The State of Maryland vs. The President and Directors of the Bank of Maryland, and Ellicott, Morris, and Gill, Trustees, 6 G. & J. 205

Buchanan, Ch. J., delivered the opinion of the court. Before the institution of this suit, there were deeds of trust executed by the President and Directors of the Bank of Maryland to Thdmas Ellicott, on the 23d of March, 1834, and the 26th of March, of the same year; and by the President and Directors of the Bank of Maryland, and Thomas Ellicott, on the 5th of April following, to Thomas Ellicott, John B. Morris and Richard W.

Gill, of all the estate, property, funds, rights and credits of the bank, Wherever situated, in trust, to divide the same whenever realized and collected, among all the creditors of the bank equally and rat^ably. The object of the bill is not to set aside the deeds, or either of them, but to subject the property and funds covered by them, in the hands of Ellicott, Morris and Gill, as trustees, calling, and treating them as such throughout, to the payment of the entire debt due from the bank to the Slate, in preference to the other creditors, and to their exclusion.

The prayer of the bill is, that the President and Directors of the Bank of Maryland, and the trustees, Ellicott, Morris and Gill, shall be compelled by decree to pay the amount of the State’s claim, $50,089 96, with interest at the rate of 5 per centum, out of the funds in the hands and possession of the trustees; and the ground taken in argument is, that the trustees took, and hold the fund under their deed, subject to the preference claimed by the Stale, not us against, but under that deed; the question as to the validity of it not being considered open for discussion, the then members of this court having heretofore determined, on the application of the Union Bank of Tennessee, for an injunction against the Trustees of the Bank of Maryland, that it was a good and valid deed, and we have perceived no reason for changing that opinion.

It has been more than| once decided by this court, that a debtor in failing circumstances may prefer oue creditor to another, by a transfer ofl| his property made in good faith. And if, according to circumstances, one creditor may be preferred to another, its would be difficult to imagine an objection to the validity off a transfer by a debtor of his whole estate, to trustees, fori the equal benefit of all his creditors.

Equality is equity,! and when a debtor makes a transfer of his property for the ' fair purpose of equal distribution among his creditors, he^ does an honest act, and discharges a moral duty, which nonej¡ can reasonably complain of; and to which objection can seldom be made, except by such, as may seek to secure theifj own claims at the expense of the other creditors.

In suchf case, it would not be the debtor seeking to evade or defeat the rights of the creditors, whose interests, according to the extent and character of tlieir respective claims he proposes to protect, but the particular opposing creditors, seok-f ing to draw to themselves more than their just proportion^ -- of the debtor’s effects, to the prejudice of the other eredi-l tors.

So that if there be any thing unfair, it would seem to be chargeable, not to the debtor in attempting to secure an equal and just distribution among his creditors, but rather to the creditor attempting to prevent such equal distribution, and to secure Ms own claim to the exclusion of the other creditors.

For it is’only with the view and expectation of securing his own debt, or advancing his interest beyond that of the other creditors, and not to procure a just and equal distribution of the debtor’s property, that a creditor will seek to set aside such a deed ; since the deedy itself if suffered to stand unimpeached secures that object.

Looking beyond the decisions of this court, before adverted to, which were founded upon the insolvent and other existing laws of the Stale, and which it is not thought necessary to examine in this place, it will be seen, that the same subject has been investigated, and the same principle maintained elsewhere. Pickstock vs.

System, 3 Maule. and Selw. 372, is a case in which a debtor in insolvent circumstances being sued by Pickstock, one of his creditors, he suffered a judgment by default, and after a writ of inquiry executed, made an assignment by deed of all his effects to trustees, for the benefit of all his creditors, embracing of course the plaintiff in the judgment: after which a fi fa. was delivered to the sheriff, who levied under the ft fa, and Pickstock, the judgment creditor, brought suit against the sheriff to try the validity of the assignment, and whether the property passed under it from the debtor to the trustees; and it was held, that the assignment was not fraudulent under the Statute 13 Eliz. but passed the property, although made with intent to delay and defeat the particular creditor, by depriving him of the benefit of his execution, who would thereby have gained an advantage over the other creditors, on the ground, that notwithstanding such was the intention and effect of the assignment, yet that it was for the benefit of all the creditors, of whom he was one, and was placed by the assignment in the same situation with the rest of the creditors, who had an equal right to a fair distribution.

