stand. Taylor v. State, 3 Tex. App. 387; Garza v. State, Id. 286. The writer is inclined to the opinion that such a verdict must be received by the court, and judgment entered in accordance therewith, and that it would operate as an acquittal of murder in the first degree. In accord with the writer's view, it has been held in other States, under statutes similiar to ours, that the court cannot deprive the jury of their power and right to fix the degree by imperatively instructing them that, if they find the defendants guilty, they must find him guilty of murder in the first degree. Rhodes v. Com., 48 Pa. St. 398; Lane v. Com., 59 Pa. St. 375; Shaffner v. Com., 72 Pa. St. 61; Robbins v. State, 8 Ohio St. 193; Beaudien v. State, Id. 639; State v. Lindsey, 19 Nev. 47, 5 Pac. Rep. 822; People v. Ah Lee, 60 Cal. 85; State v. Dowd, 19 Conn. 387; Roberts v. People 19 Mich. 411; People v. Williams, 73 Cal. 533, 15 Pac. Rep. 97; Whart. Hom. §§ 186-198. Such an imperative instruction is regarded as an unwarranted assumption of the province of the jury, and will vitiate a conviction of murder in the first degree. We have, however, found no authority which directly holds that an omission to submit to the jury the issue and law of murder in the second degree, where the evidence conclusively shows murder in the first degree, presenting no facts from which a jury might legitimately find murder in the second degree, will vitiate a conviction for murder in the first degree. In this State the decisions are numerous and uniform the other way; holding that, where there is no evidence from which, by any possible legitimate construction, the jury could conclude that the homicide was murder in the second degree, the court may properly decline to submit to the jury the issue and law of murder in the second degree: O'Connell v. State, 18 Tex. 343; Henning's Case, 24 Tex. App. 315; Trimble's Case, 8 S. W. Rep. 814, and others cited. These decisions have been the law of this State and have met with the tacit sanction and approval of the bar and the legislature of the State. We shall adhere to them as the established law of the land, in cases coming within their purview. We take occasion, however, to suggest to trial judges that they should be exceedingly cautious in murder trials, in declining to charge upon murder in the second degree. Instances are comparatively rare in which such a charge may be properly dispensed with.

IN Thompson v. Rubber Co., Supreme Court of Errors of Connecticut, 16 Atl. Rep. 554, in an action for malicious prosecution, it was held that the discharge of the plaintiff by the criminal court was not prima facie evidence of the want of probable cause. The court thus concludes on the question: "The want of probable cause must be shown by facts and circumstances existing, and information which came to the defendant, at the time the prosecution was instituted. Facts subsequently transpiring, and information subsequently received, cannot, from the nature of the case, influence his action at that time."

Assignee. An assignee is a trustee selected either by the insolvent, or by his creditors, for the purpose of collecting and converting the assets of his debtor into money, and distributing it among the creditors. These trustees are known by different designations in the various States. In some they are called assignees, others commissioners or trustees. In Louisiana, they are designated syndics. Their appointment, powers, duties and liabilities are largely regulated by statute. There are, however, quite a number of general principles alike applicable to all, some of these will be given in the following: 1. Who may be.-It is an essential qualification of an assignee, not only that he should be capable from age, health, and education of performing the duties of the office, but also that he should be of sufficient character and pecuniary ability to afford assurance to creditors, that the fund will be safe in his hands and that the trust will be properly administered. Thus, where the debtor selected for assignees three relatives, one of whom was incapacitated by residence, one by blindness, and the third by want of education, it was held that it was evidence of an intent on the part of the assignor to keep the control of the property in his own hands, and the assignment was void.2 So where the debtor selected his brother who was at the time unfit to attend to business by reason of a lingering disease which the assignor himself knew and believed was incurable and of which he died, it was held void. But the relationship of parties though calculated to awaken suspicion, is of itself no evidence of fraud in

1 Burrill on Assign. 118; Welt v. Franklin, 1 Binn. 516; Guerin v. Hunt, 6 Minn. 375. Most of the States have laws now requiring bond to be given, and the financial ability of the assignee is not such an important feature as it was when no bond was required. 2 Cram v. Mitchell, 1 Sandf. Ch. 251; Angell v. Rosenberry, 12 Mich. 241.

