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erences.

IN equity. The facts are stated in the opinion.

livering State, when these conditions are present, in- PARTNERSHIP - COMPROMISE RECEIVER. cluding the charge of a specific crime, is required to withdraw from one of its inhabitants, otherwise enti- UNITED STATES CIRCUIT COURT, E. D. VIRGINIA, led to the protection of its laws, the right of peaceful

JULY, 1884. and unmolested domicile therein, and hand him over to another jurisdiction for the purpose, and for that

FINK V. PATTERSON. only, specified in the proceedings. The charge of a

An insolvent firm offers by circular letter to its credspecific crime fixes and defines this purpose, as made

itors to pay fifty per cent of their debts, and agrees known by the demanding to the delivering State; and this specific crime is not any crime, but a particular

in the same circular to make no preferences. Many cred

itors accept the offer. It subsequently continues business crime, definitely stated in its material facts. Such, in a word, is the Constitution and the law in

at large expense, postpones the execution of this compro

mise for an indefinite period until all the creditors accept, relation to inter-State extradition; and nothing can

and pays many of the debts in full, thereby making prefwell be a clearer implication than that the purpose, in the charge of a specific crime, declared beforehand by

Held, equity has jurisdiction on bill filed to appoint a receiver one State to another as the reason for the extradition

and take possession of the firm assets and administer sought, should rule and limit the use of the custody

them for the benefit of the creditors; and this can be gained in this way, and hence that a State, having

done in Virginia by a creditors' bill, without previously asked for the surrender of the accused party on one

obtaining judgments at law. charge, should not, having obtained the surrender, proceed to deal with him on a different charge. Judge White admits this doctrine when the extradition is interuational; and there is no reason in the Constitu- Coke & Pickrell, for plaintiffs. tion, and as we have seen, no reason in the relation of Friend & Davis, for defendants. the States to each other, why the doctrine is not equally applicable when the extradition is inter-State. HUGHES, J. The principal facts of this case, as To take advantage of the enforced presence and pos- shown by the papers and proofs now before the court, session of the party extradited, for another and differ.

are as follows: ent purpose than the one avowed in the proceedings, is The defendants are grocers in Petersburgh. They a falsification of the purpose professed at the time of have been carrying on their business since 1878. They the demand and surrender, and assumed by the deliv- put no capital in it. They began with a stock of goods ering State to be professed in good faith, and is, in worth about $4,000, and owed for it about $6,000. Their fact, such an abuse of the remedy as to be in practical business has not been profitable. They have made effect a violation of the Constitution. Judge Cooley nothing but their personal expenses. By the first of calls it “a gross abuse of the constitutional com- June, 1884, they became insolvent, and their business pact.

paper went to protest. Thereupon they consulted The fact that such a course is not, in express words, legal counsel as to the course best to be pursued. prohibited by the Constitution, by no means implies These advised an assignment in liquidation. They did that it is permissible or consistent with that instru- not adopt this advice. They took counsel of meroanment. If it be inconsistent with what the Constitu- tile friends in Pittsburgh, expressing a wish to go on tion naturally and fairly implies, that is as authorita- with their business as the best method of liquidating tive as an express prohibition. The tenth article of tbeir affairs. They determined to go on with it for the treaty of 1842 with Great Britain does not ex- this purpose. They accordingly drew up a scheme for pressly declare that the party extradited under it compounding with their creditors, framed on the basis shall be tried only for the crime for which he was ex- of paying fifty per cent. This was approved and actradited; and yet the Kentucky Court of Appeals, in cepted by most of their Petersburgh creditors. They Commonwealth v. Hawes, 13 Bush, 697, held that then proposed this scheme to their creditors in genthis doctrine was implied in the treaty. A similar eral, embodying it in a circular letter, which was view was taken by Judge Hoffman in United States mailed to the non-residents. The circular was as folv. Watts, 14 Fed. Rep. 120, and by the Supreme Court lows: of Ohio in State v. Vanderpool and Jones, 16 Chicago

“PETERSBURGH, 18th June, 1884. Legal News, 34, or 4 Ohio Law Journal, 187.

" DEAR SIR: Substantially the same method of reasoning by which a negative implication was drawn from the

“We owe by bills payable and open actreaty of 1842 with Great Britain would, if applied to

counts...

.$26,552 19 the extradition provision of the Constitution, lead to

“Our assets are stock in hand, bills rethe same result. The conclusion arises as naturally

ceivable, and open accounts that we from the latter as it does from the former. The fact

consider good....

14,156 81 that the State or the nation, as the case may be, de- “We offer to our creditors fifty cents in the dollar, mands and secures a fugitive from justice for a speci- to be paid as follows: Twenty cents in the dollar, first fied purpose set forth in the extradition proceedings, November, 1884; twenty cents in the dollar on the and for that only, carries upon its face the distinct im- first March, 1885; and ten cents in the dollar in cash plication that such State or nation, in the absence of as soon as our banks begin to discount paper, which an express provision otherwise declaring, should con- we believe will be in a very few days. The deferred fine its jurisdiction over the party extradited to the payments to carry interest at the rate of six per cent purpose thus specified, and should not take advantage per annum. We make no preferences, but make the of a custody gained in this way to secure other and same proposition to all. Please let us hear from you different purposes. This is one of the fundamental at as early a date as practicable. doctrines of extradition, and is no more than is re

Yours truly, quired by honesty and good faith between States and

PATTERSON, MADISON & Co." nations, and is moreover just as applicable to the States Meanwbile, and until the 8th of July, their business of the Union as it is to nations.

SAMUEL T. SPEAR.

went on as before, except that they discharged two

*S. C., 21 Fed. Rep. 602.

" To

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clerks, and made purchases of only such goods as were signment, such creditor, would be left out or post-
necessary to fill orders, buying both for cash and on poned to the other creditors."
credit. They contigued to collect and sell, and they In a letter to F. E. Patrick, one of their accepting
paid some of their debts in full. More thau a majority creditors, defendants wrote on the 3d of July, 1884:
of their non-resident creditors answered, accepting “Your letter accepting our offer of compromise was
their proposition of compromise; a few of them ac- duly received, and we did not reply, hoping to hear
cepting absolutely, but most of them in a form more or promptly from all of the creditors, when we would at
less qualified and conditional. The complainants and once be able to comply with our proposition. We have
one or two other creditors refused to accept. In the the acceptance of the majority, both in number and
course of a short time their proposition for compro- amount of money due, and think some are waiting for
mise, after its acceptance as aforesaid, assumed fea- the maturity of our paper that they hold, before writ-
tures not contained and expressed in the circular of ing. We think in the course of two or three weeks, at
June the 18th. Tbose features were--First, that in or- furthest, we will have the compliance of all.
der to its being obligatory on the defendants all cred- "Those of our creditors who have signified their
itors must accept it; second, that the creditors accept- agreement to our proposition may be assured that
ing must release that portion of their claims not pro- their interest shall not suffer in any event. Judgment
vided to be paid ; tbird, that the proposition would be caunot be had against us till late in October, and by
kept open, if necessary, until October, 1884; and,

that time, by our plan, all will receive thirty per fourth, some of their creditors had been, and others cent of the debt; and to make an assignment now would be, paid in full.

we do not believe they, the creditors, would ever get The books of the concern show that the condition of that much." the business is worse than is represented by the circu

The business went on till the 8th instant, when the lar letter. I infer that the assets will not realize $10,000.

marshal of this court, under an order issued on the It seems too, as already indicated that after the propo

evening before, took possessiou of the goods in trade, sition of compromise was made, and after its accept

promises, books and papers of the defendants. The ance by many of the creditors was given, the defend

order coutained a rule upon the defendants to show ants paid off a portion, more or less considerable, of

cause on the 10th instant why a receiver should not be their obligations in full in cash. The statement of

appointed, and why the usual preliminary injunction their answer on this subject is as follows: “We re

against interference with the effects of the firm should served from the assets a sum sufficient to pay certain

not be granted.
confidential debts of the firm which stood upon the
highest ground of personal bonor and obligation;

I am now to pass upon the motion for an injunction

and a receiver.
most, if not all, of which have since matured and been
paid out of the fund so reserved and set aside.” There