In Hendricks vs. Robinson, 2 Johns. Ch. Rep. 289, an assignment by a debtor in insolvent circumstances, being bona fide to secure a particular creditor, was held to be good, and to pass the property, on the ground that “the object of the statute of frauds, was to prevent deeds, &c. fraudulent in their inception and intention, and not merely such as in their effect might delay or hinder other creditors.” So, in Halliard vs. Anderson, 5 Term. Rep. 233. Estwick vs. Caillard, 5 Term. Rep. 420. The King in aid of Braddock vs. Watson and another, 3 Price Rep. 6.

In this last case the assignment was of all the property of an insolvent debtor, for the benefit of all his creditors,as here; and it was held to be good and valid to pass the property out of the insolvent debtor to the trustees, notwithstanding he was a trader, no commission of bankrupt having been sued out. Marbury vs. Brooks, and Brooks vs.

Marbury, was a case of attachment sued out by Brooks, a creditor, against the lands, tenements, goods, chattels and credits, of Filzhugh, an absconding debtor, and laid in the hands of Mar-bury, who claimed and held the property, &c. under a deed of assignment to him by Fitzhugh, of all his estate, executed before the attachment was issued, for the particular benefit of certain preferred creditors, several of the banks in the District of Columbia-, and the question was, whether the deed so given to Marbury, was valid and effectual to pass the property from Fitzhugh, the debtor, to Marbury, the trustee, who was not a creditor of Fitzhugh, and it was held, that it was, and that it vested ab initio the legal estate in the trustee, although the banks, for whose particular benefit it was made, had not expressed their assent to it, and wore in fact ignorant of its execution at the time it was given.

The debts due to the banks having been considered a valuable and fair consideration, and Chief Justice Marshall, who delivered the opinion of the court, using this emphatic language, “if Fitzhugh might have conveyed directly to the banks with power to seil for their own benefit, why might he not convey to Marbury, with power to sell and pay the money to the banks? If a real distinction exists between the cases, we are incapable of perceiving it.” And again, that a debtor “may sell to a fair creditor, or for the benefit of a fair creditor.” And the same doctrine is maintained in 2 Kent's Com. 420.

In neither of the cases adverted to, was the deed of assignment executed by a corporation, but that it is conceived makes no difference, and that the principle is the same whether the deed be by a corporation or an individual. A corporation as well as an individual is bound to provide for the discharge of its debts, and whether the payment is made by sale of property for that purpose, or with money from its vaults is not material. Its property may be seized and sold as in the case of an individual, under an execution for the payment of its debts.

Why then, may not the corporation itself, instead of waiting for a judgment and execution, sell the same property for the payment of the same debt, for which it is liable to be sold under an execution? And as a bona fide assignment of his property by an .insolvent individual to a trustee, for the benefit of his fair creditors, is a valid sale and transfer of the property for a valuable consideration, a like transaction by an insolvent corporation, in relation to property subject to its debts, is equally a good sale and transfer of it.

No satisfactory reason has been advanced, and none is perceived why a corporation in failing circumstances, unless restrained by some express provision in the charter of incorporation, which is not the case here, may not assign its property to trustees, for the benefit either of preferred creditors, or of all its creditors equally, as well as an individual in insolvent circumstances. The same relation of debtor and creditor subsisting in one case, as in the other. In Catline vs. The Eagle Bank, 6 Con.

