as it stood on a lot of James L. Mc-Koin’s in South Gallatin, together with four kettles, one lead and three casts, then in said shop; all his stock of furs; all his finished and unfinished hats, hat trimmings and finishing tools of every description; all his notes due, and book accounts then due, or thereafter to fall due; all his household and kitchen furniture, consisting in part of one press, one bureau,, one set tables, three beds, bedsteads and furniture, two sets Windsor chairs, and every article of furniture of house and kitchen that he possessed; also one horse and carryall and gear; and une writing desk and counter.” The debts in question .amounted to 1198 dollars 45 cents, and die property was estimated to be worth about 1600 dollars. To cover the deficiency, and probably to secure himself a further credit with J. R. A. Tompkins and D. & A. McAuly, Turner executed his two notes of the same date with the deed, one to Tompkins for 300 dollars, to be due on the 25th of December, 1837, — the other to McAulys for 200 dollars, to be due on the 1st of January, 1838. On the next day, in order to secure his debt to Peytons, he executed another deed to It. H. Lewis, conveying to him “one frame shop on a lot of James L. McKoin’s in South Gallatin, together with four kettles, one lead and three casts then in said shop; all his stock of furs; all his finished and unfinished hats, hat trimmings, and all other materials in said shop, and his tools and furniture of every description appertaining to the same; together with all his notes, dues, obligations, and book accounts then due, or thereafter to fall due in the pursuit of his trade; also one horse, carryall and gear,” in trust if there should be sufficient left after discharging the four debts secured by the deed to Charles Lewis, or in the event that deed should be vitiated or set aside, and Turner should not pay Peytons by the first of January, 1838, then the trustee was to sell the property to raise a fund to pay said demand, &c.
    On the 20th of January, 1338, Turner appeared in the circuit court of Davidson and confessed judgment in favor of Peacock for the amount of his demand, 1072 dollars 8 cents. On this judgment a fi.fa. was sued out on the 28th of January, 1838, directed to the sheriff of Sumner which came to his hands on the 29th, and was returned the same day, nulla bona.
    
