Dudley v. Easton

Citation26 L.Ed. 668,104 U.S. 99
PartiesDUDLEY v. EASTON
Decision Date01 October 1881
CourtUnited States Supreme Court

APPEAL from the Circuit Court of the United States for the Eastern District of Missouri.

The facts are stated in the opinion of the court.

Mr. John D. S. Dryden for appellant.

Mr. J. M. Krum and Mr. C. H. Krum, contra.

MR. CHIEF JUSTICE WAITE delivered the opinion of the court.

This is an appeal from a decree dismissing on demurrer a bill filed by Dudley, the assignee in bankruptcy of William P. Bush. The case stated in the last amended bill is substantially as follows:—

On the 10th of October, 1873, Easton and Stillwell severally sued Bush in the Circuit Court of Monroe County, Missouri,—Easton on a note for $3,000, and Stillwell on one for $5,000. In due course of proceeding, judgments by default could be taken in each of the suits on the 30th of October. Bush was at the time laboring under great financial embarrassment, although, as he thought, actually possessed of lands and other property greatly in excess of his debts. On the 24th of October, after service of process upon him in the suits, he met a portion of his creditors, including Easton and Stillwell, and made known to them his embarrassed condition, and the pendency of the suits. He also stated that Easton and Stillwell would, by obtaining judgments, secure an advantage over his other creditors, and he was desirous that all should share equally in his property. He thereupon proposed that all the creditors present should accept in satisfaction of their respective debts his notes, payable in equal instalments in one, two, three, and four years from date, with interest at the rate of ten per cent, secured by a mortgage executed by himself and wife, to a trustee to be selected by the parties, on all his real estate, and that Easton and Stillwell should dismiss their suits and not take judgment against him. It is then averred that all the creditors present, including Easton and Stillwell, agreed with each other and with him to accept the notes and security as proposed, and extend the time, and that he agreed to give the notes and make the mortgage. As part of the agreement thus entered into, Easton and Stillwell were to dismiss their suits.

Relying on this agreement, Bush set about the preparation of his notes and mortgage, and paid no attention to the suits. He did not appear in court, or make any defence, as he otherwise would have done, by setting up the agreement for an extension. Consequently, at the proper time, October 30, judgments were taken against him by default, of which it is averred he had no actual notice until November 3, after the term of the court had closed.

Without any unnecessary delay, Bush executed his notes and a mortgage to the defendant Logan as trustee, in accordance with the agreement which had been made. They were all dated October 29, but the mortgage did not take effect until after the judgments were rendered. For this reason, the lien of the judgments was prior to that of the mortgage. All the creditors represented at the meeting, except Easton and Stillwell, accepted the notes, and now retain them. They are not parties to this suit, unless they are represented by the assignee. Easton and Stillwell refused to carry out their agreement, and they rely on their judgments and the priority of lien thereby acquired.

On the 28th of February, 1874, proceedings in bankruptcy were begun against Bush by some of his creditors, which resulted in an adjudication of bankruptcy and the appointment of Dudley as assignee, to whom, on the 24th of March, the general assignment was made under the law. This bill was subsequently filed against Easton, Stillwell, Logan, the trustee under the mortgage, and Bush and wife. It sets forth the foregoing facts in detail, and then avers:——

'Your orator further says that at the time of the making of said agreement of extension and of said deed of trust said Bush had a large amount of property, not included or intended to be included in said deed, sufficient in value to satisfy all the debts owing by said Bush to his other creditors, who were not parties to said agreement; that said deed was not made, nor was said agreement entered into, by said Bush with any intent to give a preference thereby to the parties to said agreement or any of them over his other creditors, or with the intent thereby to convey his said property or any of it in fraud of the provisions of said act of Congress or the acts amendatory thereof, but solely under the belief on the part of said Bush that by obtaining such extension of time of payment as aforesaid he would be enabled to pay all his creditors their debts in full, together with interest at the rate of ten per cent per annum; that the entire indebtedness secured by said deed of trust, including that to said Stillwell and Easton, amounted to $40,394,70, and that all the lands mentioned in said deed were then thought to be worth, and in fact were worth, the sum of $50,000, especially if a reasonable time could be obtained to negotiate a sale of the same; that among the property described in said deed of trust was that occupied by said Bush and his family as a homestead, out of which he was entitled to have set apart to him as exempt from levy and sale under execution a homestead of the value of $1,500...

To continue reading

Request your trial
29 cases
  • In re Independent Clearing House Co.
    • United States
    • United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of Utah
    • August 6, 1984
    ...has the rights of a judgment creditor as well as the powers specifically conferred by the bankruptcy law. Dudley v. Easton, 104 U.S. (14 Otto) 99, 103, 26 L.Ed. 668 (1881). When exercising his avoiding powers the trustee is not asserting a cause of action belonging to the debtor, but is act......
  • Gould Land and Cattle Company v. The Rocky Mountain Bell Telephone Company
    • United States
    • Wyoming Supreme Court
    • May 29, 1909
    ... ... Hayes, 83 Ala. 290; ... Prescott v. Battersby, 119 Mass. 285; Buxton v ... Hamblen, 32 Me. 448; 3 Ency. L. (1st Ed.) 872; ... Dudley v. Collier, 87 Ala. 431.) The invalidity of a ... contract made contrary to the express prohibition of a ... statute is not overcome by the ... ...
  • Blake v. Meadows
    • United States
    • Missouri Supreme Court
    • December 23, 1909
    ... ... in Bankruptcy (2 Ed.), sec. 173; ... Stewart v. Platt, 101 U.S. 731; Cook v ... Tullis, 85 U.S. (18 Wall.) 332; Dudley v ... Easton, 104 U.S. 99; 5 Cyc., 341; In re Standard ... Laundry Co., 116 F. 478; Brandies v. Cochrane, ... 112 U.S. 344; Nichols v ... ...
  • In re Christensen
    • United States
    • United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of Utah
    • December 14, 2016
    ..., 514 B.R. at 5 (collecting cases).38 DeGiacomo v. Traverse (In re Traverse) , 753 F.3d 19, 29 (1st Cir. 2014).39 Dudley v. Easton , 104 U.S. 99, 103, 26 L.Ed. 668 (1881).40 The Debtors have suggested that by using a chapter 7 trustee to liquidate real property subject to federal tax liens,......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT