troversies, were heard at the same time and upon the same evidence. In the case of Garrett & Sons v. The American File Company and others, the circuit court decreed that the defendants were jointly and severally liable for the payment of the judgment recovered by Garrett & Sons against the American File Company, and that the complainants have and recover of said stockholders the sum of $165,440.65, that being the amount due on the judgment. In the case of William F. Sayles and others v. Garrett & Sons, the circuit court dismissed the bill. Appeals were taken from both decrees; by the complainants in the case of Sayles and others v. Garrett & Sons, and in the case of Garrett & Sons v. The American File Company, by William F. Sayles and other stockholders against whom the decree was rendered. Both cases were argued together in this court.

• Abraham Payne, for appellants.

John K. Cowen and E. J. D. Cross, for appellees.

WOODS, J. We shall consider the questions raised by these appeals as presented by the record in the case of William F. Sayles and others v. Robert Garrett & Sons.

The first contention of the appellants is that the bonds of the American File Company issued in 1870 were taken by its stockholders in proportion substantially to the stock held by them respectively, on the agreement between themselves that the bonds should extinguish their individual liability, and the bondholders should look to the property mortgaged to secure the bonds and the other property of the company for payment, and that Garrett & Sons were bound by this agreement. If it be conceded, what in our opinion the record fails to show, that the bonds were issued on any such understanding, it would remain for the appellants to prove notice thereof to Garrett & Sons before the title of the latter to the bonds could be affected by it. The bill in this case having charged that when Garrett & Sons took the bonds they had actual notice of all the circumstances under which they were issued to the stockholders, and of all and singular the rights and equities subsisting between the stockholders of the company in relation thereto, and having called for the answer of defendants under oath, the defendants answered under oath, and alleged that they took the bonds in the course of business for value before maturity, and that at the time they acquired title thereto they were ignorant of the fact that Allan A. Chapman was a stockholder in the American File Company, and had no knowledge or notice of the manner or circumstances of the issue of said bonds. The testimony of each one of the defendants was taken by deposition, in which they reiterate the denial of knowledge or notice contained in their answers. The answers and depositions of the defendants on this point stand uncontradicted by any evidence, direct or circumstantial, in the record. The truth of their denial must therefore be taken as an established fact in the case. If, therefore, Garrett & Sons, having acquired the bonds before maturity, paid value for them, they can hold them unaffected by any equities between Allan A. Chapman and the American File Company or its stockholders. The evidence in the record shows beyond controversy that Garrett & Sons took the bonds as collateral security for a valid debt for which they held no other security, and which the bonds fell far short of securing; that after applying these and other assets to the debts for which they were pledged, there remained due to them from Kirkland, Chase & Co. more than $200,000. They were therefore purchasers for value, and are entitled to all the rights of bona fide holders for value, among which is the right to enforce payment from the stockholders of the American File Company. Swift v. Tyson, 16 Pet. 1; Oates v. Nat. Bank, 100 U. S. 239; Railroad Co. v. Nat. Bank, 102 U. S. 14.

But the appellants insist (and this is their second contention) that, conceding Garrett & Sons to be bona fide holders of the bonds for value without notice of any equities or defenses as against the first holders, they have never

