Citations for Plaintiff in Error.

A decree in accordance with the opinion was thereupon entered, and from it the receiver and the trustees respectively appealed.

The receiver assigned errors as follows: That the court erred (1) in refusing to set aside the deed of assignment of Bain & Bro. as fraudulent in fact; (2) in failing to declare the assignment void because executed in fraud of sections 5151 and 5234 of the Revised Statutes of the United States; (3) in holding that the receiver was entitled "to a surrender by the assignees of such of the property which it is found had actually been purchased with the moneys of the bank, but of no other;" (4) in holding that the assignment "was made and executed without any actual fraudulent intent on the part of the said grantors or either of them to hinder and delay their creditors; " (5) in holding "that the said deed of assignment is not fraudulent and void on its face."

The trustees assigned as error that the court erred (1) in finding that the trustees were to be considered as affected by constructive notice, as to certain of the property held by them, that it had been purchased with the money of the bank, and that the receiver was entitled to receive so much thereof as he elected to take, and was not, by making such election and receiving such property, estopped from receiving the benefit of the said deed of trust in favor of the Exchange National Bank; (2) in the amount of property decreed to have been traced; (3) in decreeing that as to property purchased with the money of the Exchange National Bank, and traced into such property, there was a resulting trust in favor of the bank, of which the trustees were to be considered as having had constructive notice; (4) in decreeing that the costs of the suit be paid out of the trust funds in the hands of the trustees.

Mr. Theodore S. Garnett and Mr. William J. Robertson, for Peters, cited: Russell v. Wynne, 37 N. Y. 591; S. C. 97 Am. Dec. 755; Grover v. Wakeman, 11 Wend. 187; S. C. 25 Am. Dec. 624; Upton v. Tribilcock, 91 U. S. 45; Sanger v. Upton, 91 U. S. 56; Bowden v. Santos, 1 Hughes, 158; Adler v. Milwaukee Brick Co., 13 Wisconsin, 57; Hightower v. Thornton,

Citations for Defendants in Error.

8 Georgia, 486; S. C. 52 Am. Dec. 412; Frith v. Cartland, 2 Hem. & Mill. 417; Ward v. Griswoldville Mfg. Co., 16 Connecticut, 593; Nevitt v. Bank of Port Gibson, 6 Sm. & Marsh. 513; Wood v. Dummer, 3 Mason, 308; Frelinghuysen v. Nugent, 36 Fed. Rep. 229; Pennell v. Deffell, 4 DeG. M. & G. 372; Knatch ball v. Hallett, 13 Ch. D. 696; McLeod v. Evans, 66 Wisconsin, 401, and cases cited; Metzner v. Bauer, 98 Indiana, 425 ; National Bank v. Insurance Co., 104 U. S. 54; Newman v. Cordell, 43 Barb. 448; Boardman v. Halliday, 10 Paige, 223; Barnum v. Hempstead, 7 Paige, 568; Averill v. Loucks, 6 Barb. 470; Sheldon v. Dodge, 4 Denio, 217; Strong v. Skinner, 4 Barb. 546; Kercheis v Schloss, 49 How. Pr. 284; Hyslop v. Clarke, 14 Johns. 458; Seaving v. Brinkerhoff, 5 Johns. Ch. 329; Austin v. Bell, 20 Johns. 442; S. C. 11 Am. Dec. 297; Gasherie v. Apple, 14 Abb. Pr. 64; Brigham v. Tillinghast, 15 Barb. 618; S. C. 13 N. Y. 215; A. & W. Sprague Mfg. Co. v. Hoyt, 29 Fed. Rep. 421; Shanks v. Klein, 104 U. S. 19; Allen v. Withrow, 110 U. S. 119.

Mr. Richard Walke and Mr. James Alfred Jones, (with whom was Mr. Legh R. Page on the brief,) for Griffin, Old, and Jenkins, trustees, cited: Wickham v. Martin, 13 Grattan, 427; Evans v. Greenhow, 15 Grattan, 153; Garland v. Rives, 4 Randolph, 282; S. C. 15 Am. Dec. 756; Skipwith v. Cunningham, 8 Leigh, 271; S. C. 31 Am. Dec. 642; Lewis v. Caperton, 8 Grattan, 148; Phippen v. Durham, 8 Grattan, 457; Dance v. Seaman, 11 Grattan, 778; Sipe v. Earman, 26 Grattan, 563; Shurtz v. Johnson, 28 Grattan, 657; Williams v. Lord, 75 Virginia, 390; Gordon v. Rixey, 76 Virginia, 694; Foster v. Goddard, 1 Black, 506; McCullough v. Sommerville, 8 Leigh, 415; Gordon v. Cannon, 18 Grattan, 387; Cochran v Paris, 11 Grattan, 348; Kevan v. Branch, 1 Grattan, 274; Brockenbrough v. Brockenbrough, 31 Grattan, 580; Young v. Willis, 82 Virginia, 291; Darling v. Rogers, 22 Wend. 483; Salmon v. Stuyvesant, 16 Wend. 321; Curtis v. Leavitt, 15 N. Y. 9; Parks v. Parks, 9 Paige, 107; Pigot's Case, 11 Rep. 27; Patterson v. Jenks, 2 Pet. 215; Mackie v. Cairns, 5 Cowen, 547; S. C. 15 Am. Dec. 477; Harrison v. Harrison, 36 N. Y. 543; Post v. Hover,

Opinion of the Court.