Rep. 233, the question was distinctly raised, on a bill to set aside a mortgage by the Eagle Bank, after it had failed, and was in fact insolvent, of its real estate, and an assignment of sundry promissory notes to a Savings Institution, a preferred creditor,and to subject all the funds that belonged to the bank at the time of its failure, to an equal distribution among all its creditors: and'the court decided, that the mortgage and assignment to the Savings Institution, the preferred creditor, were good and valid, and could not be set aside by Chancery, and dismissed the bill.

If then, this had been a bill by an individual creditor, there could, it is believed, be little doubt that it could not have been sustained.

Indeed it has already been determined by the judges of this court, in the ease of the Union Bank of Tennessee, a - ■ .<'•-•«• t- i very large amount, that this very deed is go " ‘'nd t«!K b, hw and equity: and the bank not being a pe;.son cap*. >L of taking the benefit of the insolvent laws of this Stale, is not within, or affected by the provisions of the eunpl' > cits oí 1812, ch. 77, sec. 1, and 1816, ch. §31, sec. 0, N lares, “that any deed, &c. made to a creditor or aee, by by any person, with a view, or under an expectation of icing ' r becoming an insolvent debtor, and with intent ¡.hereby to give an undue and improper preference to such vredilor or security, shall be void.” The words “with a view, and under an expectation of being or becoming an in* • «vent debtor,” being held by settled construction to rov.t.i, a view, and under an expectation of taking the benefit of the insolvent laws, that is, of becoming a technical insolvent, and not a mere insolvent in fact; which view or expectation' the bank could not have had, as it could not become an insolvent in the meaning of those laws, and the very prevision shows the understanding of the legislatu. - least to have been, that without it, a deed made by an im.. vidual debtor, capable of taking the benefit of the insolvent laws, to a creditor or a surety, might be valid and effectual to pass the property; otherwise such a provision would have been unnecessary : and a deed for the benefit of all the creditors equally, or of a particular preferred creditor, that would be good in the case of an individual debtor in insolvent circumstances, as against an individual creditor not Raving a prior lien, would be equally good in the case of n bank in the same circumstances, as against the same description of creditor.

But it is urged that the State has a preference in the payment of debts in cases of insolvency, and v. Lis case has the right to have the amount of its claim L?; ’ m>id out of the funds of the bank, in the hands of flic trustees, the bank being insolvent in fact when tu~ ivd was given; which right of preference is suppose': s.iv he affected by the deed of trust: and the real ír pí Jío Pat we are called upon to decide is, whether the Stale is entitled to such preference.

This is a question of some delicacy and of much importance, both as it respects the amount in controversy, and the principle involved, and has received all the attention its importance entitles it to.

We have not been distinctly informed by the solicitors for the State, whether this preference, sometimes called in argument a prerogative preference, or priority, is claimed as being given by the act of the then province of Maryland of 1650, ch. 28, or as being derived from the common law; but it has been claimed and insisted upon, as a right devolved upon the State, by one or the other; though it has been principally asserted as a common law right, secured to the State by the third

article of the declaration of rights of this State. Although as has been observed, this preference has been chiefly insisted upon as a common law right, it may be proper to inquire, 1st, what rights were conferred by the acts of 1650, ch. 28; and 2d, whether it was in force at the time .of the revolution. First then, looking to the language of that act, and it would seem from the expressions used, that the preference was given to the Lord Proprietary personally, and to his heirs, as long, and so long only, as they should be the Lords Proprietaries of the province.

The words of the act being, “that all debts which either are, or shall be, from time to time, really and truly due to his Lordship, or his heirs, Lords, and Proprietaries of this province, shall be first paid and satisfied within the said province, before any other debts whatsoever.” And that whenever he, (the then lord proprietary) and his heirs shall cease to be the lords proprietaries of the province, the preference given to them was to cease also, and would not under that act devolve upon any other.

