after entering upon the duties of his trust, make report to the Judge of the Circuit Court, under oath, setting forth the amount of money in his hands, both from the sale of property and from collections, and the amount still uncollected. And such trustee shall also, in such report, give a list of all claims of creditors which have been presented to him against the assignor, noting such as he has concluded should be allowed and such as he has determined not to allow.

2673. Allowance of claims. 12. It shall be the duty of the Clerk of such Court to spread such report and list upon the appearance-docket of the Court, distinguishing between such claims as the trustee has determined to allow and such as he has refused to allow; and in all cases where the trustee has refused to allow any claim, and where any creditor objects to the allowance of the claim of any other creditor or creditors, the Judge of such Court may order such case or cases to stand for trial at the next term of said Court thereafter. And such trial shall be governed, in all respects, by the rules regulating the trials of similar actions in the Circuit Court; and if, after hearing the proofs and allegations on the trial of any such claim, the Court be satisfied that it is valid and just, the Court shall order the same to be allowed and paid as other similar claims are paid, and shall make such order with respect to costs as the Court shall deem just.

2674. Liens. 13. Any part of the property assigned on which there are liens or incumbrances may be sold by the trustee subject to such liens or incumbrances; but in case the trustee should be satisfied that the general fund would be materially increased by the payment of such liens or incumbrances, he shall make application, by petition to the Judge of the Circuit Court, for leave so to do, and abide its order in that behalf. Before the holder of any lien or incumbrance shall be entitled to receive any portion of his debt out of the general fund, he shall proceed to enforce the payment of his debt by sale, or otherwise, of the property on which such lien or incumbrance exists; and for the residue of such claim, such holder of such lien or incumbrance shall share pro rata with the other creditors, if entitled so to do by the laws of this State.

1. The trustee can not become the agent of the mortgagee to take possession of and sell mortgaged chattels. Lockwood v. Slevin, 26 Ind. 124.

2. An order of Court confirming the report of an assignee in paying an invalid mortgage claim is not conclusive on creditors.- Id.

2675. Distribution. 14. When the Court shall have confirmed the report made as provided for in section eleven [§ 2672], and if no contested claims are standing on the docket, as provided for in section twelve [2673], such Court shall order such trustee to pay all moneys then in his hands to the Clerk of such Court; who shall, after deducting therefrom the costs incident to the execution of such trust, including such allowance to the trustee as the Court shall deem just, distribute the same among the creditors according to the provisions of this Act, taking their respective receipts therefor.

2676. Fraud, how prevented. 15. If any creditor or the trustee by petition duly verified shall ask the court for the examination of the assignor or any one to whom any part of his property has been transferred within six months previous to the assignment, the circuit or superior court, or the judge thereof in vacation, may issue an order for the examination of the asignor or the person or persons or officers of corporations or associations to whom such transfer is believed to have been fraudulently made, and all persons alleged to have been concerned in such transfer, and have such person. or persons brought before such court or judge and on oath be compelled to answer all questions put to said person or persons pertinent to the alleged transaction, and such court or judge shall

have power to stay further transfers and to subject such property as has been fraudulently withheld or transferred to the operation of the general trust, and such assignor, person or persons shall be interrogated or be compelled to answer all questions propounded to them concerning the disposition of the property of the assignor; and the assignor may be interrogated and compelled to answer all questions propounded to him concerning the management of his business and affairs for the six months last past previous to the assignment and said assignor shall be compelled to produce all books, papers and accounts in reference to his business affairs during the six months last preceding his assignment. [As amended, 1891 S., p. 313. In force June 3, 1891.

2677. Claims verified. 16. Persons filing claims with the trustee

shall make oath that they are just and lawful, and no part of the same for usurious interest, or, if so, what part, and said part shall be deducted from the claims before they are allowed. And the trustee is hereby authorized to administer oaths to creditors in reference to the validity and justice of their claims.

