KASON 'V. L. E., E. & B. W. RY. 00.
pany made a on its property to secure certain indebtedness due to various of its creditors, and at the November term, 1876, of this court, the plaintiffs in this case filed a bill to foreclose this mortgage, and on the fifteenth day of June, 1877, this court rendered a decree of foreclosure, and the railway and its property were directed to be sold, and they were accordingly sold on the thirty-first day of October, 1877. The petition of Dukes, filed June 14, 1877, assumes that the railroad was constructed on the land described while it was the property of the state, or rather, perhaps, of the trustees to whom it had been transferred by the state; the state, at the time the transfer was made, having, it is insisted by the petitioner, an absolute, indefeasible title in the land on which the railway was constructed. The intervening petition of Dukes was referred to the master to determine whethez there should be anything paid to the petitioner for any interest which he had in the land, and, if so, what sum. The master took evidence in the case and found, and has so reported, that the petitioner was the owner, under his purchase, of the land in controversy, of which the railway had taken possession, and that he was entitled to the sum of $16,800, as a reasonable compensation for the value of the property. The result of this report of the master is that he was of the opinion that no right was lost by the owner of the canal property in consequence of the action of the railway company. or of the non-action of the state, or of the trustees, 01' because of the delay on the part of the latter to interfere with the possession of the railway company. Various questions have been argued on exceptions taken to the report of the master. The materia] ones are whether Dukes bought any title to this part of the canal, and, if so, what damages ought to be paid to him as compensation for the land occupied by the railway company. As connected with this, it becomes necessary to determine whether, under the various laws of the state, it acquired an absolute title t(} the property in controversy, or whether it had the mere use as long as the canal existed as such; for it is admitted that, long before the rights of the creditors were Bought to be en·'
forced by the decree of this court in the sale of 'the canal and its appendages, it had been abandoned as such, and had ceased to be used for several years. As the case originally stood I had some difficulty in sus· taining any equity which the petitioner might have, in conse· quence of the particular situation of the property at the time it was taken possession of by the railway company, and because of the purchase made many years afterwards by the petitioner; but I think that difficulty has been obviated by a stipulation made between all the parties to the controversy, in which it is agreed that the railway company, being in possession of the property, and the petitioner only claiming compensation for what may be his interest, he shall make an absolute conveyance to the railway company of all his interest, upon the payment of such sum as shall be ultimately decided by this court or by the supreme court of the United States. I think I must hold in this case, and so affirm the ruling Jf the master, that in view of all the legislation on the sub. ject by this state, and the later decisions of the supreme court of the state thereon, the state acquired an absolute title to the property in controversy in this case. The Water- Works Co. v. Burkhardt, 31 Ind. 364:; Flemin,g v. Nelson, 56 Ind. 310. This is not like the case of Kennedy v. Cit,1J of Indianapolis, decided in this court in March, 1878. In that case the canal had never been completed or operated as a canal, and it was through a public street of the town that the canal was intended to be constructed. It was, therefore, a case of an attempt to construct a canal which was abandoned before completion. It was a case where the right to land, if any existed, was abandoned before use. In this case it is different. The land for the canal throughout its whole length, so far as this case is concerned, was taken. The canal was constructed and operated for many years. There was thus acquired by the I'>tate the title to the land occupied by the canal, and its necessary appendages, and because the canal, after being used for a of years, was ab:mdoned, and the land ceased to be occupied as a canal, it did not cease to be the property of the state. This was one of the great systems
HABON V. L. E., E. & B. W. RY. 00.