The case is in its facts a novel and peculiar one. I is no statement or indication in the answer of what the

do not know any case like it in the reports. Most of amount of the fund was which they so reserved and

the creditors who have accepted the proposition of com used, or of the amount of these obligations of honor.

promise have bụt small amounts involved. The proofs These must be gathered from the books. The answer

seem to show that the complainants in this suit are the further recites that one of defendants' counsel said to

largest of the creditors. Their claim is for $2,167; and ove of the complaipants in this cause, before the suit

the debt is acknowledged to be due by the defendants

in their answer. This indebtedness was incurred was brought, in answer to an inquiry as to what security the creditors who accepted the compromise

within ninety days before the suspension, and the would have for the payment of the fifty per cent prom

books show that as much as $20,000 was received by ised, that if the compromise was made with any of the

defendants in a short period before and after their creditors, and any other creditor should institute pro

failure. ceedings to obstruct the settlement and prevent the

The bill complains that the defendants refuse to payment, he would advise the firm to prefer the par

make assignment of their effects for the payment of ties who accepted for the amount due by the compro

their creditors; that the firm have no credit, and are mise. This conversation was not kuowl to defeud

still going on with a feeble and crippled business, conauts until after the filing of the bill in this cause, aud

suming by expenses the fund out of which creditors the counsel who made the statement did not know at

must be paid ; that defendants announce their purthe time that in their offer of compromise defendants

pose thus to continue their business until October if required that all creditors should accept. One of the

necessary; and that the only redress of creditors creditors of the firm, John Pickrell, avers as follows

against this waste of the fund on which they must ex. in an affidavit filed: “Iu a conversation he had with

clusively rely for paymeut is in a court of equity, by Patterson and Madison on the first of July, chiefly

means of the appointment of a receiver and an injuncwith the former, "they positively refused to make an

tion. They bring their bill therefore, and pray that assignment. The affiant assured them that there could

through the instrumentality of a receiver the effects of be no doubt but that all their creditors would accept

the defendants may be sold, the debts due them colit, and release the balance of their claims, and that all

lected, and that the fund so arising may be applied that was wanted was a devotion of their assets to the

pro rata to the payment of all creditors. payment of their liabilities. This they refused to do From and after the acceptance by any creditors of positively. Affiant then pressed them to name some

the proposition for compromise made by the defendtime within which their offer of compromise (which

ants on the 18th of June, 1884, all the assets of the was expressly not to be binding until all the creditors firm, including property and choses in action, became signed) should be accepted or rejected. This also a trust fund expressly dedicated to the payment, withthey refused to do, stating that none of their creditors out preferences, of the fifty per cent of debts promised could obtain judgment against them until October, by the circular letter. Offering no indorsements, tendand that they would do nothing until that time; and

ering no security, insolvent themselves, their proposi. that they would, unless all the creditors should come tion could be nothing else than a dedication of their in before, hold the negotiations open until October. assets to the fulfillment of the terms of the composiThe impression left on the mind of affiant from this tion. By accepting, the creditors contracted to reconversation is strong that if any of their creditors ceive fifty per cent in full discharge of their claims. should eventually force them by suit to make an as- What was the consideration given by the defendants

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for this agreement but the devotion of their assets to Again a debtor may require of creditors a release the payment of the fifty per cent?

from that part of their claims not provided for in a It is a well-established law that partnership assets deed of assignment, if he conveys in the deed all his are, in the eye of equity, a trust fund for the payment property; and if in the deed he gives the creditors all of partnership debts. Being a trust fund, creditors the information in regard to his condition which they have a right by proceedings in equity to subject it to ought to have in order to determine whether or not the purposes of the trust. There is a good deal of to accept the terms of the deed and to release what it learning in the books to the effect that creditors at does not provide for. Unless a deed requiring such a large have not a direct lien upon this fund; but that release does this the law pronounces it invalid and their lien must be worked out through the equity of void. Gordon v. Cannon, 18 Gratt. 388. The defend. the individual partners, and availed of by derivative ants did not make a deed; but while giving out by process.

