
17 U.S. 64 (____)
4 Wheat. 64
UNITED STATES
v.
HOWLAND and ALLEN.
Supreme Court of United States.

*65 February 4th. The Attorney General, for the appellants.
Jones, contrà.
*67 February 17th, 1819. MARSHALL, Ch. J., delivered the opinion of the court.
The bill in this case was filed by the United States in the circuit court of the district of Massachusetts, to recover from the defendants a sum of money in their hands, alleged to be the money of Jacob Shoemaker and Charles R. Travers, merchants and partners, who are stated to be insolvents, and to be indebted to the United States for duties.
It appears, that Shoemaker & Travers, on the 6th day of December 1806, executed an indenture, in which, reciting that they are justly indebted to divers persons, whose names are expressed in a list thereto annexed, and are unable at present to pay the said debts, they assign to trustees therein mentioned, all and singular the estate and effects contained in a schedule annexed, in trust, to pay the debt due to the enumerated creditors, and first that due to the United States. The schedule contains many items of property, and and among others the proceeds of the *cargo of the Deborah, then at [*115 sea. The Deborah was the property of Howland & Allen; and on her coming into port, her master delivered to her owners a sum of money which he had received at Guadaloupe for Shoemaker & Travers, and which is in the schedule annexed to the deed of assignment already mentioned. At the hearing, the circuit court dismissed the bill, on the opinion, that it was not sustainable. From this decree, the United States have appealed to this court, and now insist, 1. That it is a case in which a court of equity has jurisdiction. 2. That the United States are entitled to priority, this being a case within the provisions of the act of congress.
On the first point, no difficulty would be found, had the proper parties been before the court. A trust exists, and an account would be proper, to ascertain the sum due from Howland & Allen to Shoemaker & Travers. The case, even independent of these circumstances, would be proper for a court of chancery, but for the act of Massachusetts, which allows a creditor to sue the debtor of his debtor. Still, the remedy in chancery, where all parties may be brought before the court, is more complete and adequate, as the sum actually due may be, there, in such cases, ascertained with more certainty and facility; and as the courts of the Union have a chancery jurisdiction in every state, and the judiciary act confers the same chancery powers on all, and gives the same rule of decision, its jurisdiction in Massachusetts must be the same as in other states.
*This being a case of which a court of chancery may take jurisdiction, [*116 we are next to inquire, whether it is one in which the United States are entitled to priority. This depends on the fact, whether the deed of assignment executed by Shoemaker & Travers was a conveyance of all their property. The words of the deed, after reciting the motives which led to it, and the consideration, are "have granted, &c., and by these presents, do grant," "all and singular the estate and effects which is contained in the schedule hereunto annexed, marked A." The caption of the schedule is, "schedule of property assigned by Shoemaker & Travers, and Jacob Shoemaker, to the creditors of Shoemaker & Travers." The deed, then, conveys only the property contained in the schedule, and the schedule does not purport to contain all the property of the parties who made it. In such a case, the presumption must be, that there is property not contained in the deed, unless the contrary appears. The onus probandi is thrown on the United States.
*68 It is contended for the United States, that the clause which gives the power to sell, by using the words "all the property of them, the said Shoemaker & Travers, and Jacob Shoemaker," indicate clearly that this deed does convey all their property. But these words are explained and limited by those which follow, so as to show, that the word "all" is used in reference to the schedule, and means all the property in the schedule. The depositions do *117] not aid the deed. The question, whether the whole *property is assigned, is still left to conjecture, and this being the fact on which the preference of the United States is founded, ought to be proved. Not being proved, the court is of opinion, this is not a case in which it can be claimed.