And that when by the revolution, the proprietary-ship was abolished, the preference attached to it sunk with it, and was not transmitted to the State, if the act giving it continued to be in force up to the time of the revolution. But secondly, was it in force at that period? By

an act of 1676, it was made perpetual. In 1689 the colony revolted, and the Proprietary Government was overthrown, and became a Royal Government; and so continued until 1716, twenty seven years, when the proprietary government was restored; during the whole of which time the priority in the payment of debts due to the proprietary, given by the act of 1650, ch. 28, was at least suspended. In 1692 when the colony was under a royal government, free from the dominion of the proprietary, by

an act of that year, ch. 84, all the laws made in the province before that session of the legislature, including of course the act of 1650, ch. 28, were repealed. By the act of 1700, eh. 8, declaring what laws were in force, the repealing law of 1692, was expressly saved.

The act of 1650, ch. 28, then, which had been repealed in 1692, was not in force from that time up to the year 1704, when a law of that year was passed declaring “all acts of assembly of this province, made and enacted at any time before the session of assembly, begun and held at the port of Annapolis, on the 26th of April, 1704, to be repealed and made void, except the acts of 1702, ch. 1, and 1696, ch. 24, and except the act for keeping good rules and order in the port of Annapolis, and which are not revived, saved, and enacted, this present session of assembly.” This act of 1704, repealing all prior acts, but such as are embraced by the exception, was in force at the time of the revolution.

But it is supposed that the act of 1650, ch. 28, was revived by the exception in the act of 1704, of “all acts revived, saved, and enacted,” during that session; on the ground that the repealing act of 1692, being repealed by the act of 1704, the effect was, to revive all the acts repealed by the act of 1692, but the act of 1701, by repealing all laws passed before, necessarily repealed not only all prior repealing laws, but precluded the revival of all antecedent acts not saved by the exception.

It cannot be understood, as meaning at the same time, both to repeal and revive the same law; and the exception could only have been intended to save such of the antecedent laws, as had before, but at the same session, been revived, of which there were several — and that is shown by the express exception of the acts of 1702, ch. 1, and 1696, ch. 24, and the act for keeping good rules and order in the port of Annapolis.

The words, “revived, saved, and enacted,” meaning such acts as had been expressly revived, and enacted, otherwise the language would have been, which are not hereby revived; to revive a law by repealing a repealing law, not being to enact it, The fact that in 1704, there was no proprietary government, or lord proprietary, and had not been for fifteen years before, and was not for twelve years after, with no prospect in 1704 that it would ever be restored, is of itself sufficient to show, that it was not the intention of the legislature to revive the act Of 1650, ch. 28, giving the priority which was conferred on the lord proprietary.by that act as the head of the government, when there' was no such government or head, or prospect of it.

Besides, at that very session of 1704,

an act was passed, ch, 42, stripping him, who fifteen years before had been the lord proprietary,-of a grant of duties ca tobacco given in 1671, and granting the same duties to the crown.

Can it then be supposed that the same legislature, so dealing with other -antecedent grants, intended to revive a personal preference 'when'there was no proprietary to exert it. • And again, if the act of 1704, by.repealing the act of 1692, revived the act of 1650, ch. 28, which had been repealed by the act of 1692, it also revived all the other laws repealed by the latter act, among which was the act of 1650, ch. 23, declaring the then proprietary to be “true and absolute lord and proprietary of the province.” And will it be said, that in 1704, when there was no proprietary .government, nor for twelve years afterwards, the government of the province being then a royal government, the legislature intended to revive the act of 1650, ch. 23, declaring Ccecelius, Lord Baron of Baltimore, to “be true and absolute.-lord and proprietary of the province.” .