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2

theless lost their right to enforce the individual liability of the stockholders by reason of the agreement between them and the assignees of Chapman, whereby they assumed the liability of stockholders, and made themselves liable through the assignees to contribute to the other stockholders the money which they might collect from them on the bonds of the company. It is clear that Garrett & Sons did not by this contract agree to become stockholders of the corporation or to indemnify Chapman against his individual liability as a stockholder. The agreement will bear no such interpretation. The contract was made for the benefit of the assignees, by which they took an indemnity for themselves and the bankrupt estate. If, therefore, the assignees themselves are not liable as stockholders, Garrett & Sons by this contract of indemnity assumed no liability, and they hold the bonds in question unfettered by any equities or conditions. It is well settled that under the circumstances of the case neither the assignees nor the assets in their hands are subject to the individual liability which attaches to stocks held by the bankrupt. The evidence does not show that the assignees acted in any way as stockholders; that they ever attended any meetings of the corporation; or that their names appeared upon its books; or that they treated the stock standing in Chapman's name as an asset of his estate. They merely had in their possession the certificates of stock, and yielded to Garrett & Sons any claim to the bonds of the American File Company belonging to Chapman or his firm, and took an indemnity against any supposed liability which might attach to them as holders of the stock belonging to the estate of Chapman. In Gray v. Coffin, 9 Cush. 192, the supreme court of Massachusetts, having under consideration a law of that state almost identical with the Rhode Island statutes, held that the individual liability of "stockholders did not attach when their assignee had attended and voted at meetings of the corporation and done other acts of unequivocal ownership." The same result would follow under the bankrupt law. It has long been a recognized principle of the bankrupt laws that the assignees were not bound to accept property of an onerous or unprofitable character. South Staffordshire R. Co. v. Burnside, 5 Exch. 129; Furdoonjee's Case, 3 Ch. Div. 268; Ex parte Davis, Id. 463; Streeter v. Sumner, 31 N. H. 542; Amory v. Lawrence, 3 Cliff. 523; Rugely v. Robinson, 19 Ala. 404. As the assignees of Chapman never accepted the stock, and never consented to become stockholders in the American File Company, it follows that neither they nor the assets of Chapman in their hands are subject to the individual liability of stockholders for the debt of the corporation. The contract of indemnity did not, therefore, subject Garrett & Sons to any such liability. It follows that they took the bonds unaffected by any agreement in respect thereto between Chapman and his co-stockholders.

The result of these views is that the decree in both cases must be affirmed; and it is so ordered.

(110 U. S. 264)

FREEMAN, Trustee, v. DAWSON.'

(January 28, 1884.)

1. JURISDICTION OF SUPREME COURT-AMOUNT SECURED BY DEED OF TRUST-APPEAL BY GRANTEE.

From a decree of the circuit court, awarding a fund of $8,000 to one claiming under a distinct title, the grantee in a deed of trust to secure debts to various other persons, exceeding that amount in all, but of less than $5,000 each, may ap peal to this court.

1 Bee Steers v. Daniel, 4 Fed. Rep. 587.

2. JUDGMENT-MOTION TO SET ASIDE-EXECUTION.

A judgment duly recovered is not affected, nor the right to take out execution upon it impaired, by an application made to the court to have it set aside, and "continued until the next term, without prejudice to either party."

3. SAME SEIZURE-RELATION.

All the proceedings under a levy of execution haye relation back to the time of the seizure of the property.

4. SAME ORDER TO RETURN EXECUTION UNEXECUTED.

A levy of execution for a debt of the lessee, upon the leasehold estate, and upon a cotton-press, with its engine, boilers, and machinery, erected by him, under which the officer has seized the property, and given due notice of a sale thereof, is not defeated by an order from the clerk, under seal of the court, pursuant to a direotion of the judge in vacation, without notice to the judgment creditor, requesting the officer to return the execution unexecuted; nor by the officer, upon receiving such order, ceasing to keep actual possession of the property, and returning the execution, with his doings indorsed thereon, to the court, for further directions.

Appeal from the Circuit Court of the United States for the Western District of Tennessee.