But the United States are the creditors of Shoemaker & Travers, and have a right, as creditors, to proceed against their property in the hands of Howland & Allen. They have a right to so much of that property as remains, after the debt due to Howland & Allen shall be satisfied. But to ascertain this amount, an account between Holland & Allen and the debtors to the United States should be taken, and the persons against whom the account is to be taken, should be parties to the suit. Although, if they cannot be found within the district of Massachusetts, the process of the court cannot reach them, still they may appear without coercion. At any rate, an account ought to be taken, since the matter controverted between the parties, is more proper to be stated by a master, than to be decided in court without such report.
The decree is to be reversed, and the cause remanded, with directions to allow the plaintiffs to amend the bill and make new parties. The United States, will, of course, be at liberty to take testimony, showing the assignment to be of all the property of the parties who made it.[(a)]
DECREE.  This cause came on to be heard, on the transcript of the record of the circuit court for the district of Massachusetts, and was argued by *118] counsel: *on consideration whereof, this court is of opinion, that the circuit court erred in dismissing the bill of the plaintiffs, and that their decree ought to be reversed, and it is hereby reversed and annulled: And it is further ordered, that the said cause be remanded to the said circuit court, with directions to allow the plaintiffs to amend their bill and make new parties.[(b)]
*69 
NOTES
[(a)]  Mr. Justice STORY did not sit in the court below, in this cause.
[(b)]  The act of March 3d, 1797, c, 368, entitled, "an act to provide more effectually for the settlement of accounts between the United States and receivers of public money," declares (§ 5), "That where any revenue-officer, or other person, hereafter becoming indebted to the United States, by bond or otherwise, shall become insolvent, or where the estate of any deceased debtor, in the hands of executors or administrators, shall be insufficient to pay all the debts due from the deceased, the debt due to the United States shall be first satisfied; and the priority hereby established shall be deemed to extend, as well to cases in which a debtor, not having sufficient property to pay all his debts, shall make a voluntary assignment thereof, or in which the estate and effects of an absconding, concealed or absent debtor shall be attached by process of law, as to cases in which an act of legal bankruptcy shall be committed."

The collection act of March 2d, 1799, c. 128, § 65, provides, that "in all cases of insolvency, or where any estate in the hands of executors, administrators or assignees, shall be insufficient to pay all the debts due from the deceased, the debt or debts due to the United States, on any such bond or bonds, shall be first satisfied; and any executor, administrator or assignee, or other person, who shall pay any debt due by the person or estate from whom, or for which, they are acting, previous to the debt or debts due to the United States from such person or estate, being first duly satisfied and paid, shall become answerable, in their own person or estate, for the debt or debts so due to the United States, or so much thereof as may remain due and unpaid, in the proper court having cognisance thereof:" And "that if the principal in any bond which shall be given to the United States for duties on goods, wares *or merchandise [*119 imported, or other penalty, either by himself, his factor, agent, or other person, for him, shall be insolvent, or if such principal being deceased, his or her estate and effects, which shall come to the hands of his or her executors, administrators or assignees, shall be insufficient for the payment of his or her debts, and if in either of the said cases, any surety on the said bond or bonds, or the executors, administrators or assignees of such surety, shall pay to the United States the money due upon such bond or bonds, such surety, his or her executors, administrators or assignees, shall have and enjoy the like advantage, priority or preference, for the recovery and receipt of said moneys, out of the estate and effects of such insolvent or deceased principal, as are reserved and secured to the United States; and shall and may bring and maintain a suit or suits upon the said bond or bonds, in law or equity, in his, her or their own name or names, for the recovery of all moneys paid thereon. And the cases of insolvency mentioned in this section shall be deemed to extend, as well to cases in which a debtor, not having sufficient property to pay all his or her debts, shall have made a voluntary assignment thereof for the benefit of his or her creditors, or in which the estate and effects of an absconding, concealed or absent debtor shall have been attached by process of law, as to cases in which a legal act of bankruptcy shall have been committed."