    Thereupon, on the 3rd of February, 1838, Peacock filed his bill in the Chancery court at Gallatin against the parties to the first mentioned deed of trust, stating that Turner had been allowed to retain the possession of, and consume the property mentioned in the deed, which he charged to be therefore fraud-íilent, and especially as to the note for 300 dollars to Tompkins, and the note for 200 dolíais to McAulys, and praying that it might be so declared, and that the property therein mentioned might be subjected to the satisfaction of his demand, &c.
    The parties to the deed filed a joint answer. Lewis the trustee, disclaimed all knowledge of the fact3 and referred himself to the answer of his co-defendants. The other defendants stated that — “with regard to the books, notes and accounts of Turner, they had been, at once, delivered by Turner to the trustee, and handed over by him to J. R. A. Tompkins, who, by consent of all parties in interest, was to collect them and apply the money to the satisfaction of the debts specified in the deed. With regard to the rest of the property, it was likewise delivered over to the trustee. There was a considerable quantity of unfinished materials on hand for making hats, which would have been sacrificed, unless some one could have been got to attend to the business and finish the hats; and it was therefore agreed that Turner should continue in the shop, as agent for the defendants, until the 1st January, 1838, and finish the hats, on their account. He was likewise permitted, as agent of the defendants, to sell any of the hats in the shop, when he could do it to advantage, but never for his own individual use. He was to report his sales to Tompkins, who was to charge them on the books, and collect the money. He made sales, in this way, to the amount of 178 dollars 19 cents, a bill of which was rendered to Tompkins, and the notes taken for the purchase money placed in his hands, which would soon be collected. The horse and carryall were sold in like manner, reported to Tompkins, and the note delivered to him. Discovering that Turner had not always acted in good faith in reporting his sales, Tompkins took possession of the shop a few weeks after the execution of the deed.
    With regard to the 300 dollar note executed by Turner to Tompkins, Tompkins admitted that Turner owed him, when the deed of trust was made, only 323 dollars 31 cents, and a small account and note, which were forgotten and not included in the deed. He stated that Turner himself ivas the first to propose to secure the payments of his. demand-by executing the deed of trust, which he was the more' solicitous to do, because a considerable part of the debt had been incurred for materials' which he had bought for him' in Philadelphia, and likewise for pay of his journeymen.— Turner stated that as he had just commenced business on his" own footing, he had nothing which he could at the moment convert into money, except at great sacrifice; and that his" notes and accounts for sales would not be due till January* 1838, at which time he believed he would be able to meet alb his debts. Upon which considerations the time of the credit in the deed of trust was extended till that day. And Turner, further representing, that to carry on the business of the shop, to pay journeymen, and purchase necessary articles for himself' and family until the day at which the credit was to expire, a considerable amount would be necessary, therefore pro-' posed to execute the note in question, which was done, and it-was inserted in the deed of trust; and it was intended to secure him, Tompkins, in whatever advances he should make Turrier till the first of January, 1838; and, in point of fact no more than 25 dollars 22 cents was advanced upon it, because Turner’s employment in the shop was brought to an end' very soon after the date of the deed.
    The McAulys, stated that when Turner was about to make the deed, he told them that he must have something to live upon for himself and family until the 1st of January, 1838,-at which time the property was to be sold for the payment of the debts specified in the deed, unless otherwise discharged;’ that it would take perhaps 200 dollars or more for the support' of his family, and that he would execute his note to them for that amount, to become due on the 1st of January, 1838, and that this note should likewise be secured in the deed; that it' was done, and it was distinctly understood that Turner was to have the priviledge of extending his account with them in their store to that amount; that they were reluctant to make this arrangement, but Turner told them if they refused, he would not include their debt in the deed, but would make it to those-who would give him the credit; that, however, in consequence of Turner’s soon after leaving, he had only taken up, on account of that note with them, 25 dollars 49 cents, and they' bad never pretended to claim more of that note than that ¡amount. The defendant Tompkins denied that he had any knowledge, at the time, of the execution of the note to Mc-Aulys, and they make the same denial as to the execution of the note to him; and, therefore, they say whatever fraud Turner may have contemplated, there was no concert between the defendants upon the subject, and they denied intentional fraud in the most explicit terms.
    Turner, in his answer, said that the 300 and 200 dollar notes were made without consideration; that there was, nothing paid him for them, nor agreed to be paid him, either by taking of goods, or receiving further advances afterwards; that •it was agreed at the time that he was not to pay them, and that the overplus in their hands after satisfying the other debts was to be paid to him; that the deed was made to coyer the whole of his property by his executing those notes, the real debts being estimated at about 1100 dollars and the property at 1600; that while carrying on the business after the deed, he did apply some of the property mentioned in it to his own use, to wit: a bed, bedstead and furniture, one set of chairs, two looking glasses, some queen’s ware, &c.
    On the 27th of March, 1838, the Peytons filed their cross-bill in the cause against all the parties to the original bill, impeaching the deed of trust to Charles Lewis for the same reasons that Peacock had urged against it; and praying that it might be set aside, and his own set up and satisfied by a salé "of the property, &c. This bill was answered; and the causes were brought to hearing on the 10th of October, 1838, before his Honor Chancellor Buamlitt, on the pleadings and exhibits; and being of opinion that the notes of 300 and 200 dollars were colorable; that the first deed of trust whs therefore void; he so declared, and decreed that Peacock and Pey-tons should have satisfaction of their demands, Peacock first, find Peytons afterwards, the deed of trust made to secure their debt not having been so proved and registered as to give it priority over Peacock’s judgment; and he directed an account in which, J. R. A Tompkins was to be charged with the amount of Turner’s available effects, or which might, by reasonable diligence, have been made available; and that he should have reasonable allowances for bis attention to the business; lha# Tompkins and McAulys should pay their own costs, the residue of the costs to be paid out of the fund, and the balance' divided between the creditors secured in the first deed pro rata. They appealed in error.
    Guild, for the complainant
    said, 1. The defendants procuring Tuner to execute the two notes, one for 200 dollars, and the other for 300 dollars, without consideration, payable to themselves, and placing said notes in the deed, the payment of which to be secured by the property conveyed, was fraudulent as against his other creditors; and the deed being void in part is void in ioto. 14 John. 465; 20 John. 449; Mackie, vs. Cairns, 5 Cow. 547.
    The pretext set up by defendants in their answer, that they did not intend to enforce the collection of the notes, if Turner did not extend his account in their respective stores to the amount of these notes, and then only to the extent of his dealing with him, after the execution of the deed, cannot make the deed fair and bona fide. Turner was then indebted to insolvency. The notes were made to cover the whole of his property by this deed. The debts of defendant against him were not sufficient to do this, and keep off the rest of his creditors, and therefore he is made to acknowledge on the deed an indebtedness to the extent of $¡500 more than his actual indebtedness, and his property conveyed to pay it. And the explanation set up in the answers, amounts to a verbal arrangement between defendants and Turner, by which defendants keep off the rest of the creditors of Turner from resorting to the surplus of his property conveyed, and permits him to use and consume that property. This is fraudulent, one of the very strongest badges of fraud, being the creation and existence of secret trusts between the vendor and vendee. Twyne’s case.
    