their circular letter that they were dedicating all their However this may be in ordinary cases, the present assets to the purposes of the compromise, they case is one in which this implied character of a trust now themselves say in their answer that they with. fund is made positive by an express dedication of their held a considerable amount of money in cash, and assets, by the partnership firm, in their proposition for paid off various debts of bonor in full. Instead of imcompromise, to the payment of creditors pro rata. It parting this information in their circular of June 18th is true that this dedication is open to impeachment to their creditors, they withheld it from them, stating on grounds about to be stated; but it is nevertheless that they gave no preferences. Here again they did true that as to the defendants themselves it is valid without executing a deed, what, if they had done it in and binding, and they are estopped from objecting to executing one, would have rendered the deed frauduthe defects of the dedication.

lent and void. The statement of their condition in The law is well settled that an insolvent partnership the circular letter, instead of imparting true informay convey its whole property for the payment of its mation to the creditors, not only suppressed the fact debts, giving preferences among creditors if they just alluded to, but was otherwise exceedingly decepchoose; and moreover if the partners convey all their tive. Most probably this latter deception was not inproperty for this purpose they have a right to insert a tentional. Debtors usually victimize themselves clause requiring a release from the creditors of the more than their creditors in their estimates of their portion of their claims not paid. Such a clause will own pecuniary condition. The real fact was that the not vitiate the assigument. Gordon v. Cannon, 18 defendants were too far gone in irretrievable insolGratt. 387.

vency to have honestly continued their business. In the absence of a bankruptcy law such a deed is Every sale they have since made, every dollar they just as unassailable in a Federal as in a State court, have since paid out, has been more or less prejudicial and would be unimpeachable in this court. The de- to the interests, and has been positively violative of fendants in this case however did not make such an the rights of their creditors. When goods in trade assignment. Nor did they do the next best thing to are once dedicated to the payment of creditors; when making an assignment; namely, they did not go on the character of a positive and express trust is once with their business, avoiding complications of every imparted to assets by the debtor's act, whether by sort. Discarding professional advice, they took coun- deed or otherwise, then any dealing thereafter with gel from the street; and of their own heads, and with- them by the debtor is improper in itself and frauduout the aid of legal counsel, they drew up a proposal lent in the eye of the law. for a compromise, without preferences, and presented Here was the case of a firm hopelessly insolventit to their creditors, a majority of whom,conciliated by insolvent beyond their own belief, and beyond the the stipulation that it should be without any prefer- representations they made to creditors in proposing a ences, promptly accepted its terms; many of them composition. Here was the case of a firm making a presuming no doubt that a deed of assignment would proposition of compromise without preferences, which be made, carrying its provisions into effect. But it implied, and from which the law presumed that they afterward transpired that the defendants would not were offering to dedicate all their effects to its fulfillhold themselves bound by their proposal unless, before ment, yet withholding large cash means, and paying some unnamed date, all the creditors should accept; off in full with this cash a portion of their creditors, and unless in accepting the creditors should release after most of the others had accepted their proposition the portion of their claims not provided for in the which promised no preferences, and while it was pevdproposition. Creditors were also in course of time in- ing for the acceptance of the rest. Here was the case formed that negotiations would be held open if neces- of a firm, which after dedicating and being presumed sary until October, 1884. It is now stated that prefer by law to have dedicated all their effects as a trust fund ences have been given. Creditors have also discoy- to the payment of all their debts pro rata, yet going ered that until all have signed the composition defend. on with the business as if the property was still their ants are going on and intend to go on with their busi- own, paying off debts in full, and subjecting an exness, receiving moneys, selling off stock in trade, in- ceedingly perishable trust fund to the hazards and curring new debts, and paying out cash at their own losses of a business which had brought them while in discretion, fearless of the courts, until October.

good credit to hopeless bankruptcy. The question is whether this is a course of proceed- On the case thus presented to the court the crucial ing that a court of equity must needs sanction. If de. question is whether equity has any remedy for such a fendants had made a deed conveying to a trustee their state of things. The complainants in this cause are stock of goods for the benefit of creditors, and had in- the largest creditors of the defendants. The proposiserted in the deed a provision that they should remain tion of June 18, 1884, is still open to their acceptance. in possession and contivue the business as it was car- They would be willing to accept if any security were ried on before the deed, until default should be made offered that the promise to pay fifty per cent would be in paying any of the debts secured, the law of the land fulfilled. In the absence of such security they would declares that such a deed would have been fraudulent still be willing to accept, if by deed of assignment the and void. Addington v. Etheridge, 12 Gratt. 436. Yet assets of the defendants were set apart out of the con. these defendants, after dedicating their property to trol of defendants and appropriated to the payment of the payment of their debts, went on to do, without the claims of creditors. They complain that they are making a deed, precisely what, if they had made one, secured in neither of these forms; and they pray for would have been pronounced fraudulent.

an injunction and the appointment of a receiver as the

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only means left of intercepting these funds from waste he is to be paid. But there is no principle of equity and dissipation, and of securing them for distribution which confines these suits to any one class of cases. pro rata among creditors.