3 Currie v. Hart, 2 Sandf. Ch. 353.

a conveyance of property. If, however, a relative is made assignee and also a preferred creditor, it is almost conclusive evidence of fraud. Where the creditors are consulted and consent to the assignment, no fraud will be presumed. And they may agree that the assignor himself shall act as trustee or agent in certain cases. The fact that the assignee is an attorney at law or is not a freeholder," will not disqualify him unless prevented by staute.10

was

There 2. Bona Fide Purchaser. formerly considerable contention whether the assignee did dot take the property assigned or transferred to him as a bona fide purchaser, and that he not only acquired the rights of the assignor in the transferred property, but that he acquired those additional rights which belong to a bona fide purchaser for value. Decisions holding him to be a bona fide purchaser, are to be found in some of the earlier decisions of New York," Michigan, 12 Missouri, 13 Virginia.14 But the prevailing rule now, is that he only succeeds to the rights, equitable and legal of the assignor. 15 While this rule is generally acceded to in Ohio, yet it is not, however, without some qualifications. In Lindeman v. Ingham, 16 it was held that where the assignor had given a mortgage and then made an assignment that the mortgagee could not foreclose the mortgage, but that the assignee had the exclusive right to sell the property and apply the proceeds in the payment of the mortgagors claim. And in a case arising in the circuit courts of that State recently, it was

4 Dunlap v. Bournville, 26 Pa. St.; Montgomery's Executors v. Kirksey, 26 Ala. 172; Baldwin v. Buckland, 11 Mich. 387; Nesbit v. Digby, 13 Ill. 33. Currie v. Hart, 2 Sandf. Ch. 353.

6 Reed v. Emery, 8 Paige, 417.

7 Thompkins v. Wheeler, 16 Pet. 106.

8 Tucker v. Parks, 7 Coll. 62.

9 Simon v. Mann, 33 Minn. 412.

10 Rev. Stat. Wis. 1878; Rev. Stat. Minn. 1878.

11 Dey v. Dunkam, 2 Johns. Ch. 188.

12 Hollister v. Long, 2 Mich. 309; but this was expressly overruled in Pierson v. Manning, 2 Mich. 445. 13 Gates v. Labaume, 19 Mo. 17; Hardcastle v. Fisher, 24 Mo. 70.

14 Wiskham v. Martin, 13 Gratt. 427; Exchange Bank v. Knox, 19 Gratt. 729.

15 Burrill on Assign, 539; Willis v. Henderson, 5 Ill. 13; Reid v. Sands, 37 Barb. 185; Griffin v. Marquart, 17 N. Y. 28; Maas v. Goodwin, 2 Hill, 275; Walker v. Miller, 11 Ala. 1067; Knowles v. Lord, 4 Whart. 500; Haggerty v. Palmer, 6 Johns. Ch. 437.

16 36 Ohio St. 1.

held that although a mortgage unrecorded was valid as between mortgagor and mortgagee, it was invalid as to the assignee of the mortgagor.17 It seems to us that this decision is open to much criticism, and although it was somewhat influenced by local statutes, I doubt very much whether it correctly states the law.

3. Duties and Powers. -The assignee is clothed with all the necessary powers to obtain possession of the property assigned, and to collect the debts by process of law.18 He may attack the validity of a judgment entered upon the confession of the assignor,19 he may contest for creditors the claims of a mortgagee under a defective mortgage, to a preferance in the distribution of the proceeds;20 he may bring an action to set aside a fraudulent conveyance,21 he may restrain by injuction attaching creditors from interfering with property fraudulently conveyed,22 he may contest the validity if any claim against the estate; he has power to appoint and employ all necessary clerks and agents to assist him in the performance of his duties, and allow and pay them suitable compensation for their services. He should proceed with promptness in the collection of all debts, or he may be liable for all loss occasioned by delay,25 he may bring an action even against the assignor when he wrongfully withholds property,26 he may compromise such debts as cannot be wholly collected, provided it is done in good faith for the best interest of the creditors.27 He is the agent of the creditors

of the insolvent as well as of the law. He is the instrument by which, instead of by attachment, the property of the insolvent is