To as-scribe. to them that intention would.be to be impute to them a gross absurdity. And yet, if tbe words, which arc not revived, saved, and enacted, this present session of Assembly,” had the effect to revive that act of 1G50, ch. 28, being quite as applicable to one as to the other, and which cannot be admitted. The priority then, that is claimed in this case, was not derived to the State by the act of 1650, ch. 28, which it is conceived was not in force at the time of the revolution. This brings us to the inquiry, whether it is given by the third

article of the declaration of rights, made on the third of November, 1776, which declares, “that the inhabitants of Maryland are entitled to the common law of England, and the trial by jury, according to the course of that law, and to the benefit of such of the English statutes as existed at the time of their first emigration, &c., and also to all acts of assembly in force on the first of June, 1774, except such as have since expired, or have been, or may be altered, &c.

This asserted priority has been denounced; as an odious prerogative, springing up in the barbarous and tyrannical ages of the British government, and inconsistent with the genius of our people and the Spirit of our institutions; and it is contended that the object of the third

article of the declaration of rights, was only to secure to the inhabitants of the State the benefit of the common law as a system of laws, or rules of action; in questions of meum and tumn arising between individuals. It is not our purpose to inquire into the origin of this royal prerogative right of preference in the payment of debts, as it formerly existed in England, or to trace it through its various statutory modifications.- It is enough that it constitutes a branch of the common law of England, and that the common law has been adopted in this State, by the general terms of the declaration of rights.

The only question is, whether that branch of the common law has-been adopted. To the suggestion, that the common law was only adopted as a rule of action in controversies between individuals, the answer is this; if it was only adopted to that extent, whence did we derive our whole system of criminal jurisprudence, depending upon the principles of the common law, and having no relation to controversies in civil suits between individuals. But in The State vs. Rogers and Wife, 2 Harr. and McH. 198, in 1787. Murray and Sansom vs. Ridley, Adm'x of Ridley, 3 Harr. and McH. 171, in October, 1793. And Contee vs.

Chew's Ex'r, 1 Harr. and Johns. 417, in 1803, it was held, that at common law the State had a preference, and a right to be first paid out of the estates of deceased persons, where no liens stood in the way. These cases were decided in the late general court, and were not appealed from, but acquiesced in by the parties contesting the right. And in the State vs. Buchanan, 5 Harr. and Johns. 317, 358, and Dashiel vs. The Attorney Genl. Ib. 392, 401, it was decided by this court, that the common law was adopted by the third

article of the bill of rights, “so far at least as it was not inconsistent with the principles of that instrument, and the nature of our political institutions.” It is too late therefore, at this day, to deny the State's right at common law, to have its debt first paid out of the property of its debtor remaining in his hands, and no lien standing in the way. For notwithstanding all that has been said in disparagement of this right of priority, it is not perceived to be inconsistent with the principles or spirit of our political institutions.

It does not indeed exist here with all the incidents to the royal prerogative right in England. We have not the writ of protection, nor the extent in chief, or in aid. And^th^ priority o/ the State is a rule only in the distribution of tibe ...pr&pérty of the debtor, requiring the debt due to the State to be first paid, where the individual creditor has no antecedent lien overreaching it. The government of the State is established for the good of the whole, and can only be supported by means of its revenue; which revenue the good of the whole requires to be protected.

And as it can only act by its agents, who no matter how vigilant, cannot always be present to protect its rights, a priority in the payment of its debts, (which must always be of a public nature) is necessary to enable it to accomplish the ends of its institution. It is not therefore opposed to a sense of right, that the interests of all should prevail over that of an individual, when it can be asserted without disturbing vested rights; which diligent creditors can more readily acquire than the government through its agents.

And the Congress of the United States proceeding upon the like principle, and feeling the necessity for it, has in certain cases given a preference to debts due to the general government. Assuming then this right of priority to belong to the State, in cases to which it can attach; the remaining inquiry is, whether this is a case of that description, or whether the priority of the State’s claim, which would otherwise have existed, and might have been enforced, has not been defeated by the act of the bank.

The debt due from the bank to the Stale, is a debt on simple contract only, and not a lien, as is, and must be conceded. The Stale therefore having no lien on the property covered by the deed of trust, but a priority only, in the payment of its claim, if that right of priority has not been lost, it is subject, claiming under the common law, to the same common law rule, applicable to the royal prerogative right of priority in England, of the same description.