As society advances, and its methods of business uuThe bill in this case is addressed to the condition of dergo change,equity will adapt its relief to the changed things which has been described. It is not a bill such condition of tbiugs. This is an old principle of equity. as a creditor usually files in his own interest for settiug Indeed equity jurisprudence originated in the necesaside an assignment on the ground that it was made sity of applying new remedies to evils previously unto hinder, delay, and defraud creditors. In almost all known to the law. the States of the Union a bill for that purpose can The case we are now dealing with is novel and peonly be brought by a creditor who has obtained a culiar; but the present proceeding is as old as equity judgment or decree for his claim. In such a case the itself. This is not a bill to set aside a deed. It is true grantee in the deed complained of has a lien by force that the dedication of assets which has been mentioned of bis deed, and the courts refuse to allow this deed to is objectionable in the particulars I have beretofore be assailed except by a creditor whose claim is equally described ; and this bill may be considered as one as well authenticated. This creditor is required to brought under section 2 of chapter 175 of the Code of bave established a lien, and to show that he is without Virginia to set it aside, that provision of the Code alpower to make it good, before assailing the deed of his lowing bills of the sort to be brought by creditors who debtor. His bill is "in execution" of his judgment or have not obtained judgment or decree, and bave not decree. Even such a creditor is not permitted to set established specific liens. But while in this view of aside the deed except upou proof not only that it is the case I feel perfectly safe on the score of jurisdicfraudulent, but that the grantee had notice of the tion, I prefer to regard the presept bill as a creditors' fraud at the time of receiving it. If he can show these bill of the kind described by the text writers, Mr. Wait facts, then the creditor, in the decree setting aside the and Mr. Barbour. deed, is paid his full claim out of the property fraudu. It was such a bill as this that was filed in the case of lently converted in preference to other creditors. I Finney v. Bennett, 27 Grat. 365. The assets there adfully concur in all the propositions of law announced ministered were those of au insolvent bank owing sevby counsel for defendants in respect to bills of this eral classes of creditors. The case was decided in Circharacter brought by individual creditors, in their in- cuit Court by Judge Wingfield, who in answer to obdividual interest, praying relief for themselves indi- jections of jurisdiction similar to those urged in the vidually. As against such creditors the assignment of case at bar, delivered an opinion which was adopted & debtor is good, whether giving preferences or not, if as its own by the Supreme Court of Appeals of Virginia made bona fide, and is free from provisions from which when the case was taken there. He assimilated the the law ip its policy presumes fraud.

suit to a creditors' bill brought against the estate of a But in the present case the creditor asserts no in- decedeut insolvent debtor in the hands of his personal dividual lieu, claims no individual preference, aud representative. If creditors were left to sue individusues for all creditors. It is a creditors' bill, sometimes ally, each would obtain a preference, to be paid in full called an omnibus bill, being a bill for all. It is not according to the dates of their respective judgments, a directed at property alone, or property frauduleutly few getting their whole debt, many getting notbing at appropriated within the purview of the statute of all. The object of the bill was to prevent such a scramElizabeth; but it is directed at all the assets of the de- ble and to secure a pro rata distribution to all. The feudants, as well that existing in the form of tangible court said: property as that in the form of open accounts, notes * But it may be objected there is no precedent for due, and choses in action generally, for the ingather

such a case. Concede this. Yet it does not follow ing of which a receiver is necessary. Mr. Wait, citing that when a case arises wbich comes within the princiabundant authority, says of such a bill :

ples of its Constitution and ordinary jurisdiction, the “It may be asked in what respects a creditors' bill court ought not to take cognizance of it because it is a differs from an ordinary bill in equity prosecuted to