17 Snyder v. Betz, 2 C. C. Ohio, 485.

18 Ven Heusen v. Radcliffe, 17 N. Y.; Taylor v. Taylor, 74 Me. 582.

19 Nichols v. Kribbs, 10 Wis. 79.

20 Building Assn. v. Willson, 41 Ind. 506.

21 Huntseecker v. Heing, 11 S. & R. (Pa.) 250; Freed

land v. Freedland, 102 Mass. 475.

22 Lynch v. Roberts, 57 Ind. 150.

23 Byrne v. Creditors, 33 La. Ann. 198.

24 Meannel v. Murdock, 13 Ind. 164; Nye v. Van Husan, 6 Mich. 329; Casey v. Jones, 37 N. Y. 608; Van Dine v. Willitt, 38 Barb. 319; Mann v. Whitbeck, 17 Barb. 388; Vernon v. Morton, 8 Dana, 247.

25 Winn v. Crosby, Daily Reg. Dec. 14, 1876; Royall's Admr. v. McKenzie, 25 Ala. 303.

26 Pike v. Beacon, 21 Me. 280,

27 Rogers v. DeForest, 7 Paige, 272; Anon v. Gilpike, 5 Hun, 245; Barnum v. Hempstead, 7 Paige, 568; Grier v. Triber, 3 Ind. 11; Grover v. Wakeman, 11 Wend. 187.

secured for the benefit of the creditors. 28 But before he can carry out the trust he must give bond to be approved by some competent authority.29 In some States he must take an oath to honestly perform the duties of his offices.30 He cannot be compelled to perform the unfinished coutract of his assignor to deliver goods. He must keep clear and district and accurate accounts.32 As a creditor of the assignor, the assignee can gain no advantage from his position. 33 An assignee who allows the assignor to retain possession of and use any of the property, is responsible for the value of such use.34

31

38

4. Power to Sell.-The power to sell is very often given by the deed of assignment, and sometimes by statute; but it is always necessarily implied by every conveyance for the payment of debts. The assignee must use not only good faith, but every degree of care and diligence in conducting the sale. 56 And he should be present to superintend and conduct it.7 The sale should be made at as early a date as it profitably can be, and the assignee can generally use his discretion as to time, so that the delay is not unreasonably long.39 Generally he has discretion to sell either at public or private sale. 40 If he sell at public sale he should give the creditors notice, so that they may attend and see that the property is not sacrificed. He should also give public notices.42 It is a general rule perhaps without exception, that an assignee cannot be a purchaser, either directly or indirectly of any of the effects of the assignor's,

28 Shipman v. Etna Ins. Co., 29 Conn. 245.

43

29 Van Hein v. Elkers, 8 Hun, 516; Renelleman v. Willard, 15 Mo. App. 375; Goll v. Hutbell, 61 Wis. 293; Bates v. Simmons, 62 Wis. 69; Windham v. Patty, 62 Tex. 490.

