the McAlpines and the company for the ex- | notified Mr. McAlpine that the company would change of the two acres and seventy one-hun- not make the exchange, Mrs. McAlpine wrote dredths of an acre of the Ferry tract for the to him asking when the company would be 251-acre tract. It does not, it is true, make ready to remove its track from her land and any mention of the 160 acres in Pottawatomie come to a settlement for its use. That inquiry County, but of that land we need not concern drew from the superintendent a request that she ourselves, for as to it the bill was dismissed would "delay conclusions" until he could conand no appeal was taken by the complainants. fer with New York parties. Her letter referred If they were willing to accept a deed of the 251- to the contract made two years before, and acre tract in exchange for the two acres and stated that then an exchange of lands was conseventy one-hundredths of an acre of the Ferry sidered desirable by the railway people, as they tract, it did not lie with the railway company had been using her land for several years, for to complain that they did not make a claim for a steamboat landing and wharf, and were still the other land. It certainly was no ground using it, without making any compensation for for the company to repudiate the contract as its use. The inquiry which followed was inratified, that it called for less than was originally tended as an intimation of what would be exagreed upon. That land being left out of con- pected if the contract were abandoned, not as sideration, we have the respective parcels to be a consent to such abandonment; but it is seized exchanged sufficiently identified, and from hold of and put forth by the defendant as an [312] other documents they can be described by admission that no contract was ever concluded. metes and bounds. That is certain, as the It does not, in our judgment, justify any such maxim obtains, which can be rendered certain. inference. Nothing was ever heard from the And if the contract, for want of the signature of New York parties, nor does it appear that any the corporation or of its lawfully authorized communication was ever made to them on the agents, is not strictly within the Statute of subject. And Mrs. McAlpine afterwards called Frauds, yet the possession taken of the several upon the company to execute its deed pursuant parcels of the 251-acre tract by the McAlpines, to its contract. It was not until some time in and of the 20-acretract by the railway company December, 1880, that the general superintend-in pursuance of such contract, and continued ent informed her that the contract for the exever since, and their expenditures for buildings change of the 251-acre tract would not be carand other improvements upon the respective ried out under any circumstances, but that he parcels, constitute a part performance sufficient would take the responsibility of paying her to take the contract out of the operation of the $1,500 for her land as an amicable settlement. statute, and authorize a decree for its full per- In January, 1881, the present suit was comformance. The fact that possession was taken menced; and if, under the pretexts put forth before the ratification of the board in June, by the company, the performance of the con1878, did not impair the effect of that posses- tract could be defeated, a great wrong would sion as an act of part performance. The tak-be done to the complainants. Their possession, ing possession of, that is, exercising control and dominion over the property, was referable entirely to the contract. It was an act done with respect to the property by the consent of the vendor, which would not have been done if there had been no contract. This consent gave to the act, which would otherwise have been tortious, its character as one of part perform [313] ance. instead of being lawful, might be treated as a continuing trespass upon the property of the railway company; and the improvements placed upon the land, and the consequent increase in its value, would be lost to them. It is the wrong and hardship which would be done to a purchaser under these circumstances, by allowing the vendor to escape from the obligations of his contract for the want of some formality in It is not perceived how the effect of this pos- its execution, that constitute the ground of the [314) session, taken in behalf of Mrs. McAlpine-for jurisdiction of courts of equity in such cases to it was in her interest alone that the exchange compel performance. A principle of common was made, the title to the Ferry tract being in justice forbids that one shall be permitted to her and not in her husband-is destroyed or lead another to act upon a contract of purchase weakened as an act of part performance by the with him, and incur expenses by reason of it, fact that in June of the previous year, Mr. Mc- and then, upon some pretext of a defect in a Alpine and one Arthur had taken a lease of the matter of form, refuse compliance with its 25-acre tract until January 1, 1878. It does provisions, and thus deprive the purchaser of the not appear that Mr. McAlpine remained upon benefit of his labor and expenditures. Courts the land after the termination of the lease, of equity in such cases interfere and compel the which was before negotiations were opened