30 Barb. 312; 33 N. Y. 593; Gott v. Cook, 7 Paige, 521; De Peyster v. Clendining, 8 Paige, 295; Van Vechten v. Van Vechten, 8 Paige, 103; Gilman v. Redington, 24 N. Y. 9; Everitt v. Everitt, 29 N. Y. 39; Kane v. Gott, 24 Wend. 641; S. C. 35 Am. Dec. 641; Williams v. Williams, 4 Selden (8 N. Y.) 524; Van Schuyver v. Mulford, 59 N. Y. 426; Manice v. Manice, 43 N. Y. 303; Denny v. Bennett, 128 U. S. 489; United States v. Bradley, 10 Pet. 343; Gregory v. Gates, 30 Grattan, 83; Dixon v. McCue, 14 Grattan, 540; Wilson v. Townshend, 2 Ves. Jr. 693; Watson v. Watson, 128 Mass. 152; Chapin v. Thompson, 89 N. Y. 270; Smith v. Smith, 14 Gray, 532; Brown v. Brown, 108 Mass. 386; Hapgood v. Houghton, 22 Pick. 480, 483; Doe v. Cavendish, 3 Doug. 48, 55; S. C. 4 T. R. 741, 743, note; Birmingham v. Kirwan, 2 Sch. & Lef. 444, 450.

MR. CHIEF JUSTICE FULLER, after stating the case as above, delivered the opinion of the court.

The opinion of the late Chief Justice clearly delineates the grounds upon which the Circuit Court proceeded and minimizes our labors in the disposition of this case.

The deed of assignment was attacked as fraudulent in law and in fact.

The statute of Elizabeth, c. 5, against fraudulent conveyances has been universally adopted in American law as the basis of our jurisprudence on that subject, (Story Eq. Jur. § 353,) and reënacted in terms, or nearly so, or with some change of language, by the legislatures of the several States.

In Virginia the statute reads as follows: "Every gift, conveyance, assignment, or transfer of, or charge upon any estate, real or personal, every suit commenced, or decree, judgment, or execution suffered or obtained, and every bond or other writing given with intent to delay, hinder, or defraud creditors, purchasers, or other persons of or from what they are or may be lawfully entitled to, shall, as to such creditors, purchasers, or other persons, their representatives or assigns, be void. This section shall not affect the title of a purchaser for valuable consideration, unless it appear that he had notice of

Opinion of the Court.

the fraudulent intent of his immediate grantor or of the fraud rendering void the title of such grantor." Virginia Code, 1873, 896, c. 114, § 1.

In controversies arising under this statute, involving, as they do, the rights of creditors locally, and a rule of property, we accept the conclusions of the highest judicial tribunal of the State as controlling. Jaffray v. McGehee, 107 U. S. 361, 364; Lloyd v. Fulton, 91 U. S. 479, 485; Allen v. Massey, 17 Wall. 351. We understand counsel to contend that the deed contains certain provisions which must so hinder, delay and defraud creditors that fraud in its execution is to be conclusively presumed without regard to the intention of the parties.

The doctrine in Virginia, settled by a long and uninterrupted line of decision, is that, while there may be provisions in a deed of trust of such a character as of themselves to furnish evidence sufficient to justify the inference of a fraudulent intent, yet this cannot be so except where the inference is so absolutely irresistible as to preclude indulgence in any other. Hence provisions postponing the time of the sale and reserving the use of the property to the grantor meanwhile, though perishable and consumable in the use; permitting sales on credit; for the payment of surplus after satisfaction of creditors secured; the omission of a schedule or inventory; and the like, have been regarded as insufficient to justify the court in invalidating the deed for fraud in point of law. The fraudulent intent is held not to be presumed even under such circumstances, and in its absence the fact that creditors may be delayed or hindered is not of itself sufficient to vacate the instrument, while the right to prefer one creditor over another is thoroughly established. Dance v. Seaman, 11 Grattan, 778; Brockenbrough v. Brockenbrough, 31 Grattan, 580; Young v. Wilson, 82 Virginia, 291, 293.

When, then, it is claimed in this case that the deed is fraudulent in law, "because it appropriates partnership assets to pay individual debts in preference to the debts of the partnership," we should naturally expect to find that the Supreme Court of Appeals had held that where, as here, the conveyance included all the property of the grantors as partners and indi

Opinion of the Court.

vidually, for the benefit of partnership and individual creditors, it should be construed distributively, and the partnership assets be applied to the payment of partnership debts and the individual assets to individual liabilities. And such is the fact. McCullough v. Sommerville, 8 Leigh, 415; Gordon v. Cannon, 18 Grattan, 388. And, as pointed out by Mr. Chief Justice Waite, the difficulty, at the time the assignment was made, attendant upon any attempt to separate the partnership and individual assets, and the partnership and individual debts, would be considered under the view of the state courts, in passing upon the question of intent to defraud in failing to specifically distinguish between them.

The only other ground of objection on this branch of the case relates to the following clause in the deed:

"And the said trustees, for the purpose of executing this trust, shall at once take charge of all the property and effects hereby conveyed, and make an inventory thereof, and proceed to collect the choses in action and all evidences of indebtedness, and to convert the real and personal property into cash as soon as possible, and they may make sale of the real and other personal estate hereby conveyed, at public auction or private sale, at such time or times and place or places and after such notice as to them shall seem best, and they may make such sale upon such terms and conditions as to them shall seem best, except that at any sale of said property, real or personal, at public auction, any creditor secured by this deed in the second class above enumerated shall have the right to purchase any part or parcel of said property so sold and pay the said trustees therefor at its full face value the amount found due such purchaser secured by this deed, or so much thereof as may be necessary to enable such creditor to complete the payment of his purchase money, and to enable as many creditors as possible to become bidders on these terms, the said trustee may have the real estate hereby conveyed, or any part thereof, laid off into lots or parcels, as they may think best. And upon the conversion of the said property hereby conveyed into money the said trustees shall distribute the same to the creditors hereby secured in the order herein