
    James S. Berryman v. Mary Sullivan et al.
    The bill alleged that a debt which the complainant, an attaching creditor, sought to reach, was claimed by a third party, under an assignment which was a mere cloak to hide the real ownership, which still remained in the assignor ; the assignee denied the fraud, and asserted that the assignment was bond fide, to secure him as indorser for the assignor, and to secure other debts : Held, that the answer being responsive to the bill, and the proof not being sufficient to overthrow it, the bill must be dismissed.
    And in such case it is not incumbent upon the assignee to set forth the particulars of his liability as indorser, to secure which the debt has been assigned ; the bill not being filed for a settlement of accounts between the assignor and assignee, but directed simply to the fraud in the assignment; the court would not entertain the question whether the indorser was under liability yet or not, the bill not having been filed with such object, nor the proof taken for such purpose.
    S., a creditor of Y. & M., filed his bill against them and B. & H., alleging that B. had a judgment in this state against H., which was really the property of M., and that B. and M. were non-residents, and sought to subject H.’s debt to the payment of his claim against Y. & M. ; B. answered, denying that his judgment against H. was M.’s property, but stated it had been assigned to him by M., to secure him as indorser for M., and also to secure other enumerated debts, including one due by M. to Y., M.’s codebtorto S.; to secure which debts, also, other property had been assigned to him (B.) by M., which other property had been sold and produced sufficient nearly to pay off those debts : Held, that before S. could claim the appropriation of the judgment against H., to the satisfaction of Y. & M.’s debt to him, on the ground that M. had assigned it to B. in part to secure Y., he must show that the debt from M. to Y. was still subsisting, and was not among the debts paid by the sale of the property assigned to B.
    None but a creditor having a judgment in this state can attack a deed of trust as fraudulent, with the view of having the property conveyed by it, subjected to the creditor’s demand ; not even though the parties to the deed of trust are non-residents, and the bill be a creditor’s foreign attachment bill; nor will it aid the creditor that he has a judgment on his demand in the state where the parties to the deed of trust reside.
    In error from the superior court of chancery; Hon. Stephen Cocke, chancellor.
    The bill, filed October 7, 1844, states that the complainants, Mary Sullivan, James W. Sullivan, and William Bryan, obtained judgment in Fayette county, Kentucky, against the defendants, Thomas Young and Eben Milton, for $871.88, on the 19th of September, 1843, and makes a record of the judgment exhibit A. That W. and R. Ferriday & Co. being indebted to Young & Milton, or Milton, in consideration and payment thereof, assigned a judgment against the defendant, Thomas P. Hardaway, for $3449.35, in Warren county, Mississippi, to the defendant J. S. Berryman, nominally, but in reality to fYoung & Milton, or Milton, and for their or his,use; the assignment to Berryman being a fraud to cloak the real ownership of the judgment. That the defendant, Thomas A. Marshall, had, as attorney at law of Ferriday & Co., collected part of this judgment against Hardaway, and had the proceeds of the residue in possession. That Young & Milton and Berryman were non-residents indebted to complainants, and Hardaway and Marshall resident defendants with effects. The prayer is in the ordinary form'for injunction and payment out of the attached debt, &c.
    
