fence, and the court held it to be a valid one. After reviewing the laws above referred to, and the manifest policy by which they were dictated, they proceed as follows: "In view of the legislation on this subject, it is believed not to be susceptible of a doubt that the grants upon which the plaintiff bases his right to the lands in question ought to have been recorded, and their failure so to be recorded, or delineated on the maps, or other notice, will postpone them to a junior title, derived from the government, and will place the defendants in the position before the court as innocent purchasers without notice, and in principle not distinguishable from the great class of cases of innocent purchasers without notice of any prior or superior titles." This case is corroborated by the subsequent cases of Musquis v. Blake, 24 Tex. 461; Nicholson v. Horton, 23 id. 47; Wilson v. Williams, 25 id. 54.

Had the grant to Aguilera been deposited in the land-office, the case would have presented a question of very different consideration. It is generally conceded that an archive in the general land-office is entitled to all the privileges of an instrument recorded in the proper county. In the case just cited the court say: "Now, in cases of title emanating from the government, where the patent or testimonio had not been recorded in the county where the land lies, the archives of the general landoffice and the maps of survey, and the records and maps of the county surveyor, would be regarded as notice that the land was appropriated, and was not a part of the vacant domain of the republic." See also Byrne v. Fagan, 16 Tex. 391; Chambers v. Fisk, 22 id. 504; Wilson v. Williams, 25 id. 54. But here all the transfers of the Harris tract took place before the Aguilera title was either recorded or deposited in the landoffice. Under these circumstances, the plaintiffs should have been required to show that the defendant and those under whom he claimed had either actual or at least constructive notice of their title at the time when they respectively purchased; but the court required neither, holding in effect that the elder title was entitled to preference without any notice of its existence.

Of course, buying with actual notice of a previous title, or under circumstances which make it a duty to take notice, is a

fraud, and deprives the purchaser of the immunity arising from the fact that such title is not recorded nor deposited in the land-office. Crosby v. Huston, 1 Tex. 203; Grumbles v. Sneed, 22 id. 565.

By a late law, passed Oct. 20, 1866, a title not deposited in the land-office, and not recorded, will no longer avail as against certain descriptions of title without actual notice. The act is as follows:

"Titles to land which may have been deposited in the general land-office subsequently to the time when the land embraced by such titles had been located and surveyed, by virtue of valid land warrants or certificates, shall not be received as evidence of superior title to the land against any such location or survey, unless such elder title had been duly recorded in the office of the county clerk of the county where the land may have been situated, prior to the location and survey, or the party having such location and survey made had actual notice of the existence of such elder title before he made such location and survey." Pasch. Dig., art. 5825.

99

Whether this law can properly be extended to protect any other titles than those based on "land warrants or certificates may be questionable. But it is not necessary for the defendant to invoke the aid of this law: he can stand on the fair construction of the laws of 1836 and 1839. The title which he is called upon to combat was not to be found either in the landoffice or in the records of the counties, the only public depositories to which the people could resort to ascertain what lands have been granted, and what are vacant and free; and he may well insist that if he and his several grantors had not actual, they should at least have had constructive, notice of an elder title in order to be affected by it, something beyond the mere fact of its existence; some legal indicia or evidence of that existence, deposited in some proper place, which he was legally bound to find, and which, in the exercise of ordinary diligence, he might have found and relied on.

Many other questions are made in the record; but as this is a controlling one, we have thought it unnecessary to discuss them. We are satisfied that the judgment must be reversed, with directions to award a new trial; and it is

So ordered.

REED v. MCINTYRE.

A., in due course of legal proceedings, recovered, March 14, judgment against B., a merchant who, the preceding day, had made an assignment of all his property for the benefit of his creditors. An execution was forthwith sued out upon the judgment, and levied upon certain goods, part of the property so assigned. On the petition of a creditor, filed March 31, alleging that B. had committed acts of bankruptcy by fraudulently suspending and not thereafter resuming payment of his commercial paper due January 1, and by making said assignment, B. was by the proper court adjudged to be a bankrupt, and his estate conveyed in the usual form by the register to the assignee in bankruptcy, who filed his bill against A. to determine the title to the proceeds of the sale of the goods, which by consent had been made without prejudice to the rights, if any, of A. by the levy of the execution. Upon the hearing it appeared by the proofs that the assignment by B. was made in good faith to secure the distribution of his property among all his creditors. Held, that A. acquired no priority by the levy, and that the assignee in bankruptcy is entitled to the proceeds.

APPEAL from the Circuit Court of the United States for the District of Minnesota.

