Merchants' National Bank v. Greenhood

16 Mont. 395 | Mont. | 1895

Lead Opinion

De Witt, J.

It is not often that as full and elaborate find- . ings of fact are made in a case as those now before us. The trial involved volumes of figures and days of testimony upon questions of fact. The findings treated all these questions of accounts, and the jury gave mathematical results which would lead one to believe that they were found by a “struck jury” of accountants.

Since the case was argued in this court we have spent many days in reviewing the testimony. W e would have been aided by specifications of alleged errors of a different character than those contained in the statement on motion for a new trial in this case. We do not purpose to disregard the specifications, or to hold that they are insufficient. We express no opinion upon that subject. But, when a specification is stated as follows: “There is no evidence to sustain finding No. 2, that,” —then giving a statement of the finding, and when every specification is similar to this instance cited, it is a great labor for a court to go through 800 pages of record to ascertain whether it is true that there is no evidence to sustain any of the findings. When a case has been tried for 21 days, before a court of general jurisdiction, producing such a record as this before us, and findings are made and adopted by the court, there would seem to be some presumption that some evidence had been introduced in the case tending to support the findings. But, notwithstanding the form of the specifications, we have read the testimony, and examined it with great diligence. We are prepared to say that there is evidence to sustain the findings. Having satisfied our own minds to that effect, we see no profit in giving in this opinion a review of the testimony. It would not be valuable as a precedent. The case was tried at great length before- “a jury of unusual intelligence.” The two learned judges of the district court presided at the trial and adopted the findings. The testimony was to a great extent of a technical character, and as to mercantile accounts, transactions, and facts, upon which subjects a jury of intelligent business men are perhaps as competent to form a judgment upon the facts as is a court that has not heard the witnesses testify, or observed their demeanor.

The great issue in this case was fraud. The existence of fraud was determined by an overwhelming line of findings by the jury. See statement of the case preceding this opinion. Fraud cannot often be proven by direct evidence. Fraud conceals itself. It does not move upon the surface in straight lines. It goes in devious ways. We may with difficulty know £ ‘whence it cometh and whither it goeth. ” It ‘ ‘loveth darkness rather than light, because its deeds are evil.” It is rarely that we can lay our hand upon it in its going. We are more likely to discover it at its destination, before we know that it has started upon its sinuous course. When we so discover it, the search light of a judicial investigation goes back over its trail and lightens it from beginning to end. As the woodsman follows his game by slight indications, as a broken twig or a displaced pebble, so fraud may become apparent by innumerable circumstances, individually trivial, perhaps, but in their mass ‘ ‘confirmation strong as proofs of holy writ. ’ ’ The weight of isolated items tending to show fraud may be ‘ ‘as light as the shadow of drifting snow,” but the drifting snow in time makes the drift, the avalanche, the glacier. Fraud may hang over the history of the acts of a man like the leaden-hued atmosphere upon the house of Usher, “faintly discernible but pestilent, an atmosphere which has no affinity with the air of Heaven. ’ ’ Under this atmospheric pressure of fraud the jury in this case lived and breathed for the 21 days of the trial. We have followed them through the history of those days, as it is transmitted to this court in, the record. We have not the advantage of breathing and seeing and hearing which they had. The district court had that advantage, and agreed with the findings of the jury. We are of opinion that, under these circumstances, the evidence is not so insufficient that we should disturb the result.

In accordance with our views as to the proof of fraud, we note the following from Bump on Fraudulent Conveyances (page 759): “In questions of fraud a wide range of evidence is allowed. Fraud assumes many shapes, disguises, and subterfuges, and is generally so secretly hatched that it can only be detected by a consideration of facts and circumstances which are not unfrequently trivial, remote, and disconnected. To interpret their meaning, or the full meaning of any one of them, it may be necessary to bring them together and contemplate them all in one view. In order to do this it is necessary to pick up one here and another there until the collection is complete. A wide latitude of evidence is therefore allowed, in order that fraud may be detected and exposed. ’ ’

We will add, here, however, that the testimony as to fraud in the conveyances by Greenhood to Barnett and Weil, and the testimony as to the participation in the fraud by Kahn, assignee,' is not wholly satisfactory to our minds. But it seems to have satisfied the jury. They saw Greenhood, and Barnett, and Weil, and Kahn, and heard them testify. We have not. In view of the whole case, we do not feel called upon to disturb these findings.

It was held in Ming v. Truett, 1 Mont. 322, that the court will not reverse a judgment if the testimony is conflicting, even though the weight of evidence appears to be against the findings of the court below. This court will not disturb the findings or verdict, if there is substantial evidence to support the same, even though the evidence is conflicting. (Lincoln v. Rodgers, 1 Mont. 217; Travis v. McCormick, Id. 347: Davis v. Blume, Id. 463; Griswold v. Boley, Id. 545; Kinna v. Horn, Id. 597; Toombs v. Hornbuckle, Id. 286; Kleinschmidt v. Dunphy, Id. 124; Parchen v. Peck, 2 Mont. 570; Vantilburgh v. Hamilton, Id. 413; Orr v. Haskell, Id. 225; Knox v. Gerhauser, 3 Mont. 276; Story v. Black, 5 Mont. 26; Railway Co. v. Warren, 6 Mont. 275; Beck v. Beck, 6 Mont. 285; Ramsey v. Cattle Co., 6 Mont. 501; Budd v. Perkins, 6 Mont. 223; Diamond v. Northern Pacific R. Co., 6 Mont. 586; Territory v. Reuss, 5 Mont. 607; Kennon v. Gilmer, 5 Mont. 273, Id., 9 Mont. 110; Frank v. Murray, 7 Mont. 4; Ingalls v. Austin, 8 Mont. 333; Fitschen v. Thomas, 9 Mont. 52.) These are some of the older cases decided by this court under the territorial government. The same rule has obtained under the state organization.

It was said in the recent case of Brownfield v. Bier, 15 Mont. 403: “When there is a substantial conflict in the evidence, and that conflict has been resolved by the district court, and the district court has denied a motion for a new trial, this court will not disturb the result. This doctrine has been so persistently announced by this court for 26 years that it may be considered as the settled rule in this jurisdiction.” The decisions of this court from its organization to the present time are full declarations of this principle of practice. We shall, therefore, accept the findings as made, and proceed to the discussion of the questions' of law presented by the appellants.

The assignment for the benefit of creditors was made February 12, 1892, plaintiff here being the third preferred creditor. On February 13th this plaintiff commenced an action against Greenhood, Bohm & Co. on a money demand for $33,500. A writ of attachment was issued, and levy made by the sheriff February 15th. On April 8th a judgment was rendered for plaintiff in that case for $35,945.48. On February 24th Max Kahn, assignee, began an action against the sheriff (Jefferis) and the plaintiff herein, for the conversion of the goods seized under the writ issued in the case of Merchants’ National Bank v. Greenhood, Bohm & Co. The defendants in that action of Kahn against Jefferis and the bank justified in their answer under the writ of attachment. Replication was filed, issue made, and the case was ready for trial before the issues in the case now before us were made up. This case now before us was commenced April 21st. It and the case of Kahn against Jefferis and the bank were set for trial for the same day. In this case the issue was fraud in the assignment, and all the parties were before the court, — the bank, the assignors, and the assignee. In Kahn v. Jefferis et al. there was a legal cause of action and the equitable defense of fraud in the assignment; but in that case Greenhood and Bohm were not parties, and were not before the court. The court determined that the whole matter could be more fully tried in the action in which it found all the parties. For that reason it tried this case prior to that of Kahn v. Jefferis et al. An elaborate argument was made in this court, counsel contending that this action of the district court was error. But we need not follow the counsel into that argument, for the reason that they have strayed iar from the point decided by the district court. To ascertain that point we quote as follows from the record : “That thereafter, on the 16th day of January, 1893, this cause coming on for trial, the defendants objected to said cause being tried at said time, for the reason that the case of Max Kahn v. C. M. Jefferis and Merchants' National Bank preceded it upon the calendar, and should be tried first in its order. ” It thus appears that the only objection which the defendants made to the trial of this case prior to the case of Kahn against Jefferis and the bank was that the Kahn case preceded this case upon the docket, and for that reason should be tried first. The counsel, upon the argument before us, stated that they abandoned that point, and conceded that the court had the right to control its own docket and the order in which it may try cases. As this is the only point presented in the objection to the district court, there is nothing else for us to pass upon, and we are disappointed in not being able to accompany counsel in their diligent and learned research into the questions not raised by the record.