for vendor to keep his engagements. Lester v. Forits acquisition, by exchanging for it the prop-croft, 1 Colles, Parl. Cas. 108; Wills v. Strad erty of Mrs. McAlpine. If Arthur remained upon the premises after such termination, he surrendered and left them when informed that the contract for the exchange had been made. The obligation of the Kansas Pacific Railway It is plain, in our judgment, that the subsequent Company to execute the contract by a convey. possession of Mrs. McAlpine, to whom the deedance of the 251-acre tract to the McAlpines passed of the company was to be executed, was taken with the property to the defendant, the Union under that contract, and that the improvements Pacific Railway Company, upon the consolidawere made on the faith that in pursuance of it tion of the two companies under the latter name. the title would be conveyed to her. Whenever property charged with a trust is conveyed to a third party with notice, he will hold it subject to that trust, which he may be com pelled to perform equally with the former Nor do we perceive that the obligation of the contract was released or impaired by the fact that when in April, 1880, the superintendent ling, 8 Ves. Jr. 378, 381; Gregory v. Mighell, [315] [329] 3. An attempt to obtain an illegal preference does not have the effect of depriving the creditor of his interest, under the statute, in the proceeds of the property of the insolvent debtor, nor give a prior right to a creditor who sues to set aside such illegal preference. [No. 129.] Argued Dec. 13, 14, 1888. Decided Jan. 28, 1889. APPEAL from a decree of the Circuit Court of the United States for the Northern Dis ances, bill of sale, judgment by confession and The facts are stated in the opinion. owner. The vendee in that case stands in the The same principle applies also to the mort- ELSIE WHITE ET AL., Appts., V. FREDERICK W. COTZHAUSEN. (See S. C. Reporter's ed. 329-345.) A debtor resident of Illinois, although insolvent or in failing circumstances, may prefer one creditor to the exclusion of others when done in good faith and for a valuable consideration. Tomlinson v. Matthews, 98 Ill. 178; Payne v. Miller, 103 Ill. 442; Eads v. Thompson, 109 Ill. 87; Bean v. Patterson, 122 U. S. 496 (30: 1126). The original bill having called for answers under oath, and such answers having been made denying the material allegations on which relief was prayed, such allegations must be supported by the testimony of two witnesses, or by one witness corroborated by circumstances which are equivalent in weight to another witness. Southern Development Co. v. Silva, 125 U. S. 247 (31: 678); Morrison v. Durr, 122 U. S. 518 (30: 1225); Union R. Co. v. Dull, 124 U. S. 173 (31: 417); Vigel v. Hopp, 104 U. S. 441 (26: 765); Story, Eq. Pl. §§ 875–849a. Messrs. John C. Spooner and Enoch Totten, for appellee: All the defendants affected by a joint decree should join in the appeal; and if any of them refuse or decline on notice, the others should then be permitted to appeal. Masterson v. Herndon, 77 U. S. 10 Wall, 416. (19: 953); Todd v. Daniel, 41 U. S. 16 Pet. 521 (10: 1054). On conveyances by insolvent debtors to members of the same family and household, the burden of showing them to be bona fide and supported by a good consideration rests with the party claiming the benefit of the same. Callan v. Statham, 64 U. S. 23 How. 477 (16: 532); Venable v. Bank of U. S. 27 U. S. 2 Pet. 107 (7: 364); Bartlett v. Mercer, 8 Ben. 439; Seitz v. Mitchell, 94 U. S. 580 (24: 179); Walcott v. Almy, 6 McLean, 23. When a person acts for a principal, and such fact is known to the party dealing with him, his contract, although executed in his own name, binds his principal equally as though evidence is admissible to show the fact of his signed in the name of such principal; and parol agency in order to charge the principal, not1. The Illinois Voluntary Assignment Act, in withstanding the writing is executed by the force July 1, 1877, forbidding preferences in assign-agent in his own name. ments, should be liberally construed, so as to sup- Benj. Sales, S§ 236; Trueman v. Loder, 11 Illinois Assignment Act-unlawful preference press the mischief and advance the remedy. Ad. & El. 589-594; Stowell v. Eldred, 39 Wis. 615; Taintor v. Prendergast, 3 Hill, 72; Higgins v. Senior, 8 Mees. & W. 840; Huntington v. Knox, 7 Cush. 371; Story, Ag. § 410; Wiener v. Whipple, 53 Wis. 302; Weston v. McMillan, [330] 42 Wis. 569; Pope v. Meadow Spring Distilling | a satisfactory account of the condition of the A sale by one insolvent of all his property is presumptively fraudulent. Tiryne's Case, 1 Sm. Lead. Cas. 52, 59, note Troyne's Case, 1 Sm. Lead. Cas. 50; Pickett Mr. Justice Harlan delivered the opinion of the court: This is an appeal from a decree declaring two conveyances of real property in Illinois, à bill of sale of numerous pictures, a judgment by confession in one of the courts of that State pursuant to a warrant of attorney given for that purpose, and certain transfers of property accompanying that warrant, to be void as against the appellee, Cotzhausen, a judgment creditor of Alexander White, Jr. It is assigned for error that the decree is not supported by the evidence. Besides controverting this position, the appellee contends that the conveyances, judgment by confession and transfers were illegal and void under the provisions of the Act of the General Assembly of Illinois, in force July 1, 1877, concerning voluntary assignments for the benefit of creditors. 