new case and not to be found in the reports. * cancel a covinous couveyance. The answer is that An eminent recent chancellor of England has declared the creditors' bill is broader and more effectual in its that “it is the duty of every court of equity to adapt operation and results. The ordinary bill in equity is

its practice and course of proceedings, as far as possigenerally brought to unravel some particular transac- ble, to the existing state of society; and to apply its tion and to annul some particular conveyance. A jurisdiction to all new cases, which from the progress creditors' bill is, on the other hand, usually in the na- daily making in the affairs of men must certainly ture of a bill of discovery, and more extended in its arise.' Lord Cottingham (Taylor v. Salmon, 4 Mylue results; not only does it reach property described

& C. 141." therein, but by means of this remedy every species of

The Supreme Court of Appeals of Virginia expressed assets and even debts due the debtor, of which the its entire concurrence in this opinion, and adopted it creditor knows nothing, may be reached through the as its own, adding: “What more suitable case could instrumentality of a receiver and applied to the claim." there be for a creditors' bill, and the application of the Wait Fraud. Copy. 103, 104, and note.

rule of equity, that 'equality is equity?' If there be Iu 2 Barb. Ch. Pr. 149 (a work written under the eye no case directly in point, it is the province of a court and under the correcting hand of Chancellor Wal. of equity to provide suitable and adequate remedy for worth, and as useful as authoritative), the author de

such a case; and the court repeated the quotation scribes a creditors' bill as “a suit brought for the ad- from Lurd Cottingham. It also cited Ogilvie v. Knox ministration of assets, to reach property fraudulently

In8. Co., 22 How. 380, in which the United States Sudisposed of, eto. The bill in such cases is filed in be. preme Court held that a court of equity may, at the balf of the complainant and all others standing in a est of creditors tbat a corporation is insolvent, similar relation, who may come in under such bill, and administer its assets by a receiver, and thus collect all the decree to de made. It may be filed by simple con- subscriptions or debts due the corporation. tract creditors, and does not require a judgment to

We are not therefore without precedent for the preshave been obtained."

eut suit. This is not merely a creditors' bill praying It is true that creditors' bills are usually employed to injunction, receiver, and payment of all creditors pro settle up decedent or other estates, and to prevent a

rata, but is, as to complainants, a bill founded upon a multiplicity of suits by creditors, each eager to establish particular equity entitling them to a standing in court. by suit a priority of lien upon the assets out of which

The bill would have been the same as many others

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with which the courts are every day occupied, if the clause requiring the consideration requiring the considdefendants had done by deed what they are doing eration to be expressed in writing, was not to destroy or without deed. If in the case of a deed the court would annul the requirement that the writing must contain all have interposed to prevent the acts of defendant, how the substantial and material terms of the contract. The can it be contended that the mere absence of a deed writing, so far as the same is executory, must still show deprives it of jurisdiction and divests complainants of on its face what the whole agreement is. a redress which a court of equity only cau give? It is E. N. Bank v. Kauffman, 93 N. Y. 273, distinguished. an old principle that a court of equity will interpose to prevent what it would afterward undo. Roberts | APPEAL from order of the General Term, in the

Second Department, reversing a judgment in faFraud. Conv. 520. If defendants, by doing without

vor of plaiutiff, entered upon the report of a referee. making a deed what equity would undo if a deed had

This action was brought to recover damages for albeen made, can thereby deprive equity of jurisdiction,

leged breach of the contract of employment. then creditors would be at the mercy of fraudulent Defendants were manufacturers of milk caps, doing debtors, and the courts would be set at defiance.

business under the name of “Iron-Clad Cau Co." In Aside from this view, complainants have special equi- | January, 1875, the parties entered into negotiations, ties in this case. They are the largest creditors of de

which resulted in an oral agreement that plaintiff fendauts. They have no security that if they accept

would enter into defendants' employ as a salesman, the proposition of compromise, which tbey are willing

and serve in that capacity for three years. Defendant to do, its terms will be complied with. Defendants

Shepard thereupon wrote the following memorandum, offer, and I presume can give, no security, either in

which he gave to plaintiff: the persons of indorsers or in any other form, that they will fulfill their part of the compromise. Not