Before proceeding to examine what we consider the important question of law in this case, there are a few small matters which may be cleared up in limine.

Two matters which were relied upon in the complaint are abandoned by the respondent, namely, the question of Kej all’s partnership in the firm of Greenhood, Bohm & Co., and also the question of the laws of the state of Washington. The alleged insufficiency in the description of the property assigned is also a matter which is not relied upon, and, furthermore, seems to be settled by the decision of McCulloch v. Price, 14 Mont. 320. Again, on the question of the preferences to Rejall and Westheimer and Bach, Cory & Co. being in excess of the amount actually due them, it was found by the jury that they were in good faith, and this is not a subject upon which the court below rendered its judgment. These matters have all, therefore, been passed.

That which we consider the important question in this case is what the appellants call the want of equity in plaintiff’s cause of action. The appellants contend that facts are not pleaded or found which entitle the plaintiff to the equitable relief demanded in its complaint and granted by the court. "The plaintiff bank was a large creditor of Greenhood, Bohm & Co. Greenhood, Bohm & Co. made the assignment. The following day the bank brought the action at law hereinbefore described against Greenhood, Bohm & Co,, and levied an attachment upon the assigned goods. When the bank obtained its judgment in that cause it found this situation : It had a large quantity of goods attached. These goods were included in the assignment, which the bank claimed was fraudulent. The assignee was asserting the right of possession to the goods, and, furthermore, had brought an action against the sheriff and the bank for the alleged conversion of these goods. The bank in its money-demand suit issued an execution. The sheriff, with the execution in his hands, found this condition of affairs which we have detailed. He returned the execution in the following-language : “ No property to be found in my county to satisfy the foregoing execution, except the property attached herein, and embraced in the alleged assignment from Greenhood, Bohm & Co. to Max Kahn on the 12th day of February, 1892, and except the above garnishments, and I herewith return the said execution unsatisfied. ’ ’ There is no point made as to the garnishments mentioned in the sheriff’s return, as they were in trifling amounts. The plaintiff in the law case, to wit, the bank, then commenced this equity action, which resulted in the findings and judgment recited in the statement preceding this opinion. Does the plaintiff thus appear to be entitled to equitable relief % This is the vital question in the case, and the one around which the battle has been waged.

This is not the sort of a creditors’ bill which seeks the discovery of assets or equitable interests not subject to levy and sale. It is, on the other hand, an action to set aside a fraudulent obstruction to plaintiff’s realizing fully and successfully upon its judgment.

The counsel for appellants cite innumerable authorities upon the principle that the legal remedy must be first exhausted, and that execution must be returned nulla bona. Here the execution was not returned nulla bona, but it returned the facts, to wit, the existence of the fraudulent obstruction to the execution. We find that the’ authorities sustain the bringing of an equitable action under circumstances similar to those of the case at bar. In this case, judgment was obtained at law by the plaintiff before it brought this suit. The plaintiff was therefore in a position of a judgment creditor with a liquidated demand. The authorities to the effect that the creditors’ bill cannot be brought until judgment is obtained are therefore not applicable. The resort to equity in this case was not a resort to simply aid an attachment, although some cases hold that even a simple attachment without judgment may be aided by creditors’ bill. (Pom. Eq. Jur. §115, note on page 125.) As noted before, the action is to remove a fraudulent obstruction, and was brought after the judgment at law was obtained. We are of the opinion that the weight of the better authority is irf favor of sustaining such action. The contention over this point has been so earnest and persistent, that we shall proceed to quote from the authorities with some liberality.

We make the following quotations: “The jurisdiction of equity to entertain suits in aid of creditors undoubtedly had its origin in the narrowness of the common-law remedies by writs of execution. These writs, issued by courts of common law, besides being otherwise limited in their operations, were of course confined to those estates and interests recognized by the law, and did not extend to estates and interests equitable in their nature. Creditors’ suits were therefore permitted to be brought in those instances where the relief by execution at common law was ineffectual, — as for a discovery of assets, to reach equitable and other interests not subject to levy and sale at law, and to set aside fraudulent conveyances and obstructions. Statutes in England and in certain American states have greatly extended the scope of writs of execution, thereby providing for adequate legal relief in cases where, formerly, resort to equity was necessary, and even extending the relief to instances where, perhaps, a creditors’ bill would not lie. In other states, statutes have increased the efficiency of creditors’ suits by dealing with the subject directly. It is a necessary result from the whole theory of the creditors’ suits that jurisdiction in equity will not be entertained where there is a remedy at law. The general rule is, therefore, that a judgment must be obtained, and certain steps taken towards enforcing or perfecting such judgment, before a party is entitled to institute a suit of this character. In this there is a uniformity of opinion, but the difficulty arises in determining exactly how far a plaintiff should proceed after he has obtained his judgment. It is, of course, necessary for the creditor to allege and prove that he has taken the necessary proceedings at law before he can show a case requiring the interposition of equity. Whether ah equitable suit, analogous to the creditor’s suit, will be allowed in aid of the lien created by an attachment before the recovery of judgment, is a question to which the American courts have given directly conflicting answers. ” (3 Pomeroy’s Equity Jurisprudence, § 1415.) This case at bar is one of those described by Pomeroy as one ‘ ‘to set aside fraudulent conveyances and obstructions. ’ ’ See the authorities cited to this text in note 3.

We find the following in 2 Beach on Modern Equity, §§ 8'83, 885. Section 883: “A court of equity will aid a judgment creditor to reach the property of his debtor by removing fraudulent judgments or conveyances or transfers which defeat his legal remedy at law, and will also aid him where the debtor’s property consists of choses in action and mere equitable interests not liable to be sold on execution; and where a debtor transfers his property in fraud of creditors, an injunction may be granted as incidental to the relief sought by the creditors’ bill, and will, if necessary, grant him a double relief under one bill by removing the fraudulent obstruction in the way of his execution, and also ■ at the same time enabling him to reach his debtor’s equitable assets. If, when the bill was filed and execution returned unsatisfied, there was property within the creditor’s knowledge subject to levy on execution the bill cannot be sustained.” Section 885: “A creditors’ bill may be entertained if the legal remedy is not in all respects as plain and satisfactory as that afforded by equity. For example: a bill may often afford a better remedy than a garnishment against a fraudulent transferee, because on recovery a corn't of equity would be the more appropriate forum for distributing the fund among numerous claimants.” Note 1: “Thus in Boyce’s Ex'rs v. Grundy, 3 Pet. 210, it was said: ‘It is not enough that there is a remedy at law. It must be plain and adequate, or, in other words, as practical and efficient to the ends of justice and its prompt administration as the remedy in equity.’ ”

It seems to us quite clear in this case that the rémedy at law was not at-all as practical and efficient as the remedy in equity. In the money-demand action of the bank against Greenhood, Bohm & Co., the assignee, Max Kahn, was not a party, and in the action for a conversion by Kahn against Jefferis and the' bank, Greenhood and Bohm were not parties; but in the case at bar every one was before the court, and the rights of every one could be finally determined.

