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Statement of the Case.

On the 26th of April, 1880, the assignee made a report to the bankruptcy court, setting forth that, on the 24th of April, 1880, he had sold to the highest bidder for cash all the right, title and interest of the bankrupt, and of himself as assignee, to real estate which he described, free and clear of the lien of the judgment and execution-levy of the creditors mentioned in the order of sale, "but subject to all other liens and incumbrances thereon, and taxes and assessments thereon." The description included the premises at the corner of West Madison Street and Sheldon Street, with the buildings thereon, at the sum of $250, to L. G. Pratt, trustee. The gross proceeds of sale were $6122, and the net proceeds $5107.42, which the assignee reported to the register on the 27th of May, 1880.

The register, on the 14th of June, 1880, made an order directing the assignee to pay to Taylor and Bruce $5053 out of the proceeds of the sale.

On the 17th of June, 1880, the assignee, by a deed recorded on the 30th of August, 1880, conveyed to Lorin G. Pratt, trustee, certain real estate purchased by him at said sale, including the premises at the corner of West Madison and Sheldon streets. The deed recited the prior proceedings in bankruptcy, the order of sale and its confirmation, and the order for a deed, and conveyed all the right, title and interest of the bankrupt, which he had on the 31st of August, 1878, and of the assignee, subject to all unpaid taxes and to all liens and incumbrances, unless by the terms of sale expressly excepted, to the real estate described in the deed.

Robertson, on the 4th of December, 1880, filed his petition for a discharge in bankruptcy.

Taylor and Bruce, on the 22d of December, 1880, directed the marshal to release the levy made February 15, 1878, and to return the execution of January 29, 1878, unsatisfied. This was done.

On the 5th of January, 1881, under an execution issued to the marshal on the previous day, on the judgment of Taylor and Bruce, he levied on certain real estate of Robertson, including the premises at the corner of West Madison and Sheldon

Statement of the Case.

streets, with all the buildings and improvements thereon, and on the 27th of January, 1881, sold the premises at the corner of West Madison and Sheldon streets, to Lorin G. Pratt, trustee, for the sum of $5000. No deed appears to have been made under this sale.

No proceedings having been taken in this suit since the demurrer to the original bill was sustained, an order was made, on the 6th of July, 1881, after an interval of more than three years and three months, giving leave to the plaintiffs to amend their bill and also to file a supplemental bill.

On the 17th of September, 1881, they filed an amended and supplemental bill, dismissing the original bill as to all the real estate except that situated at the corner of West Madison and Sheldon streets, 73 feet by 116 feet, with the buildings thereon erected. This new bill recited the contents of the original bill, and stated that, on a demurrer thereto, the court held that all the property and estate of Robertson, so far as it could be discovered, must first be exhausted, before the court could interfere in equity to compel the discovery and relief sought, and required the plaintiffs to wait until all such visible property and estate was so sold and exhausted. It set forth the contents of the trust deed from Grow to Gallup; that Peabody was the successor in trust of Gallup; that the deed was made to secure the payment of an indebtedness of $35,000 to Greene; that Peabody had been in possession of the premises, and receiving the rents and profits, amounting to more than sufficient to pay all the interest on the debt, and the taxes, insurance and expenses of carrying the property; that, in pursuance of a fraudulent scheme to place the property beyond the reach of the plaintiffs, Robertson, on the 23d of July, 1877, which was two days after the verdict was returned in their suit against Robertson and seven days prior to the rendering of their judgment, executed a second deed of trust to Peabody, to secure an alleged additional indebtedness of Robertson of $35,000; that, for the purpose of making it appear that the trust deed had been made before the verdict was rendered, it and the note were dated back to April 2, 1877; that, for the purpose of preventing the plaintiffs from learning who was

Statement of the Case.

the real holder of the note and the interest coupons, or whether the deed was a bona fide lien in addition to the first lien, the note was made payable to the order of Robertson and endorsed by him in blank; that said trust deed was only a renewal of the former trust deed from Grow to Gallup, and was made to secure to Greene said debt to him, and was not an additional incumbrance on the property; that said first mortgage should have been released of record so that the plaintiffs might ascertain from the record the true amount of the encumbrance, but it was withheld, making it appear that the property was subject to $70,000 incumbrance, instead of only $35,000; and that Robertson prayed an appeal from said judgment to the Supreme Court of the United States, which appeal was not perfected, but on account of its pendency the plaintiffs were unable to issue an execution on their judgment until October 15, 1877. The new bill then recited the mortgage to Templeton, and averred that it ought to be cancelled of record. It then set forth the making of the lease to McAllister for two years from September 1, 1877, at a rent of $300 a month, and the reduction of the rent to $30 a month from January 1, 1878, and averred that this was done for the purpose of lessening the income from the property, so that it would be insufficient to pay the taxes, insurance and expenses, and the interest on the loan; and that the plaintiffs used due diligence to reach the estate of Robertson, but were unable to realize anything therefrom by execution. It then set forth the turning over by Robertson to Peabody, as agent and trustee for Greene, of all the leases, rents and profits of the premises; and alleged that this was done in pursuance of the fraudulent scheme aforesaid, and under an arrangement substantially as follows: Robertson was to go through bankruptcy and obtain a discharge; Greene and Peabody were to carry the property and collect the income from it, but by reason of such reduction of the rent the income would be insufficient to carry it; Peabody was thereupon to declare a forfeiture for non-payment of interest, and sell the property under the deed of trust, and thus cut out the lien of the plaintiffs' judgment, and also prevent the property from coming to the hands of the assignee in

