John Shawhan, Daniel Shawhan, George Perrin, Benjamin Berry, Catharine Snodgrass, and Isaac Miller, Appellants v. Perry Wherritt, Assignee of the Bankrupt Estate of Benjamin Brandon

• Decision Date: 01 January 1849
• Citation: 48 U.S. 627,12 L.Ed. 847,7 How. 627
• Parties: JOHN L. SHAWHAN, DANIEL SHAWHAN, GEORGE H. PERRIN, BENJAMIN BERRY, CATHARINE SNODGRASS, AND ISAAC MILLER, APPELLANTS, v. PERRY WHERRITT, ASSIGNEE OF THE BANKRUPT ESTATE OF BENJAMIN BRANDON
• Court: U.S. Supreme Court

48 U.S. 627

7 How. 627

12 L.Ed. 847

JOHN L. SHAWHAN, DANIEL SHAWHAN, GEORGE H. PERRIN,

BENJAMIN BERRY, CATHARINE SNODGRASS, AND ISAAC

MILLER, APPELLANTS,

v. PERRY WHERRITT, ASSIGNEE OF THE BANKRUPT ESTATE OF

BENJAMIN BRANDON.

January Term, 1849

THIS was an appeal from the Circuit Court of the United States for the District of Kentucky.

On the 6th of April, 1842, Benjamin Brandon executed the following deed:——

'This indenture, made and entered into this 6th day of April, 1842, between Benjamin Brandon, of Harrison county and State of Kentucky, of the one part, and William A. Withers, of the county and State aforesaid, of the other part, witnesseth: That the said Benjamin Brandon, for and in consideration of one dollar, to him in hand paid, and for the further consideration hereinafter mentioned, hath given, granted, bargained, sold, released, conveyed, and confirmed, and by these presents do give, grant, bargain, sell, release, convey, and confirm unto the said William A. Withers, his successor or successors, for ever, all the estate, real, personal, and mixed, of whatever nature or kind it may consist, (except such property only as by law not subject to execution,) said estate hereby conveyed consisting of a tract of about 336 acres of land, situated in the State and county aforesaid, and the same tract on which said Brandon now resides, and on which is a steam-mill and distillery, the boundary of which land is more particularly designated in the several deeds which said Brandon holds for said land; also, five negroes, two wagons and teams, about 400 head of hogs, about 15,000 pieces of cooper's stuff, all his stock of horses, cattle, and sheep, his household and kitchen furniture and farming utensils, his debts and choses in action, of every kind and description; it being the intention of said Brandon, by this deed, to convey to the said Withers and his successors, for ever, all his estate, real, personal, and mixed, and choses in action, with the exceptions hereinbefore expressed, whether the same be particularly mentioned and set forth in this instrument or not. To have and to hold all the estate, real, personal, and mixed, and choses in action, hereby conveyed to the said William A. Withers and his successor or successors, for ever, in trust, for the following purposes, namely: To collect the debts and choses in action due, payable, or owing to said Brandon, and to sell the real estate hereby conveyed, either all together or in lots, as said trustee may think most advisable, at public auction, to the highest bidder, on the

following payments: namely, one third of the purchase-money to be paid in hand, and the residue in one and two years; and the slaves and personal estate to be sold at public auction to the highest bidder, on a credit of twelve months; and after making to said trustee a just and reasonable compensation for his trouble and expenses in executing this trust, to pay all the money which he may receive as trustee aforesaid, either by the collection of debts or choses in action, from the proceeds of the sale of the trust estate, to all the creditors of said Brandon, ratably, proportionably to the amount of their respective debts or demands; but should any one or more of the creditors of said Brandon become the purchaser or purchasers of any portion of the real or personal estate, or slaves, hereby conveyed, said trustee is authorized and empowered to accept the debt or debts due or owing by said Brandon to such purchaser or purchasers, in payment for their respective purchases, so far as said debts may go; and in such cases, if any such should occur, only the residue of the price to be distributed pro rat a as aforesaid; and after the payment of all said Brandon's debts, to pay the residue, if any, to said Brandon, his heirs and assigns; and the title to the estate hereby conveyed he doth hereby warrant and defend to said Withers, and his successor or successors, for ever, in trust for the purposes aforesaid, against the claim or claims of him, the said Benjamin Brandon, and against all other claims. In testimony of which, the said Benjamin Brandon hath hereunto subscribed his name and affixed his seal, this day and year first above written.

BENJAMIN BRANDON.'

