Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1871-07-28

Adams and II. A. Burt, of Swanton on the par
of the petitioner, and Hons L. P. Poland H.
Royce and r. C. Benton, Of St. Adams for tn
defence.
At the conclusion Of the hearing, which oeeu
MED the attention Of the court for some days
His Honor deferred the decision until the 1871
inst when he rendered the following opinion;
OPINION.
sbrpman, This is summary petition Il
equity brought by the assignee 10 prevent ID
contamination of an alleged fraudulent agreemen
entered into by the bankrupt, Alsnson NJ. Clari
and Oscar A. Burton, his bro1her-ln-leW, Wn'
claims to hsve a very large debt against tn
bankrupt The alleged corrupt agreement =
far as it is in writing was entered into On the loti
Of February, 1870, the day before the petition
10 put Clark into bankruptcy WAS hlet.
From 1860 down to the latter part of 1870
Clark and Burton had been exceedingly hostile
and had been engaged IN bitter snd protrscte-
litigation in the State Courts Of Vermont.
In 1850 CLARK brought an action Of psi
AGAINST Burton in the Franklin County Court
demanding seven;y-fye thousand dollars
To this demand Burton filed heavy claim II
offset. and under a statute of Vermont which a.
lows a defendant 70 recover in such cases When
he proves 3 balance in his favor, Burton Al INC
April term Of thSt court in lsuo recovered
Judgment Of about forty-six thousand dollars
CLARK had during the whole litigation strenuous
II insisted that Durtou's alleged claims against
him we're utterly false and fraudulent lie hled
exceptions to various rulings on the tria!, car
RED the case % the Supreme Court and sought
10 have the judgment reversed and a new tria
ordered. The case was, for reasons not necessary
10 state here, never argued IN the supreme court
Il was still pending therein at the January
term. 1870, when C.srk's counsel not being
ready. tiled afilayits and moved that II be con
tinued to the next term OF that COURT where
upon Burton CONSENTED TO 3 reversal Of the Judg-
mept. and the same was reversed and ne"
trial ordered.
10 August, 1867, while the above suit was
ueadinc. Burton brought an action Of book &C
count Ia form Of remedy peculiar TO Vermont
and one other State) snd attached Clsrk's prop
erty to the amount Of one hundred thousand
dollars more or less. This suit and attachment
is now pending in the State Court.
Ia an opinion rendered upon a former hearing
bankrupt Register. Vol ", ?. u OF this con
troversy, history Of this and other liigations
between Clark aud Burton is given, aid need
not be repeated here.
The following is the srecel fraudulent agree
ment entered into between Clark and Burton IN
February, 1870;
This agreement made this ls,h day Of teoru-
arv. 1870. between Oscar A Burton, Of Bur
lington, in the county Of Chittenden and Manson
NJ. CLARK, OF ST. Al5ans, in the county OF Frank
lin, witnesseth:
|. The suit nov pending in the Franklin
County Court in favor Of sid Clark against said
Burton is 10 be non-suit without costs at the
next term Of said court.
2 The suit in chancery nov pending in Chit
teuden county in favor Of said Burton against
said Clark and Bradley Barlow is hereby diseon-
tnued without costs.
g. The suit in chsnceTy BOW pending IN FRANK
lin county in favor Of said Clark against said
Burton is hereby discontinued without costs
T. In the action OF book account now pending
in Franklin County Court in favor of said Bur
ton against said Clark wherein Timothy 2. Red
field, Homer " Heston and Silas ?. Carpenter
are auditors, the said parties may ile all ciAims
included in their specifications in the suit IN
favor Of said Clark above named and which IS
hereby agreed to be entered non-suit
And the taid Clark may also file in said &C
ton his five promissory notes, es n dated Febru
ary lst, 1860, and no obligation shsll be made
by either party to the determination on suy Of
said claims by said auditors
And it is further agreei that the statute Of
limitations shall not be bar or defense to said
claims. or any Of them, on either side, but that
the auditors in said csse shall hear and deter
mine said claims upon their merits, under the
proofs to be submitted to them.
