(after stating the case as above). From the foregoing summary of the pleadings and proceedings in the lower court, it is manifest that the original bill, which was filed by Nellie Houchens against Thomas H. Allen et al. in the circuit court for the county of Jefferson, state of Arkansas, was a bill to preserve and protect trust property, and to administer a trust, which, as she claimed, had been created for her benefit as well as for the benefit of all the other creditors of the firm of Thomas H. Allen & Co. The bill was filed upon the theory that the assignment executed by the firm of Thomas H. Allen & Co. at Memphis, Tenn., on November 24, 1890, created a trust in favor of all the creditors of that firm, including the complainant, as respects the Arkansas lands which were described in the bill; that this trust had been recognized and confirmed by the composition agreement that was entered into on December 20, 1890, by and between Thomas H. Allen & Co. and the creditors of said firm; and that unforeseen events had thereafter occurred which had interfered with the execution of the trust in the manner contemplated by the parties, and had so far jeopardized the safety of the trust property as to render an appeal for relief to a court of equity both a proper and necessary step. Upon this theory, the complainant below, who is the appellee here, accordingly exhibited a bill for relief in behalf of herself and all other creditors of the aforesaid firm who might see fit to join in the proceeding and contribute to the expense thereof. The bill was originally filed in Jefferson county, Ark., where a part of the trust property was located, and in a court possessing full common-law and equity jurisdiction. The original defendants to the bill, among whom were the assignors and M. B. Trezevant, the assignee named in the deed of assignment, all of whom were citizens and residents of the state of Tennessee, thereupon appeared in that court and obtained an order removing the cause to the federal circuit court for the Western division of the Eastern district of Arkansas, on the ground that Nellie Houchens, the complainant, was a citizen and resident of the state of Louisiana. This order of removal was properly obtained, and vested the federal circuit court with jurisdiction of the case; for although neither of the parties plaintiff or defendant resided in the Eastern district of Arkansas, yet it is now well settled that a citizen of a state who is sued in the courts of a state of which he is neither a citizen nor a resident, by a nonresident of that state, may remove the case to the federal circuit court of the district wherein the
The decree of the lower court, from which the appeal was taken, is assailed by learned counsel for the appellants on various grounds, but the fundamental question in the case, from our point of view, is whether the assignment which was executed by the firm of Thomas H. Allen & Co. on November 24, .1890, in favor of all their creditors, and the deeds executed by Thomas H. Allen and wife on the same day and subsequently, whereby they conveyed the Arkansas lands to M. B. Trezevant, the assignee, in furtherance of the purposes of the assignment, had the effect of creating a trust in favor of the creditors of the last-named firm as respects the Arkansas lands, which a court of equity will recognize and enforce. It is said that this assignment was not executed, or rather administered, by the assignee in conformity with the statutes of the state of Arkansas regulating general assignments for the benefit of creditors; that the lands in controversy, which formed a part of the assets of said firm, were all situated in the state of Arkansas; and that for these reasons the deed
We perceive no reason, therefore, for holding that the statute of Arkansas relative to general assignments, which is above referred to, is applicable to, an assignment executed, as in the present instance, outside of that state, merely because such assignment conveys some property located within the state. Nor do we believe that the statute was intended to comprehend assignments of that character. The rule of comity which prevails among the states requires that a voluntary general assignment made in one state, and there held to be valid, or which is valid at common law, should be recognized and enforced by the courts of another state as respects property situated within the latter state, when, as in the case at bar, the rights of no citizen of the state are jeopardized, and the controversy is wholly between nonresident creditors of the assignor, some of whom are attempting, by process of attachment, to ignore the assignment and secure for themselves an undue preference over other creditors. As will appear from the foregoing citations, this doctrine obtains, so far as personal property is concerned, and no reason is perceived why it should not be extended to real property, when the title thereto has been vested in the nonresident assignee by a conveyance which is in the form prescribed by the lex rei sitse for the conveyance of real estate.
But if the views last expressed are erroneous, and if it should be conceded that the Arkansas statute concerning voluntary assignments was intended to embrace assignments made in other states by persons there domiciled, provided they convey any property within the state, still we should be of the opinion that the present appellants are estopped by their conduct from denying that the lands now in controversy are held in trust for the common benefit of all the creditors of the firms of Thomas H. Allen & Co. and Richard H. Allen & Co., both of said firms being composed of the same persons. On December 20, 1890; shortly after the assignment and deeds heretofore mentioned had been executed, Thomas H. Allen & Co. made a written proposition to their creditors to issue a series of notes, running 6, 12, 18, and 24 months, and bearing 8 per cent, interest, for the full amount of the debts of said firms. This proposition contained a clause to the effect that the title to the lands conveyed to Trezevant, as trustee, on November 25, 1890, should remain vested in him as security for the payment of said notes until all of them, including the interest
In the light of what has already been determined, we proceed to notice some other objections to the decree which have been discussed at considerable length.