of internal improvement devised and executed in pursuance of the legislation of the state; and the state, having incurred debts through its construction and operation, had transferred whatever interest it had to trustees, for the benefit of its creditors, and therefore there existed in the creditors what. ever interest the state had in the canal, and the lands which had been used for canal purposes; and, at the time the railway company took possession of the land in controversy, the contract made for the benefit of the creditors was still binding upon the property. I must assume, I think, also, that the original owners of the land used for the purposes of the canal had become absolutely divested in favor of the state of all interest whatever in their property, and that the fact that the land ceased to be used for a canal did not re-invest the property in them. This being so, it follows that the foreclosure and sale of the property covered by the deed of trust, which was given by the state for the benefit of the creditors of the canal, clothed the purchaser at that sale and the petitioner in this case with the title to the property in controversy; and that he could recover possession of the same by proper legal proceedings in any court having jurisdiction of the case and of the property in controversy, the railway company having acquired no title to the same. The exceptions, therefore, to this part of the master's report must necessarily be overruled. The next question is whether the master has 'allowed a proper amount as compensation to the petitioner for the interest which he acquired by virtue of his purchase of the. property. . The master felt great embarrassment, which is shared by tne court, in determining this questi0!l, because the testimony upon the subject is very voluminous and conflicting, and it would be impossible to say, from the examination of the testimony, what is the true value of the property beyond all cavil or doubt. I have concluded, on the whole, to make a reduction from the amount allowed by the master in his report. It is true that the price of property obtained at a sale under legal proceedings is not always a true test of its value, and yet, in view of the great conflict of evidence in
this case, it seems to me impossible to be uninfluenced by the price which the petitioner gave for more property than is in controversy in this case. That price was only $3,250. The sale to the petitioner was a public sale, after ample advertisement. It is difficult, of course, to lay down any absolute rule, even as to the reduction of the amount allowed by the master. We must necessarily generalize, to a greater or less extent, in considering a question of this kind under the character of the evidence. On the whole, I have come to the conclusion that I shall reduce the amount allowed by the master to the sum of $10,000, and for that amount a decree will be allowed to the petitioner, which the owners of the railway will be required to pay upon the execution of & deed by the petitioner to them.
WRIGHT and others v. THOMAS and others.
(Otrcuit Court, D. Indiana.
AsSIGNMENT FOR BENEFIT OF CREDITORs-INDIANA STATU l'ES CONSTRUED.
Under the statutes of Indiana an assignment for the benefit of credit. tors is not void, (1) because the assignees did not make oath that the indentures and schedules required by the law contained a statement of all the property belonging to them, and did not make oath to other facts named in the statute; (2) because the trustees, before entering upon their trust, did not make oath that they would faithfully execute the same, together with other things named in the statute; (3) because the assignees reserved in the deed the right to instruct the trustees as to their duties; (4) because they reserved the right, with the consent of twothirds in value of their creditors, to remove one or all of -the trustees; (5) because they authorized the trustees to sell the on credit, or in any other manner that might seem for the bcst interest of all the creditors.
DRUMMOND, J. This was a bill filed by'the assignees in bankruptcy of Ebenezer Nutting, Frank Wright and Francis N. Randolph, partners, under the style of E. Nutting & Co., to determine the right and title to certain property formerly owned by the bankrupts, and also to enjoin certain creditors of the bankrupts from prosecuting suits to enforce liens claimed
WRIGHT t1. THOMAS.
by virtue of judgments obtained against them. A demurrer was interposed to the bill, which was sustained, and the bill dismissed, from which decree the plaiIitiffs took an appeal to this court. The principal facts alleged in the bill, and upon which the controversy must turn, are these: E. Nutting & Co., on the twentieth day of July, 1875, being in straightened circumstances, conveyed all thei! property to certain persons in trust for the benefit of all their creditors equally. This conveyance was made under the act of the general assembly of this state, which provided for the voluntary assignment of personal and real property in trust for the benefit of creditors, and regulated the mode of administering the same. The grantees in this deed accepted the trust, and, submitting the matter to the Marion civil circuit court, assumed the execution of the trust under the order and jurisdiction of that court. This deed of trust was duly recorded in the several counties in which the property assigned was situated. After this took place, and before the commencement of proceedings in bankruptcy, various creditors of E. Nutting & Co. instituted suits and recovered judgments against them in several courts, which judgments, if the deed of trust before referred to is invalid, became a lien on the real property of the bankrupts. In January, 1876, E. Nutting & Co. were adjudicated bankrupts by the district court of the United States for this district, and the plaintiffs became, by virtue of the proper proceedings in bankruptcy, the assignees of the bankrupts, and by operation ot law became vested with all the property of the bankrupts. After this action of the district court the Marion civil circuit court made an order directing the trustees in the deed of trust before mentioned to convey all the property of the bankrupts to the assignees in bankruptcy, who, this being done, took possession of the property, and ever since have held the same. Among other suits that have been commenced in the circuit court of the state was one by some of the judgment creditors to set aside the deed of trust on the ground that it was fraudulent and void under the law of the state; and the bill