1 S. & C. 1303. The record contains a large amount of testimony, oral and written; but the principal facts are as follows: estate, they consulted an attorney, who, upon investigation, ascertained (using here the words of the appellants' counsel) that Alexander White, Jr., "had lost the entire personal estate, and had nothing except his interest as an heir in certain of the real estate with which to make good his losses." It appeared, as is further stated, that he had mortgaged some of the real property the title to which had been taken in his name; had anticipated rents on other property; had exchanged lands for stock in a heating and ventilating company; had allowed taxes to accumulate; and had, besides, induced some members of the family to guaranty his notes to a large amount. Upon these disclosures being made, the property was put under the immediate charge of the younger son, and the attorney with whom the mother and sisters had advised was directed to collect the amount due from Alexander White, Jr. Thereupon a friendly accounting was had, which resulted in a report by him to the probate court on the 18th of July, 1879, of his acts and doings as administrator during the whole period from the date of his appointment, April 9, 1872, to July 21, 1879. The report admits a balance due from him as administrator, of $89,646.05, and charges him, "by virtue of the statute" (Rev. Stat. Ill. 1874, chap. 3, § 113), with $40,123.80, being interest on that sum from January 21, 1875, to July 21, 1879, at the rate of 10 per cent per annum; in all, the sum of $129,769.85. He does not seem to have asserted any claim whatever for his services as administrator or for managing the real property. That report was approved by the probate court, which made an order, July 22, 1879, directing the said sum of $129,769.85 to be distributed and paid by the administrator as follows: to the widow, $43,256.61, and to each of the other children, $14,418.87. It should be stated, in this connection, that on the 16th of July, 1879, two days before the report to the probate court, the proceedings in the partition suit were brought to a conclusion by a decree assigning dower to the widow, and setting off specific parcels of land to Margaret and Alexander respectively, and other parcels to the remaining heirs jointly. Alexander White, Sr., died intestate in the year 1872, his wife, Ann White, four daughters, Margaret, Elsie, Mary S. and Annie, and two sons, Alexander and James B., surviving him. Each of the children except James was of full age when the father died. At the request of the mother, and with the assent of his sisters, Alexander White, Jr., qualified as administrator and in that capacity received personal assets of considerable value. With their approval, if not by their express direction, he undertook the management of the real estate of On the same day, Alexander White, Jr., exwhich his father died possessed; making im-ecuted two conveyances, one to his sisters (exprovements, collecting rents, paying taxes and [331] causing repairs to be made. He received realty in exchange for stock in a manufacturing company and in part exchange for the homestead, taking the title in his own name. After the death of the father, the widow and children remained together as one household, the expenses of the family and of each member of it being met with money furnished by Alexander White, Jr., out of funds he received from time to time and deposited in bank to his credit as administrator. But no regular account was kept showing the amount paid to or for individual members of the family. In 1878 it was determined by the widow and children to have an assignment of dower and a partition of the real property, and proceedings to that end were instituted in the Circuit Court of Cook County, Illinois. Before the close of that year, or in the spring or summer of 1879, having failed to obtain from the administrator cept Margaret) and his brother James, jointly, [332 note. Subsequently, September 4, 1879, pur- sale, warrant of attorney, and transfers, to suant to that warrant of attorney, judgment | which reference has been made, he was left was entered against Alexander White, Jr., for without anything that could be reached by $43,807.50, in the Circuit Court of Cook Cotzhausen. So completely was he stripped County. It is not claimed that any money was by these transactions of all property that, subpaid to him in these transactions; and it is ad- sequently, when his deposition was taken, he mitted that the sole consideration for his trans- admitted that he owned nothing except the fers of property to the members of his family clothing he wore. He recognized his hopewas his alleged indebtedness to them respect-lessly insolvent condition, and formed the purively. By the final decree in these consolidated 3] causes, it was adjudged that the two conveyances of July 16, 1879, the bill of sale of July 18, 1879, and the judgment by confession of September 4, 1879, and the transfers accompanying the warrant of attorney of July 21, 1879, were made without adequate consideration and with intent to hinder, delay