30 N. Y. Rev. Stat. 2266.

31 Matter of Adams, 15 Abb. (N. Y.) 61.

32 Perry on Trusts, § 821; Bishop on Insolvent Debtors, § 291.

31 Am. & Eng. Ency. of Law, 877. 34 Harrison v. Mock, 10 Ala. 616.

35 Williams v. Otey, 8 Humph. 563; Perry on Trusts, pp. 147, 398.

36 Johnson v. Easton, 2 Ired. Eq. 330; Quackenbush v. Leonard, 9 Paige, 347; Chesley v. Chesley, 49 Mo. 540.

37 Burrill on Assign. 561.

38 Inloes v. Am. Ex. Bank, 11 Ind. 173.

39 Hawkins v. Alston, 4 Ired. Eq. 137; Haynes v. Crutchfield, 7 Ala. 189.

40 Huger v. Huger, 9 Rich. Eq. 217; Perry on Trusts, 412, 415, 422.

41 Hart v. Crane, 7 Paige, 37.

42 McDermott v. Lorillard, 1 El. Ch. (N. Y.) 273. 43 Van Horne v. Fonda, 5 Johns. Ch. 588; Hawley v.

5. Liability. The liability of an assignee, is for the most part commensurate with the duty which the assignment imposes on him.47 This duty may in its most general terms be stated to be to observe good faith in all his transactions, and to exercise all reasonable diligence and carefulness in the management of the trust. 48 For gross misconduct, or violation or abuse of the trust, he is not only personally responsible,49 but may be dismissed from office.50 He is answerable for property or money lost by his gross negligence,51 and it need not always be gross negligence to make him liable.52 He is liable for every loss occasioned by his negligence, want of caution, or mistake, as for neglecting to collect debts assigned, omitting to recover property from the debtor,5% for permitting the debtor to retain possession of assigned property,56 and for failing to take proper security for property sold.57 Loss through an honest mistake will not generally be charged to him ;58 although it is not very easy to say when he

personally responsible,49

58

I will not be held liable for even an honest mistake.59 The only safe way where the assignee is in doubt is to apply to the court for instruction.60 The legal presumption always is that the assignee has faithfully executed

Cramer, 4 Cow. 718; Slade v. Van Necten, 11 Paige, 21; 2 Kent's Commrs. *438.

44 Blick v. Schenck, 10 Barb. 285. See Cranston v. Crane, 97 Mass. 459.

45 Ennis v. Leach, 1 Ired. Eq. 416; Barnard v. Duncan, 38 Mo. ; Welsh v. Davis, 3 S. C. 110. 46 Shaeffer v. Child, 7 Watts (Pa.), 84.

47 Burrill on Assign. ; Am. & Eng. Ency. of Law. 48 Freeman v. Cook, 6 Ired. Eq. 373.

49 Williams v. Otey, 8 Humph. 563.

50 2 Story Eq. Jur. § 1287; Perry on Trusts, § 817.

51 Hurt v. Fisher, 1 Harr. & G. 88; Meacham v. Sternes, 9 Paige, 405.

52 Litchfield v. White, 7 N. Y. 438.

53 2 Kent's Commrs. *230.

54 Royall's Admr. v. McKenzie, 25 Ala. 363.

55 Simpson v. Gowdy, 19 Ind. 292; Blackburn's Appeal, 39 Pa. St. 160.

56 Harrison v. Mock, 16 Ala. 616.

57 Miller v. Holcombe, 9 Gratt. 665.

58 In re Durfee, 4 R. I. 401; Perry on Trusts, § 562. 59 Ward v. Lewis, 4 Pick. 518; Chittenden v. Brewster, 14 Ala. 315.

60 Freeman v. Cook, 6 Ired. Eq. 373; Burrill on Assign. 631.

his trust unless the contrary is fully shown.61 And where the assignees act in good faith, and with due diligence, they receive the favor and protection of the court, and their acts are regarded with the most indulgent consideration;62 but where they betray their trust, they will be rigorously dealt with.63

6. Continuing Assignor's Business.-It has been held by leading courts, that the assignor may direct in general terms a sale of property and collection of debts assigned, and may also direct upon what debts and in what manner and order the proceeds shall be applied, but beyond this can prescribe no conditions whatever as the management disposition of the assigned property. The general rule seems to be that where such stipulations are intended chiefly to benefit the assignor, they will be invalid,65 if to the benefit of the creditors valid.66 Independently of any provision in the deed of assignments, the assignee may continue the business of the assignor during such a length of time as is manifestly for the interest of the estate.67 He should, however, continue the business no longer than is required to work up the material on hand. 68 When a stock of goods in a retail business is assigned, the assignee cannot continue the business and retail the goods as before with a view of obtaining higher prices.69 He should generally close the business within a reasonably short length of time after the assignment is made.70

7. Distribution. -The distribution of the assets among the creditors is said to be the end and object of all insolvency proceedings.71 It is the most important of all the proceed

61 McCubbin v. Cromwell, 7 Gill. & J. 157; Goodwin v. Nix, 38 Ill. 115.

62 Burrill on Assign. 633.

63 Paige v. Olcott, 28 Vt. 461; Miller v. Holcombe, 9 Gratt. 674; Diffinderfer v. Winslow, 3 Gill. & J. 311.

64 Dunbar v. Waterman, 17 N. Y. 9; Renton v. Kelley, 49 Barb. 536; Schluesel v. Willett, 34 Barb. 615. 65 King v. Kenan, 38 Ala. 63; Inloes v. Am. Ex. Band. 11 Ind. 173; Marks v. Hill, 5 Gratt. 400; Berry v. Riley, 2 Barb. 307.