      Marshall answers, admitting the fact of his having four hundred dollars in his possession, collected out of the debt assigned to J. S. Berryman by Ferriday & Co., which he has ready to pay over according to decree. He disclaims all knowledge on the subject of the other allegations in the bill, and files, as exhibit 1, a copy of the assignment by Ferriday & Co. to J. S. Berryman, dated March 1, 1843; by which $3008.71 of the judgment against Hardaway is assigned to Berryman, provided he does not collect $1900 from one Holmes, in Louisiana ; in which event Berryman has only the remainder.
    By a supplemental answer, Mr. Marshall acknowledges the reception of five hundred dollars more from Hardaway.
    J. S. Berryman answers and states, that he knows nothing of the claim of complainants against Young & Milton, but refers to the record. He admits, that Milton obtained the assignment of the judgment against Hardaway, for a debt due to him, Milton, by Ferriday & Co., but denies that the assignment was made to him for fraudulent purposes, but avers that it was made for a valuable consideration, and that neither Young nor Milton have any interest in it. That the judgment was assigned to him, in the first place, to secure him as indorser for Milton, and Young & Milton for large amounts. That in anticipation of this transfer, he has already paid two hundred dollars. That after all his liabilities for said Milton have been fully paid off, the balance of the money received from Hardaway is to be appropriated to pay debts due by Milton, and Young & Milton; enumerated in a deed of trust made by Milton to him as trustee, in April, 1842, which deed is filed with the bill. That the debts enumerated in the deed of trust amount to about $17,000; that he has sold the property conveyed by it to him; that the amount of sales did not reach the amount of debts by $3000, which is more than he expects to get from Hardaway. The answer then enumerates the debts stated to be due in the deed of trust. They amount to $17,181, and include a debt to Thomas Young of $1700 ; to this list is added also the sum of $900, which he claims as compensation for acting as trustee. That he sold the property conveyed by the deed to him, on a credit, and it sold for about $15,000. That these estimates he believes to be about correct; that they are exclusive of his liabilities as indorser, which it is possible may be settled without touching this fund ; that he does not expect to get more than $13,00 or $14,00 from Hardaway.
    The deed of trust filed with this answer, is made on the 28th day of April, 1842, between Eben Milton and James S. Berry-man, and conveys a tract of land in Kentucky, except the part on which the bagging factory of Young & Milton is erected, for a description of which part, reference is made to a deed of the same date by Young & Milton to J. S. Berryman; also another tract of land, all the horses, hogs, sheep, cattle, household and kitchen furniture, one old barouche and harness, all the crop then making on the farm of Milton, for the year 1842, which Milton was to cultivate and gather, and all his other property of every kind, except provisions for the support of Milton’s family for the year; upon condition that Berryman is to hold the property thus conveyed, to pay certain specified debts, and indemnify him from certain specified indorsements, with power to sell the whole or any part of the property, when any one or more of the creditors, whose interests amount to $3000, shall request him in writing to do so. After the debts enumerated, including the one to Thomas Young of $1700, and one to himself of $1885.50, are paid, and they amount in the aggregate to $13,501, Berryman is to pay off certain other enumerated debts, part of which are secured by funds conveyed by another deed from Young & Milton to J. S. Berryman. Berryman accepts the trust and undertakes its execution.
    Milton’s answer was ordered to be taken from the files for want of security. It is in the papers, and admits the assignment to Berryman was for a debt due to himself, but denies fraud, &c.
    . There are pro confesaos, on publication, against Young & Milton, and on service of process against Hardaway.
    The deposition of A. W. Magowan, on behalf of complainants, proved, that he is the sub-assignee in bankruptcy of W. and R. Ferriday & Go., and has been for years familiar with their business; that Ferriday & Co. were in debt to Milton, and that in 1842, (by letter of assignment,) Milton assigned this debt, and the collaterals given by Ferriday & Co. on Holmes and Hardaway, to secure it, tp Berryman. The consideration of the assignment to Berryman from Milton, witness did not know. That in March, 1843, Ferriday & Co. assigned the judgment against Hardaway to Berryman, Berryman and Milton being both present, negotiating it, to secure the debt due to Milton. This witness files two letters from Milton; one is a letter of inquiry from Milton, in 1844, about the condition of the debts; the other is in ,these words, viz.:—
    “ Lexington, May 9, 1842.
    ” “Messrs. W. & R. Ferriday & Co. — Just as I was about leaving Louisville, on this day week, I received your last letter to me, informing me, that out of your numerous debtors, you expected to save, through a Mr. Holmes, about $2500 for me.
    “I can assure you that I never received any news that did me more good; it may be the means of procuring for my wife and eleven children a small house, out of what property I have lost in the business I have followed; since I saw you I have .been hard pushed, and to secure my securities from loss I have been compelled to mortgage to them my property, and want has been staring me in the face ever since; but, your letter has inspired me with hope, and I feel that I can again go on; and, for fear that some person may be disposed to get an attachment against you, I wish you to consider the debt now transferred to James S. Berryman. Yery respectfully yours,
    “ Eben Milton.”
    Also the following letter was in evidence : —
    “Lexington, Feb. 16, 1844.
    “Messrs. Smedes & Márshall, — Gentlemen, the time has passed that Mr. Hardaway was expected to pay part of the debt transferred from W. & R. Ferriday &'Co. to J. S. Berryman; the debt due from Holmes, which is mentioned in Ferriday’s transfer, is not yet paid, and vrhen paid, if at all, will not exceed $1600; should that debt be made, there will have to be paid out of Hardaway’s debt upwards of $1400; that njuch, at least, can be paid out of the first payment from Hardaway, which, when ready, i' will show you the necessary documents. The main object of this letter is, to ascertain if any money has come to your hands, out of which part can be paid. Please answer.
    “ Respectfully &c.,
    “ Eben Milton.”
    Also the following receipt in the hand-writing of Milton: —
    “Natchez, March 17, 1845. — Received of W. & R. Ferriday & Co., nineteen hundred and sixty-eight dollars and sixty-six cents, on account of a debt due me by them of $3008.71; to be allowed as a credit on account, 11-14 July next, being the proceeds .of Holmes’s debt. J. S. Berryman,
    “Per Eben Milton.”
    The deposition of Robert Young proves, that Thomas Young, of the firm of Young & Milton, is the same Thomas Young secured by the deed of trust.
    This was all the proof in the case.
    The answers of Berryman and Milton were filed November 26, 1844. The order of publication for Young, Milton and Berryman, was granted 10th of December, 1844; on the 14th of December, 1844, the answers of Milton and Berryman were ordered to be taken from the files, “ being filed in violation of law and the rules of the court.” The bill was taken for .confessed, June 1845, against Milton and Young, when the counsel for plaintiffs and defendants in the cause, agreed to submit it for final hearing upon the bill, answers, and proof, February 6, 1846. The cause was referred to a commissioner, who reported $1081.74 due complainants by Young & Milton, January 17, TS46, when the chancellor ordered a decree for complainants; the decree recites, that the cause was submitted upon the bill and exhibit of the complainants ; the answer of the defendants, Thomas A. Marshall and James S. Berryman, and the respective exhibits thereto, and the pro confessos against Young, Milton, and Hardaway, and the proofs and depositions in the cause; the report of the commissioner was confirmed, the fund attached declared to be liable to the attachment, and Marshall ordered to pay the sum he had on hand, and execution against Hardaway directed for the residue. Berryman alone sued out this writ of error.
    