That right in England is enforced by the process in the writ of extent in chief, or in aid, according to circumstances, and may be here, by proceedings known to our courts. But in either case, to make it available, the proceeding must be resorted to, before other vested rights to the property sought to be subjected to the claim are acquired.

In 2 Tidd’s Pr. 1098, 1099, the law upon that subject is thus laid down, “when goods are bona fide sold, or fairly assigned by the king’s debtor to the trustees for the benefit of his creditors, before the teste of the extent, they cannot be taken under it, even though in the latter case the debtor was a trader within the bankrupt laws, and the assignment was

an act of bankruptcy.” And the examples put by that writer are these. “A factor to whom goods have been sent for sale, and who has accepted bills of exchange drawn on him by his principal to the amount of their value, has a lien on such goods and the purchase money, which lien is available against the crown, when the goods or money have been seized under an extent against the principal for a debt due to the crown.

So goods pawned or pledged before the teste of an extent cannot be taken under it; because the pawnee, or bailee, has a special property in them; nor for the same reason goods demised, or let to another for a term certain, during the term.

But it seems that goods pawned before the teste of the extent may be taken as against the pawnee, on satisfaction of the pledge.” And in 1099, “that an extent will not operate upon the goods of a bankrupt actually assigned before the teste of the extent.” The same doctrine is also to be found in Chitty's Prerogative of the Crown, 285, and in 281, 284, that the extent is an execution, and binds the defendant’s goods only from the award of the execution. And these writers are fully sustained by the adjudged cases upon the subject. The case of the King in aid of Braddock vs.

Watson and another, in 3 Price’s Reports of Cases in the Exchequer 6, was the case of an extent in aid against the goods of an insolvent debtor of the king’s debtor, (between the effect of which, and an extent in chief, there is no difference) where Ihe insolvent debtor having before the teste of the extent assigned his goods for the general benefit of all his creditors, (which was

an act of bankruptcy, he being at the time a trader, and within the bankrupt laws) it was held, that the goods were protected by the assignment against the operation of the extent. The King vs.

Lee and others, 6 Price, 369, decided in the exchequer, is the case of an extent in chief, issued against an immediate debtor of the crown, who before the teste of the extent had sent his goods to a factor for sale, who had accepted bills of exchange drawn on him by the debtor to the amount of the value of the goods; and it was ruled that the factor had a lien on the goods that was available against the claim of the crown ; with a recognition by the court, of the principle, that goods pawned or pledged before the teste of the extent cannot be legally seized under it. And in Giles vs.

Grover and another, decided in the house of lords, 1 Clark and Finley, 72, it is treated as a settled doctrine, that goods seized and sold by the sheriff under a ft fa. before the teste of an extent in chief, or in aid, cannot afterwards be taken under that writ to satisfy a debt due to the crown. And it is conceded throughout, in the elaborate arguments of the judges, “that the crown under its process against its debtor cannot seize the property of another.

That when the property has passed from the debt- or to another by contract, or a fair and bona fide transfer before the teste of the extent, or under a sale by a sheriff in virtue of a fifa the extent comes too late, and the priority of the king is lost; and that the crown cannot by its extent avoid an antecedent equitable mortgage, or lien of a factor, or of a wharfinger, or a bona fide assignment in trust for creditors, or any other similar assignment or charge; because they are created when the debtor has legal power and authority to create them, and attach upon the goods, before the process of the crown; and the crown can only take the goods subject to such liabilities as the debtor has legally •created.” We have endeavored to show that this is a fair and bona fide assignment for a valuable consideration, and passed the property from the Bank, and beyond its power or control. •If so, and a similar assignment in England has the effect to protect the property against the king’s extent, and to defeat his priority, (as we have seen it does) it has equally the effect here, to protect the property in the hands of the trustees against the common law priority of the State.

