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May Term, to an issue of fact, the affirmative of which the plaintiffs 1860.

MCFARLAND

V.

were bound to prove.

Upon the trial, the plaintiffs, in support of the averment BIRDSALL. that defendants had sold and conveyed their property with a fraudulent intent, &c., gave in evidence a deed of trust executed by defendants to said Miller. By this deed, they sold, assigned, and conveyed to Miller the entire stock of goods held and owned by them as partners, &c.; also all the notes, books, and book accounts appertaining to their store; and also certain real estate in Fayette county (describing it), the separate property of Birdsall, one of the partners; to have and to hold to said Miller, in trust, to be disposed of as he may deem most expedient, to pay and satisfy, as far as it may, the following notes due and owing by them: Here the deed sets forth and severally describes various notes, amounting, in the aggregate, to 4,764 dollars, and then proceeds: These notes, having been given for borrowed money, are hereby made preference claims, and the assignee is required to pay them, pro rata, and if the property so assigned be sufficient to pay them, and leaves a surplus, then such surplus is to be applied in payment of the following notes, which the deed also sets forth and severally describes, and which amount, in the whole, to 4,306 dollars. Appended to the deed, there is a schedule of the notes and accounts assigned to the trustee, amounting to 8,136 dollars. The deed stipulates "that any surplus remaining after the payment of the last-mentioned class of notes, is to be returned to the assignors;" and also contains this provision: "It is understood that, in case any creditor or creditors above named decline taking under this assignment, and wait the closing of the same for any balance that may be coming after the fund is exhausted, such creditor or creditors shall be excluded entirely from the benefits thereof, and all to be then applied to the other creditors abiding the assignment," &c.

The appellants contend that the stipulations just recited render the trust deed fraudulent in law, and this position, it is said, involves the main inquiry in the case.

BURRILL, in his treatise on Assignments, says: "A re

May Term. 1860.

MCFARLAND

V.

servation 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 releasing the debtor, will avoid the deed." Bur. on Assign., BIRDSALL. 181. This rule, so far as it relates to the release of the debtor, has been recognized by this Court. Henderson v. Bliss, 8 Ind. R. 101.

In this case, however, there is no condition requiring a release. The creditor, it is true, is excluded from the benefit of the fund unless he abides the assignment, and waits the closing of it, for any balance that may be due him after the fund is exhausted; and the fund, in case he fails to recognize the assignment, is to be all applied to the other creditors. This condition, it seems to us, ought not to be allowed to render the deed fraudulent per se. It does not coërce the creditor into a relinquishment of his demand, nor does it reserve to the debtor the share to which the creditor would have been entitled had he become a party to the assignment.

Thus, it has been decided that a clause in an assignment authorizing the payment to the assignor of the surplus that might remain after the satisfaction 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. Conkling v. Carson, 11 Ill. R. 503.-Livingston v. Bell, 3 Watts, 198. -The Mechanics' Bank v. Gorman, 8 W. and S. 304.Shipwith v. Cunningham, 8 Leigh, 271.-Phippen v. Durham, 8 Grattan, 457.-Halsey v. Whitney, 8 Mason, 206.Brown v. Lyon, 17 Ala. R. 659.-Dana v. The Bank, 5 W. and S. 223.-Bergin v. Bergin, 1 Ired. 453.-Beck v. Burdick, 1 Paige, 305.

Upon the questions under discussion, the authorities are not uniform; but the weight of them evidently sustains the position that, in the absence of the requirement of a release from the creditor, the mere hypothetical reservation of the surplus to the debtor, will not vitiate the assignment. Indeed, there are decisions to the effect that such a VOL. XIV.-9

May Term, reservation is in no case fraudulent per se, but only a cir1860. cumstance from which a jury may infer the intention of MCFARLAND the parties. Estwick v. Cailand, 5 T. R. 420.-Bergin v. BIRDSALL. Bergin, supra.

V.

The evidence shows that some three or four of the defendants' creditors, whose claims in the whole amount to 150 dollars, are not named in the deed; and this, it is said, renders the assignment void; but these creditors are not complaining, and, moreover, it was sufficiently proved that their claims were omitted through mistake.

We are of opinion that the trust deed was not fraudulent in law; and whether it was so in fact, was a question for the Court sitting as a jury.

Benjamin P. Miller, the assignee, being on the stand as a witness, the defendants, on his cross-examination, propounded to him this question: "State whether, so far as you have any knowledge, information, or belief, the foregoing assignment was bona fide or fraudulent; and if fraudulent, what facts are within your knowledge to show it?"

