
    David Ripley versus Otis Severance, Principal, and Joel Allis, Trustee.
    Where a surety receives from his principal, property to secure him against his lia* bilities, and the principal subsequently makes a settlement with the surety, in which he transfers to the surety his whole interest in the property for a grossly inadequate consideration, the settlement is fraudulent against creditors of the principal; but the surety is still entitled to hold the property to secure him against his original liabilities.
    If in such case the surety be summoned as trustee of the, principal, he will have a right to deduct from the proceeds of the property all payments which he has made on account of his liabilities as surety, and all amounts which he is still liable to pay on that account, and also any other payments bonájide made by him on account of the principal ; and will be chargeable only for the balance after making these deductions.
    Where in such a case, one of the original liabilities was to pay a life annuity to a third person, the Court directed the value of the annuity to be estimated in ready money, and to be deducted from the proceeds in the trustee’s hands, and that he should only be chargeable with the balance.
    If in such case the parties and all concerned agree, the plaintiff may relieve the trustee from his future liability to pay the annuity.
    A person cannot be chargeable as trustee in the trustee process, on account of land which has been conveyed to him by the principal defendant io defraud creditors.
    From the answers of Allis, the supposed trustee, the following facts appeared : — On the 23d of December, 1818, Allis became surety for the defendant in a bond to Hannah Martindale to pay her an annuity of forty-two dollars during her life, if she should see cause to demand it, on account of her having released to William Hanson her dower in certain land ; and on the same day he became surety for the defendant in a bond to Hanson, conditioned that Emily Severance, then a minor, should release her interest in the same land to Hanson within two months after she should “ become capable in law of making a deed.” This last bond was discharged after the service of the writ in this action, by procuring the deed from Emily Severance, Allis paying her the sum here after mentioned. These bonds were fairly made for the purposes specified in their conditions. The defendant, to indemnify Allis for his liabilities, deposited in his hands five promissory notes of Otis Gunn for 200 dollars each, taking a written agreement from Allis that he would deliver up the notes or their amount in money when he should be wholly discharged from the bonds. Allis soon after paid back to the defendant nearly the amount of one of the notes, which had been paid to Allis by Gunn. In February, 1821, Allis paid the defendant 184 dollars, and in October, 1822, 160 dollars, and also paid to creditors of the defendant several small sums amount ing to 15 dollars. Allis also became bound for the defendant, to pay Emily Severance 160 dollars, and afterwards paid that sum to her with interest. He also gave up a note for 72 dollars which he held against the defendant, and became bound to pay Uriah Martindale 22 dollars on the defendant’s account. The note of 72 dollars which Allis gave back to the defendant had been given to Allis by the defendant as an additional security, at a time when it was supposed that the Gunn notes were not sufficient to indemnify Allis against his liabilities. In September, 1822, Allis became bound to the defendant to support his mother, Hannah Martindale, during her life. In consideration of these payments and obligations of Allis, the defendant, on the last of September or first of October, 1822, discharged him from all notes and book accounts, and agreed that he should have as his own property the notes previously assigned to him ; and gave up his written agreement before mentioned for the return of the notes. At the time when this settlement was made, Allis gave the defendant a note for 40 dollars, and they passed receipts. Hannah Martindale, before t^e service of the writ in this action, demanded of Allis the payment of the annuity of 42 dollars and all that was due to her on the bond. Allis had accordingly paid her 64 dollars before the date of the writ, and given his note to her for 184 dollars for the arrears of the annuity. In February, 1821, Allis received a deed of land in Pennsylvania, for which the defendant had paid by giving his note for 250 dollars. Allis had to pay the note and costs, which constituted the two payments of 184 and 160 dollars first above mentioned. Allis agreed to allow thé defendant to occupy the land five years, paying the taxes but no rent, and to convey it to the defendant when Allis should be discharged from the bond. The defendant ab sconded in November, 1819, being in debt. At this time there were unsatisfied executions against him in the hands of an officer. The notes of Gunn were all paid to Allis. The defendant is a brother-in-law of Allis.
    
      Sept. 24th.
    