      F. Anderson, for plaintiff in error, insisted,
    1. That there was no sufficient proof assailing the validity of the assignment of March 1, 1843, to Berryman: and that Berryman’s answer stood unimpeached. On this point Mr. Anderson reviewed the-proof, and contended that the letter of Milton, of May, 1842, was nearly>a year anterior to the assignment to Berryman, and could not therefore affect it. He also considered at length the letters of Milton, and insisted that they did. not prove any thing to invalidate the assignment.
    2. That the debt of $1700 to Thomas Young, secured by the deed of trust, could not be attached, because no such proceeding was authorized by the statute, How. & Hutch. 620, § 63; inasmuch as Young was a non-resident, as well as Milton and Berryman. On this point he cited 9 Yerg. 244; lb. 261; 3 Leigh, 306 ; Comstock v. Rayford, 1 S. & M. 441.
    3. But it is contended, that, inasmuch as there is a fund in this state to proceed against, to wit, that in the hands of Hardaaway and Marshall, and which is coming to Berryman, who is indebted to plaintiffs in the above mentioned $1700, this will give the court jurisdiction. It is a sufficient answer to this, to say this court has not jurisdiction to say whether Berryman is indebted to plaintiffs. To do this, would be to grant a kind of double attachment; 1st, an attachment against the effects of Young & Milton, to bring them into court, to try whether they are indebted to plaintiffs; 2d, an attachment to bring Berryman into court, to try whether he is indebted to Milton & •Young.
    4. Let the plaintiffs first proceed against Berryman, in Kentucky, to try the question, whether by the receipt of the $1700 for Young, he has become indebted to them; and if they establish their case against him, then they may require the aid of this court, to attach a fund in this state, due to him, but-not before.
    