8. P. Walker and C. W. Metcalf, for appellant.

D. H. Poston and W. K. Poston, for appellee.

GRAY, J. This is an appeal by the grantee in a deed of trust, from a decrees of the circuit court of the United States for the Western district of Tennessee, in favor of a judgment creditor of the grantor. The undisputed facts of the case, as shown by the pleadings and the documentary evidence, are as follows: In January, 1878, the owners of two lots of land in the city of Memphis county of Shelby, and State of Tennessee, executed to R. C. Daniel a lease, thereof for the term of six years, at a certain rent, and with a provision that any improvements or machinery made or erected by the lessee might be removed by him at the end of the lease. Steers and Morse, under a contract with Daniel, erected upon the land a cotton-press, engine, boilers, and machinery; and on August 8, 1878, filed the original bill in this case against him, in the chancery court of Shelby county, to enforce a mechanic's lien, under the statutes of Tennessee, upon his leasehold interest in the land, and upon his interest in the press and machinery, and obtained a writ of attachment against the same. On June 6, 1878, A. H. H. Dawson duly recovered against Daniel two judgments at law, upon default, in the circuit court of the United States, amounting together to the sum of $5,629.91. At the same term, on June 13th, an application was made by Daniel to vacate each of those judgments, and was "continued until the next term of the court, without prejudice to either party." On July 5th writs of fieri facias upon both the judgments were issued by the clerk and delivered to the marshal. On July 9th the marshal, as appears by his indorsement thereon, levied each of these executions upon Daniel's interest in the land, (particularly described,) and upon all his interest "in and to the chattel property in, about and upon the foregoing described lots and parcels of land, consisting of a Morse improved Tyler cotton compress, with engines, boilers, machinery, etc., with all appurte nances thereto belonging;" and afterwards published and posted, and served upon Daniel, as required by law, notices of a sale to be made on August 8th in pursuance of the levy. On August 5th the circuit judge sent to the clerk the following letter:

"KNOXVILLE, TENNESSEE, August 5, 1878.

"MY DEAR SIR: I have been furnished by Messrs. Gantt & Patterson, attorneys for Mr. R. C. Daniel, with certified copies of the record in the suits of A. H. H. Dawson v. Daniel, pending in your court. From this, as I construe it, judgments by default were rendered at the last term, and then an application made to set aside said judgments and permit defendant to plead, which application was continued to next term of the court. This leaves these cases pending and undetermined. Yet Messrs. Gantt & Patter

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son, for their client, represent that executions have been issued and levied on Daniel's property. If this is so, the executions are without authority, and ought to be called in as improvidently issued. There is no final judgment on which they can rest. My suggestion is that you issue a paper to the marshal reciting the fact that executions were issued without authority, and request him to return the same unexecuted.

“I am, very truly, etc.,

"BELL W. ETHERIDGE, Esq.

"U. S. Circuit Clerk, Memphis, Tenn."

JNO. BAXTER.

On August 7th the clerk delivered to the marshal a paper headed "Circuit Court of the United States for the Western District of Tennessee," with the names of the cases and their numbers on the docket, and the rest of which was as follows:

"To the United States Marshal, Western District of Tennessee:

"In accordance with the instructions of Judge BAXTER, Communicated by letter, a copy of which is hereto attached, I notify you that the executions in the two above-named cases were issued without authority, and request you to return the same unexecuted. You will therefore act accordingly. "Witness my signature, and the seal of said court, this, the seventh day of August, 1878.

[Seal.]

"BELL W. ETHERIDGE, Clerk."

The marshal's return upon each execution, after stating the levy and notice, concluded as follows: "And on seventeenth August, 1878, in obedience to an order of court issued by Hon. JOHN BAXTER, I return this writ without further proceedings." "The coroner of Shelby county thereupon, on the same day, took possession of the property under the writ of attachment issued upon the bill in equity of Steers and Morse, On November 22d Daniel executed a deed, which was recorded on the next day, of his interest in the leasehold, and in the cotton-press, with its engine, boiler, machinery, and appurtenances, to John J. Freeman, in trust to secure, and to sell for the payment of, debts due from Daniel to various persons, in sums of $6,000 or less, and amounting in all to the sum of $18,370, for moneys borrowed by Daniel to pay for the leasehold and fixtures. The circuit court, at a regular term, on January 6, 1879, denied the applications of Daniel to vacate the judgments at law, and on Febuary 8th granted motions of Dawson for writs of venditioni exponas. On Febuary 10th such writs were issued accordingly, which recited that "said writs of fieri facias have been returned without any sale of the property levied on as aforesaid, which levies this court now adjudges as still in full force, and unabandoned by the marshal, and the property so levied on is still in his possession by virtue of said levies." The opinions delivered on the applications and motions are reported in Dawson v. Daniel, 2 Flippin, 301, 305. The returns subsequently made by the marshal upon the writs of venditioni exponas show that, upon receiving them, he went upon the land, and found the cotton-press being operated by and under the control of Charles Yerger, who claimed to be in possession, in behalf of the sheriff and coroner, under an order of the chancery court of Shelby county; that he exhibited his writs of venditioni exponas, and demanded of Yerger possession of the property, which was refused; that he was thereupon directed by the attorneys for Dawson to proceed under those writs to a sale of the property, and gave notice to Daniel of such a sale to take place on March 11th; and that on February 12th those attorneys "directed that all proceedings hereunder be suspended until further orders in the premises." On February 13th Steers and Morse filed in the suit in equity an amended and supplemental bill against Dawson, Freeman, trustee, and the beneficiaries under the