W e find the following pertinent remarks in 2 Freeman on Executions, § 424: “The objects which may be accomplished by proceedings in equity to obtain satisfaction of a judgment at law are three: (1) A full and complete discovery may be obtained of all the defendant’s assets, and when discovered they may be compelled to contribute to the payment of the plaintiff’s judgment. (2) Equitable and various other assets, not subject to levy and sale at law, may be sold under the direction of chancery, and the proceeds applied to the payment of the plaintiff’s debt. (3) Various obstructions may be removed from property liable to seizure and sale at law, and by their removal the plaintiff? s legal remedy may be made far more certain and efficient than it would otherwise be. (4) The complainant may, in effect, assert for his benefit a cause of action existing in favor of the judgment debtor, and which the latter neglects or refuses to assert. Under the third subdivision fall that numerous class of cases in which property has been made the subject of liens and transfers made to defraud creditors. In such a case, the creditors may proceed to levy and sell as if no such lien or transfer existed. Their remedy at law is nevertheless seriously obstructed, because few persons can be found willing to purchase property at execution sales, and take upon themselves the burden and the risk of contesting with adverse claimants. A creditor is therefore allowed to go into equity to test the validity of claims which interfere with his rights, and which he believes to be founded in fraud. Upon a proper showing, equity will remove a fraudulent transfer, or mortgage, or judgment, or other lien, or clear away a cloud from the title. * * * While fraud is a more frequent ground for the removal of obstructions than any other, it is not an indispensable ground. . The mere fact that there is an apparent obstruction calculated £to inspire doubt and apprehension in the mind of purchasers, and thus prevent them from bidding upon the property,’ is generally sufficient to warrant equity in decreeing its removal. * * * Whatever may be requisite to prevent the plaintiff’s suit from proving abortive will generally be done, provided it is not beyond the relief which equity is competent to extend. V ery frequently the property sought to be reached by the bill is taken into the possession of the court, and a receiver appointed for its protection and management. Usually there is great danger that the property sought to be reached by the bill will be transferred by the defendant to some third person, or will by some other means be placed in a situation where it will be either difficult or impossible to make it answerable to the decree which may ultimately be entered in the case. Hence, it is usual, at or very soon after the filing of the bill, to obtain an injunction to prevent the defendant from making any disposition of his property which would tend to make the suit ineffectual. While the necessity of an injunction against a transfer of the defendant’s property may be more frequent and obvious than any other, yet this is by no means the only occasion for the use of this preventive relief in connection with creditors’ suits. Whatever may be the wrong threatened, if it be of such a character that its perpetration will render the suit wholly or partly ineffectual, as in case of the removal or destruction of the property, an injunction will issue. If a fraudulent obstruction has been interposed to hinder or delay the plaintiff at law, he sometimes does not ask equity to do anything beyond removing such obstruction, for when it is removed the plaintiff may safely proceed at law under his execution. But the more usual practice, both in proceedings to remove fraudulent obstructions, and in proceedings to reach property not subject to execution at law, is to obtain the appointment of a receiver, and thereby bring the property within the custody and control of the court. If the property consists of real estate, the defendants are required to execute a conveyance to the receiver. If it consists of personalty, the title vests in him by virtue of his appointment. After he has been vested with the title, the receiver collects, manages, and disposes of the property as directed by the orders and decrees of the court; and the plaintiff, when entitled thereto, obtains satisfaction out of the funds realized by the receiver. ’ ’ The practice as suggested in Freeman is that which was observed in this case. A receiver was appointed, who collected and disposed of the property and retains the proceeds thereof subject to the judgment of the court.

We note the following from Tappan v. Evans, 11 N. H. 327: ‘ ‘The general principle, deducible from the authorities applicable to this case, is that where property is subject to execution, and a creditor seeks to have a fraudulent conveyanee or obstruction to a levy or sale removed, he may file a bill as soon as he has obtained a specific lien upon the property, whether the lien be. obtained by attachment, judgment, or the issuing of an execution. But if the property is not subject to levy or sale, or if the creditor has obtained no lien, he must show his remedy at law exhausted, by an actual re- ' turn upon his execution that no goods or estate can be found (which is pursuing his remedy at law to every available extent), before he can file a bill to reach the equitable property of the debtor. (McDermott v. Strong, 4 Johns. Ch. 687; Williams v. Brown, Id. 682; Brinckerhoff v. Brown, Id. 676; Spader v. Davis, 5 Johns. Ch. 280; Beck v. Burdett, 1 Paige 305; Child v. Brace, 4 Paige 310; Dodge v. Griswold, 8 N. H. 425; Hadden v. Spader, 20 Johns. 554; Weed v. Pierce, 9 Cow. 722; McElwain v. Willis, 9 Wend. 548, 560, 561, 566.) The same principle seems to be recognized in North Carolina and Kentucky. See cases cited in 1 Ben. & H. Dig. 348, 353.” In addition to the remarks made in the New Hampshire case just cited, it is always to be remembered that, in the case at bar, we have not only the attachment but the judgment and the return of the execution stating the facts of the obstruction.

We find the following language in the case of Tuck v. Olds in the United States circuit court for the state of Michigan, 29 Fed. 738: “But while I do not think the bill could be sustained on this ground, still I think it may be as one filed to remove an obstruction to the execution. * * * The principle upon which this class of creditors’ bills rests is that the defendant, by some inequitable proceeding, has put an obstruction in the way of complainant’s realizing his just satisfaction out of the property of the defendant levied on. The obstruction must be one calculated to inspire doubt and apprehension in the minds of purchasers, and thus prevent them from bidding upon the property, whereby the process is paralyzed. In such a case the complainant has no adequate remedy at law. (Beck v. Burdett, 1 Paige 305; Jones v. Green, 1 Wall. 330; Thayer v. Swift, Har. (Mich.) 430, 433.”

In an old case in New York, in 1829, Chancellor Walworth says: “There are two classes of cases where a plaintiff is permitted tó come into this court for relief, after he has proceeded to judgment and execution at law without obtaining satisfaction of his debt. In one case the issuing of the execution gives to the plaintiff a lien upon the property, but he is compelled to come here for the purpose of removing some obstruction, fraudulently or inequitably interposed to prevent a sale on the execution. In the other, the plaintiff comes here to obtain satisfaction of his debt out of property of the defendant, which cannot be reached by execution at law. In the latter case, his right to relief here depends upon the fact of his having exhausted his legal remedies, without being able to obtain satisfaction of his judgment. In the first case, the plaintiff may come into this court for relief, immediately after he has obtained a lien upon the property by the issuing of an execution to the sheriff of the county where the same is situated; and, the obstruction being removed, he may proceed to enforce the execution by a sale of the property, although an actual levy is probably necessary to enable him to hold the property against other execution creditors or bona fide purchasers. Angell v. Draper, 1 Vern. 399, and Shirley v. Watts, 3 Atk. 200, are cases of this description. In the first, a fraudulent assignment was interposed to prevent a sale of the defendant’s property on execution; and in the last case it became necessary to redeem a term of years in a leasehold property from a lien of a prior mortgage. In both these cases the plaintiffs were allowed to come into equity for relief before the executions were returned unsatisfied. ’ ’ (Beck v. Burdett, 1 Paige 305.)

In the United States circuit court of Missouri, we have the following: “The general rule of equity, as contended for by respondents, is that before the general creditor can resort to a court of equity to reach his debtor’s property held under a fraudulent deed and the like, he must reduce his claim to judgment, issue execution, and have a return of nulla bona. In other words, he must exhaust his legal remedies. The reason of this rule, requiring a judgment, etc., is that the claim must be rendered certain; otherwise, the proceeding to vacate the fraudulent transfer of the title, and to remove obstacles placed in the way of the successful operation of the execution, might be entirely fruitless if, after all, the debtor failed to obtain a judgment on his claim. * * * Where the reason of the rule ceases, the rule itself ought not longer to operate. In this case the claim was not only certain, but it had back of it a judgment conclusive and binding, and, under the law of the forum where the attachment suit was instituted, the complainant had secured and fixed his lien upon the real estate. Why should it, then, be compelled to proceed to execution, when all the purchaser could obtain by a sale thereunder would be a lawsuit, before he could get rid of the legal title of the respondents?” (Chicago & A. Bridge Co. v. Anglo-American Packing and Provision Co., 46 Fed. 584.)

