longing to the individual members, is to be applied to the payment of the individual debts of the assignors.

The assignment sets out with the declaration of the insolvency of the banking firm, but does not declare the insolvency of the members of the firm as individuals, apart from their individual liability for the debts arising by the firm. Had it provided that the firm assets should be applied to the payment of the individuals debts, without first satisfying the debts owing by the firm, I would hold the assignment fraudulent and void; but that is not the provision of this assignment. The provision is that after the partnership debts are satisfied, the residue, whether arising from partnership debts, or those belonging to the individual members, shall be applied to the payment of the debts against the individual members. If it is intended that the individual property of one member, or his share in the partnership assets, shall be, before the payment of his own debts, applied to the payment of the other, it would render the assignment fraudulent and void. This the assignee might do without violating the directions of the assignment, and is certainly a strong circumstance, taken in connection with other circumstances, tending to establish the fraudulent intent upon the part of G. M. Klein in making this conveyance; but I am not prepared to hold that it is sufficient to hold it void upon its face, therefore I cannot conclude that the conveyance contains, upon its face, sufficient provisions to render it fraudulent and void.

The next question is, was the assignment executed with the fraudulent purpose of hindering and delaying the creditors of the banking firm, or of either of its members? The proof shows that J. A. Klein, the senior partner of the firm, and father of G. M. Klein, had been in declining health for a number of years, and had for a year before the execution of the assignment become so imbecile of mind as not to be able to comprehend any business matters, and has since died without even knowing that his business had failed, or anything connected with it; and that the entire business of the firm and his individual business had been conducted by his son, said G. M. Klein,-so that if any fraud was committed it was done by G. M. Klein, who had a power of attorney, executed by his father before his mind became impaired, authorizing and empowering him to transact any business in his name, pertaining either to the business of the firm or of his private affairs; but no provision is made in it for making an assignment of the character of the one under consideration.

The proof also shows that G. M. Klein was engaged in quite a number of other business enterprises, of which he seems to have been a leading manager; that he had almost unlimited credit, and little or nothing was known of the embarrassed condition of the banking firm, r of any of the various enterprises in which G. M. Klein was engaged, until the day of his failure; that on the day before the assignment the bank received deposits amounting to over $90,000; that on that day he had a deed conveying to his mother two valuable store-houses,

valued at $24,000, (which from its date, and the date of the acknowledgment, was executed about a year previously, but never put upon the public record,) then placed upon record; that the rents had been collected and credited upon the books of the bank in the name of the firm, or of J. A. and G. M. Klein, and that nothing was known, by others than the parties to it, and the officer who took the acknowledgment; that such a conveyance had been executed, and it is not known that the officer knew the contents of the deed. On the same day J. A. Klein's account was charged with $20,000 for school warrants and other scrip; and also on the same day a credit for some $2,000, standing on the books of the bank to the credit of M. C. Klein, of North Carolina, a brother of G. M. Klein, was by him transferred to the credit of his mother; and on the same day he sold a tract of land to his mother; and on the next morning before the assignment was made he delivered to his mother $8,000 in warrants, etc. About 5 o'clock on the evening of the twentieth of November, he sent for his attorney, closed the doors of the bank, and all the employes in it went to work arranging for the assignment, which was completed, signed, and acknowledged before banking hours next morning. The defendant G. S. Irving was selected assignee. Mr. Irving was a customer of the bank, and was then indebted to it, and was a personal friend of the Messrs. Klein and family; the sureties upon his bond as assignee being the mother of Mr. Klein and other members of his family. When Klein applied to Irving to become his assignee, he remarked to him that he found that he could not meet paper then drawn upon him, and that he would make an assignment in which he would prefer his home creditors, and that he expected to arrange with the others, and rich creditors, on a basis of time. At the time of the assignment there was in the bank about $6,000 in warrants, which had been obtained from one Wolf, and for which a due bill had been given and was held by Wolf. After the assignment Klein gave the warrants back to Wolf, and took up or canceled the due bill. Also, after the assignment, he delivered to the attorney of Mr. Peyton, of Raymond, a note for about $5,000, belonging to his father; Peyton being a large creditor of the bank for deposits made, at interest, from time to time. The mercantile firm of Ragan & Martin were large creditors of the bank; the last deposit by them having been made on the evening of the twentieth of November for a considerable sum. Ragan hearing of the failure of the bank became very much distressed, and importuned Klein to do something for him, in which he was aided by Mr. Andrews, a warm friend of Klein. Shortly afterwards Ragan & Martin were paid in money and warrants several thousand dollars, which Klein in his testimony stated that he obtained from his mother. He also testifies that since the failure he has paid to the destitute and needy home creditors some $15,000, which he also obtained from his mother. After the assignment was made, Klein made an assignment of an interest he had in certain railroad enterprises, upon which he placed a

high estimate, to Thomas Rigby, who held a large indebtedness against the bank. This assignment was antedated so as to show that it was made before the assignment to Irving, and was witnessed by his confidential friend.

