United States v. Wood
28 F. Cas. 753
U.S. Circuit Court for the Dis...
1841
Check Treatment
THE COURT

observed that if the debt due the United States is entitled to the preference secured by the impost act of 1799 (section 65) to bonds given for the payment of duties, yet such priority was conferred only in case of insolvency proved by the assignment of all the debtor’s property. The language of the act plainly looks to this condition, and no adjudication of the United States courts or state courts has given it a greater extent. [U. S. v. Hooe] 3 Cranch [7 U. S.] 73; [Conard v. Atlantic Ins. Co.] 1 Pet. [26 U. S.] 386, 1 Paige, 139; U. S. v. Clark [Case No. 14,807]. The United States must establish by clear proofs their right to come in as creditors of the first degree. When the assignment purports to convey all the debtor’s estate, that may be sufficient evidence per se, but, this assignment not being of that character, the plaintiff must supply the proof aliunde. If the receipt or stipulation of Ives to Wood may import that the whole of Wood’s estate was conveyed, still it is susceptible of explanation by parol proof, and the testimony of Ives shows that it was designed as an acknowledgment only of the amount of property transferred, and the conditions upon which it was received. This testimony, corroborative of the answer, is full to the fact that the assignment was of parcels of Wood's estate only, and for the specific object of securing the debt which Ives represented. The United States accordingly lay no foundation for their claim of priority, if such right may be considered to exist even where no bond has been taken or credit given.

But the evidence, as it now stands, exhibits Ives as a general trustee of Wood’s creditors for the surplus in his hands. The plaintiff, as such creditor, would be entitled to enforce the trust in this form of action. [U. S. v. Howland] 4 Wheat. [17 U. S.] 108, and note 118. The bill can, therefore, be retained for that object, and the suit be prosecuted to the appropriate decree. Order accordingly.