moved from the minds of all members the | lished and continued, and according to the least apprehension of injustice and bad present government." faith; "Now, therefore, be it known by these presents, that the undersigned, with a view to carry out fully the great principles of our union, and in consideration of the benefits to be derived therefrom, do hereby solemnly enter into covenants, and agree with each other as follows:

"2d. All the property of the society, real, personal, and mixed, in law or equity, and howsoever contributed or acquired, shall be deemed, now and forever, joint and indivisible stock. Each individual is to be consid-cumulations; and that the then and subseered to have finally and irrevocably parted quently admitted members occupied the with all his former contributions, whether relation of donors, and the society, as a soin land, goods, money, or labor; and the ciety, of donee. same rule shall apply to all future contributions, whatever they may be.

The 8th article was as follows: "It is hereby distinctly and absolutely declared and provided, that all the property, real, personal, and mixed, which now or hereafter shall be held or acquired by any trustee or trustees, or person under them, is and shall be deemed the common property of said society, and each trustee now or hereafter appointed hereby disclaims all personal interest in the present resources Early in 1890 John S. Duss and two and future earnings of the society, other others, employees, but not members, of the than that of a member thereof, according society, were elected to fill vacancies in the to the articles of association hereby estab-board of elders.

In April, 1890, certain articles were exe-managed by said incorporated company, and cuted, the number of members being stated be sold and otherwise disposed of from time to be forty-five. to time in pursuance of proper corporate action, as may be determined by the directors and officers of said incorporated company.

98.

28.

and in effect. They were settlements by | to them alone, it would belong, and among agreement, instead of through litigation. them it would be divided."

Finally, substantially the entire property of the society and its affairs have been turned over to a corporation created under the laws of Pennsylvania, authorized to purchase and sell land. This corporation has none of the powers confided by the articles of 1847 to the board of elders and the board of trustees. It has no power to feed, lodge, maintain, and support, or to care for the spiritual welfare of, members of the society, or to perform any of the duties imposed upon the boards. The trustees have no distinct title to the society's property, but only the rights pertaining to the stock of the Union Company. All the industries carried on in Economy are carried on by tenants and lessees of the Union Company, and the society has ceased to possess the power to carry out the purposes for which its property was accumulated.

It is inconceivable that the creators of the trust contemplated any such result, when they sought to perpetuate Christian fellowship by the renunciation of their property.

The present membership has shrunk to eight members, less than enough to fill the board of elders, and that board consists of Duss and his wife, an old man and five women, aged or ignorant. Practically, Duss is the last survivor, and he claims the ownership of this vast estate as such survivor. By the articles, no period was fixed for the termination of the life of the society. There is no remainder over, nor provision of any kind for the disposition of the trust estate in the event of the society's extinction.

Joint tenancy with survivorship, or tontine, excluding all but living members and casting accumulations on the survivor, are neither of them to be presumed. They are the result of express agreement, and there is none such in these documents.

The affairs of the Union Company must be wound up under the state statutes in that behalf, and proceeds derived from the lands by sale or otherwise would go to the stock- On the contrary, this property was held holders by way of dividends. The legal ef- in trust for the use and benefit of the sofect of the transaction was the same as a ciety, as a society, and not for the individsale, out and out, for cash, and it was ir-ual members. The trust was for the use revocable. And this point so arises on the and benefit of the society in the maintenrecord that it must be disposed of as mat-ance of its principles as declared by its conter of law. stitution and laws. When the purposes of the society were abandoned or could not be accomplished, or the society ceased to exist, the trust failed, and the property reverted, by way of resulting trust, to the owners who subjected it to the trust, living, and to the heirs and legal representatives of those of them who are dead.

The master found, as matter of law, that the society continued to exist because the surviving members had not formally declared it to be dissolved, and that the purposes and principles of the society could not be held to have been abandoned, unless by the formal action of all its members. But this could only be so on the assumption that the scheme of the trust created a joint tenancy with the right of survivorship, or a system of tontine; and that a single surviving member might be the society, although to the integrity of a community numbers are essential. By the articles, neither the members, nor the board of elders, nor the board of trustees, nor all together, possessed the power voluntarily to formally dissolve the association; and it is for a court of equity to adjudge whether a condition of dissolution, or a condition requiring winding up, is, or is not, created by acts done or permitted.

Such being, in my opinion, the condition here, the trust property must go, as I have said, either to the surviving members as joint tenants, with right of survivorship, or by way of tontine; or to the owners or donors living, and to the heirs and legal representatives of those who are dead, by way of resulting trust.