On the 3d of May, 1842, John L. Shawhan and others filed a bill in the Harrison Circuit Court of Kentucky, sitting as a court of equity. The bill recited, that the complainants were creditors of Brandon; that he had executed the deed above set forth, 'for the purpose of hindering, delaying, and defrauding the creditors of the said Brandon in the collection of their debts'; that the trustee was about to sell and dispose of the property mentioned in the deed; and prayed for an injunction to stop him.

On the same day an injunction was issued, and served upon Brandon and Withers, the trustee.

On the 21st of May, 1842, Brandon and Withers filed separate answers to the bill. Brandon admitted his indebtedness, and the execution of the deed of trust; averred that Shawhan was present while the deed was preparing, and expressed himself satisfied with its provisions; denied most positively that he executed said deed either to hinder, delay, or defraud

his creditors, but, on the contrary, in good faith, believing that general satisfaction would be given to them. The answer of Withers was to the same effect as that of Brandon.

On the 25th of June, 1842, Withers and Brandon applied for an order to change the venue. It was granted, and the record sent to the county of Bourbon.

On the 24th of September, 1842, John Lail presented a petition to the United States Kentucky District Court, sitting in bankruptcy. It alleged that, on the 6th of April preceding, Brandon had made a fraudulent conveyance with intent to defraud his creditors; and that he had concealed himself to avoid being arrested. It then prayed that the court might declare the said Benjamin Brandon a bankrupt. With the petition were filed several exhibits, which it is not necessary to state particularly.

On the same day an order was passed, setting down the hearing for the 4th of the ensuing November, and, in the mean time, enjoining the defendant and all others from removing or otherwise disposing of the property of the defendant, or which, on the decree, the assignee might be entitled to reclaim and recover.

On the 22d of October, 1842, the Bourbon County Court, before which the suit of Shawhan and others against Brandon and Withers was pending, passed a decree annulling and setting aside the deed of trust, as being, in point of law, fraudulent and void. The court enumerated many of the creditors, whose claims had been exhibited, and then ordered, that 'so much of the personal property, slaves, and real estate mentioned in said deed of trust as may be necessary for the purpose be sold to satisfy the aforesaid debts.' Thomas B. Woodyard was appointed to make the sale, according to certain given directions.

On the 22d of November, 1842, the District Court of the United States passed the following order:——

'JOHN LAIL v. BENJAMIN BRANDON.

'The prayer of the petitioner, that the defendant be declared a bankrupt, having been heard upon the allegations of the petition, and the proofs taken and filed, (the defendant having failed to answer,) and now having been fully considered:

'It is found and adjudged by the court, that the said Benjamin Brandon, of Harrison county, being a retailer of merchandise, and indebted as in the petition mentioned, did, by making the deed of conveyance and assignment to William A. Withers, of all his property, real, personal, and mixed, and rights of property, subject to the payment of his debts by the

laws of the State, bearing date the 6th day of April, 1842, and on the 7th day of that month and year admitted to record in the clerk's office of the Harrison County Court, and in the petition mentioned, whereof a copy is filed here, now adjudged a fraudulent conveyance and assignment; and by concealing himself to avoid being served with process, whereby a suit had been commenced against him, thereupon became and is a bankrupt.

'Perry Wherritt is appointed the assignee, and required to execute bond in the penalty of $5,000, with two sufficient sureties.'

On the 24th of November, 1842, Woodyard, the commissioner appointed by Bourbon County Court, proceeded to sell the personal property of Brandon.

In May, 1843, the commissioner made his report to Bourbon County Court, whereupon another decree was passed, reciting that the former sale was insufficient to pay the debts, and directing that so much of the land comprised in the deed of trust as might be necessary for the purpose should be sold for the payment of the balance of the debts.

On the 14th of July, 1843, the commissioner sold the land, in conformity with the above order, and John L. Shawhan became the purchaser. A writ of possession was issued in his favor, in April, 1844, which will be mentioned again in its proper place.

On the 10th of August, 1843, Wherritt, as assignee of the estate of Benjamin Brandon, filed a bill in chancery, in the District Court of the United States for the District of Kentucky, against John L. Shawhan and the other parties named in the caption of this statement. The bill referred to the former proceedings of the court, declaring Brandon to be a bankrupt, and all the other facts in the case. It stated that the assignee had taken possession of the property of the bankrupt, including the land; that Shawhan and others knew of the commission of the act of bankruptcy, but had nevertheless obtained a decree of Bourbon County Court, under the authority of which they had sold the land to Shawhan, who was threatening to disturb the possession of the complainant, and by his threats and false claims of title was preventing the complainant from disposing of the land. It then prayed that Shawhan might be ordered to surrender up, to be cancelled, any pretended...