2678. Compounding debts. 17. A trustee may compound or compromise any debt or claim belonging to the assignor, which can not be otherwise recovered without endangering the recovery of such claim or debt. 2679. Final report. 18. It shall be the duty of the trustee at the expiration of one year after entering upon the duties of his trust, or at the next term of such Court thereafter, to make out a final report to such Court; and upon the hearing and determination thereof, if the Judge be satisfied with and approve the same, he shall order the trustee to be discharged from his trust: Provided, Such Judge may, for good cause shown, grant further time to said trustee to file his final account.

2680. Removal and discharge of trustee. 19. The Judge of the Circuit Court may, in term time or in vacation, upon the petition of any creditor or the assignor, remove a trustee under this Act for good cause shown, and appoint his successor; and shall, whenever a vacancy occurs by death, resignation, or removal of such trustee from this State, have power to fill such vacancy; and shall order any trustee thus removed, to surrender all property in his hands belonging to such trust to such successor, and that he forthwith pay to the Clerk of such Court all moneys in his hands, and that, on or before the next term, he shall make and file a full and final report showing the condition of the trust and his management thereof while under his control; and if the Court shall be satisfied with such report, and that such trustee has fully complied with the requirements of this Act, and paid all moneys in his hands to the Clerk of such Court, then such Court may discharge such trustee.

2681. Appeal. 20. Nothing in this Act contained shall prevent any party or parties who shall deem himself or themselves aggrieved by any order or decree of the Court under this Act, from having an appeal as in other civil actions.

2682. Fees. 21. For whatever services the Clerk of the Circuit Court is required to perform under this Act, he shall be allowed the same fees as are allowed him by law for similar services in other civil proceedings; and the appraisers under this Act shall be entitled to one dollar per day each, for their services; and the Judge of such Court shall allow the trustee such remuneration for his services in executing his trust, out of the general fund, as such Judge may deem just and proper.

[1875, p. 166. In force February 1, 1875.]

2683. Surviving partners. 2. The surviving partner or partners of

any firm doing business in this State shall have full power to make assignments under the act to which this is a supplement; and where assignments have been made by such surviving partner or partners the same are hereby legalized.

[1885 S., p. 278. In force February 24, 1885.]

2683a. Appointment of trustees in certain cases. 1. In cases where more than one trustee has been appointed by the assignor in any deed of voluntary assignment of personal and real property in trust for the benefit of creditors under the act of the General Assembly of the State of Indiana, approved March 5, 1859, and acts amendatory or supplemental thereto; and in cases where more than one person may have been appointed by the judge of the Circuit Court or by the clerk thereof, as trustees, as provided in said act by reason of the failure of the trustee or trustees named in the deed of assignment from any cause to comply with the provisions of said act, all such appointments are hereby legalized and made valid, the same as if said act expressly provided for the appointment of more than one trustee.

2683b. Acts legalized. 2. That all lawful acts of such trustees done, or which may be done by them, are hereby legalized and made valid.

NOTES TO CHAPTER 13.

ASSIGNMENTS.

2662. Failing debtor may make. This section provides, only, for a general assignment of all the debtor's property for the benefit of all his creditors. When that is attempted the statute must be complied with. The statute does not prevent preferences, bona fide, of one creditor over another; Cushman v. Gephart, 97-51; see Lord v. Fisher, 19-7; Wilcoxey v. Annesley, 23-285.

2. The statute was not intended to prevent a debtor from making a contract, with his creditors, by which his property is conveyed to trustees, to be disposed of for his benefit as well as that of the creditors; Robbins v. Magee, 76-385.

3. A grant, by warranty deed, without condition or limitation therein expressed, conveying land to grantees named in the deed, without indicating that the grant is to grantees as trustees and without any directions therein as to how the property shall be disposed of, and a separate agreement, executed by grantor and his grantees, which shows that they take as trustees to sell and apply the proceeds to the payment of grantor's creditors, who may become a party thereto, are to be regarded as a composition agreement between grantor and his creditors not as a voluntary assignment under the statute; Robbins v. Magee, 76-385.