But this has been assailed as a voluntary assignment by the Bank, and is therefore supposed to be void as against the State's elaim, not having been made on the solicitation, or by the coercion of its creditors. We have seen, that being in trust for the equal benefit of all the creditors, it is not void under the statute of the thirteenth Elizabeth. In the King (aid of Braddock) vs. Watson and another, 3 Price, 6, the assignment was not made at the instance of creditors, but being for their general benefit, it was held to be good against the crown. In Marbury vs.

Brooks, 7 Wheat. 556, and 11 Wheat. 78, the assignment was for the particular benefit of certain creditors, (several banks) made not only not at their instance, but without their privity; yet it was held to be good, and the assent to it of the preferred banks presumed, they having expressed no dissent. The attempt to assimilate the condition of the Bank, after the execution of the deeds, to that of a deceased debtor, on the supposed ground that the Bank, by the transfer of all its property thereby became dissolved, and ceased to exist as a corporation, rests on no stronger basis.

An executor or administrator takes the funds of the deceased to be distributed according to law, subject to such preferences as the law allows. The moment the debtor dies the law asserts'the rights of the creditors, and takes the property into its hands, and makes or directs the distribution of it according to their priority, that being the law of deceased person’s estates, which a testator cannot by his will defeat.

Not so in the case of a bank; its funds are in its own hands, and not in the hands of the law; and like an individual, it has the power and authority to pay or transfer them to or for the benefit of its creditors. And although it should by a transfer of all its property render itself powerless to discharge the ordinary purposes of its institution, it still remains a living or existing corporation.

But if a mere assignment of all its property, could of itself have the effect to dissolve a corporation, it could only be on the ground, that the deed of assignment was valid and effectual to pass the property out of the corporation — otherwise if the deed was void, the property would remain in the corpora-.ration, and it would stand as if no such deed had been made.

The remaining ground taken by the solicitors for the State is, that admitting the deed to be good, and the State entitled to come in under it pari passu, with the other creditors, that at once brings the right of the State into conflict with the rights of other creditors, and thereby entitles it to a preference to the whole amount of its debt — which might be answered by a reference to the case of the King (aid of Braddock) vs. Watson and another, 3 Price, 6, where the assignment was for the equal benefit of all the creditors.

But the proposition amounts to this; that the deed is to be first set up as good and valid, in order to let in the State to a just proportion of the funds under it, and then to be overthrown to give to the State the entire fund, which cannot be; the deed cannot be good and bad at the same time. If void, and the State goes for the whole of its debt, (and it can only do so on the ground of its being void) it must claim adversely to the deed. If good, (and we have said and endeavored to show that it is) it has lost its preference and can only take its just proportion, according to the provisions of the deed.

And taking under the deed, there is, and can be no conflict of rights between the respective parties, each creditor’s right being only to a just proportion, without disturbing the right or claim of any other. And when neither has a right to the proportion of the other, but each only to hisown separate and distinct proportion,howcan there be a conflict of rights. It is not like a case of the concurring rights of the king and subject creditor, each seeking to obtain and secure the whole or the same thing, would be a case of conflict.

As where there is an execution by the subject, and an execution or extent by the king, before the right or title of the subject is consummated; in such case the king’s extent has the preference. But if the property be fairly and bona fide changed, or the right of the individual creditor be completed before the extent,, either by sale under fi fa. or a valid conveyance to him, or to a trustee for his benefit; the extent coming afterw'ards will be Unavailing.

There being no point of time at which the two tights were in conflict, and nothing for the extent to act Upbn, after the property ceases to be the property of the debtor. The right of the Slate being only against the property of its debtor, and not against the property of its debtor’s Creditor. We are therefore of opinion, that the preference which the State had, so long as the title of the property remained' in the Btiñk, is defeated by the deed of trust, and the decree musí be affirmed. DECREE AFFIRMED.