“(Preserve this.) withstandiug this inability, they are themselves ad

Memorandum Iron-Clad Can Co. ministering the assets which they have dedicated to “Two thousand dollars for first year. their creditors, and in a manner necessarily involving

“Two thousand and five hundred dollars for the waste, and incompatible with the purposes of the trust. second year sure, and provided the increased sales They offer, and I presume can give, no bond for prop- shall warrant it, he is to have $3,000. erly administering these trust assets. There but “Third year in proportion to business as above. one mode in which complainants can insure the appli

“IRON-CLAD Can Co., cation of these assets to the purposes of the trust im

“H. W. SHEPARD.” posed upou them, and that is by the intervention of

The plaintiff took the memorandum home, and on the court through the instrumentality of a receiver

Tuesday following wrote and mailed to the defendants and an injunction. This is what they ask. Is not the

a letter in the following words: court bound to give them the security of a responsible and judicial administration of the trust fund?

“UTICA, Jan. 12, 1875. It is laid down as a general principle that if a trustee

Iron-Clad Can Co., or H. W. Shepard : becomes insolvent and compounds with his creditors

"I accept your proposition of the 9th inst., and will he may be removed; and this is on the ground that

ve in New York on Monday next to conimence operathe cestui que trust has a right to have the trust ad

tions. ministered by responsible trustees. 1 Perry Trusts, S

"JOHN DRAKE." 279. A man who has a common interest with others

Plaintiff went to work under the contract, and conin a trust fund or trust estate is entitled to sue on be- tinued in defendants' employ until about January, half of himself and others for the protection of the

1878, when they refused to employ him or to pay him. property by injunction, when the property is in the

Plaintiff tendered his services, and remained ready hands of an insolvent. Kerr Inj., citing Scott v.

and willing to perform them during the year. Becher, 4 Price, 346. When the act complained of M. M. Waters, for appellant. would, if done, be irremediable, the court will interfere as a matter of course, and take property out of

Samuel Hand, for respondents. the hands of irresponsible parties misapplying it. A FINCH, J. The court below has defeated the plaintbill will lie and injunctiori be granted in the case of a iff upon the ground that his cause of action rested surviving partner who is embarrassed and is misapply- upon a contract which, by its terms, was uot to be ing the funds, to restrain him from disposing of the performed within one year, and which was revdered assets. Hartz v. Schrader, 8 Ves. 318. In this case void by the statute of frauds for the waut of a suffithe injunction was given but a receiver refused. In cient note or memorandum. That determination is the similar case of Read v. Bowers, 4 Brown Ch. 441, challenged on this appeal, and it is contended on beau injunction was granted and a receiver appointed. half of the appellant that the memorandum was suffiThere was no question of the jurisdiction of equity to cieut, for the double reason that no integral or mateinterfere in either case.

rial part of the agreement was omitted, but if it was, On the whole I have no doubt of the power of the the omission was only of the cousideration, which uncourt to entertain this bill, and to grant the relief for der the statute no longer needs to be expressed. It which it prays. I think also there is necessity for the will be convenient to consider the last proposition intervention of the court in tbis matter by granting a first, since if it is sound it determines this appeal. preliminary injunction, and by appointing a receiver; Before the Revised Statutes went into effect the con• and I decree.

sideration of an agreement within the statute of frauds was required to be stated in the memorandum.

In the early case of Wain v. Walters, 5 East, 10, this STATUTE OF FRAUDS-MEMORANDUM. was put upon the ground of a distinction between the

word "

agreement and the word “promise'' as used NEW YORK COURT OF APPEALS, NOV. 25, 1884.

in the statute; but later upon the proposition that the memorandum should contain within itself all the ele

ments of a complete cause of action without the need DRAKE V. SEAMAN.

of resort to parol evidence. Saunders v. Wakefield, 4 The effect of the amendment of the provision of the stat- Barn. & Ald. 595. Thereafter the courts in this State

ute of frauds, declaring certain contracts invalid un- admitted and enforced that rule (Sears v. Brink, 3 less in writing (act of 1863, ch. 464) which struck out the Johns. 211; Kerr v. Shaw, 13 id. 236), but held the

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