Page:Federal Reporter, 1st Series, Volume 5.djvu/881

 GARBETT V. CITY OF MEMPHI3. 869 �subject for their satisfaction any property possessed hj the corporation at the time. In the view of equity, its property constitutes a trust fund pledged to the payment of its debts to creditors. And if a municipal corporation, upon the surren- der of its charter, be possessed of any property, a court of equity will equally take possession of it for the benefit of the creditors of the corporation." �So in Curran v. Arkansas, 15 How. 307, it was said "the assets of a corporation are assets for the payment of its debts, and are trust funds for that purpose." See, also, Maenhout V. New Orleans, 2 Woods, 112, 114. �In Dillon on Municipal Corporations, § 37, the rule is stated thus : "Where the legal existence of a municipal trustee is destroyed by legislative act, a court of chancery will assume the execution of a trust, ♦ ♦ • take charge of the prop- erty, and carry into effect the trust." �In Beckwith v. Racine, 7 Biss. 142, the court said: "Where a contract cannot be enforced at law against a municipal corporation, owing to a repeal of its charter, and there are any funds, a court of equity will administer them for the benefit of creditors. It is hardly necessary to say that the prirate properliy of a municipal corporation is so deeidedly stamped with a trust in favor of its creditors that it is inca- pable of being diverted to other uses by the legislation of the state. This law bas again and again been declared." Gro- gan v. San Francisco, 18 Cal. 613, by Field, J. ; Com'rs v. Detroit, 28 Mich. 236; City of Dubuque v. III. Cent. B. Go. 67, 68. �The citations I bave made (many others might be added) are sufficient to maintain the jurisdiction of the circuit court in this case, and its power to lay hold, by its receiver, of ail the property and assets belonging to the city of Memphis when its charter was repealed, including ail taxes levied and collected, but undisposed of, and ail taxes uncollected, ail property purchased by the city in sales for taxes, and ail assets of every description, except the property above mentioned held for strictly public uses, and also to administer such assets for the benefit of the creditors. ����