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Part V.
Of Sales Fraudulent Against Creditors.

Fraudulent The statute of fraudulent alienations (a), reciting that gifts, conveyances, &c., had been contrived to delay, hinder, or defraud creditors of their lawful demands, enacts that all feoffments, gifts, grants, alienations, bargains, and conveyances of lands, goods, and chattels, made for such fraudulent purposes, shall be utterly void and of none effect, as against those persons whose actions, suits, debts, &c., might be in any wise disturbed, hindered, delayed, or defrauded. A subsequent section provides, that the act shall not extend to conveyances made, upon good consideration, to parties having no notice of such covin, fraud, or collusion (6).

Fraud The object of the statute was to protect credi

tiuorj. tors(c), against the clandestine and fraudulent

(a) 13 Eliz. c. 5.

(6) sect. 6.

(c) A conveyance by bill of sale, though it may be void against third parties, will bind the party executing it, and his assigns. Robinson v. McDonnell, 2 B. & A. 134 ; Steel v. Brown, 1 Taunt. 381; Haxces v. Leader, Cro. Jac. 270 ; S. C. Yelv. 196 ; Baker v. Lloyd, Bull. N. P. 258; Cowell v. Lane, ibid. To protect purchasers the statute 27 Eliz. c. 4 was passed, relating to real estates only; see Doe dem. Otley v. Manning, 9 East, 59 ; 2 Sugd. Vend, p. 160, (9th Ed.)

assignments of property by debtors ; and tbe question as to whether a transfer by the debtor be valid or Void, must always be decided by reference to the motives and intention of the party making the transfer (d). Fraud, in such cases, may be either an inference of law from the circumstances, or it may be a conclusion of fact for the jury (e). "Where the fraud can be collected from the instrument itself, or from the instrument coupled with extrinsic circumstances, without any finding by the jury as to the intention of the party transferring, it is a question of law arising upon the facts; but when it depends on the real intention of the parties, that intention is a question of fact for the jury (/)."

Continuance of possession by the vendor, after Cominu. the sale, is always a suspicious circumstance; session -1 since, in general, a change of possession accom- fraud!"' panies a change of property, and by deviating from this ordinary course of dealing, third parties are deceived, and induced to give credit to the apparent owner (g). It seems to have been formerly

(rf) "The question in every case is whether the act clone is a bond fide transaction, or whether it is a trick and contrivance to defeat creditors." Per Lord Mansfield, C. J. Cowp. 435.

(e) "Fraud is sometimes a question of law, sometimes a question of fact, and sometimes a mixed question of law and fact." Per Buller, J. 5 T. R. 420.

(/) 2 Stark. Ev. p. 358 (2nd Edit.)

(g) Twyne's case, 3 Rep. 80 a.; Chumberlayne v. Twyne, Moore, 638 ; Shep. Touchst. 66.


held, that where a debtor executed a bill of sale of his property to his creditor, and was still permitted to remain in possession, it was such a badge of fraud as, ipso facto, to avoid the sale absolutely (A). Bat not This doctrine is now somewhat qualified (i), and although continuance of possession is a strong presumption of fraud, it may be rebutted by extrinsic evidence.

Thus, where J. S. sued out a writ of execution against the duke of M., and having bought the goods, under the execution, from the sheriff, sold them by bill of sale to the plaintiff, and the property was left on the premises, and used by the duke as before the sale, but the circumstance of the execution was notorious in the neighbourhood, —in an action brought against another judgment creditor for removing the goods, it was held to be properly left to the jury, whether the sale was bond jide, or otherwise: the plaintiff had a verdict (Jc). In this case a servant had been left by the plaintiff in joint possession of the goods, but the decision

(h) Edwards v. Harben, 2 T. R. 587; Bamford v. Baron, 2 T. R. 594, n. Buller, J., said, that the judges had been unanimously of opinion that, unless possession accompanies and follows the deed, it is fraudulent and void. lb. p. 595. And see 5 Taunt. 217.

(i) See 1 B. & B. 512; 4 B. & C. 654; 3 B. & Ad. 505; Eastwood v. Brown, 1 Ry. & Moo. 312, cor. Abbott, C. J.

(k) Latimer v. Batson, 4 B. & C. 652. And see Jezeph v. Ingram, 1 B. Moore, 189; S. C. 8 Taunt. 838, where Gibbs, C. J., put it upon the ground of the notoriety of the execution.

did not depend on that circumstance; for it has been held, that joint possession is not a whit better than no possession at all (7). To evidence a substantial change of possession, it must be exclusive; even where possession is actually changed, if the former owner is allowed to interfere, and act as with his own property, there is evidence of fraud (m).

Where the continued possession of the vendor Possession

• . •11 Pi conaistent

is consistent with the terms ot the conveyance, wiihibe such possession will not in general be deemed ""'} '"""*' fraudulent (n); as where, by a bond fide settlement upon marriage, goods are settled on the wife, and the husband retains possession in pursuance of the terms of such settlement (o). So, where one lends another money to buy goods, and takes a bill of sale of the goods to secure repayment, but suffers the vendor to remain in possession, there is no fraud to vitiate the transaction (p). So, where the party buys goods himself, and lends them to an

(l) Wordall v. Smith, 1 Campb. 332, cor. Lord Ellenborough, C. J. See Hunt v. Stephens, 3 Taunt. 113.

(m) Paget v. Perchard, 1 Esp. 205, cor. Lord Kenyan, C. J.

(n) Reed v. Wilmott, 5 M. & Payne, 553; see Dewey v. Bayntun, 6 East, 257.

(o) Lord Cadogan v. Kennett, Cowp. 432; Cross v. Glode, 2 Esp. 574.

(p) Meggott v. Mills, 1 Ld. Raym. 286; Martindale v. Booth, 3 B. & Adol. 498; Kidd v. Rawlinson, 2 B. & P. 59; Benton v. Thornhill, 7 Taunt. 149; Bull. N. P. 258.

other (q); as where plaintiff purchased a puhlic house, but did not reside in it (because having another he could not procure a licence), and put an insolvent into possession, it was held, that the plaintiff might maintain an action against the sheriff, for seizing in execution his chattels and liquor in the house under an execution against the insolvent (r).

On the same principle, where a party mortgaged land, and in the same deed sold a windmill which was on the land, it was held good, and that the windmill could not be taken in execution under a fi. fa. against the vendor, though he had been allowed to remain in possession; because the possession was accounted iox(s). But if it had been a chattel capable of easy removal, it would have been otherwise, although the instrument transferring the goods contained a valid mortgage of leasehold buildings, in which the chattels are situated (t). Conditional So, where the conveyance depends on a con

conveyance. ^^

(7) Leonard v. Baker, 1 M. & S. 251. Especially if rent be received, Walkins v. Birch, 4 Taunt. 823.

(/•) Dawson v. Wood, 3 Taunt. Z5G, (Mansfield, C. J. dissentient e).

(s) Steward v. Lombe, 1 B. & B. 506 ; (the jury had found that the windmill was not a fixture.)

(t) Reed v. Blades, 5 Taunt. 212. A symbolical delivery will be sufficient where the nature of the goods does not admit of better, Manton v. Moore, 7 T. R. 67; (on the old Bankruptcy Act, 21 Jac. I. c. 19).—Post.

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