This conclusion does not involve the assertion of a reversion secured by the express terms of the contracts, but rests on the familiar principle of equity jurisprudence, that when the trust clearly created by the documents terminated, a resulting trust arose to the grantors or donors, or their heirs. The distinction is thoroughly elucidated by Mr. Justice Gray in Hopkins ▼. Grimshaw, 165 U. S. 342, 41 L. ed. 739, 17 Sup. Ct. Rep. 401. It was there said, among other things:

"But the trust was restricted, in plain and unequivocal terms, to the particular society to be benefited, as well as to the purpose of a burial ground, adding (as if to put the matter beyond doubt) and for no other purpose whatever.' The trust would end, therefore, at the latest, when the land ceased to be used as a burial ground and the society was dissolved.

"In the case at bar, the trust created by, the deed having been terminated, according to its express provisions, by the land ceasing to be used as a burial ground, and the dissolution and extinction of the society for whose benefit the grant was made, there arises, by a familiar principle of equity jurisprudence, a resulting trust to the grantor and his heirs, whether his conveyance was by way of gift or for valuable considera

Appellees contend for the first of these propositions. Their counsel says in his brief: "It is the society, as a society, which owns this property. It is the entire body as one whole. If at any time the society did dissolve, its property would go to the persons who then were its members. No one else has any legal or equitable claim to it except those members. To them, and' tion.'

* 42

See same case below, 40 C. C. A. 664, 100 Fed. 718.

Statement by Mr. Justice Brown: This was a writ of error to a judgment of the circuit court of appeals for the eighth circuit affirming a judgment of the court of appeals of the Indian territory, which latter court affirmed the judgment of the United States court for the northern district of such territory, sustaining an interplea by one King to recover the value of certain property attached and sold by Robinson & Co., which had been conveyed to King as assignee by a deed of assignment made by his codefendant Belt.

The facts of the case are substantially as follows: One John C. Belt, a resident of Arkansas, who was engaged in business in the Indian territory, on December 29, 1891, made an assignment for the benefit of his creditors to King, as assignee.

On the following day "J. M. Robinson & Co.," plaintiffs in error, brought suit against Belt in the United States court in that territory, sued out an attachment, and

Courts-state laws as rules of decision assignments for the benefit of creditors-levied upon the property assigned. Belt release as condition of preference-appeal-objection not raised below.

1. The validity of an assignment for the beneat of creditors which requires a release by creditors as a condition of preference is de terminable by the state law as interpreted by its highest courts.

2. The courts of the Indian territory are bound to respect the decisions of the supreme court of Arkansas interpreting laws of that state which were adopted and extended over the Indian territory by the act of Congress of

May 2, 1890.

failed to plead, and judgment by default was taken against him, and the attachment sustained.

On May 31, 1892, defendant in error King filed an interplea, setting out his deed of assignment, and claiming the property as his by virtue of such deed. After so doing he entered into a stipulation with other attaching creditors, of whom there were a large number, whereby it was agreed that this interplea should be considered as filed in every suit, and, virtually, that the result of the interpleader proceedings in the suit 8. An assignment for the benefit of creditors, of J. M. Robinson & Co. should control all although requiring a release by creditors as other suits. The property was, after its a condition of preference, must be deemed attachment, sold under order of court, purvalid in the Indian territory, In view of the suant to statutes governing such proceeddecisions of the courts of Arkansas upholdings, and at such sale realized the sum of ing such assignments under the statutes of that state concerning assignments for the benefit of creditors and the statute of frauds, which were adopted and extended over the Indian territory by the act of Congress of May 2, 1890 (26 Stat. at L. 94, § 31). 4. Objections to the validity of an assign

ment for the benefit of creditors for want of acceptance, and to the form of the judgment, cannot be raised for the first time in the Supreme Court of the United States.

$7,900.

A demurrer to the interplea was filed and sustained by the court, from which order King sued out a writ of error from the United States court of appeals. He gave no supersedeas bond, however, and the fund was, by order of the court, distributed pro rata to the attaching creditors according to their priorities. The court of appeals reversed the judgment on the demurrer, and on September 19, 1895, Robinson & Co. filed their answer to the interplea, denying that King was owner by virtue of the deed of asDecided October 27, signment, and alleged the same to be fraudulent and void; denied that King filed complete inventory; denied that certain personal property described in the deed of

[No. 46.]

Argued May 2, 1902.

1902.

ERROR to the United States Circuit

I Court of Appeals for the Eighth Circuit assignment was the property of the wife of

tachment.

to review a judgment affirming a judgment Belt, and admitted that the property deof the Court of Appeals of the Indian Ter-scribed in the deed was seized under the atritory which had affirmed the judgment of the United States Court for the Northern District of that Territory sustaining an interplea by an assignee for the benefit of creditors to recover property attached by a areditor of his assignor. Affirmed.

1. See Courts, vol. 13, Cent. Dig. § 968.

The trial on the interplea was had before a jury, and resulted in a verdict in favor of the interpleader, which found the attached property to be the property of King, as assignee. A judgment was thereupon entered in his favor, which was subsequent

ly affirmed, first, by the court of appeals for the Indian territory, and then by the circuit court of appeals for the eighth circuit. Whereupon a writ of error was sued out by Robinson & Co. from this court.