      
      Charles Scott, on same side.
    1. The chancellor erred in striking the answers of- Berryman and others from the file. They were necessary parties, and being non-residents, had a right to file their answers before or after publication under the statute. A non-resident defendant not-served with process, has a right to appear in court within five years from the rendition of a decree, and file his answer, &c. Hutch. Dig. 765.
    2. The answers being taken from the file, the cause was set down for final hearing, without even a pro confesso against the plaintiff in error. The decree purports to have been rendered upon bill, answers, exhibits, and proofs, when in fact the answers of appellant and other defendants had been taken from the file, and the bill was not taken for confessed. It was error to render a final decree under such circumstances.
    
      W. C. Smedes, for defendants in error, contended,
    1. That the letter of May 9, 1842, established the fraudulent motive of Milton, in directing the assignment.
    2. That the answer of Berryman was so vague and general, as to the liability he was under, as indorser, and so silent as to the nature or value of the additional indemnity he had, as to justify the conclusion that he was under no responsibility on that account, especially in view of Milton’s letter. Even if this judgment were assigned to Berryman, to pay the debts enumerated in the deed of trust, sufficient appears to sustain the decree.
    1. It appears by the answer, that all the debts to be secured by the deed, amount to $17,181; and that $15,000 are in his hands to pay it with; leaving only $2181 unpaid, except what he claims as compensation; but since the filing of this bill, he has received, as-appears by his receipt, $1968.66; so that there is really due and unprovided for, by the deed of trust, but $212.34; and that amount attached, is sufficient to pay that sum, and the complainant’s debt besides.
    2. One of the very persons, to secure whom this deed of trust is made, is Thomas Young; he ¡is entitled to $1700 of this attached debt. The fund attached belongs to Young, more than enough to pay our debt. Young is our debtor, and it seems to me our attachment must hold it.
    3.Enough appears in the case to justify the court in disregarding the alleged assignment to Berryman, and treating it purely as the property of Milton.
    1. The deed made by Milton and Berryman, has the following badges of fraud. (1.) It conveys all the debtor’s property, without exception, stripping him of every thing. (2.) It allows him to retain possession, until creditors in interest, to the extent of $3000, demand a sale. (3.) It makes an express reservation in favor of the grantor, of corn and provisions, for the year’s support of his samily. (4.) It prefers certain creditors, and makes no provision for others to have the benefit of the surplus. (5.) Berryman is both trustee and cestui que trust, with power of sale.
    2. He has sold all the property without order of court, and without, so far as appears, the assent of the creditors, or their request in writing, as required by the deed.
    3. He sold the property on a credit, when no such power is given to him.
    4. He states that the property sold for about $ 15,000, without stating who purchased it; that it sold for a fair price; or that he made advertisement as required by the deed.
    5. It appears by the deed, that Young & Milton conveyed a bagging factory, and other property, by another deed, not before the court, but in their custody, to secure Berryman, as indorser, and to secure some of the debts named in the deed, filed with the bill. Yet the answer nowhere states what has become of that property, what its value is, what debts it has paid, or will pay, but conceals all about it.
    6. Berryman claims $900 for compensation. He is a voluntary assignee, to secure his own debt, for his own benefit and indemnity, and is not entitled to compensation. See the following authorities. Green v. Winter, 1 John. Ch. R. 27; Manning et al. v. Manning, lb. 527.
    7. The proof and pleadings all show Berryman to be a merely nominal party, to shield this judgment from Milton’s creditors. Milton writes to Ferriday & Co. to that effect; Milton is the only party who takes an interest in its collection; and finally Milton is the party who actually, with the assent, and in the name of Berryman, received $1968.66 of the money.
    (The argument on the technical objections to the decree, is omitted.)
   Mr. Justice Clayton