    The property of a debtor who fails belongs, in moral justice, to his creditors. Per Savage, Chief Justice, in Mackie' vs. Cairns, 4 Cow- 547. An insolvent debtor may pay some creditors in preference to others, and may secure his preferred creditors by assignment in trust for such creditors; but he can make no assignment of any part' of his property for himself; and if the security contain any such provision, it is void, not only for the portion reserved, but for the whole, not only in equity but at law.
    If the provision for the support of Turner’s family had been placed in the deed, it would have rendered the whole deed void. Is it not a much stronger case of fraud, if the defendant accompanies the deed covering his whole property, with a secret agreement, that he should use and consume to the extent of $ 500 of his property? Would not such a deed delay and hinder his creditors in the collection of their debts, within the meaning of the statute of 1801, c .26, & 2; and the decisions on that subject. 3 Yer. 503; 2 Wend. 596.
    If a judgment is taken for a larger amount than is actually •due, for the purpose of defeating another creditor, the plaintiff is liable to the penalty given by the statutes. Wilder vs. Fondey, 4 Wend. 100.
    Fraud will be inferred, if a debtor in failing circumstances embrace more property in the assignment than sufficient to pay the debt. Beck vs. Burdett, 1 Paige, 309. The distinction between the jurisdiction of fraud at law, and in equity is, that in the former court it must be proved and is not to be presumed, whereas in the latter it may be presumed. Gallatian vs. Cunningham, 8 Cow. 361.
    The admission of facts in an answer, from which fraud may be inferred, is sufficient to set aside the deed, although the defendant shall, in his answer, deny any intent to defraud. Grover vs. Wakeman, 11 Wend. 187.
    2. The possession of the property conveyed by Turner, his use and consumption of part, renders the deed fraudulent and void.
    A mortgage of personal property, as well as the absolute conveyance of such property, is prima facie fraudulent and void, as against creditors and bona fide purchasers, unless accompanied by an immediate delivery, and followed by an actual and continued change of possession. But a continuance of possession by a vendor or mortgagor may he explained; but his accommodation will not present a sufficient explanation. Gardner vs. Adams, 12 Wend. 297.
    
      The record shows, that Turner was to continue in the possession and consumption of this property, as he did, which of itself renders the deed void.
    Creditors cannot be permitted to secure their honest debts, on their debtors property, and at the same time to cover his. remaining all from every other creditor, with an intent to let the debtor use and exhaust his means of payment, reserving the object secretly to bo applied to the mortgagee’s debt. Hence it is that the courts have so strongly set against those sweeping deeds. Darwin vs. Handley, 3 Yer. 503.
    3. The complainant had a right to come into chancery for relief, so soon as he had' obtained his lien, by taking out his execution. He can resort to a court of equity to subject the equity of a debtor, to the satisfaction of his debt. Case of real estate. Shirley vs. Watts, 3 Atk. 200.
    When property is subject to an execution, and a fraudulent obstruction is interposed to prevent the sale, a creditor may file his bill to remove the obstruction so soon as he has obtained a specific lien upon property, by the issuing his execution. It is not necessary that it should be returned. Beck vs. Burdelt, 1 Paige,, 305.
    If the creditor does not seek to remove a fraudulent obstruction, but to reach an outstanding equity, the execution should be returned'. I Paige, 305.
    Complainant in. this case brings himself within either of those distinctions, as his execution was issued and returned by the sheriff, nulla bona.
    