The proof shows various other transactions made by G. M. Klein before and soon after the assignment to Irving, which need not be referred to in detail, which require explanation to establish their good faith. As soon as the failure was known to the citizens of Vicksburg, a very large number of all classes of whom were creditors of the bank, and of the Klein's individually, quite an excitement among them was created, and a committee was appointed to interview Klein, and to try to get him to do something for their relief. Of this committee Mr. A. Kuhn was chairman, or an active member, and he made an earnest application to Klein to do something for them. At the time of this interview Gen. Butts had been appointed receiver, and had possession of the assets. Klein was pressed to give a statement of the cause of the failure, and to give a statement of the assets of the bank and partners, which he promised to do, provided Butts, whom he considered as his enemy, was removed from the receivership, but that unless that was done he would make no disclosure of the assets and business; that in speaking of the matter he pointed to the sides of the house, and remarked that there were securities all around this house that no one knew anything about but himself, and would not, unless Butts was removed as receiver. Butts soon after resigned as receiver, but the statement has not been furnished his successor. Klein in his deposition explains that he meant that the securities were in the hands of banks and others, as collateral security for liabilities to them; but there is no proof that he has ever made a statement of them to the receiver, or discovered them in any way. Klein in his deposition endeavors to explain a number of the transactions stated, but the circumstances were certainly such as to cast a strong suspicion upon their fairness, and ought to be explained by all the proof within the control of the defendants sustaining the explanations attempted to be given by Klein, which has not been done; and the presumption is that the proof could not be bad.

The proof further is that the liabilities, as shown by the books of the bank, are in all $1,147,908.32, and the nominal assets of all kinds, belonging either to the firm or the individual members, amount to about $400,000, out of which may be realized $200,000. For a considerable portion of the difference between the liabilities and the assets there is no satisfactory explanation; there may be a satisfactory reason, but it ought to be given.

The sole question is, do these circumstances, considered separately, or all taken together, establish a fraudulent purpose in G. M. Klein, in making this deed of assignment; or, if not, are its provisions such that the assignee cannot execute the trust imposed? These conveyances, like all others, are presumed to be executed with an honest

purpose, and this presumption stands until overcome by the proof. It is said that courts should be astute in finding reasons to sustain them; I suppose the meaning is that courts should be astute in ascertaining the truth. Mr. Klein, in his testimony, says he did not know of his embarrassed condition until the twentieth day of November, the day before the assignment was made, and that he did not then contemplate making the assignment until about 5 o'clock in the evening. It was his duty to have known his pecuniary condition long before that time, and it is passing strange that he did not do so. Whether he contemplated making the assignment before the time stated by him or not, the arrangements made on that day to secure his family, by placing the deed to the town lots and improvements thereon on record, and the other provisions for his family, go far to establish the fact that some steps were to be taken without delay, or they would suffer loss. There is no reason given why these steps were not taken before that time.

The secrecy which was observed in preparing and executing the assignment is another circumstance going to show the purpose of the transfer. That G. M. Klein had no power to execute the assignment in the name of his father, and that, so far as that part of the assignment is concerned, it was not binding on him in his life-time, or those claiming after him, and is not binding on his individual creditors, is apparent-First, for want of power in the power of attorney; and, secondly, because the power of attorney was revoked by the insanity of J. A. Klein, the maker, and which insanity was well known to G. M. Klein when he executed the assignment, and which had been carefully concealed by him from the business public. The effect of this want of power to execute the assignment, if there was nothing more, in my opinion, renders the conveyance void, as it will be impossible for the assignee to execute the trust imposed in all such instruments, the conveyance itself being the only guide for the assignee. The establishment of this want of power is necessarily done by proof outside of the face of the assignment, and could not be considered when determining its validity or invalidity upon its face. And if the conveyance were not invalid for this reason, I am satisfied that, considering the occurrences upon the day before the assignment was executed, on that day, and on the subsequent days, as shown by the evidence, it cannot be maintained that the conveyance was made with the sole purpose of having all the property and assets, purported to be conveyed honestly and fairly, applied to the payment of the debts due by the firm and its members. This position is greatly strengthened by the fact that no statement has ever been made of the collaterals claimed to be held by distant creditors, the refusal to disclose which only upon condition of Butts' removal was not consistent with good faith to his creditors; and, had it been so, the failure to disclose them to his successor is unexplained. Therefore, for the reasons stated, I am brought to the conclusion-First, that the assigument is fraudu

lent in fact; and, secondly, that it is void as to J. A. Klein, and is incapable of execution, and therefore void in toto.