In the first place, it is said that the lower court had no jurisdiction, because no controversy existed at the time the suit was commenced in the state court, nor when it was removed to the federal court. We understand that what counsel mean by this statement is that no facts were alleged in the bill which would warrant a court of equity in granting equitable relief, — in other words that the bill was demurrable for want of equity. In no other sense can it be said that the lower court was without jurisdiction; since, if such facts were alleged as entitled a court of equity to grant relief, it matters not whether the defendants were contesting the right to such relief or were consenting thereto. The power of the court in which the bill was filed to entertain it, as involving a controversy, did not depend upon the existence of' an actual dispute between the litigants over any question, but upon the inquiry whether the complaint alleged such facts as will ordinarily induce a court of chancery to afford relief of any sort. The bill, as heretofore shown, was one to enforce a trust and to protect and preserve trust property. Courts of equity exercise an undoubted jurisdiction in such cases, it being one of their special duties to afford protection to those whose title to property is equitable, and who, for that reason, have no standing in a court of law to enforce their rights. Turning to the averments of the original and supplemental bills, on which the case was eventually tried and determined, we find all the
Learned counsel for the appellants further contend that the lower court had no jurisdiction over a part of the lands in controversy, and no power to appoint a receiver as respects such lands. With reference to this proposition it may be said that it appears from the record that some of the lands in controversy are situated in two counties within the Eastern division of the Eastern judicial district of Arkansas, but the greater portion thereof appear to be located in the Western division of said district. The suit at bar was originally instituted in Jefferson county, Ark., where a part of the land is situated, which is a county within the Western division of the district, and it was thence removed to the federal circuit court for the Western division of the district, which sits at Little Rock. For this reason it is urged that the court, sitting at Little Rock, acquired no jurisdiction over, or power to appoint a receiver of, the lands in the Eastern division of the district. This contention is evidently based upon the assumption that the action at bar is a strictly local action, like a suit in ejectment, or a suit to partition real property, and that, because of that fact, the lower court could only deal with those lands which were situated within the Western division of the district. This theory, however, is erroneous. The suit at bar is not a local action, but a bill to administer a trust, and in such cases courts of equity always act in personam. It is one of the equitable maxims that they so act. Bisp. Eq. § 47- When a court of equity acquires full jurisdiction of the trustee in whom the legal title to trust property is vested, and other necessary parties are before the court, either in obedience to process or by their voluntary appearance, it can compel the trustee to dispose of the legal title and distribute the proceeds thereof as it may direct, although a part of the trust property may be located outside of the territorial limits of its jurisdiction. Such orders, and decrees and conveyances made in pursuance thereof, when they emanate from a court possessing full chancery powers, which has acquired jurisdiction of the trustee and other necessary parties, are respected everywhere as bind1 ing upon the parties to the litigation and their privies, although some of the property thereby affected may not be within the territorial jurisdiction of the court. If such were not the rule applicable to such cases, many trusts could not be successfully, or, at least, eco
Aside from this view of the case, certain decisions of the supreme court of the state of Arkansas demonstrate, we think, that the circuit court of Jefferson county, in winch this action was originally instituted, could have afforded the relief sought by the bill and appointed a receiver for all of the lands in controversy, those situated within that county as well as those situated in other counties; and, as the case was lawfully removed to the federal circuit court for the proper division of the district, no reason is perceived why that court was not competent to afford the same relief which was obtainable in the state court. The defendants could not deprive complainant of the relief to which she was entitled, and could have obtained, in the state court, by removing it to the federal court. Railway Co. v. Humble, 38 C. C. A. 502, 504, 97 Fed. 837. The Code of Procedure of the State of Arkansas declares, in substance (Sand. & H. Dig. Ark. § 5684), that actions for the recovery of real property, for the partition of the same, and to foreclose mortgages and other liens, as well as actions for injuries to real property, must be brought in the county in which the land, or some part thereof, is situated. This statute treats one action at least as being local, which, but for the statute, would not be so regarded. Nevertheless, it has been held in that state that a bill to set aside fraudulent settlements made by an administrator, to restate his accounts, and also to subject to the payment of the decree certain realty, the title whereto stood in the name of the administrator’s wife, was not a local action, but might be brought in the county where the estate was being administered, although the realty standing in the name of the wife was situated in another district or county. Dyer v. Jacoway, 42 Ark. 186, 197. So it has been held in that state that an action in chancery to enjoin the sale of land, under a fraudulent or satisfied mortgage, for an accounting of the amount due on the mortgage, and to cancel fraudulent conveyances of the land, is not a local action, but may be brought in any county where jurisdiction of the defendants can be obtained