McRea v. Branch of Bank of Alabama - 60 U.S. 376 (1856)
U.S. Supreme Court
McRea v. Branch of Bank of Alabama, 60 U.S. 19 How. 376 376 (1856)
McRea v. Branch of Bank of Alabama
60 U.S. (19 How.) 376
Where money, was borrowed from a bank upon a promissory note signed by the principal and two sureties, and the principal debtor, by way of counter-security, conveyed certain property to a trustee for the purpose of indemnifying his sureties, it was necessary to make the trustee and the cestui que trust parties to a bill filed by the bank, asserting a special lien upon the property thus conveyed.
But where the principal debtor had made a fraudulent conveyance of the property, which had continued in his possession, after the execution of the first deed, and then died, a bill was good which was filed by the bank against the administrators for the purpose of setting aside the fraudulent conveyance and bringing the property into the assets of the deceased for the benefit of all creditors who might apply.
The bill was filed by the Branch Bank of Alabama under the circumstances which are stated in the opinion of the Court. It had a double aspect -- first setting up a lien upon the slaves by virtue of the deed of trust to Gale, and secondly, as a creditor in common with others, to set aside the bill of sale to Margaret McRea as fraudulent and void as against creditors.
The circuit court decreed that the bill of sale from John D. Bracy to Margaret McRea was fraudulent and void, made for the purpose of hindering, delaying, and defrauding the creditors of Bracy, and especially the complainants. They therefore decreed that it should be set aside, and in case the administrators did not pay the account of the bank, which had been presented to them, that the marshal should sell the slaves for the benefit of all the creditors of Bracy who should signify their willingness to come in and bear their share in the costs and expenses incurred, in the mode which is customary in a creditor's bill.
From this decree the administrators appealed to this Court.