A decree will be entered in each cause declaring the assignment null and void, and for its cancellation.

HOW EXECUTED. Under the New York law a general assignment should be executed and acknowledged by all the members of the firm the same as a deed of real estate, otherwise it is void and inoperative.1 Where an assignment is made in another state, if valid there, is valid here.2 A partner who has withdrawn from the firm need not join in the assignment by the firm.3

DISSOLUTION OF PARTNERSHIP. If partners dissolve the partnership in good faith, and divide the partnership assets among themselves, or transfer them all to one partner, after such transfer a partner may use the assets to pay his individual debts, without being a violation of the rights of partnership creditors. A dissolution and division of assets among partners is not in itself fraudulent, although the object is to prevent individual creditors of one partner from levying on partnership property;7 but if the effect is to delay, hinder, or defraud individual creditors of one partner, it is void. If a dissolution is not made in good faith, but to divert partnership assets from partnership creditors to individual creditors, it is fraudulent, and partnership creditors are entitled to priority out of the assets, even though the transfer was to pay individual debts. 10 In such case the insolvency of the partnership may be considered, in determining whether the dissolution was in good faith or not. On dissolution of the partnership, the firm creditors have the right to have partnership property applied to the payment of the partnership debts in preference to those of the individual partner; 12 and this right cannot be impaired by any consideration with reference to the amount of capital contributed by each individual partner; 13 and debts contracted in the name of one partner may be shown to be in reality partnership debts; 14 but where such debt was incurred by consent or privity of the other partner, proof of joint creditors against the separate estate, in competition with the separate credit

In re Lawrence, 5 Fed. Rep. 349; Smith v. Tim, 14 Abb. N. C. 447.

2 In re Paige & S. L. Co. 31 Minn. 136; S.

C. 16 N. W. Rep. 700.

3 First Nat. Bank v. Hinman, 21 N. W. Rep. 280; Same v. Rock River Paper Co. Id. 280.

4 Case v. Beauregard, 99 U. S. 119; Allen v. Center Valley Co. 21 Conn. 130; Kimball v. Thompson, 54 Mass. 283.

5 Ladd v. Griswold, 9 Ill. 25; Howe v. Lawrence, 63 Mass. 553; Robb v. Mudge, 80 Mass. 534; Shirner v. Huber, 19 N. B. R. 414; McNutt v. Strayhorn, 39 Pa. St. 269; Smith v. Edwards, 7 Humph. 106.

6 Case v. Beauregard, 99 U. S. 119; Hapgood v. Cornwell, 48 Ill. 68; Goembel v. Arnett, 100 Ill. 34; Armstrong v. Fahnestock, 19 Md. 58; Pfroman v. Koch, 1 N. Y. 460; Sage v. Chollar, 21 Barb. 596; Dimon v. Hazard, 32 N. Y. 65; Wilcox v. Kellogg, 11 Ohio, 394; Baker's Appeal, 21 Pa. St. 76; Bullitt v. Chartered Fund, 26 Pa. St. 108.

Atkins v. Saxton, 77 N. Y. 195.

Burrill v. Lawry, 18 N. B. R. 367; Weaver v. Ashcroft, 50 Tex. 427.

In re Cook, 3 Biss. 122; Collins v. Hood, 4 McLean, 186; In re Byrne, 1 N. B. R. 464; In re Tomes, 19 N. B. R. 36.

10 Tracy v. Walker, 1 Flippin, 41; Collins v. Hood, 4 McLean, 186; Sanderson v. Stockdale, 11 Md. 563; Flack v. Charron, 29 Md. 311; Phelps v. McNeely, 66 Mo. 554; Ferson v. Monroe, 21 N. H. 462.

11 Frank v. Peters, 9 Ind. 344; Shemer v. Huber, 19 N. B. R. 414.

12 Case v. Beauregard, 99 U. S. 119; Evans v. Winston, 74 Ala. 349; Warren v. Taylor, 60 Ala. 218.

13 Wilson v. Robertson, 21 N. Y. 587. 14 Cox v. Platt, 32 Barb. 126; Read v. Baylies, 35 Mass. 497; Marks v. Hill, 15 Grat. 400; Barcroft v. Snodgrass, 1 Cold. 430; Siegel v. Chidsey, 28 Pa. St. 279; Gwin v. Sedley, 5 Ohio St. 96; Haben v. Henshaw, 49 Wis. 379; Schaeffer v. Fithian, 17 Ind. 463; Wait v. Bull's Head Bank, 19 N. B. R. 500.