(siguei) o. BrrToy.
Upon the former hearing before this court,
Burton was perpetuslly enjoned from using this
agreement in any manner, for reasons then fully
given. The object Of that injunction was 10
prevent Clark and Burton from controlling the
litigation in the State court, in their joint inter
est or in the exclusive interest Of the latter, and
to the detriment Of the other creditors Of Clark
1t was insisted by the assignee that Burton had
no right. by law, to transfer the claim which be
had set up against Clark, in his pies of offset in
the sction Of assun,pst, brought by ClSrk against
him, to the action Of book account, and thus
shelter it under his attachment in the latter
suit. thereby gaining preference over other
creditors, as provided for in their agreement.
But while this court, as the case then stood
before it, arrested or intended to arrest the use
of this agreement it left the question Of law as It
stood before any agreement was entered into, TO
the ueleruluAtluu VI iuG 9taiN tAAnunhls
If. under the laws Of Vermont. Burton had
the right to transfer from his plea Of offs { in
the pending assumpsit suit, the items there set
up, to his pending book action, the State court
would 50 decide, and if the decision was not sat
isfsctory to the assignee, the latter could carry
the case to the Supreme Court Of the United
States if Burton had no such right, it was
presumed that the State court would so
decide
But during the whole of the proceedings be-
fore this court, it was assumed, upon the evil
dence, that the action of assumpsit was still
pending in the State court. 1t now turns out
that Burton hsd caused this agreement to be
filed in the State court as early as the 2l Of
April, 1870, and, in pursuance thereof, the clerk
of that court dropped the case, under standing
order of the court, from the docket. After
wards, and after this court had issued its injunc-
ton against the use Of the agreement i'll ques-
zion, the assignee went into the State court and
moved TO have the case reinstate1 on the docket,
which Burton successfully resisted. The result
is that that action Of assumpsit is out of court,
and the question whether, under the law of YER
mont, Burton has the right to transfer his claim
from pending assumpsit to the book action no
longer remains, 1t hss been swept out Of ex-
istence by the operation of this unlawful agree
ment, which this court has already decided was
entered into by Clark and Burton with the
knowledge Of both, that the former WAS on the
eve Of bankruptcy. Thus Clark and Burton, by
fraudulent agreement between themselves,
have disposed Of this question, Whether Bur-
ton can now set up claims in a suit, in which he
has attached nearly all the property CT this
bankrupt, which he has once attempted 10 en-
force under plea of set-of when he had no at
tachment, and thus secure what was before an
unsecured debt, depends not upon the law and
practice of Vermont courts, but upon the bank
rupt law as administered by this court To
leave Burton now to pursue his book action, and
cover all his alleged claims against Clark by his
attachment bill in that action, is to secure him
and Clark the enjoyment Of the fruit of their
fraudulent agreement.
Upon the former hearing before this court,
there was no very eogent evidence that the re-
versal Of the Judgment of 5000 in Burton's
favor, was the result Of collision between Clark
and him. 1t is true that the circumstances were
peculiar and suspicious but the fact of collision
was not satisfactorily proved The proof ad-
duced by the assignee at this trial on
this point is ample That before the
reversal of the judgment, Clark and
Burton had an understanding between them
that this judgment should be reversed, and the
suit discontinued, for the very purpose OF allow
ing Burton TO transfer his claim to the book
action, aud thus secure what was before an IN
secured debt, or pretended debt, no unparalleled
mind, on reading the evidence now before this
court, can have doubt. Clark, in order to
protect this arrangement, which was evidently
part of a comprehensive scheme to cheat his
creditors, in November 1868, retained evidently
with Burton's knowledge, two of Burton's coun-
eel in all bis (Clark's) matters, except the Bur-
ton cases. | make no imputstion upon the
counsel thus retained, but the fact Of their being
retained by Clark, and still remaining counsel
for Burton, in the view Of the former attitude Of
Clark and Burton, and in the light Of the facts
developed in this case. was, to say the least,