Grand Rapids herald., 1893-11-02
yisslson. Matter & Cos Mort
cages Are Pnor Lens
TO &c eTts Full CREDIT
The Moti.sa fpr an fatanctioa 90 He
sxraia the Assignee and - APP
posns a EsceiseF Deaied.

nots.l enss u TIE Cold Blast Feather
company against Sclsos. Matter 1 Co.
81 az. shess.a an Application wss made
~ ssf sside esrtaln mortgages and fof
ths appcinfment II q receiver for the
eompsnys business. rhs cass has been
watched uith much intsrezs By the un-
sscuFed creditors add also tbs holders Of
ths nortxzgez Al of the attorneys la
the eass. asmbeFs Of the <eison. Matter
4 90. nrm. and several u the firms cred
ilors xers present when the decision wss
read After Judgs S~vcrens had COM
pleled reading bis decision he eonascisd
TIE parties interesled 10 dispose of the
sf0ck % the best interests possible Of
the uns<rured creditors Following -
the decision IN fnii.
Statement OF the Casa
In the ca.e q the Cold Blast Feather
company Va Nslaon. Matter 4 Co et a.,
! have gwen. as opportunity afforded
quite careful examination Of the pls ad-
lngs and the aeidayifs and the briefs
which counsel have submitted upon the
questions which were reserved. snd have
also reviewed the propositions stated
upon the argument Of the case and i
hssSe endeavored 10 give the case sach
consideration a. tho importance Of the
interests az stake and the deIicacy OF the
questions involved seem 20 require. and
( Wili proceed 70 state the results OF
thar examination and the conclusions az
which have arrived The bill presents
a case withia the jurisdiction OF this
court The complainants are creditors
uho are the heneficiaries OF trust
Upon the facts stated in the bill the as
sEnee's attitude tou ards the mortga-
gees and general creditors is such that
Il could not be depended upon 10 enforce
the alleged rights Of the unsecured
creditors against the mortgages The
cOmpiainants are, therefore, entitled 90
fle their bill. Under the statutes Of
Michigan relating % assignments tor the
benefit of creditors the assignee becomes
a trustee for the latter. The state court
IN chancery is given jurisdiction and
power upon summary application OF the
assignee % give directions IN regard 70
ths execution OF the trust. The assign
msnt II the source OF the appointment
% the assignee. and a. affected by
the statute ia the source OF
his authority also II takes the
legal title BY virtue Of 10 and
has a consequent righ, % possession.
IL does not acquire tho right Of posses-
sion from the court but a. consequence
of the assignment The state court does
not. a. a consequences Of the assignment
acquire possession Of the property aud
IL not charged with its management. ex-
cept that from time 10 time that court
may MAKE orcers about IL upon special
application
Power Co Interfere.
The situation in such case is quite
different from one in which the court
4ctiox by a receiver or other officer
takes the property into its possession
for administration. where the title "a
not IN the coart Indeed. this statute
Itself provides for the appointment OF a
receiver upon ~ occasions, fact clearly
indicating the difference in the status
% assiCuee and receiver and their re-
spectivo relations 10 the court That
the federal court has power in a case
where the requisite citizenship Of the
parties exists. "a interfere with the
management % the trust by the assignee,
N there has been or 10 likely 20 be any
fraud or abuse. has been repeatedly
held BY this court upon the concurrence
of the circuit and district judges. IL
has been 80 held ia the eastern district
of Nichigan by Judge Brown. now Mr.
Justice Brown. in thu circuit court of
the United States, also IN the circuit
court ~ the Ualtesl States IN Minnesota.
from which stats the Michigan statute
in relation - assignments has been
borrowed. and Ia courts of the United
States 10 ioNa and other states. where
simiiar statutes haycexisted. Thsques-
fioa Niii theFefore be no logger treated
IN this court a. an open one The plea
o. the ass ignee In th.s case IS therefore
withou' ueFit
Jvrtsiiction Caqacstionahie.
Ihr asst ixnee Immediately after It's
appoinimfut fled a hili ia the state
court Which the complainants here al
irge vas without any occasion. and one
object - which appears 10 have been %
obtain an order directing the assignee
- take possession 20 the assigned prop-
efts Such ar order Was there made.
Whefher the h,sng q the biil sas an
abuse - The Jurisdiction - the state
court ard shether the order made there
on Nas Inadvertently made are not
questions for this court % decide. but
sra for ths state court alone. and
therefors express 90 opinion Whatever
uren that subject But when the IS
s.Rree Rad ta<ea possession under the
er.irr. that ov'ier had spent its force and
the tasignee's POSSESSION was precisely
whrt u voait hsve been had i taken
ths fossessicn without the order. There
was 40 requirement that the assignee
sfould bring the fuods iato court or do
say ether tniog thar what vas due and
pf1per 81 - done IN the usual order e
things undsr the fstute 80 Tar as is
nIasie - sppear. nothing hs< been done
ty fte state coaet which would oust the
Jurisdiction ~ this court - make such
crsirr aud decree as The nature of the
equities in the ease requires
The Mortgages Are valid
The motion nov made - Tor the sp-
pointment of receiver and foF an 10
junction.
IA snsr~ctson of the hiil di~rlos>. that
is allegations ara formed for the par.
po=e q establishing the irvsiidify
q The morsEaGre ss against the
general ezesftors and for The disfribu-
tion - al the sssets u the company
eqsaiiy smorE - credit0rs That =
tie ot.ecf n she buL The receissrshlp
ard 'nianrs.oa rrsyed are aneiliary a.
the nts,a pCrpoee ~ The snit Feliow-
ieE a. sn compelled 20. the raliugs II
ne sfste sapser,s court opon the cou.
str1cf1on n tee ststste l bold that the
evhierce tails ~ establish that TIE
mortgage we're given and received With
81 eyF,'.tstion hat thev you'd - fnl