and defraud the appellee Cotzhausen, who was found by the decree to be a creditor of Alexander White, Jr., in the sum of $27,842.22, the aggregate principal and interest of four several judgments obtained by him against White, in 1881 and 1882. The debts for which these judgments were rendered originated in the early part of 1878, in a purchase from Cotzhausen of nearly all the stock of the American Oleograph Company, whose principal place of business was Milwaukee, Wisconsin. In this purchase Alexander White, Jr., was interested. It is to be inferred from the evidence that the principal object he had in making it was to transfer the office of the company to one of the buildings owned by the family in Chicago, and to start or establish his younger brother in business. His mother and sisters were evidently aware of this purchase and approved the object for which it was made. It may be here stated that Margaret White died unmarried and intestate before the decree in this cause was entered, but the fact of her death was not previously entered of record. The parties to the present appeal, however, have, by written stipulation filed in this cause, waived all objections they might otherwise make by reason of that fact. It is further stipulated that the appellants are the only heirs at law of Margaret White. The appellee waives all objections to the present appeal on the ground that Alexander White, Jr., did not join in it. Too much stress is laid by the appellee upon the fact that Alexander White, Jr., after qualifying as administrator, was authorized by his mother and sisters to control, in his discretion, both the real and personal estate of which his father died possessed. The granting of such authority cannot be held to have created any lien in favor of his creditors, upon their respective interests. Nor can it be said that they surrendered their right to demand from him an accounting in respect to his management of the property. Upon such accounting, he might become indebted to them; and, to the extent that he was justly so indebted, they would be his creditors, with the same right that other unsecured creditors had to obtain satisfaction of their claims. The mode adopted by them to that end, with full knowledge as well of his financial condition as of the fact that he was being pressed by Cotzhausen, was to take property on account of their respective claims. After he had executed the conveyances bill of 129 U. S. U. S., Book 32. 44 pose of yielding to creditors the dominion of The first question, therefore, to be considered The first section of that statute provides: "That in all cases of voluntary asssignments hereafter made for the benefit of creditor or creditors, the debtor or debtors shall annex to such assignment an inventory, under oath or affirmation, of his, her or their estate, real and personal, according to the best of his, her or their knowledge; and also a list of his, her or their creditors, their residence and place of business, if known, and the amount of their respective demands; but such inventory shall not be conclusive as to the amount of the debtor's estate, but such assignment shall vest in the assignee or assignees the title to any other property, not exempt by law, belonging to the debtor or debtors at the time of making the assignment, and comprehended within the general terms of the same. Every assignment shall be duly acknowledged and recorded in the county where the person or persons making the same reside, or where the business in respect of which the same is made has been carried on; and in case said assignment shall embrace lands, or any interest therein, then the same shall also be recorded in the county or counties in which said land may be situated." Other sections provide for publication of notices to creditors; for the execution by the assignee of a bond and the filing of an inventory in the county court; for the report of a list of all creditors of the assignor; and for exception, by any person interested, to the claim or demand of any other creditor. The sixth section provides "that at the first term of the said county court, after the expiration of three months, as aforesaid, should no exception be made to the claim of any creditor, or if exceptions have been made, and the same have been adjudicated and settled by the court, the said court shall order the assignce or assignees to make, from time to time, fair and equal dividends (among the creditors) of the assets in his or their hands, in proportion to their claims," etc. 679 [338] The thirteenth section is in these words: "Every provision in any assignment hereafter made in this State providing for the payment of one debt or liability in preference to another shall be void, and all debts and liabilities within the provisions of the assignment shall be paid pro rata from the assets thereof." The main object of this legislation is manifest. It is to secure equality of right among the creditors of a debtor who makes a voluntary assignment of his property. It annuls every provision in any assignment giving a preference of one creditor over another. No creditor is to be excluded from participation in the proceeds of the assigned property because of the failure of the debtor to make and file the required inventory of his estate and the list of his