Plaintiffs objected to the interrogatory thus propounded, on the ground that an answer to it would tend to contradict the deed; but their objection was overruled, and they excepted.

This exception is not well taken. As we have seen, the deed was legal upon its face, and evidence tending to show that, in point of fact, it was an honest transaction, instead of contradicting it, would be consistent with its legal effect. Similar objections were made to like questions propounded to other witnesses, which were correctly overruled.

All the evidence given in the cause is in the record. We have examined it carefully, and, in our opinion, it furnishes no sufficient proof of the fraudulent intent charged in the affidavit.

Per Curiam.-The judgment is affirmed with costs.
B. F. Claypool, for the appellants.

S. W. Parker and J. C. McIntosh, for the appellees.

CONWELL, PRESIDENT OF THE BANK OF CONNERSVILLE, V.

HILL.

The issuing of a note by a bank organized under the general banking law of
1852, and the receiving of it by the holder as money, is, in effect, a contract
between the holder and the bank that the latter will pay it on demand; and
upon the refusal of the bank to do so, it may be sued by the holder.
Section 8 of that act confers no power upon the auditor-the trust funds hav-
ing been exhausted-to sue the bank for a balance due the note-holder.
The measures to be adopted by the auditor to prevent loss to note-holders, re-
late solely to the management of the stocks transferred to him by the bank.
The note-holder may sue the bank without in the first instance filing certifi-
cates of protest with the auditor-the stocks in the hands of the latter being
merely collateral security.

There is nothing in the act requiring the auditor to delay the payment of such
protested notes until all the notes issued by the bank have been deposited in
his office.

In a suit against the bank, upon a failure to pay on demand, the notes, or a copy of them, should be filed with the complaint; and the fact that they are deposited in the auditor's office, does not excuse a failure to file them or a copy.

It seems, that the filing of one note, or a copy of it, of each denomination, with an averment that there were other notes, enumerating them, of like denomination, would be sufficient.

May Term, 1860.

CONWELL

V.

HILL.

APPEAL from the Fayette Circuit Court. DAVISON, J.—The appellee, who was the plaintiff, brought three several actions in said Court against Conwell, as president of the Bank of Connersville. These actions were, at the March term, 1856, of that Court, consolidated, and, as one suit, proceeded to trial and final judgment.

The complaints allege substantially these facts: The Bank of Connersville was organized and went into operation under and by virtue of an act entitled "an act to authorize the business of general banking," approved May 28, 1852; and the plaintiff, being the holder and owner of the circulating notes of said bank to the aggregate amount of 11,344 dollars, on the day of -, in the year

1855, presented the same at her place of business for redemption and payment, which was then and there refused; whereupon he caused said notes to be protested for nonpayment. A copy of the original certificate of protest was

Tuesday,
May 29.

May Term, 1860.

CONWELL

V.

HILL.

filed with the complaint, and made a part thereof. After
this, on the 21st of November, 1855, the auditor of state,
having converted the stocks and securities deposited in his
office by the bank into money, the same was found insuffi-
cient to fully pay the notes issued by her, and remaining
unredeemed; and having apportioned such proceeds, in the
proportion they bore to the circulating notes of the bank,
he ascertained that the same amounted to, and would only
pay,
87 per cent. on such outstanding notes. It is averred
that the plaintiff, on the last-named day, deposited and
filed all the circulating notes so held and owned by him,
with the auditor, in his office, and received from him the
dividend of 87 per cent. on the above 11,344 dollars, and
also his certificate that the notes had been deposited and
the dividend paid. A copy of this certificate was filed
with the complaint and made a part of it. After the pay-
ment of the dividend, there remained unpaid 13 per cent.
of the aggregate amount of said notes, amounting to 1,474
dollars, for the recovery of which this suit was instituted.

Defendant demurred to the complaint, but his demurrer was overruled, and thereupon he answered. His answer contains a general denial, and seven special defenses. Demurrers were sustained to all the special defenses, excepting the sixth, to which there was a reply by a general denial.

The Court tried the issues and found for the plaintiff 1,474 dollars, and, having refused a new trial, rendered judgment, &c.

In support of the demurrer to the complaint, it is argued that the act under which the bank was organized does not contemplate the proceeding instituted in this case in the Circuit Court; but intends, in case of a bank failure, and a deficiency of funds from the sale of the securities held by the state to redeem her circulating notes in full, that other steps necessary to recover of the bank the balance due the note-holders should be taken by the state auditor. This position is, in our opinion, untenable. The issuing of the note and the receiving of it by the holder as money is, in effect, a contract between him and the bank that she

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