    The power of the circuit court to issue the execution previous to adjournment of the term, is a power inherent in the-court, and is conformable-to practice in this state.
    If the execution was irregularly issued, it might be a ground for the defendant in the execution to quash it by motion. It cannot, however, be disputed by third persons, and in a different court.
    4. Judgment obtained against a non-resident on a bond is-prima facie evidence that the consideration is paid, it is not conclusive, but enough to throw the burden of proof on those-who dispute it. 8 Yer. 44.
    §,. There is no error in the decree below, declaring the; «leed of the 7th July fraudulent in fact, and decreeing that defendant, J. R. A Tompkins, shall account for the property, and its proceeds in his hands, and pay it over to the judgment creditor, James Peacock. A deed fraudulent in fact is absolutely void, and is not permitted to stand as a security for any purpose of reimbursement or indemnity; but it is otherwise with a deed obtained under suspicious or unequita-ble circumstances, or which is only constructively iraudu? lent. Boyd vs. Dunlap, Johns, c. 487; 8 Ves. 2S3; Sands vs. Codwise, 4 Johns. 536, 598, 99.
    White, for the defendants,
    said, this case stands alone upon the pleadings in the cause, no proof having been taken, upon either side. Tompkins, McAuley and the Pattersons, are not to be prejudiced by the answer of their co-defendant, Turner, because it is a rule in equity that the answer of on© co-defendant is not evidence against another. Even the de-? position of a joint defendant cannot be taken without an express order from the master.
    To enable the complainant to come into this court, he must first show that he has exhausted his legal remedies. That an execution has been issued upon his judgment at law,, which has been returned no property found. Angellvs. Draper., 1 Ver. 398-9; Shirley vs. Walls, 3 Atk. 200; 2 Johns. Ch. 296-7, Hendrick vs. Robinson fy Son; 3 Yer. 81-2, Cloud vs. Hamilton 8? Sillier.
    
    These facts are stated by complainant in his bill, but are. denied in the answer, and the point relied upon as a defence. The execution which is shown in the record from the circuit, court of Davidson, issued during th.e sitting of the same court in which the judgment was rendered, and was forthwith returned during the same term. This was not warranted by the law, or the rules of the court, and the execution was iri regular and void.
    2. Complainant’s bill cannot be sustained upon another ground. Even if the deed of trust was fraudulent, which it is not, it cannot be attacked by a judgment which is confessed without proof that it is a just debt. Roberts on Frau. Con. 489-90. Turner’s indebtedness to complainant is denied in. the answer, and complainant is called upon for proof..
    