We quote as follows, from the supreme court of New Hampshire “ The object of the plaintiff’s bill, although somewhat inartificially drawn, was clearly twofold : First, to remove out of the way of the levy of the Waldron execution, belonging to the plaintiff, all fraudulent mortgages and conveyances of William H. Sheafe’s interest in the Jacob Sheafe farm; and, secondly, to obtain from the court a decree which should secure to the plaintiff a lien upon that interest for the payment of the sums due and to become due to her annually as alimony, under the decree of the superior court, July term, 1852, ordering said William H. Sheafe to pay her the sum of §150 per annum for that purpose. In the opinion delivered in this case at the adjourned term in March last, we recognize the validity of plaintiff’s claim for relief on both these grounds. Upon the first point we remarked : ‘ The general principle deducible from the authorities seems to be that, where property is subject to execution and a creditor seeks to have a fraudulent conveyance or obstruction to a levy or sale set aside or removed, he may file and maintain a bill for that purpose as soon as he has obtained a specific lien upon the property, whether by attachment, judgment, or the issuing of an execution.’ (Tappan v. Evans, 11 N. H. 327, and cases cited; Iron Co. v. Goodall, 39 N. H. 223.)” Sheafe v. Sheafe, 40 N. H. 517.

The New Jersey court of chancery expresses the following view : £ 1 But all the cases proceed upon the principle that the judgment creditor, in order to be entitled to the aid of a court of equity in enforcing his remedy by removing obstructions from his path, must have acquired title to or a lien upon the specific thing against which he seeks to enforce his judgment. He must complete his title at law before coming into equity. Unless he has established his title to or lien upon the property of his debtor, he has no right to interfere with his debtor’s disposition of it. Such lien the creditor does acquire under our law by the service of the writ of attachment. The law recognizes the claim of the attaching creditor after it has been verified by affidavit as prescribed by the statute, as a subsisting debt, for the purpose of creating the lien. Having that lien by authority of the statute, prior to the recovery of judgment, he is entitled to the aid of a court of equity to enforce his legal right. The statute for various purposes recognizes and enforces this right, although it may be that the claim may eventually prove to be unfounded. The objection to the interference of a court of equity, that the claim of the attaching creditor is not ascertained, if it be entitled to any consideration, can have no application in the present case, for the plaintiff’s claims against the defendant have in fact been established by judgment.” (Robert v. Hodges, 16 N. J. Eq. 304.)

A decision which is often quoted is that of the casé of Case v. Beauregard, 101 U. S. 688, in which the court says : ££It is no doubt generally true that a creditor’s bill to subject his debtor’s interests in property to the payment of the debt must show that all remedy at law had been exhausted. And, generally, it must be averred that judgment has been recovered for the debt, that execution has been issued, and that it has been returned nulla bona. The reason is that, until such a showing is made, it does not appear in most cases that resort to a court of equity is necessary, or, in other words, that the creditor is remediless at law. In some cases, also, such an averment is necessary to show that the creditor has a lien upon the property he seeks to subject to the payment of his demand. The rule is a familiar one that a court of equity will not entertain a case for relief where the complaint has an adequate legal remedy. The complaining party must, therefore, show that he has done all that he could do at law to obtain his rights. But, after all, the judgment and fruitless execution are only evidence that his legal remedies have been exhausted, or that he is without remedy at law. They are not the only possible means of proof. The necessity of resort to a court of equity may be made otherwise to appear. Accordingly the rule, though general, is not without many exceptions. Neither law nor equity requires a meaningless form. '•Bona sed impossibilia non cogit lex.’ It has been.decided that, where it appears by the bill that the debtor is insolvent, and that the issuing of an execution -would be of no practical utility, the.issue of an ex-execution is not a necessary prerequisite to equitable interference. (Turner v. Adams, 46 Mo. 95; Postlewait v. Howes, 3 Iowa 365; Ticonic Bank v. Harvey, 16 Iowa 141; Botsford v. Beers, 11 Conn. 569; Payne v. Sheldon, 63 Barb. 169.) This is certainly true where the creditor has a lien or a trust in his favor. So it has been held that a creditor, without.having first obtained a judgment at law, may come into a court of equity to set aside fraudulent conveyances of his debtor, made for the purpose of hindering and delaying creditors, and to subject the property to the payment of the debt due him. (Thurmond v. Reese, 3 Ga. 449; Cornell v. Radway, 22 Wis. 260; Sanderson v. Stockdale, 11 Md. 563.) * * * The foundation upon which these and many similar, cases rest is that judgments and fruitless executions are not necessary to show that the creditor has no adequate legal remedy. * * * But, without pursuing this subject further, it may be said that, whenever a creditor has a trust in his favor, or a lien upon property for the debt due him, he may go into equity without exhausting legal processes or remedies. (Tappan v. Evans, 11 N. H. 311; Holt v. Bancroft, 30 Ala. 193.) Indeed, in those cases in which it has been held that obtaining a judgment and issuing an execution is necessary before a court of equity can be asked to set aside fraudulent dispositions of a debtor’s property, the reason given is that a general creditor has no lien. And when such bills have been sustained without a judgment at law, it has been to enable the creditor to obtain a lien, either by judgment or execution. But when the bill asserts a lien or a trust, and shows that it can be made available only by the aid of a chancellor, it obviously makes a case for his interference.”

Upon the argument of this case our attention was called to an alleged conflict in the decisions from the court of appeals of New York, counsel citing Thurber v Blanch, 50 N. Y. 80, and Mechanics’, etc., Bank v. Dakin, 51 N. Y. 519; but the recent case of People ex rel Cauffman v. Van Buren discusses these cases and states the doctrine as follows:

“In Thurber v. Blanck, 50 N. Y. 80, it was held that an attaching creditor had no standing in court to reach equitable assets until his remedy at law was exhausted, nor to attack a fraudulent transfer of the property of his debtor until after judgment; and in Mechanics’, etc., Bank v. Dakin, 51 N. Y. 519, the commission of appeals held that an attaching creditor, after the recoveiy of judgment and the issuing of execution, may maintain an equitable action in his own name to set aside a fraudulent transfer of the property which had been seized under the attachment. The impression seems to have prevailed that there was an irreconcilable conflict between these two cases, and the reporter, in a foot note in 51 N. Y., says: ‘This case, it will be perceived, was argued prior to the decision of the case of Thurber v. Blanck, 50 N. Y. 80, with which it is in conflict. That case had not been brought to the attention of the commission at the time of the decision herein. ’ But we fail to discover any real ground of antagonism between them. In Thurber v. Blanck the court was dealing with an attempt on the part of an attaching creditor to reach equitable assets, which it has been uniformly held cannot be done until judgment has been recovered, execution issued and returned unsatisfied, and an action or proceeding in the nature of a creditors’ bill instituted. The provisions of the Revised Statutes (now §§ 1871-1879 of the Code) which authorized a judgment creditors’ action, imperatively required the recovery of a judgment and the issue and return of an execution unsatisfied as an indispensable condition of the creditor’s right to bring the action.

“In Mechanics’, etc., Bank v. Dakin, the attaching creditor had, by the recovery of judgment and the issue of execution, acquired the right to have the attached property applied to the satisfaction of the execution, but in the assertion of this right he found the way obstructed by the interposition of a conveyance of the property by his debtor, which was apparently valid but which was in fact void. In such cases it has always been held that, while the process for the collection of the debt was outstanding, the equitable jurisdiction of the court could be invoked to remove the fraudulent obstruction to the legal process and permit it to be effectually enforced.” (136 N. Y. 259, 32 N. E. 775.)