delivered the opinion of the court.

This was a bill filed in the superior court of chancery, to attach a debt due from Hardaway, originally to Ferriday & Co., but by them assigned to Milton, and by him to Berryman. The bill was filed in September, 1844, to obtain satisfaction of a debt due from Young & Milton to complainants, by subjecting the debt of Hardaway, assigned as aforesaid. The complainants, as well as the defendants, Berryman, Young & Milton, are all non-residents. The assignment was made in March, 1843. To enable the complainants to succeed, they must establish the allegation contained in their bill, “that the assignment to Berryman was a cloak to hide the debt for Milton, and that it really belongs to Milton.” In this we think the complainants have failed. The answer of Berryman, which we regard as part of the record, in accordance with the agreement of the counsel of complainant, asserts that the assignment was made bona fide, with the intention of securing him as indorser, and of securing the payment of other debts. No proof has been taken to contradict that answer, and it must therefore prevail, being directly responsive to the bill.

But it is urged that the record fails to show, that any responsibility rests upon Berryman as indorser. This bill was not filed for any general settlement of accounts, among all the parties, to ascertain whether any, and what degree of indebtedness exists. Its only allegation is as to the fraud in the assignment, but it is attempted to establish the fraud, by going into all the numerous transactions between the parties where they reside, in Kentucky. ■ It would be very inconvenient to enter into such inquiry in this state, upon a bill filed with no such object in view, and upon proof taken for no such purpose, referring to it only collaterally, and tending to show that the deed of trust made in Kentucky, was fraudulent, that the debts provided for by it were paid, and that Berryman was in no danger of loss, as indorser.

But it is said that one of the debts secured by the deed of trust, was due to Young, the partner of Milton, and that he being a joint debtor to complainants, and having thus an interest in this fund, the attachment should hold it. We do not see the applicability of this reasoning. The debt of Young may be one of those that are fully paid, by the sales of the trust property. Nearly all the debts mentioned in the deed of trust have been paid. If the complainants sought to hold this fund by reason of the non-payment of the debt due to Young, they should have shown by proof, that it was still a subsisting, and not a discharged debt.

The deed of trust executed in Kentucky, upon property within that state, and which has been sold in accordance with its provisions, is next ‘attacked, as fraudulent upon its face, in order to induce the court to treat this debt as that of Milton, without regard to the conveyance by him. All. this is collateral; but still if we are to decide upon it, it must be by those rules which would govern, if this were a bill filed directly to impeach it. No one but a judgment creditor could file such bill. These complainants have no judgment in this state, and their judgment in Kentucky cannot be available for such purpose. See Zecharie v. Bowers, 3 S. & M. 641; Tarbell v. Griggs, 3 Paige, 207.

There was nothing in the cause to contradict the answer of Berryman. The assignment to cover his contingent liability.as indorser, was valid, and should be supported until the complainants could show, that the contingency was at an end, and that no liability rested upon him. The admission in the answer, that by possibility the whole debts might be paid from the trust property, without a resort to this fund, was made in a spirit of candor and fairness. But this admission ought not to take away from him the security of the assignment, until the certainty was ascertained, or a reasonable time had been allowed for the purpose.

The complainants having failed to make out their case, the decree must be reversed, and the bill dismissed.  