      
      3. Of the fraud charged in the bill, there is an express and unequivocal denial in the answer. The answer, which is responsive to the bill, must be taken as true; and it shows clearly that no fraud in point of fact, no actual or intentional fraud was committed. Is it then fraudulent by construction and in point of law?
    Did the arrangement between Turner and Tompkins and the McAulys render the whole deed fraudulent and void? This is wholly different from the cases in 3 Yer. 503; 4 Yer. 547; 8 Yer. 140, 419. They merely show that you cannot include perishable property in the deed, which must necessarily be consumed in the use, and let the grantor remain in possession.
    This arrangement could not possibly make the whole deed fraudulent, because the effect of it would not be to enable the debtor to use and consume the property as his own. It would give him no control over that. It would merely secure .an honest debt, which it was agreed might be created. It .could not delay creditors, because the introduction of these notes in the trust did not extend the time when the property was to be sold.
    As a decisive test in regard to the question of fraud, suppose McAuly had advanced the whole $200 in goods, and Tompkins the $300 in paying journeymen, and in furnishing the materials for sale, could there then have been any possible ground for the charge of fraud? Certainly not. The only .contest then that could have taken place with other creditors, would have been in regard to the validity of these last debts, .and whether the payment of these two notes should not be postponed if there was a deficiency to pay other creditors. Can a failure in the consideration of these notes vitiate the instrument, because McAuly advanced in goods but twenty-five dollars, instead of two hundred dollars, and it became necessary for Tompkins to make only small advances, which were otherwise principally paid.
    If the deed was originally fair and bona fide, no matter ex post facto could make it fraudulent and void.
    The authorities show that a deed may be made to secure future advances as well as existing claims; and that a sum may be reserved in the deed for the maintenance of the grantor, and that it will not invalidate the instrument. 15 John. 573, 582-9, Murray vs. Riggs; 2 John. Ch. 305, 30S, 309, Hendricks vs. Robinson: 3 Cranch, 73, 89; 2 John. Chan. 565, 680; 20 John. 557; 2 Ver. 510-5; 5 Term Rep. 420.
    It is said, however, that this fact ought to appear upon the face of the deed; the answer is, there is no law which requires the consideration of the notes to be stated in the deed. And again, it is not necessary to the validity of the deed that it should truly state the debt intended to be secured; but if the real transaction is somewhat variant from that which is described in the deed it shall still stand as security, for the real equitable claims of those claiming under it. Shirras %• others vs. Craig fy Mitchell, 7 Cranch, 36, 50-1.
    It is a principle of a court of equity, that when a man asks for equity he must be willing to do it. And when the complainant asks to be let in upon the trust fund, he must first allow the true amount of the debt secured by the prior lien. Further than this defendants do not now, nor have they ever claimed the property.
    To make a sale void against creditors, the vendee rnusf participate therein. 9 Yer. 325. The same principle will equally apply to the grantee or bargainee, under a deed of trust. The defendants in their answer say, that the arrangement in regard to the $300 note made between Turner and Tompkins, was not, known to the McAulys, nor was the arrangement between Turner and the McAulys in regard to the $200 note known to Tompkins, and whether Turner had any intention of committing a fraud upon the creditors, they are unable to say. If he had any such intention they did not know it, it was not communicated to them.
    Where a deed is sought to be set aside, as voluntary and fraudulent against creditors, and there is not sufficient evidence of fraud to induce the court to avoid it, but there are suspicious circumstances as to the adequacy of the consideration and fairness of the transaction, the court will not set aside the conveyance altogether, but will permit it to stand as security for the sum actually paid. 1 John. Chan. 473, 482, Boyd Suydam vs. Dunlap <Sf others.
    
      January 4.
    In the case of Grover vs. Wakeman, 1Í Wend. 190, the decree of the chancellor, which was affirmed, allowed the creditors the amount of the fund, which, before the. filing of complainant’s bill, was in their hands, and this decree of the chancellor was affirmed. In the case before the court the whole fund was in the hands of the creditors before filing of complainants bill. See 5 Paige, 13, Jinxes vs. Blunt, shstaining the same principle. Upon this ground likewise, the decree of the chancellor ought to be reversed, and the defendants allowed to participate in the fund.
   Reese, J.

delivered the opinion of the court.

The main question arising upon the bill and answers, is, whether the deed of trust, by virtue of which Tompkins and dfhers claim to be entitled to the property and effects assigned to them, for satisfaction of their debts, be fraudulent in fact, or by operation of law as against the complainant, a creditor of the assigning debtor, Turner?

In the deed of trust, there is specified a bill single of the amount of $300, as due to Tompkins, and another of $200 as due to McAuly, which, it is admitted in the answers, were executed at the time of making the. assignment, not to secure any debt then due, or any advances then made, but upon a verbal agreement and understanding between the parties, that credit should be given to the debtor, and advances made for the joint object of enabling him to support his family, and to manufacture the materials assigned for the benefit of the assignor and assignees. Was this fraudulent in fact or by operation of law, as being calculated to embarrass and postpone other creditors in the collection of their debts?

