Chap. 434.—An ACT relating to deeds of assignment for the benefit of creditors,
and prescribing certain requirements to be complied with. (H B 250)

Approved March 21, 1924.

1. Be it enacted by the general assembly of Virginia, That hereafter
whenever a deed of assignment for the benefit of creditors is executed,
the same shall be forthwith recorded as are other deeds, and the trustee
named therein, or the one substituted in the manner hereinafter pre-
scribed, if no notice has been given, before selling under the deed of
assignment, shall at least ten days before the sale mail a registered
letter or notice to each of the creditors named in the said deed, advising
of the execution thereof, and when, where and how the sale will be held,
the terms thereof, and whether or not the deed provides that acceptance
shall be in full satisfaction; and no creditor shall be preferred in the said
deed except those given a lien or preference by law, or those having a valid
lien upon the property conveyed, or some part thereof, and those having
a lien shall be preferred only to the extent of the value of the property
upon which they have a lien.

2. A majority of the unsecured creditors in number and amount of
the assignor may agree in writing upon a trustee different from the one
named in the deed of assignment, whereupon upon petition to the court,
or the judge thereof in vacation, which would have jurisdiction if suit
were brought against the assignor, such agreed trustee may be substi-
tuted in lieu of such named trustee with all of the rights, powers and
duties-conferred upon such named trustee in the said deed of assign-
ment, and the clerk of the court shall cause to be entered upon the margin
of the deed book where the deed of assignment is recorded the fact of
the entry of said order, and a reference to the order book and page where
the same is recorded, together with the name of the substituted trustee,
and shall make proper indexing. The substitute trustee shall reside in
the county or city in which the property or a majority of it is located,
that is conveyed in deed of assignment. Any creditor of the assignor
who questions the validity of any other creditor’s claim, or the trustee
if he questions the validity of any claim, may file, within thirty days
after the recordation of said deed a petition against the creditor whose
claim is questioned in the court which would have jurisdiction, if the
suit was brought by the creditor whose claim is questioned against the
assignor, and the burden of proof shall be upon the creditor whose claim
is questioned. Upon filing of such petition the court, or the judge of
such court in vacation, may order the party whose claim is questioned
to appear, at such time as it thinks right and proper, to defend such
claim and the court shall determine the matter in a summary way.

3. Any such deed of assignment may contain a provision to the
effect that those creditors who accept thereunder, do so in full satisfac-
tion of their respective claims, and shall be forever barred from further
recovery of any balance. Every trustee referred to herein shall receive
reasonable compensation for services.