creditors. Nor, if such a list is filed, is any creditor to be denied his pro rata part of such proceeds because his name is omitted, either by design or mistake upon the part of the debtor. The difficulty with the courts has not been in recognizing the beneficent objects of this legislation, but in determining whether, in view of the special circumstances attending their execution, particular instruments are to be treated as part of an assignment, within the meaning of the statute. The eighth section declares that "No assign-erences are to be held to be within the 'provisment shall be declared fraudulent or void for ions' of the assignment or comprehended want of any list or inventory as provided in within its general terms,' it must be because the first section." they fall within the intent and spirit of the Act. It will be observed, this Act does not assume to interfere, in the slightest degree, with the action of a debtor, while he retains the dominion of his property. Notwithstanding this Act, he may now, as heretofore, in good faith sell his property, mortgage or pledge it to secure a bona fide debt, or create a lien upon it by operation of law, as, by confessing a judgment in favor of a bona fide creditor. But when he reaches the point where he is ready, and determines, to yield the dominion of his property, and makes an assignment for the benefit of his creditors, under the statute, this Act declares that the effect of such assignment shall be the surrender and conveyance of all [340] his estate, not exempt by law, to his assigneerendering void all preferences and bringing about the distribution of his whole estate equally among his creditors; and we hold that it is within the spirit and intent of the statute, that when the debtor has formed a determination to voluntarily dispose of his whole estate, and has entered upon that determination, it is immaterial into how many parts the performance or execution of his determination may be broken, the law will regard all his acts having for their object and effect the disposition of his estate, as parts of a single transaction, and, on the execution of the formal assignment, it will, under the statute, draw to it, and the law will regard as embraced within its provisions, all prior acts of the debtor having for their object and purpose the voluntary transfer or disposition of his estate to or for creditors; and if any preferences are shown to have been made or given by the debtor to one creditor over another in such disposition of his estate, full effect will be given the assignment; and such preferences will, in a court of equity, be declared void, and set aside as in fraud of the statute." The leading case upon this subject in the Supreme Court of Illinois is Preston v. Spaulding, 120 Ill. 208 [8 West. Rep. 481]. In that case the members of an insolvent firm, in anticipation of bankruptcy, made, within a period of less than thirty days, four conveyances of their individual estate to near relatives, and various payments of money to other relatives, on al[339] leged debts. After these conveyances and payments, and with full knowledge of impending failure, the members of the firm held a conference with their legal advisers before the expiration of said thirty days, respecting the measures to be adopted by them and the shape After setting out the details of the plan detheir failure was to assume. It was determined vised to secure certain creditors a preference in that they should make a voluntary assignment, advance of the filing of the deed of assignbut that preference be given to certain cred- ment, the court further said: "It will be obitors by executing to them what are called judg- served that all this was strictly in accordance ment notes. The assignment in form was with the forms of law; but will anyone deny made, but on the same day and before it was that a most palpable fraud was, in fact, perexecuted, the creditors to whom the notes were petrated upon the appellee Spaulding, by the given caused judgment by confession to be en- debtors, or that the acts of the debtors were in tered thereon, and immediately, and before the fraud of the statute? . . . This Voluntary Asdeed of assignment was or could be filed, signment Act is in its character remedial, and caused execution to be issued and levied, where- must, therefore, be liberally construed; and no by they took to themselves the great bulk of insolvent debtor, having in view the disposition the debtor's estate. The trustee, named in the of his estate, can be permitted to defeat its assignment, having refused to attack the pref-operation by effecting unequal distribution of erences thus secured, a creditor brought suit in equity upon the theory that the giving of the judgment notes and the making of the deed of assignment were parts of one transaction, and, consequently, the preferences attempted were illegal and void under the statute. The Supreme Court of Illinois, considering the question whether the preferential judgments obtained in that case were within the prohibitions of the Act of 1877, said: "The statute is silent as to the form of the instrument or instruments by which an insolvent debtor may effect an assignment . . . If, then, these pref his estate by means of an assignment, and any We agree with the Supreme Court of Illinois [341] |