It is said, in argument, on behalf of the assignees, and authorities are cited to prove, that it is not a circumstance vitiating a deed of assignment, if it stipulate for future advances. ,Without deeming it necessary to assent to, or to repudiate this proposition, it is sufficient to remark that such is not the stipulation in the deed, upon this record. It announces to other creditors, an existing debt of $500, which did not in fact exist, and for which there was no consideration, other than the secret agreement between the parties, which is stated in the answers. If this may be done, and the deed remain a valid security for the debt really due, is it not obvious that it would furnish to fraudulent and embarrassed debtors, and their friendly assignees, a mode of protecting property against the executions of other creditors, as simple and easy as it would be safe? A small amount of actual indebtedness, to serve as a nucleus, might, in this manner, be enlarged to such magnitude as to cover considerable property, and so as to alarm and repel other creditors; and, depriving them of the legal remedies, constrain them to seek discovery and relief, and investigate the question of indebtedness and its extent, in a court of chancery. Perceiving from the pleadings no ground upon which to charge the parties to this deed of trust, with intentional fraud, or fraud in fact, we entertain no doubt that, for the reasons stated, the deed is fraudulent by operation of law, and must be set aside as void, and as constituting no valid security for the debt mentioned in it.

As resulting from this opinion, it is clear that, as against the assignees in the deed mentioned, the complainant in the original bill has a right to claim and receive such effects, or the proceeds of such effects, as existing in specie at the time of the issuance of complainant’s scire facias, would, in the absence of the deed of trust, have been subjected to the operation of its lien: after deducting all reasonable charges and commissions for taking care of said effects, or for the sale of them and the collection of the proceeds.

2. By filing his bill in the present case, the complainant has obtained an equitable lien, which enables him to claim an account of the funds of his debtor in the hands of defendant, Tompkins, beyond the amount of the proceeds of the effects above referred to, as subjected to the lien of the execution.

Butin taking this account, we are of opinion that the funds in the hands of Tompkins, at the time of filing this bill, other than those subjected to the lien of the execution mentioned, may be retained by Tompkins to the extent of his bona fide debts. This is sanctioned, we think, by the principle determined in the case of Ames v. Blunt, 5 Paige, and the case of Grover v. Wakeman, 11 Wendell, 187. These were cases, indeed, where the funds were in the hands of assignees who were not creditors; but we apprehend the principle will apply to the present case.

In the first named case, the Chancellor, upon this point, says-: “I apprehend that the liability of the assignees, for the proceeds of the assigned property, which have been distributed to the bona fide creditors under the assignment, must depend upon the question whether the legal or equitable rights of the complainants have been impaired or affected by such distribution. In other words, whether they have in fact been defrauded thereby. The principle, then, upon which the decision of this court in Wakeman v. Grover, and of the Vice .Chancellor in the present case is sustainable, is, that the proceeds of the assigned property had been distributed, according to the directions of the assignors, in payment oí bona fide creditors, to whom such proceeds might have been lawfully distributed by the assignors themselves at any time before the complainant had obtained any legal or equitable lien thereon; and, therefore, that the complainants have not been defrauded or injured by such distribution. But, if the assigned property, or the proceeds thereof, had remained in the hands of the assignees, undistributed, at the time of filing the bill, which would have given to the complainants a lien thereon as the property of their debtor, the assignment being voidable by them at that time, it would be a fraud upon their rights to distribute the proceeds afterwards.”

If, therefore, before the filing of the bill, Tompkins had received his bona fide debt, it was, as if paid to him by the assignor, and would not be in fraud of the legal or equitable lien of complainants; and if, as assignee, he paid over in satisfaction of bona fide debts to the other parties, money of the debtor in his hands, before complainant’s legal or equitable lien attached, the payment will be good. But if money of the .debtor over the amount of his bona fide debt, were in his hands at the filing of the bill, he must account for it in this .case.

But as to the money arising from effects and sources upon which the complainant’s fieri facias created no lien, and which cannot be retained upon the principle last above stated, all the parties, creditors, before the court, in the present bill, will be entitled pro rata. As to the accounts and cho'ses in action which remain uncollected, the same principle will bé applied.

The question of priority as between the complainant in thé original bill, and the complainants in the bill in the nature of á cross-bill, will be reserved till the coming in of the report.