4. All assignments under the statute must be general; Krug v. M'Gilliard, 76-30. 5. An insolvent debtor's assignment of his property is not fraudulent and void because of the unintentional omission of portions of debtor's property of trifling value, if it embraces substantially all of his property. The filing of a "supplemental" assignment, containing property unintentionally omitted from the original assignment, does not carry forward the date of its taking effect; Krug . M'Gilliard, 76-30.

6. An assignment, by co-partners, of all the co-partnership property, for the payment of the partnership debts will be valid, although it does not embrace the individual property of any of the partners; Blake v. Faulkner, 18-47; Ex p. Hopkins, 104159. 7. A conveyance to another, by an insolvent debtor, of all his property, in trust ta

pay certain creditors to the exclusion of others, and return the balance of the proceeds to the debtor is fraudulent and void, as to the creditors excluded — by reason of this statute (sects. 2662-83).- Thompson v. Parker, 83-106.

8. A sale of debtor's real estate under a voluntary assignment, made under the statute, is a judicial sale, within the meaning of section 2508.- Lawson v. DeBolt, 78-564; Wright v. Gelvin, 85-129. Wherefore, the assignee can sell only the undivided two-thirds of such land, the wife's inchoate right becoming absolute.Wright v. Gelvin, 85-129.

9. A voluntary assignment, for the benefit of creditors, made by defendant in execution does not divest the lien of the execution.-State v. Krug, 82-61; Griffin v. Wallace, 60-410; Marsh v. Vawter, 71-22.

10. In the absence of allegation or evidence that a deed of general assignment is made with an actual intent to cheat, hinder or delay creditors, it is only where such deed contains directions which are actually hostile to or in disregard of some express provision of the statute, or where it is apparent therefrom that it was not the intent of the assignor to bring his estate under the control of the court and secure its distribution according to the law regulating voluntary assignments that such a deed will be held fraudulent and void per se under this section. If such a deed contains a provision preferring one creditor over another, such provision will be held void; but the deed, as constituting a valid statutory assignment, will be upheld. Grubbs v. King, 117–246.

11. This statute provides only for a general assignment of all a debtor's property for the benefit of all his creditors. When that is attempted the statute must be complied with, or the assignment, without regard to actual fraud, will be held fraudulent and void. On the other hand an assignment by a debtor for the benefit of a part of his creditors, in order to be held void must be actually fraudulent. The statute does not prevent bona fide preferences of one creditor over another (modifying Thompson v. Parker, 83-96, in so far as it conflicts). Therefore, a conveyance by a debtor of all his property subject to execution, for the benefit of certain creditors named, to the exclusion of other creditors, with the avowed purpose of giving to the creditors named a preference over those not named, is not within this section and is valid and a reservation in such conveyance that the surplus, if any, should be paid to the grantor's wife, does not render the conveyance void. Hays v. Hostetter, 125-61.

2663. How made. In the absence of actual fraud, a deed of assignment, under this statute, will be upheld as a valid general assignment, non obstante, a provision that certain creditors shall be preferred. Such a provision will be controlled and annulled by force of the statute.-Schwab v. Lemon, 111-55.

When a debtor makes an assignment under this statute, the title to his real estate passes from him to the assignee, on the recording of the deed of assignment. A sale of the real estate by the assignee is a judicial sale, within the meaning of section 2508.-Elliot v. Cale, 113-393.

(a) Action for partition by the assignee of an insolvent debtor. An allegation in the complaint that the deed of assignment was "duly" filed, and recorded in the recorder's office, of the county in which the assignor resided and in which the real estate is situated, shows a compliance with the requirement of this section, that the deed shall be filed with the recorder of the county in which the assignor resides, within ten days after its execution, and be recorded as other deeds. (b) In such an action the deed of assignment is not its foundation, wherefore, such assignee, as plaintiff, is not required to file a copy of the instrument with the complaint as an exhibit.-Jewett v. Perrette, 127-98.

