John Whitney v. Freeland and Murdock, 26 Miss. 481

Mr. Justice Handy delivered the opinion of the court. The merits of this case lie within a narrow compass. Many collateral questions of much importance have been ably argued by the counsel; but we do not consider a decision of them as necessary to the determination of this case. We, therefore, announce only the conclusions to which we have come, after careful consideration of the questions involved. These conclusions are the following: — 1. Though the assignment to Freeland and Murdock be fraudulent and void, it is only so at the instance of the creditors of the bank.

It was competent for the creditors to file their bill in chancery, and have the assignment set aside, for their benefit, and they have a right to do so, notwithstanding the appointment of the appellant as trustee. 2. Though the trustee be entitled, in point of legal right, in a proper case, to treat the deed of assignment as void for the benefit of creditors, yet he does not present himself in an attitude to exercise that right under the state of facts presented here.

It appears that a large majority of the creditors of the bank, both in number and amount, assent to the assignment to the appellees, and it is not shown that aby creditor is unwilling to acquiesce in it, or that any creditor has presented and established his claim, under the appointment of the appellant, as trustee; and it is further shown, that only about seventeen hundred dollars of the notes and circulation of the bank are outstanding, and that they are in the hands of unknown persons, or destroyed, all the rest of the creditors assenting to the assignment to the appellees.

It does not, therefore, sufficiently appear that any claim will ever be presented by any creditor of the bank other than those who have agreed to the assignment. Under such circumstances it is not proper to act on the presumption that there are other creditors who may object to the assignment; because the court might proceed to declare the assignment void as to creditors, and annul it, and in the sequel there might never appear a single creditor seeking to set it aside.

Thus .the unjust and absurd conclusion would be reached, that the instrument would be rendered null and void for the benefit of creditors, when every creditor was satisfied with it and acquiesced in its provisions. It is, therefore, better to leave any creditors who may see proper to impeach the assignment to their own remedy which they have a right to pursue for themselves, than to do

an act which may turn out to be vain and useless in itself, and highly injurious to almost the whole of the creditors, by declaring the assignment void as to creditors, when no creditor is impeaching it, and no one ever may appear to impeach it; for by this course no injury can be done to any interest entitled to protection in equity. It is clear that the assignment is' void only as to creditors.

Suppose, then, that the dissenting creditors, if there be any, had filed their bill to set it aside, or that the appellant, in their behalf, had set forth their claims in his bill, would not the appellees have had the right to pay and satisfy those claims ? Such right will scarcely be questioned, because the substantial ground of complaint would thereby be removed. Then, can the appellant enjoy a better right by having failed to show the claims of any creditors unsatisfied, than he would have had if the claims had been specified in the bill or shown by evidence ?

We think not, and we are therefore of opinion, that all the injury of which the appellant could complain in a court of equity in behalf of dissenting creditors, would be removed by the offer which the appellees .make to pay and satisfy any demands which may be brought forward against the bank. The decree of the district chancery court dissolving the appellant’s injunction is, therefore, affirmed.