
    * Robert Stevens, Jun., and Eleven Others, versus Shubael Bell.
    A debtor, or one bound to indemnify his sureties, may secure his creditors or sureties by honestly pledging his property, or conveying it in trust for their use, with their consent
    When schedules of the effects conveyed, or of the amount of the debts, or of the liabilities to be indemnified against, are not made at the time of the grant, it furnishes,pimafade, a presumption of fraud; but this presumption may be removed by the facts attending the transaction. But a debtor may not convey his estate in trust for creditors generally without their consent.
    This action was trover for certain chattels claimed by the plaintiffs as their property, and averred by them to have been converted by the defendant to his own use.
    A trial was had, during the present term, on the general issue, before Sewall, J., and a verdict taken for the plaintiffs, for the sum of 22,000 dollars, to be amended, as to the amount, by the Court, upon evidence to be exhibited; and the whole subject to the opinion of the Court, upon the facts reported by the judge, whether the plaintiffs are entitled to recover.
    Both parties agreed, at the trial, that the chattels in question were the property of Hastings, Etheridge, and Bliss, until the tenth day of September last, when a certain indenture was executed between the plaintiffs and the said H., E., and B. The plaintiffs claimed the chattels under that indenture; and it was agreed that the defendant, being a deputy sheriff, attached and took the same chattels by virtue of sundry writs directed to him, issued at the sui't of divers bona fide creditors of the said H., E., and B., other than the plaintiffs, by which he was directed to attach their goods; it being admitted that the just claims of the said attaching creditors exceeded the value of the chattels attached.
    
      The indenture above mentioned was between the present plaintiffs on one part, and if., E., and B.,011 the other part. After reciting that the plaintiffs are severally sureties for H., E., and B., for the payment of divers sums of money, which the said principals were unable punctually to pay when they should become due, and that the same H., E., and B., were also indebted to certain of the plaintiffs in divers sums of money, — it is witnessed that, in consideration of the said sums due, and also to indemnify the plaintiffs respectively, the said H., E., and B., grant and assign the chattels in question, together with other estates, to the plaintiffs in trust, that they sell and collect the proceeds of * all the effects [ * 340 ] conveyed and assigned, as soon as may be for the best interest of the parties, and with the proceeds pay to Stevens and Joy, two of the plaintiffs, two thirds of the money they should pay as sureties, and also of what was then due to them, and with the residue to pay and retain to themselves what they should respectively pay as sureties, and what was then due to them respectively, including the remaining one third due to Stevens and Joy; — if such residue should be insufficient, each of the parties to abate pro rata; — if more than sufficient, the plaintiffs to account for the surplus to the said H., E., and B. And it was agreed that a schedule of the respective claims of the plaintiffs should be made out as soon as might be ; and if any dispute should arise as to the said claims, they should be submitted to arbitration. The plaintiffs were also constituted the attorneys of the said H., E., and B., with a power of substitution.
    It was also agreed by the parties that the said indenture was executed on the said tenth day of September, and that possession of the chattels was immediately after given to the plaintiffs; that the defendant made his attachment at the suit of bona fide creditors, whose dt bts were due before the indenture was executed; that, at the time of its execution, no schedule was made of the several articles and effects sold and assigned, nor of the amount of the several and respective claims and demands of the plaintiffs; but those schedules were afterwards correctly made, but not before the defendant made his attachment; that, when the indenture was executed, the debts due to, and the claims of, the plaintiffs were estimated at about 56,000 dollars, and Bliss, one of the debtors, estimated the stock transferred at about 60,000 dollars, valuing the articles at a wholesale price, and at 100,000 dollars at a retail price. But, from subsequent events, it appeared that the estimate was much too high. It was further agreed that all the property of H., E., and B., was conveyed, except their household furniture. [ * 341 ] and some real estate belonging to one of * them ; and that to four of the plaintiffs no debts were then due, but they were only liable as sureties. Some other facts were stated, which did not seem, in the minds of the Court, to bear materially on the question before them.
    The parties on either side being very urgent for a decision of the cause, the Court heard an argument a few days after the trial.
    
      For the defendant, it was urged that the conveyance was void as to attaching creditors, — as being mala fide, — against public policy, and without a valuable consideration.
    As to the first point, it was said that a secret trust was contemplated for the grantors, — as they conveyed every thing but their household furniture, — as no schedule was made at the time of the conveyance, — as no time was fixed in which the grantees were to turn the effects into money, and to appropriate the proceeds, — and as they were to account with the grantors for any eventual balance.
    On the second point, it was said that creditors had a right to secure their debts by attachment; and that a conveyance of this kind tended to delay and defeat creditors; and if there should be a surplus remaining in the hands of the plaintiffs, after their debts and liabilities are discharged, it could only be secured by relying on the oaths of trustees, and not by the finding of the jury.
    As to the last point, — the want of a valuable consideration, — the objection was, that, as some of the plaintiff's were not creditors, but sureties only, there was no consideration, as to them ; and if the conveyance is void as to one of the grantees, it is void as to all. And it was further objected that, although a debtor might pledge property as security for a debt, yet he could not convey it in trust to pay a debt.
    These objections were answered by the counsel for the plaintiffs, and the action stood continued nisi for advisement. At an adjournment of the last March term of this Court, in Norfolk county, holden in July following, the chief justice, Sewall, J., and Parker, J., being present, the opinion of the Court was delivered by
   * Parsons, C. J.