Counsel for appellants have relied, among other cases, upon Buckeye Engine Co. v. Donau Brewing Co., 47 Fed. 6. That case seems to have decided that a creditors’ bill cannot be maintained upon a judgment on which execution was issued and returned unsatisfied, when the return does not expressly show that there was no property subject to levy. But that decision is not in conflict with the principles announced in the above-quoted cases. As we have tried to make clear throughout this discussion, this is not the sort of a creditors’ action where the showing that there was no property subject to execution was of great importance, when the return in fact showed the existence of the obstruction which the creditors wished to have removed. It is even held in the state of Washington that the obtaining of judgment is not a prerequisite to equitable interference. Of course, we are not required to go that far in this case, and we mention the Washington case only to show the tendency, perhaps, to extend equitable aid. The Washington court uses the following language: “The first questio that presents itself in this case is, is it necessary to reduce a claim to judgment, issue an execution and secure a return of milla bona made thereon, to support a creditors’ bill, or is an attachment lien a sufficient basis for such an action ? Many cases have been cited both by appellant and respondents on this proposition, and from an investigation of the cases it must be conceded that the weight of opinion, considering both the old cases and the new, sustains the doctrine that the claimant must press his claim to judgment, send out his execution, and show a fruitless search for property before he can appeal to a court of equity to set aside a fraudulent conveyance. But we are satisfied that the trend of modern decision is the other way. At all events, the decisions of courts are so conflicting that this court feels justified in adopting that rule which seems to it best calculated to protect the interests of bona fide creditors from fraudulent transactions. We think no good purpose can be subserved by compelling a creditor to await his judgment, but that the effect will be to aid dishonest debtors in fraudulently disposing of their property. And, especially in view of the language used by the supreme court of the territory in Meacham Arms Co. v. Swartz, 2 Wash. T. 412, 7 Pac. 859, and Thompson v. Caton, 3 Wash. T. 31, 13 Pac. 185, we feel justified in now deciding that, where a lien has been obtained by attachment on the property in controversy, and it appears by bill that the debtor is insolvent, and the issuing of an execution would be of no practical utility, the obtaining of the judgment and the issuance of an execution thereon is not a necessary prerequisite to equitable interference.” (Benham v. Ham, 5 Wash. 128; 34 Am. St. Rep. 852.) See, also, Williams v. Michenor, 11 N. J. Eq. 520.

As looking in the direction of the authorities above quoted, we cite as follows from Leopold v. Silverman 7 Mont. 266: ‘ ‘The most important one of the incidental questions presented in the record is this: Should the judgment on the pleadings have been rendered in favor of the defendants because the plaintiffs had a plain, speedy, and adequate remedy at law ? Let us first inquire whether or not the plaintiffs had such a legal remedy. If both the first and second mortgages are void on their face, as is alleged in the plaintiff’s pleadings, there can be no doubt that they had a remedy at law by an action of claim and delivery under our statute for the possession of the property. But does this fact preclude them from bringing a suit in equity to set aside the prior mortgages for fraud, and to foreclose the subsequent mortgage, and, incidentally, of course, to have a receiver to preserve and dispose of the property and distribute the proceeds under the direction of the court? In states where the two jurisdictions of law and chancery are strictly separated, and relief is administered in different courts or by the same court sitting in different capacities, this question might be answered in the affirmative. But in the territories of the United States there is only one court to try all causes, whether legal or equitable, and the blended system prevails to its fullest ■ extent as established by acts of congress. ’ ’

Innumerable other cases might be cited. Those from which we have quoted seem to be representative, and state the doctrine clearly and satisfactorily. As heretofore observed, the appellants have cited many authorities upon the subject of creditors’ bills, but those cases treat of facts different from those in the case at bar, and of creditors’ bills of a nature other than that set up in this complaint. We are perfectly satisfied that, under modern views of equity jurisprudence, the action will lie to remove a fraudulent obstruction to the reasonable success of plaintiff in realizing upon its attachment lien when it has reduced its claim to judgment and it appears that the said obstruction to the fairly successful execution of judgment exists. We are of the opinion that it would not be reasonable or equitable for a court of chancery to turn away such a plaintiff, and require it to go to its remedy at law and sell property and to breed a swarm of actions, some of which would later have to be finally settled in equity, when this one action may finally dispose of all of the contentions. There may be cases which hold views contrary to those which we have expressed. We do not purpose to review those cases. We have satisfied our own mind upon the conclusions which we have reached, both in reason and upon authority.

It is argued by appellants that, by issuing an execution and its being returned unsatisfied, the plaintiff abandoned its attachment lien. The district court, upon this subject said: ‘ ‘This contention impresses us as somewhat frivolous. In the whole litigation nothing is clearer than the fact that the plaintiff has clung with the utmost tenacity to this lien, both as a matter of intent, and from a legal standpoint.” We, also, are of the opinion that this contention of the appellant is not substantial. If it is argued that the respondent abandoned its attachment lien as a,matter of fact, this is not true. Abandonment is a question of intent. Intent is ordinarily proved by acts. The acts of respondent certainly indicate that it was far from abandoning the attachment lien. It issued an execution, which execution at once encountered a fraudulent obstruction. Instead of abandoning the attachment in fact, the respondent at once came into the court of equity to render more completely available its attachment lien. If it be contended that the respondent by its acts abandoned, as a matter of law, the attachment lien, the contention is settled by the views which we have heretofore expressed, in treating of the subject, as the appellants call it, of the alleged want of equity in the case. As to the return of the execution, it stated the exact facts, and the facts as we have determined, upon which the equity action may rest. Upon the contention that the attachment lien was abandoned, see the case of People ex rel Cauffman v. Van Buren, 136 N. Y. 259, in which the court says, on page 260: “It would seem to be illogical to accord to the plaintiff the right to attach property fraudulently transferred, as he concededly may under the decisions in Hall v. Stryker, 27 N. Y. 596, and the other cases cited above, and yet deny him the right to have the lien preserved until he can merge his claim in a judgment and issue final process for its collection. No adequate remedy at law can be suggested in such a case. ’ ’

Again, the appellants contend that, if the assignment is to be set aside in this action, the only judgment proper to render would be one marshaling the assets and requiring all the creditors to come in and prove their claims, to the end that they might share pro rata in the funds, and that the plaintiff has no lien prior to any of the creditors. The appellants claim that the judgment should therefore be modified. But they make this claim upon the ground that the respondent abandoned its attachment lien. That point we have already decided against them, and with that falls also their contention that the judgment should be modified. This is not a case where the plaintiff claims a priority because it first brought its suit to discover assets. We think that we have heretofore made it plain that that is not the nature of the action, but, on the other hand, it is an action to remove the fraudulent obstruction.

The appellants allege error in the action of the court in allowing testimony as to statements made by the assignors some days after the assignment was executed, and after possession had been delivered to the assignee. We shall not approve or disapprove the ruling of the court in this respect. It is important to observe what was the character of this testimony, and what was its materiality, in order to ascertain whether this error, if error it were, was sufficiently prejudicial to reverse the case. L. H. Hershfield, president of the plaintiff bank, was first interrogated as to conversations preceding the assignment. He was then allowed to testify as to conversations between Greenhood and Bohm and himself after the assignment. His testimony in this respect was as follows: “I objected to their assignment, and they said they did the best they could, and in that line evidently they had no use for me. They said they were disappointed in the action that had been taken, that they were in hopes that they could borrow from Bejall §40,000 or §50,000, and make a settlement with their creditors, and that the course that we had pursued had prevented them from doing so; that they thought they could settle with preferred creditors at 50 cents on the dollar, and with the other creditors at 25' cents. I asked them where they wanted to get the money, and ■ they said from Bejall, — that Bejall would give them the money. ’ ’ This evidence does not seem to us to be particularly substantial. It does not necessarily seem to be indicative of fraud that the assignors hoped to make a settlement with their creditors by borrowing money to do so.

There may have been fraud in their plans in this respect, but the bare fact of their hoping to borrow money, to make a settlement we do not think, in itself, particularly tends to indicate a fraudulent intent in making the assignment. While this testimony may be incompetent and immaterial, it does not seem to us to have been of such a substantial character that the whole case should be reversed upon this ground.

