Сн. 32. 17. The court held, that if one assign his goods to trustees for some of his creditors, and he is to remain in possession one year, and account to the trustees for the profits of his business, this is fraudulent. But if my tenant sell me catis cited Bam- tle absolutely, and I leave them with him to pasture for me at the usual price, the sale is good as to his creditors, 15 Mass. R. 244. 2 T. R. 594, ford v. Baron. Dougl. 88, Devon v. 1 Wood's 18. So contracts may be void for fraud, though there be a valuable consideration, and even possession given. As where one purchases and pays a valuable consideration, Con. 417,418. he has no title or right of action thereby, if at the time he knew there was a decree for the thing in favour of another, or that another had a deed of it, though not recorded. -Co. L. 35. 3 Co. 80. 2 T. R. 587. Mass. S. J. Court, Nov. Swinerton § 19. In all these cases the buyer must be a party in the fraudulent intentions to cheat or deceive others; for however fraudulently disposed the seller or debtor may be, if the buyer jr. v. Swiner- or creditor is innocent and honest in the affair, his title is good, toh.-2 BI. (except in certain cases of bankruptcy) but if the buyer have reason to think the seller in debt, this may be evidence of such intentions. Com. Chr. Notes 39. The same case also. Mass. S. J. Court, Nov. 1796, Adams Adams, and post. Cowp. 434, v. Kennett. 20. So no creditor can object to a conveyance as fraudulent, unless he be a creditor when it is made, for if then not a creditor he is not affected by it, and it is then good as to him, and cannot be made void by a subsequent fact; but see a. 2. $21. A fraudulent sale of A's goods makes the vendee executor of his own wrong of A after his death, 2 Saund. 137. And if A sell and deliver goods to B, insolvent, on his false and fraudulent representation, that he is in good circumstances and take his note, the sale is void, and A may replevy them from the officer who has attached them for B's creditors; though one fairly purchasing them of B might hold them, 15 Mass. R. 156, 159. $22. In this case Lord Mansfield stated the law, and said, 435, Cadogan that acts against fraud ought to have a very liberal construction in order to suppress it; that by the 13th of El. "no act whatever done to defraud a creditor or creditors shall be of any effect against such creditor or creditors." (The 27th of El. is the same as to purchasers.) That this act must be so construed as not to "make third persons sufferers," this act is not against any bona fide transaction, "and where there is no imagination of fraud," "and so is the common law;" but if not bona fide" a valuable consideration will not alone take it out of the statute." And so if the possession of the goods be actually changed, yet if done to defeat creditors, the transaction is fraudulent and void. But the purpose must be fraudulent or iniquitous; it must be to assist one man to cheat another. "The statute says not a word about possession." But the law says, if after a sale of goods the vendor continue in possession, and appear as the visible owner, it is evidence of fraud," "because goods pass by delivery." "But it is not so in the case of a lease, for that does not pass by delivery; see 2 Bos. & P. 59, 60, and many cases cited. CH. 32. Art. 1. York. 23. "The statute of 27th of El. ch. 4, does not go to This statute is voluntary conveyances merely as being voluntary, but to such adopted in N. as are fraudulent." "The question in every case is, whether 10 Johns. R. the act done is a bonâ fide transaction, or whether it is a trick 185, &c. and contrivance to defeat creditors." Possession in the vendor does not prove fraud when a part of a fair trust or contract, as where one fairly secures the furniture of his house in trust, and remains in possession of that and his house in pursuance of the deeds. Vernon. § 24. If I contract to sell lands to A, I am deemed in 10 Mod. 518, equity a trustee for him till the conveyance is executed. And Atcherley v. if I afterwards sell them to B, he having notice of the preceding argreement, his purchase is fraudulent, and A may bring his bill against B for a specific performance; but there is a question if there be any remedy at law. Doe v. Rout 25. In this case it was decided, that a voluntary settle- Cowp. 705, ment is not void against a subsequent purchaser within the 27th ledge, and of El., if it be not covinous and fraudulent; and that he to be post. within the act must be a fair purchaser, bonâ fide, and for good consideration, as marriage or money &c. More at large, Ch. 109, a. 9. See Sugden $26. A judgment confessed for too large a sum, and so 5 T. R. 8, apparently void, may be explained by evidence, to be by mis- Pease v. Naytake, and so valid. What is not a purchase within 27 El., Co. L. 3, Hatton v. Jones, lor. Holberd v. Anderson. 