66 Hitchcock v. Cadruns, 2 Barb. 381; Foster v. Saco, 12 Pick. 451; Woodward v. Marshall, 22 Pick. 468; Ravises v. Alston, 5 Ala. 297.

67 Patton's Estate, 2 Pars. (Pa.) Select Cases, 108; Woodward v. Marshall, 22 Pick. 468.

68 Hanling v. Mill River, 34 Conn. 458; Doyle v. Smith, 1 Cole (Tenn.), 15.

69 Hart v. Crane, 7 Paige, 38; Whallon v. Scott, 10 Watts, 237; Connah v. Sedgwick, 1 Barb. 210.

70 Levey's Accounting, 1 Abb. (N. C.) 186.

71 Burrill on Assign. 586.

ings connected therewith. Where the deed of assignment contains preferences, allowable by the laws of the place where the assignment is made, those preferred creditors should be first paid."2 It should be remembered, however, that in quite a large number, perhaps a majority of the States of the Union, have laws forbidding preferences; and that such stipulations in the deed of assignment will make it void. At common law preferences are allowed. By act of congress in cases of insolvency, the United States is a preferred creditor and must be first paid.78 It has been held, however, that the preference of the United States only applies in cases of a voluntary assignment, and not where there is a legal insolvency or involuntary assignment.74 By statute, it is generally declared that taxes, assessments, and debts due the State are entitled to priority in payment. Likewise a claim for labor performed within a certain time, and usually limited in amount. Rent is sometimes made a claim entitled to priority. Where the creditor holds security for the payment of his claim, the courts are not united in their decisions. Some hold that he is entitled to a dividend on the entire amount of his claim not to exceed the balance remaining unliquidated by the entire exhaustion of the securety fund.75 The general rule, however, seems to be that he would only be entitled to a dividend on the balance remaining unpaid after the security fund had been exhaused.76 Care should be taken by the assignee that the proper persons participate in the distribution. He will not be excused that he had through a misapprehension of his duties, or a misconstruction of the instrument paid over all the money to other creditors.7 Where there is a difficulty in ascertaining the order of priority of payment, or where there are conflicting claims, the assignee ought to apply to the court for instructions.78 Such application may be

72 Gundry v. Vivian, 17 Wis. 437; Gates v. Labeaume, 19 Mo. 17.

78 U. S. Rev. Stat., § 3466; State Bank, etc. v. U. S., 6 Pet. 35, 36.

74 Thelluson v. Smith, Pet. C. C. 195.

75 Morris v. Olivine, 25 Pa. St. 21; Patten's Appeal, 45 Pa. St. 151; Miller's Appeal, 35 Pa. St. 481.

76 Burrill on Assign. 606; Wurtz v. Hass, 13 Iowa, 515; Midgely v. Slocomb, 32 How. Pr. 423.

77 Ward v. Lewis, 4 Pick. 518.

78 Pratt v. Adams, 7 Paige, 615.

made either by motion or by a bill in equity;79 but all parties interested ought to have notice.80 WM. M. ROCKEL.

79 Codwise v. Gelson, 1 Johns. 521.

80 Stone v. Miller, 62 Barb. 431; People v. Loper, 7 N. Y. 431. The reader will find the following articles in law journals to be of interest: "Power of Assignee to Avoid Previous Conveyances of Assignor:" 21 Cent. L. J. 494. "Powers of Foreign Involuntary Assignees:" 27 Cent. L. J. 111. "Assignments at Common Law by Statute:" 7 Cent. L. J. 243, 283, 301. "Right to Assign Contracts Involving Performance of Services but not Personal Services:" 11 Cent. L. J. 243. "Assignment of Part of a Demand," annotated case: 23 Cent. L. J. 489. See also Am. & Eng. Ency. of Law, Title, "Assignments," etc., and "Insolvency."