Upon this point we append the following quotations: “It then remains to be seen whether there was any such error in the decision of the judge who tried these issues, as to render it proper to grant a new trial. And here it may be proper to observe that the principles upon which this court directs a new trial of a feigned issue are somewhat different from those which govern courts of law in .granting new trials. Where this court directs an action, although accompanied by particular directions, the parties in other respects are left to their legal rights. The application for a new trial is in that case to be made to the court in which the action is brought, and is subject to the rules which govern the proceedings of that court in other cases. But if an issue is directed, it is to inform the .conscience of the chancellor, and the application for a new trial must be made here. (Carstairs v. Stein, 2 Rose 178; Fowkes v. Chadd, 2 Dickens 576; Ex parte Kensington, Coop. 96.) In the latter case this court will not grant a new trial merely on the ground that the judge received improper testimony on the trial of the issue, or that he rejected that which was proper, if, on the whole facts and circumstances, the chancellor is satisfied the result ought not to have been different if such testimony had been rejected in the one case or received in the other. Head v. Head, 1 Sim. & S. 150; same case on appeal, Turn. & R. 142; Barker v. Ray, 2 Russ. 63; Collins v. Hare, 1 Dow & C. 139, per Lord Lyndhurst. ” (Apthorp v. Comstock, 2 Paige 487.) “The lord chancellor then observed, upon the doctrine of courts of equity as to new trials, that if evidence which ought to have been received has been refused, or evidence which ought to have been refused has been admitted, or if, in some instances, the judge can be shown to have miscarried in his directions to the jury, the court will not grant a new trial, if, looking at the whole evidence before the jury and the address of the judge to the jury, its own conscience is satisfied.” (Head v. Head, 1 Turn. & R. 141.)

“On the appeal to the general term from the original judg- • ment, the order to be made would depend upon the extent to which, in the opinion of the court, errors had affected that judgment. If errors had been committed on the trial of the issues ordered to be tried by a jury, which so affected the result that the court was not willing to proceed to judgment thereon, a new trial would be necessary. But we apprehend that the court was not required to grant a new trial merely because it found on the record some exceptions which were well taken, if satisfied upon the whole case that justice had been done. This case, on the part of the defendant, upon the former appeal to the general term, and on the present appeal, has been treated and considered as though exceptions, if well taken, were to have the effect of reversing the judgment, however technical or unimportant to the general result they may be. Such effect was not given to mere errors on the trial of a feigned issue out of chancery, and it is not apparent that the Code has introduced a new rule on the subject. (Forrest v. Forrest, 6 Duer 138, 139; Barker v. Ray, 2 Russ. 63; Lyles v. Lyles, 1 Hill Eq. 82; Muloch v. Mulock, 1 Edw. Ch. 14, and cases cited; Apthorp v. Comstock, 2 Paige 482, and cases cited.) And the observation, gathered from these cases, that the trial of issues, and much more the proceedings on reference, being to inform the conscience of the court, even the rejection of competent testimony or the admission of incompetent evidence does not necessarily require the court to set aside the proceedings or grant a new trial, may properly be borne in mind in considering the objections heretofore to be noticed.” (Forrest v. Forrest, 8 Bosw. 653.)

‘ ‘It was insisted that the same principles upon which a court of law formerly proceeded in granting or refusing á new trial should be applied to the case; and if evidence had been rejected on the trial of the issues that ought to.have been received, or evidence received that should have been rejected, the defendant was entitled to a new trial. This is hardly the rule now in a court of law, for, latterly, even these courts undertake to judge for themselves of the materiality of evidence found to have been improperly admitted or rejected, and when satisfied that no injustice has been done, and that the verdict would have been the same with or without such evidence, they have refused a new trial. (Doe v. Tyler, 6 Bing. 561.) Courts of equity have, however, been governed by very different principles from those of a court of law, in granting or refusing new trials of issues of fact. Though evidence had been improperly admitted or rejected, if a court of equity was satisfied that the verdict ought not to have been different, it would not grant a new trial merely on such ground. (Barker v. Ray, 2 Russ. 63; Lyles v. Lyles, 1 Hill Eq. 82.) The object of a feigned issue is to satisfy the mind of the equity judge upon matters of fact, and that object is attained when the conscience of the judge is satisfied that, at the trial, justice has been substantially done. (Mulock v. Mulock, 1 Edw. Ch. 14; Apthorp v. Comstock, 2 Paige 483; Collins v. Hare, 1 Dow & C. 139; Id. 2 Bligh (N. S.) 106; Bootle v. Blundell, 19 Ves. 503; Savage v. Carroll, 2 Ball & B. 444; Forrest v. Forrest, 25 N. Y. 509.)

“Were this an action at law, the rulings of this court in admitting evidence would be subject to review, but, this being a chancery cause, a different rule prevails, and the inquiry here is whether or not the competent evidence in the record, taken in connection with the pleadings, sustains the decree that was entered.” (Sawyer v. Campbell, 130 Ill. 166, 22 N. E. 464.)

Under these authorities, we are of the opinion that the unimportant and unsubstantial character of the evidence submitted is such that the whole case should not be overturned by reason thereof. It is apparent that the principal findings of fraud may be sustained without this evidence, and it is difficult to understand that this evidence could have any substantia] bearing upon the findings. We decline to reverse the case on this alleged error.

What we have said in the last paragraph as to the practice in equity in not reversing a case for unsubstantial errors, where it is perfectly clear that the result is correct, applies to several errors which the appellants have urged, and which we do not purpose to review in this opinion.

Again, it is contended by the appellants that it must be shown that the fraud was participated in by the assignee and by the creditors. As before remarked, the participation in the fraud by the assignee was found by the jury, and while the evidence is not wholly satisfactory upon that finding, we have felt that we are not in a position to disturb it. But as to the question of participation by the assignee and the creditors, we note section 229, div. 5, Comp. Stat. Mont., which is as follows : “Sec. 229. Every conveyance or assignment, in writing or otherwise, of any estate or interest in lands or in goods in action, or of the rents or profits thereof, made with the intent to hinder, delay, or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts or demands, and any bond or other evidences of debt given, suits commenced, decrees or judgment suffered, with the like intent as against the person hindered, delayed or defrauded, shall be void.”

In order to exclude from the operation of this statute a purchaser for a valuable consideration, section 232 is as follows : “Section 232. The provisions of this chapter shall not be construed in any manner to affect or impair the title of a purchaser for a valuable consideration, unless it shall appear that such purchaser had previous notice of the fraudulent intent of his immediate grantor or of the fraud rendering void the title of such grantor. ’ ’

The statutes of the state of New York upon this subject are almost identical with ours. They are as follows: “Section 1. Every conveyance, or assignment, in writing or otherwise, of any estate or interest in lands, or in goods or things in action, or of any rents or profits issuing therefrom, and every charge upon lands, goods, or things in action, or upon the rents or profits thereof, made with the intent to hinder, delay or defraud creditors or other persons, of their lawful suits, damages, forfeitures, debts or demands, and every bond or other evidence of debt given, suit commenced, decree or judgment suffered, with the like intent as against the persons so hindered, delayed or defrauded, shall be void.” “Section 5. The provisions of this chapter shall not be construed, in any manner, to affect or impair the title of a purchaser for a valuable consideration, unless it shall appear, that such purchaser had previous notice of the fraudulent intent of his immediate grantor, or of the fraud rendering void the title of such grantor. ’ ’ 4 Rev. St. N. Y. (8th Ed.) pp. 2592, 2593.