trust deed; and on February 15th removed that suit into the circuit court of the United States, and there moved for a temporary injunction to restrain Dawson and the marshal from further proceeding against the property under the judgments and executions at law. On March 18th that court issued such an injunction, and ordered, with the consent of all the parties, "that the custody and possession by the marshal of said property shall remain as it is, undisturbed, and that for the preservation of the property he may employ a day and night watchman for the same, but without in any manner affecting the rights or claim of any party hereto; and nothing herein contained shall be held in any manner to affect or release any lien that the defendant Dawson claims to have acquired under his said judgments, executions, and liens." On June 2d the marshal returned the writs of venditioni exponas, "without further proceedings." On June 13, 1879, after answers filed by Dawson, and answers and cross-bills filed by Freeman and the beneficiaries under the trust deed, the suit in equity came to a final hearing in the circuit court, and a decree was entered, by consent, ordering and confirming a sale of the leasehold, and of the press and machinery, establishing the priority of the lien of Steers and Morse, and applying to the satisfaction of that lien, and to the payment of the accrued rent and taxes, the proceeds of the sale, except the sum of $6,000, which was reserved to abide the result of the litigation between Dawson and Freeman. And on July 28, 1880, a final decree was entered, affirming the validity of the judgments and executions, and awarding the fund of $6,000 to Dawson. The opinion is reported in Steers v. Daniel, 2 Flippin, 310; [S. C. 4 Fed. Rep. 587.] Freeman thereupon appealed

to this court.

By the marshal's deposition, and the weight of the whole evidence, the other material facts in the case appear to be as follows: The marshal, on July 9, 1878, at the time of levying the executions issued upon the judgments at law, and with the consent and at the expense of Dawson's attorneys,, put a watchman in possession of the premises to protect the property against fire and depredation; and on August 8th showed the letter of the circuit judge, and the paper received from the clerk, to Dawson's attorneys, and was told by them that actual possession was not required by law to maintain the levies, and thereupon by their direction withdrew the watchman, knowing that the coroner was about to levy the attachment granted by the state court on the bill in equity of Steers and Morse; and the marshal did not afterwards retain possession, in fact, of the property. But he did not intend to abandon the levies; and he suspended further proceedings merely in obedience to the order received from the clerk, and for the purpose of submitting to the court the question of the validity of the executions and levies. The appellee has moved to dismiss the appeal for want of a sufficient amount in controversy to sustain the jurisdiction of this court. The reason assigned for the motion is that, if the appellant's position is maintained, no one of the creditors secured by the trust deed will receive so much as $5,000 out of the fund of $6,000 in court. But it is admitted that the whole amount of debts secured by the deed of trust exceeds that fund. The sole question at issue on this appeal is of the legal title to the whole fund, as between Dawson, the judgment creditor, on the one hand, and Freeman, the grantee in the deed of trust, on the other; and no question of payment to or distribution among the several cestuis que trust is presented. The motion to dismiss must therefore be overruled. Ex parte Baltimore & O. R. Co. 106 U. S. 5, [1 SUP. CT. REP. 35,] and cases there cited.

Upon the merits, the priority of the mechanic's lien having been established by the circuit court with the consent of the parties, the single question is whether the title of Dawson, under the judgments rendered against Daniel and the executions levied on the property, is to be preferred to the title of Freeman under the deed of trust to him from the judgment debtor. The