Mr. David Goldsmith for plaintiffs in

error.

No counsel for defendants in error.

Mr. Justice Brown delivered the opin

ion of the court:

This is a contest between certain attach-counsel, and the assignment held good by ing creditors of John C. Belt, and one King, his voluntary assignee for the benefit of creditors.

to be sufficient to justify them in setting aside the assignment; and, where such provision has been sustained, it has usually been in deference to authority, rather than upon conviction of its propriety or wisdom. The question was discussed at considerable length by Mr. Justice Story in Halsey v. Fairbanks, 4 Mason, 206, 227, Fed. Cas. No. 5,964, and the validity of the clause sustained, largely in deference to the case of King v. Watson, 3 Price, 6, where, as he states, the very exception was taken by however, has but a remote bearing, and the court of exchequer. King v. Watson, seems to have been pro tanto overruled by Mr. Justice Story finally remarks that if the case of Spencer v. Slater, above cited. the question were entirely new, and many estates had not passed upon the faith of his mind would be against their validity. such assignments, the strong inclination of "As it is," said he, "I yield with reluctance to what seems the tone of authority in faexpressed by Mr. Chief Justice Taney in vor of them." Somewhat similar doubt is White v. Winn, a memorandum of which is found in 8 Gill, 499. The question was also incidentally considered by this court in Security Trust Co. v. Dodd, 173 U. S. 624, 633, 43 L. ed. 835, 839, 19 Sup. Ct. Rep. 545, but the case went off upon another point.

The record is in an unsatisfactory condition. It is impossible to tell whether the plaintiffs are a corporation or a partnership; and, if the latter, who constitute the firm, or against what individuals the judg ment of the court was rendered. Although the only right of the plaintiffs to contest the assignment of Belt to King arises from the levy of an attachment upon the assigned property, neither the writ of attachment nor the return of the marshal of the levy thereunder appears in the record or testimony. Nor does the record contain a copy of the complaint, in which these proceedings were probably averred. The only pleadings before us are the interplea of King, filed in the action (which appears to have been brought against Belt alone), setThis court has never directly passed upting up the assignment, and the answer of on the validity of this provision, but, wherthe plaintiffs thereto, denying the ownerever it has been called in question, it has ship of King and averring the fraudulent been treated as determinable by the local character of the assignment. But as the law of the state from which the question interplea of King alleges that on December arose. Thus, in Brashear v. West, 7 Pet. 81, 1891, and just after he had completed 608, 8 L. ed. 801, the clause was upheld an inventory of the property so assigned, solely upon the ground that the courts of plaintiffs caused a writ of attachment to be Pennsylvania had sustained its validity. levied upon a portion of the property, we The assignment in that case was in trust may treat this as a sufficient admission of to pay and discharge the debts due from the plaintiffs' title to justify us in passing upon assignor, first, to certain preferred credthe question of the validity of the assign-itors, and afterwards to creditors generally, ment, upon which the case largely depends. provided that no creditor should be entitled 1. This assignment is attacked by the to receive a dividend, who should not, withplaintiffs chiefly upon the ground that it in ninety days, execute a full and complete contains a provision that the preferred release of all claims and demands upon the creditors shall accept their dividends "in assignor. Mr. Chief Justice Marshall, after full satisfaction and discharge of their resummarizing the arguments for and against spective claims, and execute and the validity of this provision, did not comdeliver to said John C. Belt a legal release mit the court to the expression of an opin therefor." This provision has been the sub-ion, but held that "the construction which ject of discussion in England and in most of the states, and in a large number of cases has been held to avoid the assignment, upon the ground that the debtor has no right to compel his creditors to accept his terms or lose their preference. In England a clause of a somewhat similar nature was held to be void under the statute of Elizabeth as an attempt to hinder, delay, or defeat creditors (Spencer v. Slater, L. R. 4 Q. B. Div. 13), though the applicability of that case to this particular provision admits of some doubt.

The fact that it enables the debtor to extort a settlement by playing upon the fears or apprehensions of his creditors is thought by the courts of many of the states 23 S. C.-2.

the courts of that state [Pennsylvania] have put on the Pennsylvania statute of frauds must be received in the courts of the United States," and decided the case upon the authority of Lippincott v. Barker, 2 Binn. 174, 4 Am. Dec. 433, in which this question arose, and was decided, after an elaborate argument, in favor of the deed. He also remarked that the question had been decided the same way in Pearpoint v. Graham, 4 Wash. C. C. 232, Fed. Cas. No. 10,877. In that case Mr. Justice Washington thought that an assignment in trust for the benefit of such creditors as should release their debts was founded upon a good and valua ble consideration, and was valid, the only inquiry being whether it was bona fide.

*45