    Wells, for the plaintiff.
    The money received on the Gunn notes having been received by the trustee, he must be charged, unless he can show clearly how he has disposed of it to exonerate himself. If there is any uncertainty, it must operate against the trustee. Cleveland v. Clap, 5 Mass. R. 201; Sebor v. Armstrong, 4 Mass. R. 206; Hart v. Ten Eyck, 2 Johns. Ch. R. 62, 87. Property placed in the hands of a person by a debtor in fraud of his creditors may be reached by this process. Burlingame v. Bell, 16 Mass R. 318; Thomas v. Goodwin, 2 Mass. R. 140; Hastings v. Baldwin, 17 Mass. R. 552; Dix v. Cobb, 4 Mass. R. 511. In this case there was a fraudulent contrivance between the defendant and the trustee to keep the property out of the reach of creditors. The inadequacy of the consideration on which the settlement was made was conclusive evidence of fraud. The trustee has an interest in the land, for which he is chargeable.
    
      Grennell and Ashmun, for the trustee.
    This process will not reach real estate, even if fraudulently conveyed. Howe v. Field, 5 Mass. R. 390. They admitted that the answers were not so clear as would be desirable, but they contended that the uncertainty was in the transactions themselves, not in die answers. _
    Sept 26th.
    
   Wilde J.

_ delivered the opinion of the Court. As the trastee admits that long previous to the service of the plaintiff’s writ upon him, divers notes were deposited in his hands as security to indemnify him against certain liabilities, it is incumbent upon him to show clearly that he has been damnified to the amount of the notes ; or that the principal has bon i fide discharged him from his liability to account for them ; and if this is left doubtful, he must be charged, for no presumption is to be made in his favor.

It is admitted that the first contract, under which the notes were deposited, was bond fide and valid, and so it clearly appears to have been by the facts as disclosed by the trustee He must be allowed therefore for all payments made or liabilities incurred by virtue of that contract; for the subsequent agreement, although fraudulent as against creditors, did not vitiate the first contract. The trustee therefore is to be charged with the whole amount of the notes against Gunn (1000 dollars and interest), deducting the following payments and liabilities, viz. 1. the sum of 160 dollars paid to Emily Severance ; 2. the sum of 64 dollars paid to Hannah Martindale, and also the sum of 184 dollars secured to her by note. As to any future liabilities of the trustee to H Martindale, the value of the annuity of 42 dollars may be computed in ready money, having regard to the age of the annuitant ; or if the parties and all concerned agree, the plaintiff may relieve the trustee from his future liability in this particular. 3. The trustee is also to be allowed the sum of 200 dollars, which, as he states, he paid to the principal, being about the amount of one of the notes deposited. 4. We think also that the trustee should be allowed the sum of 37 dollars paid to Uriah Martindale and other creditors ; for although this payment was not made * under the first contract, yet it was made bond fide, and in satisfaction of just demands against the principal ; it ought therefore to be deducted from the funds of the principal in the hands of the trustee. These deductions being made from the amount of the notes against Gunn, the trustee must be charged with the surplus ; for it is very clear that the discharge given him in 1822 was void as against creditors, and that his other claims on the trust fund cannot upon any principle be supported. The sums of 184 dollars and 160 dollars were paid for the land in Pennsylvania conveyed by Peck ; and the note for 72 dollars was without consideration, and was therefore rightly given up. The note for 40 dollars also, given by the trustee on the settlement in 1822, was without good consideration, or rather the consideration has failed, as the creditors of the principal see fit to set aside that settlement.

As to the land in Pennsylvania, the trustee cannot be charged upon the facts disclosed. It does not appear that the present value of the land exceeds the sum paid for it by the trustee ; and it cannot be presumed ; but if it could, he trustee would not be liable in this process.

Trustee charged. 
      
       See Harris v. Aiken, 3 Pick. (2nd ed.) 4, note 1; Kelly v. Bowman, 12 Pick. 383; Gordon v. Coolidge, 1 Sumner, 537.
     
      
       See Lamb v. Stone, 11 Pick. 533; Boston Type &c. Co. v. Mortimer, Pick. 166; Andrews v. Ludlow, 5 Pick. 32.
     
      
       See Bissell v. Strong, 9 Pick. 564, 565; Dickinson v. Strong, 4 Pick (2nd ed.) 58, note 1; Webb v. Peele, 7 Pick. 247; Gore v. Clisby, 8 Pick 555; Risley v. Wells, 5 Connect. R 431
     