27. There is a distinction between fraud and legal dili- 5 T. R. 235, gence. Therefore, if the deft. owe a debt to the plt. and another debt to A, and the plt. get judgment against the debtor, and he then goes to A, his other creditor, and confesses judgment to him, on which he gets execution and levies it on the day the first plt. would have been entitled to execution, and had threatened the debtor to sue it out, this preference the debtor gives A, or this step he takes, is not fraudulent within the 13th of El. 28. So a purchase for a full price is fraudulent if it be Watson on Partnership made to wrong a third person; as if A get judgment against 146, 147. B for a just debt, and C knowing this buys B's goods for a full price to defeat the effect of A's judgment, this is fraudulent. 29. "Again, if a man knowing that an executor is wasting 1 Burr. 474, and turning the testator's estate into money, the more easily Worseley v. De Mattos Dougl. 92. Сн. 32. 1 W. Bl. 362, to run away with it, buy from the executor with that view, though for a full price, it is fraudulent. 30. But a creditor may attach, get a mortgage, a bill of sale of goods, &c. from his debtor, and thereby secure his whole debt. This he may do even under the bankrupt system, but the debtor under that system can never give a voluntary preference. Hence, 31. Lord Mansfield said, a trader before an act of bankCompton v. ruptcy committed may pay a fair honest creditor in money or goods, or give him security. Bodford. 1 W. Bl. 441, v. Smith. 32. But if the bankrupt assign all his stock in trade, it is 442, Hooper void, for the deed of assignment makes him a bankrupt; he not having any thing to trade on. The deed itself is an act of bankruptcy. A fraudulent exception of a part does not alter the case; but a trader may lawfully assign part of his stock in trade in favour of a particular creditor, the same day on which he afterwards commits an act of bankruptcy. As where a bankrupt assigned silks, about half his stock in trade, to his mother to secure a just debt, on the morning of the day on which he afterwards committed an act of bankruptcy. 1 W. Bl. 660, Alderson v. Temple. 33. And in this case Lord Mansfield said, a man may, or may not at the eve of a bankruptcy give a preference to a Same case, 4 particular creditor; if one demands first, or sues or threatens Burr. 2235. him, and he prefers without fraud, the preference is good, but -Cowp. 117, when it is clearly to defeat the law, it is bad. A bankrupt Therefore, if he Harmon v. Fisher-See cannot of his own head make a preference. Linto v. Bart lett. 3 Wils. 47, prefer one creditor, in sending him a bill by post without his knowledge, this is fraudulent and void when done on the eve of bankruptcy. And in this case no course of dealing between the parties appeared in sending this note. See Bankruptcy, Ch. 18. 5 T. R. 420, Caillaud. See a. 4, s. 22. § 34. In this case the court held, that where one having Estwick v. several creditors, conveyed a part of his real and personal estate to a trustee, in trust out of the profits to pay half to the grantor and half to certain creditors named, not meaning any fraud or delay to other creditors, the conveyance was valid. And in this case Buller J. said, that "fraud is sometimes a question of law, sometimes a question of fact, and sometimes a mixed question of law and fact." In this case it was proved, that Lord Abingdon, the grantor, had no intention to defraud or delay Townsend, a creditor, who questioned the validity of the deed, and no other creditors appeared not provided for in the deed; and his remaining in possession of a house &c. was no objection, as it was satisfactorily explained. So, valid, though to the intent to delay a creditor of his execution, 3 Maule & Sel. R. 371, 377, possession was delivered. 35. The statute of frauds and perjuries, 29 Ch. II. c. 2, has provided for sundry contracts being in writing, and has СH. 32. also introduced a distinction between written and unwritten Art. 2. contracts, already considered in chapter 11, a. 2, as to agree-W ments &c. As the act was passed for the suppression of frauds, 1 Dallas 427. as well as perjuries, it ought to be liberally construed to effect those purposes. admr. of Abr 393. ART 2. Voluntary and fraudulent conveyances and settle- Mass. S. J. Court, Nov. ments, how affected by a further sale. § 1. In this action the 1793, Essex, plt. claimed the estate as assets of his intestate for his credi- Goodale tors. The deft. claimed it as a fair purchaser. The case Hooper v. was, the intestate, Robert Hooper, A. D. 1787, when insol- Nichols. vent, conveyed the land in question to his son Greenfield See 2 Rol. Hooper, by deed executed, acknowledged, and recorded. A See Parker v. valuable consideration was expressed in it, but it was proved Partrick. there was no consideration in fact; but that it was a voluntary Stevenson v. settlement and fraudulent as against creditors. The son, the Hayward, grantee, entered