Haliday Bros. v. Croom
Haliday Bros. v. Croom
Opinion of the Court
delivered the opinion of the court.
Croom being largely indebted, made to Marshall, as trustee, a deed in trust to secure all his creditors, giving preference to Hayns & Bro. and to Gardner. After the payment of the two preferred claims, the remainder of the debts were to be paid, pro rata.
Complainants file this bill, charging the debt secured to Gardner to be fraudulent, and sustained the charge by proof.
There was a demurrer, ujlon the ground that the complainants, being beneficiaries under the deed, could not attack it in part as fraudulent, but are compelled« to accept or reject the deed as an entirety. The demurrer was overruled, properly as we think. The general rule relied on is applicable only in cases where the entire deed is impeached. In such case, the attacking party must stand by his election, and if he fail, can take nothing under the deed.
To apply the rule to a case like the present, would be to give to a fraudulent debtor the power to reserve in the name of a friend a benefit to himself out of property or funds that should in equity and good conscience go to his creditors. The deed may be treated as several made for the benefit of each creditor. ¿If, instead of one deed, the debtor had made one for each creditor, giving such preference as he
The one deed is made for convenience and economy merely, but is in law as many deeds as there are beneficiaries, and must be so treated in this suit.
Affirmed.
Case-law data current through December 31, 2025. Source: CourtListener bulk data.