Upon this statute the court of appeals of New York used the following language: “I conclude, therefore, that the judge would have pronounced the assignment void but for the additional fact that there was no fraud intended by the assignee. Having found that fact also, he held the assignment to be valid. If the decision turned, as it must have done, upon that fact, it was erroneous in point of law. By another section of the statute it is declared that ‘the provisions of this chapter shall not be construed in any manner to affect or impair the title of a purchaser for a valuable consideration, unless it shall appear that such purchaser had previous notice of the fraudulent intent of his immediate grantor or of the fraud rendering void the title of such grantor.’ 2 Rev. St. p. 137, § 5. I have no doubt that, under this statute the grantee in a conveyance which is fraudulent on the part of the immediate grantor may be protected, and that this section does not refer exclusively to derivative and subsequent conveyances of the same property. But an assignee in trust for the benefit of creditors is not 'a purchaser for a valuable consideration,’ however innocent he may be of participation in the fraud intended by the assignor. The uprightness of his intentions, therefore, will not uphold the instrument, if it would otherwise for any other reason be adjudged fraudulent and void.” (Griffin v. Marquardt, 17 N. Y. 28.)

See, also, the following language from Rathbun v. Platner, 18 Barb. 272. “This charge cannot be sustained. The substance of the charge is that it matters not how fraudulent may have been this insolvent debtor’s intent in making this general assignment, if his assignees are only free from all imputation of participating in his fraudulent designs, the assignment is to be upheld. The assignment is to be held good, notwithstanding this debtor may have made it with the express view to hinder, delay, and defraud his creditors, if the jury are only satisfied that the trustees whom he has appointed to carry out his fraudulent designs are free from the imputation of fraud themselves. The statute declares that every assignment, in writing or otherwise, of any estate or interest in lands, or in goods or things in action, etc., made with the intent to hinder, delay, or defraud creditors or other persons of their lawful suits, damages, forfeitures, debts, or demands, etc., shall be void. 2 Rev. St. p. 137, § 1. The statute is that every assignment made with such intent shall be void. It was held by Chancellor Walworth, in the case of Bank v. Atwater, 2 Paige, 51, that a voluntary conveyance made by a debtor with the intention of defrauding his creditors is void, although the voluntary grantee was not privy to the fraud-; and Assistant Vice Chancellor Sandford, in discussing Phillips’ assignment (Mead v. Phillips), 1 Sandf. Ch. 85, which was a general assignment in trust for the benefit of creditors, says: “If Phillips made it with the intent to hinder, delay, or defraud creditors, it is void, although his assignees were perfectly honest and entirely ignorant of his designs. ’ Interests thus obtained through the fraud of the debtor cannot be sustained upon any principle known to the law. (Haguenin v. Baseley, 11 Ves. 289, 290; Hildreth v. Sands, 2 Johns. Ch. 42, 43.) Such assignments must be made in good faith, or they cannot be upheld. (Russell v. Woodward, 10 Pick. 108; Burdick v. Post, 12 Barb. 168, 172.) Our statute of frauds pronounces void all such assignments which are made with the intent to hinder, delay, or defraud creditors, as we have already seen. The statute regards the intent with which the act was committed. (Van Nest v. Yoe, 1 Sandf. Ch. 9, 10; Burdick v. Post, 12 Barb. 172.) It declares void all assignments which shall be made with such fraudulent intent. (Van Nest v. Yoe, 1 Sandf. Ch. 10.) Our books are full of cases where sales have been declared void under the statute because of the fraudulent intent of the assignors in making them. (Id.) There are many cases where the late chancellor and vice chancellor have set aside assignments made by insolvent debtors in trust for the benefit of creditors, when the assignees have been perfectly free from the imputation of fraud; and it has been the settled rule in all such cases, when the assignees have acted in good faith, to protect and ratify their sales and acts done in good faith. (Barney v. Griffin, 4 Sandf. Ch. 552). It is claimed and insisted, however, that the case stated in the charge of the judge is governed by a different principle, inasmuch as the assignees themselves are to take the entire avails of the assigned property to pay their preferred debts, and consequently there will not in fact be any trust for them to execute for the benefit of the other creditors provided for in the assignment, and that the case falls within the principle and is governed by the rule of Waterbury v. Sturtevant, 18 Wend. 353, where a debtor had conveyed property directly to his creditor in payment and satisfaction of a bona fide debt, and the court upheld the conveyance, notwithstanding it was conveyed by the debtor with intent to hinder, delay, and defraud other creditors, because they found that the creditor was not a party to the fraud, but received the conveyance in good faith, in payment of an honest debt, applying the general rule which exists between vendor and vendee, mortgagor and mortgagee, pledgor and pledgee. (Beals v. Guernsey, 8 Johns. 348; Wickham v. Miller, 12 Johns. 320; Jackson v. Terry, 13 Johns. 471; Jackson v. Myers, 18 Johns. 425; Coote, Mortg. 421; Wood v. Dixie, 7 Q. B. 892; Pickstock v. Lyster, 3 Maule & S. 371; Holbird v. Anderson, 5 Term R. 235.) That rule has never been applied to a case like the present, so far as my acquaintance with, the books has extended, and I do not think that any case can be found where this rule has been applied to a case like the one under consideration. ’ ’

Again, in the later case of Loos v. Wilkinson, (October, 1888), we find the following language: “If the assignment itself is for any reason fraudulent and void, it may be set aside, and then all power of the assignee under it ceases. An innocent assignee may not be permitted to act under a fraudulent assignment. The provision of law (3 Rev. St., 7th Ed., p. 2329) that every conveyance or assignment made with the intent to hinder, delay, or defraud creditors is void, is still in full force and operation, notwithstanding the act of 1858 and the various acts relating to voluntary assignments for the benefit of creditors. It may be that in a particular case an honest assignee may, under the acts referred to, undo all the fraudulent acts of the assignor preceding and attending the assignment, and the preparation of the schedules under it. Yet, if the assignment was made by the assignor with the fraudulent intent condemned by the statute, the assignment may be set aside at the suit of judgment creditors, and all powers of the assignee, however honest he may be, taken away. In assailing a voluntary assignment for the benefit of creditors, it is important only to establish the fraudulent intent of the assignor (Starin v. Kelly, 88 N. Y. 418), and when that has been established the assignment may be set aside, and creditors may then pursue their remedies and procure satisfaction of their judgments as if the assignment had not been made. ” (110 N. Y. 195, 18 N. E. 99.)

See, also, Starin v. Kelly, 88 N Y. 418. See, also, the following remark by the supreme court of California : “It is obvious, therefore, that the question upon which the case must turn is whether the conveyance was in fraud of the rights of the plaintiff as a creditor. This, under our statute, is a question of fact (Civil Code, § 3442); that is to say, a question of intent. And since the deed was without consideration, the intent which is material is that of the grantor. It is immaterial how innocent the grantee was. (Lee v. Figg, 37 Cal. 336; Peek v. Peek, 77 Cal. 111; 19 Pac. 227; Swartz v. Hazlett, 8 Cal. 128.” Judson v. Lyford, 84 Cal. 508.) We are of the opinion that our statute, as we have recited above, and the constructions given to the same statute by courts of the state of New York, is conclusive upon this subject. A general assignment for the benefit of creditors is not a conveyance to a purchaser for a valuable consideration, and for that reason the fraud by the assignors is sufficient to avoid the assignment. See cases last cited; also, Farrington v. Sexton, 43 Mich. 456, 5 N. W. 654, and Chace v. Chapin, 130 Mass. 131.

Again, the appellants contend that the secretion of the assets by assignors is the only ground of fraud in this case, and that such secretion is not sufficient to avoid the assignment. Upon this point they cite cases holding that the application by the assignors of some of their assets to debts, which application was made before the general assignment, was not fraud sufficient to avoid the general assignment. But that is not at all this case. The assignment purports to be a general one of all the property of the assignors, and it is far from the fact that the secretion of the assets is the only evidence of fraud relied upon. In this case the secretion of the assets was not wholly for the purpose of paying debts due by the assignors, but such secretion was part of the evidence and findings showing fraudulent intent in the assignment.

The appellants also contend that there was error in admitting in evidence, upon the trial of this case, the judgment roll in the money-demand action of the bank against Greenhood, Bohm & Co. But the objection which they urged in this court was not made in the court below, by reason of which that court had no opportunity to pass upon the matters which are now urged.