William H. Shuey, a merchant at St. Paul, Minn., executed, March 13, 1874, a deed of assignment conveying his entire property, including his stock in trade, to William S. Combs in trust, for the equal benefit of all his creditors. Upon the same day, immediately after the acknowledgment of the deed, Combs entered upon the discharge of his duties as assignee, and took possession of Shuey's stock. During the succeeding day, Mrs. Reed obtained a judgment in one of the State courts of Minnesota against Barnard and Shuey, for the sum of $5,120.45. An execution was immediately issued, and the sheriff forth with levied it upon the same goods of which Combs had taken possession. Upon the occasion of the levy, the officer was notified of the assignment and Combs's possession. On the 31st of March, 1874, Mrs. Sanderson, a creditor of Shuey, by petition filed in the proper court, prayed that he might be declared a bankrupt, upon two grounds: 1st, that being a merchant and trader, he had, Jan. 1, 1874, fraudulently stopped and suspended payment of his commercial paper, to wit, the promissory note held by her, and had not resumed payment thereof; 2d, that, March 13, 1874, being then insolvent, he made the

said assignment to Combs with intent to hinder, delay, and defraud his creditors, which she alleged was an act of bankruptcy. Before the return of the rule which issued upon this petition, Shuey, by written stipulation, filed in court, without admitting or denying the alleged grounds of bankruptcy, consented that an adjudication might be entered against him. This was at once done, the order reciting that, in consideration of Shuey's written consent, and of the proofs, in the cause, the facts set forth in the petition were found to be true; and it was therefore adjudged that he was a bankrupt, within the meaning of the act of Congress. McIntyre was duly selected as assignee, and to him the usual conveyance by the register was made. Afterwards, to prevent a sacrifice of the goods at a forced sale, and to save expense, a written agreement was made between Mrs. Reed and McIntyre, whereby the latter took possession of and sold all the property levied upon, but without prejudice to such rights as she had acquired under and by virtue of her execution, or to her right to raise any question in a suit in equity, to be promptly instituted, which she might have raised if that property had remained in the custody of the sheriff.

The present suit was commenced by a bill in equity filed by McIntyre for the purpose of obtaining a judicial determination of Mrs. Reed's rights in the property levied on, or rather in its proceeds. She claimed that to the extent of the judgment against Shuey her rights acquired by the levy are superior to those of the assignee in bankruptcy. That view was controverted by him, and a decree having been rendered in his favor, Mrs. Reed appealed.

Mr. E. C. Palmer for the appellant.

Reed obtained the judgment against Barnard and Shuey in the due course of proceedings at law to recover a bona fide subsisting debt, and the execution thereon was duly issued. The levy on the goods in question by the sheriff having been regular, his possession and right of possession thereunder were prima facie lawful. Wilson v. City Bank, 17 Wall. 473; National Bank v. Warren, 96 U. S. 539.

The adjudication in bankruptcy did not affect the levy or impair the lien acquired thereby. The assignee in bankruptcy took the title to the goods subject to all existing valid liens

and incumbrances on them. Kelly v. Scott, 49 N. Y. 595; Cook v. Tullis, 18 Wall. 332; Hayes v. Dickinson, 16 N. Y. Sup. Ct. 277; In re Hambright, 2 Nat. Bank. Reg. 498; McDonald, Assignee, v. Moore, 15 id. 26; Dolson v. Kerr, Sheriff, 16 id. 405; Mitchell v. Winslow, 2 Story, 630; McLean v. Moline, 3 McLean, 201; Donaldson, Assignee, v. Farwell et al., 93 U. S. 631; Jerome v. Mc Carter, 94 id. 734; Goddard v. Weaver, 1 Wood, 260.

Combs is not a party to this suit, and makes no claim to the goods or to their proceeds. The assignment to him of March 14 was declared void, as having been made with the intent to hinder, delay, and defraud creditors, and as an act of bankruptcy. It presents, therefore, no obstacle to the effectual maintenance of Reed's rights under the levy.

Mr. E. G. Rogers and Mr George L. Otis, contra, cited Mayer et al. v. Hellman, 91 U. S. 496; Johnson, Assignee, v. Rogers et al., 15 Nat. Bank. Reg. 1; In re Steele et al., 16 id. 105; In re M. J. Nelson, id. 312; In re James Croughwell, 17 id. 338; In re Arthur A. Hull, 18 id. 5; In re John C. Walker, id. 56; Dodge v. Sheldon, 6 Hill (N. Y.), 9; Seaman V. Stoughton, 3 Barb. (N. Y.) Ch. 348; Everett v. Stone, 3 Story, 446; Penniman v. Cöle et al., 8 Metc. (Mass.) 496.

MR. JUSTICE HARLAN, after stating the case, delivered the opinion of the court.

It is stated in the printed argument of counsel for the appellee, and the statement is not controverted by opposing counsel, that at the date of the assignment to Combs there was no statute of Minnesota relating to assignments by debtors for the benefit of creditors.

In determining, therefore, the validity and effect of the assignment in question, we must look to the doctrines of the common law and to the provisions of the Bankrupt Act.

The assignment to Combs was, according to the evidence in this cause, made in good faith for the purpose of securing an equitable distribution of the debtor's property for the benefit of all of his creditors, including the appellant, and not with any intent to hinder, delay, or defraud them. The right of a debtor at common law to devote his whole estate to the satis