2670. Exemption. Where a statute, which confers the right of exemption, also prescribes the manner in which the debtor may avail himself of it, his failure to make his claim and act at the time and in the manner prescribed is a waiver of the privilege. This section provides that a debtor who has executed a general assignment for the benefit of his creditors must claim and have set off to him at the time of the appraisement the property which he desires to have exempted. He can not after the real estate has been sold in discharge of liens, claim an exemption out of the residue of the proceeds remaining in the hands of the commissioner.- Graves v. Hinkle, 120-159.

2671. Duties of trustee. It is made the duty of the assignee to sell the property as it comes to him, so soon as possible after filing the appraise

ment required by the statute, after giving thirty days' notice, in the manner provided for. An assignee can not, as a matter of course, maintain an action for partition. No doubt, in a proper case, he may-if by virtue of his trust he is a tenant in common of real estate on a proper showing, obtain an order from the court to bring and maintain an action for partion; unless, however, it is made to appear by the assignee that it will be to the interest of his trust to bring an action to sever the joint estate and only then, by direction of the court is he within the authority which the statute confers.- Jewett v. Perrette, 127-99.

Where a cause of action accrues to the trustee of, or concerning, the estate which he wrongfully refuses to enforce by suit, or, where there is apparent collusion between the assignor and his assignee, by means whereof the trust property is wasted or sacrificed, the creditors of the assignor may sue, in their own names, joining in one complaint and maintaining a joint action. Wright . Mack, 95336. See, as to the joint action, Robbins v. S. C. Turnp. Co., 34-461; Strong v. Taylor S. Tp. 76–208.

2. Suit by assignee in a voluntary assignment, for the recovery of a part of the trust estate; he must allege that the deed of assignment to him has been duly recorded in the recorder's office of the proper county and must file a copy of such deed, as an exhibit.- Wheeler v. Hawkins, 101-490.

ment.

3. Replevin by mortgagee of chattels against a trustee under voluntary assignA creditor, as such, is not a proper defendant.- Antrim v. Gilson, 79-341. 4. This section authorizes an order, by court, for the sale of debtor's real estate at private sale, on a credit not exceeding two years from the date of such sale.Lawson v. De Bolt, 78-566.

2673. Allowance of claims. The statute does not suspend a creditor's right to maintain an action, at any time, in the proper court, for the recovery of a personal judgment against the assignor for an amount due.-Lawrence v. M'Veagh, 106-214.

2. This section has no application to a complaint by a mortgagee seeking to enforce his mortgage against the proceeds of a sale of the mortgaged property (see sect. 2674).—Stix v. Sadler, 109–256.

2674. Liens. Creditors of a debtor who has made an assignment can not, to the injury of the mortgagee, repudiate a contract made by assignee with the holder of a chattel mortgage to sell the mortgaged property and apply the proceeds to the payment of the lien.—Stix v. Sadler, 109–257.

2. Husband and wife joined in a mortgage, of the husband's lands, to secure his debt. Afterward, he made a voluntary assignment under the statute. A large amount of personal property passed by the assignment. The trustees did not pay off the mortgage and, after a foreclosure and sale of the land under it and the purchase of the equity of redemption, by arrangement of the purchaser at the foreclosure sale at the instance of the trustees- did not redeem but took a conveyance from the latter. The trustees were not bound to pay off the mortgage to redeem and the wife had no action against them for the proceeds of the sale by them or otherwise.-Gough v. Clift, 81-376.

2675. Distribution. In the distribution of funds the assignee may set apart, where there are debts contracted, the amount allowed, under the exemption law (sect. 703), in property or proceeds.- O'Neil v. Beck, 69–239.

2. A bona fide purchaser of claims is entitled to the distributive shares of the original holders of the claims. He may enforce payment against the debtor's estate in the hand of the assignee.- Fosdyke v. Nixon, 107-142.

2677. Claims verified. A claim, under this section, is sufficient when it informs the assignee of the nature and amount of the creditor's demand. The strict rules of pleading will not be applied to such claims.- Fosdyke v. Nixon, 107-139.