By our law, as well a debtor as he who is bound to indemnify another against an engagement entered into for his use and at his request, may, without question, secure his creditors and his sureties by pledging his property, or by conveying it in trust for their use, with their consent, so that the same be done honestly and fairly ; for the existing debt, or the engagement by the surety, is a valuable consideration, and such security oi trust is repugnant to no principle of public policy. If such security, so pledged or conveyed in trust, be delivered over agreeably to the conveyance, and if the security be not manifest!} excessive, and greatly more than adequate to the debt or indemnity, no injury is done to other creditors, if there be a stipulation that the surplus over the debts and indemnities shall enure to the use of the debtors.

For, at common law, every man might prefer any creditor, and might pledge his property, and convey it in trust, so that no fraud resulted to others; and if he stripped himself of all his property in favor of any one creditor, leaving himself quite destitute, no other creditor had legal cause of complaint, if the transaction was honest, and for a valuable consideration. This right in a debtor is founded on the acknowledged principle, that he may prefer or secure any one creditor in a way that is not a fraud on another.

But, in consequence of our statutes authorizing attachments, and of our want of a chancery jurisdiction, it has been several times settled that a debtor cannot convey his estate in trust, for his creditors generally, without their consent given to such conveyance ; but to creditors consenting, and parties to the conveyance, he may grant all his estate, for the payment of their debts, or to secure them indemnities, if thereby he exercise only his right of preference, and do not defraud others.

But when the conveyance is in trust for all the creditors, generally, without their assent, a creditor is not bound, but may proceed by way of attachment; for, being no party to the conveyance in trust, he can have no remedy upon it * at [ * 343 ] law, and there is no equitable jurisdiction, to which he may apply.

We make no distinction between a conveyance to creditors with their assent, whether it be by way of pledge, or in trust for their use, for we know no reasonable foundation for any such distinction. Goods may be pledged to a creditor, to be redeemed on payment of the debt, and with liberty to the creditor, on failure of redemption, to sell the pledge, pay himself, and account for the surplus to the debtor. When the creditor exercises this liberty, he becomes a trustee; and the debtor may at all times waive his right to redeem, if he is to have the surplus.

The same principle must apply, whether the debtor pledges the goods separately to a single creditor, or jointly to several creditors, with the liberty to sell, pay themselves, and render an account, on failure of redemption, unless the right to redeem be waived. And on similar grounds we make no distinction between a pledge given, or a trust created to secure to sureties an indemnity against their liabilities. For undoubtedly a single surety might be secured by a pledge, with liberty to sell if damnified, accounting to the pledgor for any surplus.

Otis and Jackson for the plaintiffs.

Dexter and Prescott for the defendant.

In the application of these principles to the case before us, there appears to be a valuable consideration for the conveyance ; and there is no trust, expressed or implied, for the grantors, except the accountability of the grantees for an eventual surplus, which may be secured by attachment, at the suit of any other creditor, and is, therefore, not a fraud on any creditor. Nor are the other creditors delayed or defeated of the recovery of their demands, but as a consequence of the legal right of a debtor to prefer any creditor or creditors at his option.

A debtor may, if he pleases, convey all his effects for the use of any particular creditors; and if the effects are delivered over, such conveyance may be bond fide; and when no time is fixed for the grantees to apply the proceeds and render an account, the law requires them to execute the trust in a reasonable time.

[ * 344 ] * When schedules of the effects conveyed, or of the amount of the debts, or of the liabilities to be indemnified against, are not made at the time of the grant, although, primd facie, this may furnish a presumption of fraud, yet this presumption' may be removed by the facts attending the transaction. And the facts agreed in the case at bar remove this presumption ; for a schedule was to be made out as soon as might be, and also an account of the debts and liabilities, which, if disputed, were to be arbitrated.

Upon a view of all the facts agreed, and of the whole transaction, so far as it has been laid before us, we see no fraud to impeach the conveyance, as against creditors not parties to it. And it is our opinion that the verdict must be in favor of the plaintiffs; and, when amended conformably to the agreement of the parties, will entitle them to judgment upon it. 
      
       [There seems to be no difference, in that respect, between a conveyance for the benefit of certain creditors, who become parties to the indenture by executing it, and a conveyance in trust for all the creditors, whose assent will be presumed, unless the contrary appear. The latter species of conveyance is valid both in law and equity. Halsey vs. Whitney, 4 Mason, 206.— Brooks vs. Marbury, 7 Wheat. 556. —11 Wheat. 78.— Wheeler vs. Sumner, 4 Mason, 183. — Brashear vs. West, 7 Peters, 608. — Pickstock vs. Lyster, 3 M. & S. 371 — Ed.]
     