Statement of the Case.

bankruptcy, but Robertson, or his agent, said McAllister, was to be allowed to redeem from such sale, after Robertson had procured his discharge, upon paying the amount actually due according to the terms of the loan, and the expenses incurred in carrying the property, less the amount received from the rents and profits thereof, the same as if no sale had been made; the release of the trust deed to Gallup was to be withheld from record, so as to prevent any outside bidder and the plaintiffs from bidding at the sale; such arrangement was made with Robertson and McAllister, his agent, and Peabody, as agent for Greene, began to collect the rents of the premises under the leases, and they were, if judiciously and honestly applied, more than sufficient to carry the property and pay the interest on the loan, but they were not applied to that purpose. The new bill further set forth that, immediately on the making of such arrangement, Robertson filed his petition in bankruptcy, and very soon afterwards left the United States and had since remained continuously absent therefrom, so that he could not be examined; that Peabody proceeded to declare a forfeiture of the trust deed for non-payment of interest on the loan, and, on October 7, 1878, pretended to sell the premises, and executed a deed thereof to Greene for a pretended bid at the sale of $30,000; that after the sale an agreement was made by Robertson, either in person or by his agent McAllister, with Greene, and Peabody, as the agent of Greene, whereby Greene was to hold the property and collect the rents and apply them to carrying the property, and to allow Robertson or McAllister to redeem on payment of the amount of the incumbrance and interest, and the cost of carrying the property, less the amount of rents received, the same as if no sale had been made; that the notice of sale was insufficient and defective; that the release of the trust deed to Gallup was purposely withheld from record; that the plaintiffs had no actual notice of the sale, but it was concealed from them and they did not learn of it until long afterwards; and that the deed of June 17, 1880, by the assignee in bankruptcy, on his sale, was made to Lorin Grant Pratt as trustee for the plaintiffs. It then set forth the purchase of the property by the plaintiffs for $5000, at the

Statement of the Case.

marshal's sale; that Greene died after the pretended purchase by him of the premises at the sale by Peabody; that on his death whatever right, title, or interest he had in and to the premises passed to and became vested in Mehitable B. Greene, his widow; William W. Crapo and Charles W. Clifford, as trustees of Robert B. Greene, Susan G. Page, Horatio N. Greene, and Francis B. Greene; and said Robert B. Greene, Susan G. Page, Horatio N. Greene, and Francis B. Greene, as the heirs at law or devisees of said David R. Greene, and was still so held by and vested in them; that such heirs at law or devisees are citizens of Massachusetts and of full age; and that E. A.Cummings, a citizen of Illinois, is the agent for the property, and collecting the rents for the heirs or devisees of Greene.

The new bill made as defendants the five persons who were defendants to the original bill, and also the widow, and the heirs or devisees above named of Greene, and their trustees, and Cummings, their agent. Its prayer was that the mortgage to Templeton might be declared void; that the deed from Peabody to Greene might be set aside as against the rights of the plaintiffs; that Greene, during his lifetime, and his heirs or devisees, and Cummings as their agent, might be decreed to be mortga gees in possession; that they and Peabody make full answer in the premises; that an account be taken; and that the plaintiffs be allowed to redeem on paying the amount found to be due. All the defendants, except Robertson and Templeton, entered an appearance in the suit on the 21st of November, 1881.

The plaintiffs, on the 15th of December, 1881, consented to the discharge of Robertson in bankruptcy.

On the 31st of December, 1881, all of the defendants who so appeared, except McAllister, put in an answer to the original bill and the amended and supplemental bill, denying all the allegations imputing fraud to the said defendants or to Greene in his lifetime, and claiming that the foreclosure proceedings by Greene and Peabody were had in good faith.

On the 6th of February, 1882, a replication to this answer was filed, and on the 6th of June, 1882, the cause was referred to a master, to take proofs and report them.

After some proofs had been taken on the part of the plain

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