and was seized and possessed for about five years, and then sold it bona fide to the deft. for a valuable consideration; these facts were found by a special verdict. The judgment was, that this after sale was good, as it was made to an innocent and fair purchaser. Bailments. Pre. Ch. 310. tin, 4 Bos. & 225, a. 9, s. 2. In this case Chief Justice Parsons held, second bond Mass. S. J. Court, April fide sale good, and the case of the second innocent purchaser Term, 1808, is better than that of the first innocent buyer. Swasey sold Sutton v. the land to Farley, his son-in-law, when insolvent, and this was questionable; Farley sold to the deft. bonâ fide. plt. levied on the land as Swasey's. Judgment for the This second sale to him being fair and honest, was valid if the first was not. A, buying without notice, is not affected by the fraudulent purchase of his seller, and if B sell to one knowing the fraud, yet his title is good. sale Lord, Ch. The 12. See a. deft. 13, s. 12. 185.-1 Johns. Ch. R. 213, even 10 Johns. R. 219.-8 Johns. R. 137. 3 Com. D. 264. Covin 3. So if one make a covinous settlement on his son, who sells for a valuable consideration, and afterwards the father B. 4sells to another for money, the son's sale is valid. And the principle as to personal estate is the same as it is real. 4Wheat. 487. See 1 Sid. as to the 134-2 Bac. Abr. 607. 9 Mod. 44, Herring. 48, case of 1 Lev. 237. § 4. The plt's. testator owned an annuity ticket and lost it, and the deft. came by it bona fide for a valuable consideration, and judgment for him, for he was an honest purchaser and had no reason to suspect it was the property of the testator. Salk. 344.5. So a gaming bill accepted and endorsed to an innocent endorsee, is good against the endorser; otherwise if sued by a party to the wrong. A. D. 1696. Strange 1155; 9 Mass. R. 1. So if the maker's name be forged. 12 Mod. 97, Hussey v. Jacob. 6 Cranch 224, 133. 6. In this action of assumpsit by several partners, the deft. 8 T. R. 140, was allowed to plead in bar the bankruptcy of one of them. 141, &c.Case.--Woodeis Case in Colvile v. Parker.--Cro. Jam. 158, Jason v. Jervis.--1 Vern. 286. Wilson's CH. 32. 9 Mod. 35, 2 Esp. 292.- Edwards v. 2 T. R. 596, Baller J. And further held, that if partners by deed assign all their partnership effects &c. to trustees for the benefit of their creditors, and some of the separate creditors of one partner do not assent to it, the assignment is fraudulent and void, not only as against those creditors who did not concur, but was an act of bankruptcy; and that it was immaterial whether the creditors who did not concur were joint or separate; and a creditor of one partner has a demand on their partnership effects after the partnership creditors are satisfied. 7. It has been held in the Court of Chancery, that if A owns an estate, and knows it, and knows that B is buying it of a third person, and A gives no notice of his right to B, A shall never after be permitted to set up his right to avoid B's purchase, for it was an apparent fraud not to give notice of his title; and infancy or coverture is no excuse. And in this case another strong case is cited. See Ch. 62, a. 5, s. 7; 1 Ves. jr. 190. 8. A voluntary conveyance without a valuable consideration, by 27 El. c. 4, is fraudulent against a subsequent purchaser for a valuable consideration, though with notice betore all the purchase money was paid or the deed executed. In such case the law presumes fraud "without admitting sich presumption to be contradicted. Many cases cited. ART. 3. Conditional sales. § 1. If the seller remain in possession, according to the usual course of business or the nature of the transaction, there is no fraud. As where Lord Montfort on his marriage, conveyed his household goods of his house in town, (among other things) to trustees in strict settlement. His wife's fortune was £10,000, equal to all his debts then, and the goods were added to the settlement, his real estate not being deemed sufficient for the settlement. He remained in possession of these goods. The deft. was a creditor to him when this conveyance was made, and took the goods in execution. The trustees brought trover for them, and the court held, that the 13th of El. was only intended to operate against fraudulent conveyances, and that possession alone was not evidence of fraud. That this being a fair and proper settlement could not be deemed void under that statute. Not done "with a view to defeat creditors." This case has been often recognised, art. 4, s. 7. 2. So where cows were settled on the marriage of the plt's. wife on certain trusts. Held, not liable for her husband's debts. "When the deed is to take place at a future time, or when a condition is performed, the possession is still in the vendor by the deed, and is consistent with it." "And such possession comes within the rule as attending and following the deed;" also 2 Bos. & P. 59, 60. |