by personal service of process upon them. Jones v. Fletcher, 42 Ark. 422. It is obvious, therefore, that an action like the one at bar, to administer a trust by direct action on the trustee, would not be regarded in that state as a local action, but as a proceeding in personam. And as a part of the lands in controversy were situated in Jefferson county, where the complainant brought her suit originally, the courts of that state would doubtless hold that the court in which the action was commenced had full power to exercise control, through the trustee, over any lands within the state which formed a part of the trust property, and, if need be, to appoint a receiver thereof. The court to which the case was removed was entitled, in our judgment, to exercise the same power. This view of the case is strongly confirm éd by the fact that section 742 of the Revised Statutes of the United States declares that “any suit of a local nature, at law or in equity, where the land or other subject-matter of a fixed character lies partly in one district and partly in another, within the same state, may
It is further urged in behalf of the appellants that, while the original defendants to the action may have waived all objections to the jurisdiction of the lower court by the removal of the case to that forum, yet this is not true of themselves, the attaching creditors, who subsequently became parties to the litigation in the manner heretofore explained. It is said, in substance, that they have never consented to be sued in the Western division of the Eastern district of'Arkansas, and are not inhabitants of that district or state, and that their rights cannot be determined by the federal court for that district. It matters not, however, whether they have so consented or where they may reside. They were not originally named as defendants to the bill, nor was it necessary to do so, although, as creditors of the firm of Thomas H. Allen & Co., they had an undoubted right to intervene in that proceeding and make themselves parties thereto for the protection of their own interests. By the removal of the case to the federal court, that court acquired full jurisdiction of the cause, as we have heretofore held. The proceedings which were subsequently taken against the appellants as attaching creditors were rendered necessary by their attempt to seize and appropriate the trust property to the payment of their own claims to the exclusion of other creditors of Thomas H. Allen & Co., and in open violation of the terms of the composition agreement, which they had signed. The proceedings against the appellants, therefore, were of an ancillary character, being incidental to the exercise of a jurisdiction which had been lawfully acquired. They were such proceedings as might have been taken against any one, without reference to his citizenship, who intermeddled with the trust property after a bill to administer and enforce the trust had' been filed and jurisdiction for that purpose over the necessary parties had been lawfully acquired. In the case of Zimmermann v. So Relle, 25 C. C. A. 518, 520, 80 Fed. 417, 419, and in Merritt v. Barge Co., 24 C. C. A. 530, 533, 79 Fed. 228. this court held that “when a suit is brought to enforce a lien 'against specific property, or to marshal assets, or to administer a trust, or to liquidate an insolvent estate, and in all other cases of a similar kind, where, in the progress of the case, the court may find it necessary or convenient to assume control of the property in controversy, the court which first acquires jurisdiction of such a case, by the issuance and service of process, is entitled to retain it to the end, without interference on the part
A number of other objections to the decree below have been stated and argued at length by counsel for the appellants, all of which have been fully considered, but in view of what has been already decided we only deem it necessary to notice specially one other contention;
It is said that “the appellee is estopped to deny the right of the appellants to have the lands attached in the suits in the Crittenden county circuit court sold under the orders of sale” made by that court. This proposition is based on the following ground: On November 10, 1892, after M. B. Trezevant, the trustee named in the deed of assignment and in the composition agreement, had been appointed receiver of all the lands in controversy, by order of the federal court, he appears to have filed a motion in the attachment suits that were then pending in the circuit court for Crittenden county, Ark., which had been brought by three of the appellants, namely, the Memphis Savings Bank, the Phoenix Fire & Marine Insurance Company, and the City National Bank of Cairo, 111., against the firm of Thomas H. Allen & Co., wherein he averred, in substance, that he had been appointed receiver of the attached lands lying in said county as early as July. 1, 1892, by the federal court; that the writs of attachment had come to the hands of the sheriff of Crittenden county on July 6tli and 8th of that year, and that under these circumstances the levies were unauthorized and illegal. The receiver accordingly prayed that the levies, under the various writs of attachment, might be quashed. The court to whom this motion was addressed overruled it for the reason, as its order recites, that, as “the levies in question were made upon real estate * * *
In conclusion, it is proper to remark that the decree which was ■rendered by the lower court will manifestly lead to a result which, from any point of view, is just and equitable. It devotes the proceeds of the Arkansas lands to the payment of all of the debts of the insolvent firm, to which the lands belong, without preferences, as the creditors of that concern, including the appellants, agreed that they might be devoted by the terms of the composition agreement.
After a careful consideration of all the arguments that have been adduced by learned counsel for the appellants to sustain their attachment liens and to secure a priority over other creditors, we are satisfied that the decree below was for the right party and that it should be affirmed. It is so ordered.