Under these acts the following points have been determined: 1. That the preference given to the United States by the act of 1797, c. 368, § 5, is not confined to revenue-officers, and persons accountable for public money, but extends to debtors of the United States generally. United States v. Fisher, 2 Cranch 358, 391, 395. And that the collection act of 1799, c. 128, § 65, does not repeal the 5th section of the act of 1797, c. 368, though the 65th section of the collection act applies only to bonds taken for those duties on imports and tonnage, which are the objects of the act. Id. 394. The United States are entitled to their preference on a debt due to them by the insolvent as indorser of a bill of exchange, as well as on any other debt. United States v. Fisher, 2 Cranch 358.
*2. The acts do not create a lien, nor extend to a bona fide conveyance by the [*120 debtor to a third person, in the ordinary course of business, or to a mortgage to secure a debt, or to a case where the debtor's property is seized under a fi. fa., before the right of preference has accrued to the United States. United States v. Fisher, 2 Cranch 390; United States v. Hooe, 3 Id. 73, 90; Thelusson v. Smith, 2 Wheat. 396, 424. But the United States are not precluded from asserting their priority, by a voluntary assignment made by the debtor, under such circumstances as would be a fraud on the bankrupt laws. Harrison v. Sterry, 5 Cranch 289, 301. A mortgage of part of his property, made by a collector of the customs, to the surety in his official bond, to indemnify the surety therein, and also to secure him from his existing and future indorsements for the mortgagor at the bank, is valid against the United States, although it turns out that the collector was unable to pay all his debts, at the time the mortgage was given, and although the mortgagee knew, at the time of taking the mortgage, the mortgagor was indebted to the United States. United States v. Hooe, 3 Cranch 73. The priority of the United States is not affected by an assignment under a commission of bankruptcy. United States v. Fisher, 2 Id. 358.
3. A mere state of insolvency or inability in a debtor of the United States, to pay all his debts, gives no right of preference to the United States, unless it is accompanied by a voluntary assignment of his property for the benefit of his creditors; or, unless his estate and effects shall be attached as those of an absent, concealed or absconding debtor; or, unless he has committed some legal act of bankruptcy or insolvency. United States v. Fisher, 2 Cranch 358; United States v. Hooe, 3 Id. 73; Prince v. Bartlett, 8 Id. 431; Thelusson v. Smith, 2 Wheat. 396, 424. The priority is limited to some one of these particular cases, when the debtor is living; but it takes effect generally, if he is dead. United States v. Fisher, 2 Cranch 390. In this last cited case, Mr. Chief Justice MARSHALL intimated his own opinion, that if it did not create a *121] devastavit in the administration of effects, and would require *notice, in order to bind the executor, or administrator or assignee. Id. 391, note a.
4. The assignment must be of all the debtor's property. United States v. Hooe, 3 Cranch 73, 91. If, however, a trivial portion of an estate should be left out, for the purpose of evading the act, it would be considered as a fraud upon the law, and the parties would not be allowed to avail themselves of such a contrivance. But where a bonâ fide conveyance of part is made, not to avoid the law, but to secure a fair creditor, the case is not within the acts. Id. 91.
5. The priority attaches at the time of the insolvency manifested in any of the modes specified in the acts, whether a suit has been commenced by the United States or not. United States v. Fisher, 2 Cranch 395.
6. In the distribution of a bankrupt's effects in this country, the United States are entitled to a preference, although the debt was contracted by a foreigner, in a foreign country, and although the United States had proved their debt under a commission of bankruptcy in this country, and had voted for an assignee. The law of the place where the contract is made, is generally speaking, the law of the contract; i.e., it is the law by which the contract is to be expounded. But the right of priority forms no part of the contract itself; it is extrinsic, and is rather a personal privilege, dependent on the law of the place where the property lies, and where the court sits which is to decide the cause. Harrison v. Sterry, 5 Cranch 289, 298.
7. Though a judgment gives to a judgment-creditor a lien on the debtor's lands, and a preference over all subsequent judgement-creditors, yet the acts defeat this preference in favor of the United States, in the cases specified. Thelusson v. Smith, 2 Wheat. 396, 423.