Appellants also contend that the court erred in allowing certain amendments to the plaintiff’s complaint. We have examined this matter, and are satisfied that there was no abuse of discretion in allowing those amendments.

The appellants have also called the attention of the court to the case of State ex rel. New York Sheep Co. v. Eighth Judicial District Court, 11 Mont. 577, upon the question of the appointment of a receiver in the case at bar. That case is wholly distinguished from this one, as a reading of the decision will make apparent. That case was a simple money-demand action; with an attachment as ancillary thereto, and it was held that the statute did not provide for a receiver in such case. The case at bar is an equity action seeking the equitable relief of setting aside an assignment alleged to be fraudulent.

We have now reviewed all of the errors which were relied upon by the appellants, and which we regard as of sufficient importance to demand a treatment in this opinion. We are satisfied that there is nothing in the case which demands its reversal.

We will refrain, at the close of this long discussion, from giving a resume of the various findings of the jury, upon which the court determined that the assignment should be set aside. We refer to the elaborate statement of the case preceding this opinion. We are satisfied, as was the district court, that those findings are sufficient to set aside the assignment, and we are also satisfied that the judgment entered by the district court was correct. The trial in that court was a long, patient, and laborious one. As shown above, both of the learned judges of that court presided, and, as they inform us, they had an unusually intelligent jury. From a perusal of the findings of that jury, we are satisfied as to their intelligence and good judgment.

Inquiries into alleged fraud are always difficult and tedious. We cannot but conclude, upon our own laborious review of tfiis case, that the same was fairly tried and the result fairly reached. The appellants had the benefit of an array of counsel drawn from the ranks of the ablest members of the bar of the county. They presented every merit and every technicality of their case. We cannot close this opinion without expressing our appreciation of the earnest and able labors of all the counsel engaged in this case. No diligence and no learning has been spared. Some of the questions involved were first impressions in this jurisdiction, and we have felt the importance of arriving at a conclusion that would satisfy ourselves. It is most gratifying to have our labors lightened by the high order of learning which has been exhibited in the arguments and briefs of counsel.

We are satisfied of the result which we have reached, and therefore order that the judgment as rendered and entered be affirmed.

Affirmed.

Pemberton, C. J., concurs. Hunt, J., having tried the same as district judge, does not participate in the decision.

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Rehearing

OE REHEARING.

Per Curiam.

In this case a motion for rehearing has been filed and submitted. The appellants ask for a rehearing, in order that they may argue an objection to the judgment as entered in the lower court. The objection which they suggest to the judgment is only as to a portion of the same. This objection is now made for the first time. The record in this case was on file in this court for 17 months before the appeal was heard. The counsel filed briefs covering nearly 400 printed pages. On the argument we extended the time, and gave counsel more than twice as much time for argument as the rule prescribes. With all this time which counsel had to prepare the case, and with the extraordinarily voluminous briefs that were filed, and with the unusual time given to the arguments, counsel never suggested that there was the slightest error in the entry of the judgment below. We are not prepared to say that we would never grant a rehearing upon a point that was presented for the first time on the motion for such rehearing, but, under the extraordinary circumstances of this case, we do not feel that we are called upon to entertain the motion. The point presented now is wholly new, and we do not know that it is of great importance. There has been the amplest and the fairest opportunity for counsel to present everything upon which they relied. The remittitur even was sent to the lower court, under rule 15 (13 Mont. 577), and was recalled to await the determination of this motion. As to such matters this court said, in Mining Co. v. Holter, 1 Mont. 429: “A rehearing will not be granted in an equity cause after it has been remitted to the court below to carry into effect the decree of the court above according to its mandate. ’ ’

Again, the court said in Davis v. Clark, 2 Mont. 394: ‘ ‘This case is before us upon motion of appellant for a rehearing. In considering the questions which have been submitted, we must be governed by the rule established in Mining Co. v. Holter, 1 Mont. 432. The decisions of this court will not be reversed unless they are in conflict with a statute or controlling decision, to which the attention of the court has not been directed, or it appears that some question which is decisive of the case has been submitted by counsel, and been overruled by the court. ’ ’

In the case of Beck v. Thompson (Nev.) 41 Pac. 1, the court said: “All the points raised in the petition, except as to the rent, are new matters, and, under the decisions of a long line of authorities, they should not be considered on petition for rehearing. ‘A rehearing in the supreme court will not be granted in order to consider points not made in the argument upon which the case was originally submitted.’ (Kellogg v. Cochran 87 Cal. 192.) ‘The supreme court will not consider a petition for rehearing that attempts to discuss the case upon grounds which were not presented in the original argument or discussed in its opinion. ’ (San Francisco v. Pacific Bank, 89 Cal. 23.) ‘New questions cannot be raised for the first time on motion for rehearing. ’ (2 Enc. Pl. & Prac. 386, and authorities cited in note 1.) ‘Counsel are presumed to have presented on their original argument all the grounds upon which they rely for the affirmance or reversal of the judgment appealed from.’ (Id., and note 2.) We fully concur with the above-named authorities. A rehearing is denied. ’ ’

In the note to 2 Enc. PI. & Prac. cited by the Nevada court, the author cites the following cases: Robinson v. Allison, (Ala.) 12 South. 604; Bank v. Ashmead, 23 Fla. 391, 2 South. 657, 665; Jacksonville, etc., Ry. Co. v. Peninsular Land, etc., Co., 27 Fla. 1, 157, 9 South. 661; Funk v. Rentchler, 134 Ind. 68, 33 N. E. 364, 898; Martin v. Martin, 74 Ind. 207; Lawrence Co. v. Hall, 70 Ind. 477; Yates v. Mullen, 24 Ind. 277; Graeter v. Williams, 55 Ind. 461; Rickhoff v. Machine Co., 68 Ind. 388; Heavenridge v. Monday, 34 Ind. 28; Brooks v. Harris, 42 Ind. 177; Cramer v. City of Burlington, 45 Iowa 630, McDermott v. Railway Co., 85 Iowa 180, 52 N. W. 181; Dietlin v. Eagan (Com. Pl.) 2 Misc. Rep. 52, 21 N. Y. Supp. 6; Moore v. Beaman, 112 N. C. 558, 17 S. E. 676; Hudson v. Jordan, 110 N. C. 250, 14 S. E. 741; Weld v. Manufacturing Co., 84 Wis. 537, 54 N. W. 335; State v. Coulter, 40 Kan. 673, 20 Pac. 525; Weathersbee v. Farrar, 98 N. C. 255, 3 S. E. 482; Lovenberg v. Bank (Tex. Supp.), 5 S. W. 816; Schrichte v. Stite's Estate, 127 Ind. 472, 26 N. E. 77; Lawrence Co. v. Hall, 70 Ind. 469; Bitting v. Ten Eyck, 82 Ind. 421; Coleman v. Keels, 31 S. C. 601, 9 S. E. 735; Underwood v. Sample 70 Ind. 450; Porter v. Choen, 60 Ind. 388; Railroad Co. v. Huff, 19 Ind. 315; Kellogg v. Cochran, 87 Cal. 192, 25 Pac. 677; San Francisco v. Pacific Bank, 89 Cal. 23, 26 Pac. 615; Farrell v. Pingree, 5 Utah 530, 17 Pac. 453; Rogers v. Laytin, 81 N. Y. 642; News Co. v. Wilmarth, 34 Kan. 254, 8 Pac. 104; Knoth v. Barclay, 8 Colo. 305, 6 Pac. 924; Whitehead v. Tulane, 11 La. Ann. 302; Broom's Succession, 14 La. Ann. 67.

We feel that it is the proper practice to deny this motion for rehearing. With all the diligence and labor in preparing and arguing this appeal, there is nothing whatever to indicate to us any excuse for counsel not having fully presented their points. We heard counsel at length, we studied their briefs at length, and deliberated over their case for many weeks; and, under all these circumstances, we are now of opinion that as to this case “interest reipuFlicai ut finis litium sit." A rehearing is denied.

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