CORPORATIONS-DIRECTORS-DUTIES— LIABILITY.

MARSHALL V. FARMERS' & MECHANICS' SAV. BANK.

Supreme Court of Appeals of Virginia, January 24, 1889.

Directors of a corporation undertake to bring ordinary skill and knowledge to the discharge of their duties, and they are required to be diligent and careful in performing such duties, and they must inform themselves of the proceedings of the corporation, and if any loss results from their neglect of such requirements, or if by fraud or mismanagement of its officers, agents or directors, which ordinary care and attention on their part would have prevented, they are individually liable for the loss so accruing.

LACY, J., delivered the opinion of the court: The suit was brought by the appellant, James A. Marshall, for himself and on behalf of the other creditors of the appellee corporation, the Farmers' & Mechanics' Savings Bank of Virginia, a broken bank, to reduce into possession and distribute among said creditors the assets of the said bank, and to charge the individual defendants, who were the officers and directors of said bank, with the difference between the assets and liabilities of the said bank, upon the ground that the said directors had not had a meeting for at least one year prior to the 1st day of December, 1876, the date of the suspension and failure of the said bank, and for at least one year prior to the ascertainment of embarrassed condition of said bank, which occurred sometime before its said suspension, and that they did not give that care, supervision, and attention to the business affairs of said corporation which the duties of the office and the nature of the trust reposed in them required; but, on the contrary, neglected the same, and intrusted entirely the business concerns of the bank to the president and one, and possibly two, directors, who recklessly and improvidently loaned the money and securities of the said defendant corporation to various embarrassed and insolvent corporations, firms, and individuals, without tak

ing proper and sufficient security for the protection of the depositors and creditors of the said bank, and being themselves connected with or interested in said embarrassed and insolvent corporations; by reason of which said conduct upon the part of said directors the appellant insists that heavy losses have fallen npon the bank, and that the said directors are individually and personally liable to the depositors and creditors of the bank for the losses so occasioned by the neglect of the duties of their office as directors. The bank answered the bill of the plaintiff through its president, and the directors answered individually, wherein negligence is denied; and it is also denied that the business of the bank was intrusted wholly to the president; but it is admitted that, "instead of regular formal weekly meetings of the board as prescribed by the by-laws of the bank, informal meetings were substituted—it being proved soon after the bank went into operation that formal weekly meetings were unnecessary.” The questions involved were referred to a commissioner in chancery for examination and report. The commissioner reported that the said directors not only did not exercise ordinary care and diligence but that they were guilty of gross negligence.1

*

On the 30th of March, 1887, the circuit court of Alexandria city rendered a decree in the cause, whereby "the said report, so far as it finds the directors of the Farmers' & Mechanics' Savings Bank, or any of them, personally responsible for the losses sustained by the bank, be, and the same is, overruled-it appearing to the court that no such dereliction of duty on their part is shown as to fix upon them such personal liability; and that as to the said directors, and the personal representatives of such as are dead, the plaintiff's bill be, and the same is hereby, dismissed, with costs. It is further adjudged, ordered, and decreed that the said report be, and the same is hereby, confirmed and ratified in all other particulars." From this decree the plaintiff applied for and obtained an appeal to this court.

By the appellees no error is assigned, so the question involved here does not raise any other question than the single inquiry, was there such negligence on the part of the directors of this bank as to make them, or any of them, personally liable for its losses? There is no dispute as to what the losses have been, and their several amounts; and of the terms or periods as to which each director is liable, if at all. The appellees insist through their learned counsel that while there have been errors of judgment, and unfortunate loans made, there has been no negligence. The liability of directors for losses growing out of their mismanagement of the concerns of the bank, and their negligence in the discharge of their duties, has been often the subject of judicial in

1 A part of the opinion of the court, which simply states the findings of the commission, is here omitted.-[ED. CENT. L. J.